The new strategic priorities of Russia's policy in Asia and the ways of developing economic ties in the region were discussed at the session of the Valdai Club titled "Turning Russia to the East: The Next Decade," which was held on December 14 as part of the Days of the Far East in Moscow.
Opening the session, the Chairman of the Board of the Development and Support Foundation of the Valdai Club, Andrey Bystritskiy, noted that the Valdai Club played an important role in understanding the turn of Russia to the East. "This topic was raised by the Club for a long time and has been intensively discussed," Bystritskiy said.
Speakers noted that Russia’s Turn to the East has succeeded. In recent years, the volume of trade, economic and political ties with the countries of Asia has grown significantly. The strategy of creating a community of Greater Eurasia is developing.
Sergei Karaganov, Dean of the Faculty of World Economy and International Affairs at the Higher School of Economics, noted that the center of global economic development is shifting to Asia, and the turn of Russia to the East is a movement towards new and progressive markets. The expert called it a huge achievement that Russia has actually turned to Asia. At the same time, a number of measures have been developed, necessary for the development of the Russian Far East. Among them, the first is the liberalization of economic relations. The professor stressed that the creation of Greater Eurasia is not an anti-European project, it is also supposed to involve Europe.
Timofei Bordachev, Programme Director of the Valdai Club, and Director of the Center for Comprehensive European and International Studies at the Higher School of Economics, agreed that a turn to the East does not at all mean a turn away from Europe. Russia has a long-term strategy of participation in Asia, and this has nothing to do with Europe. At the same time, Bordachev thanked Europe for pushing Russia to the East with its own policy. Now, the mutual sanctions of Russia and the EU are institutionalized, and they are unlikely to disappear anytime soon. Among the important measures necessary for the development of the economy of the Far East, the expert named the removal of non-tariff barriers.
The shift of the world economic center is an obvious advantage for the Far East of Russia, which is one-eighth of the Asia-Pacific region. Russia is making efforts to integrate the Far East into the system of economic ties and value chains of the Asia-Pacific region.
Alexander Krutikov, Deputy Minister of the Russian Federation for the Development of the Far East, noted that the region is creating a new economic space based on private investment, while previously there was only state investment. The basis of this is the creation of competitive conditions for investing and doing business on the scale of the whole Asia-Pacific region. Today, the Russian Far East taxes investors less in the territories of priority development and the Free Port of Vladivostok than only one country, Malaysia. According to Krutikov, the set of measures allowed attracting more than 1000 new projects to the Far East for $55 billion. Among investors, he named China, Japan, Korea and mentioned new investors from India.
Yegor Borisov, head of the Yakutia region, confirmed the special governmental approach to the eastern development of Russia. As evidence of Russia's turn to the East, he brought up the increase in oil production and export to the Asia-Pacific region. In addition, the Power of Siberia pipeline will begin deliveries to the China in 2019.
Along with positive trends, discussion participants noted the internal and external challenges that could affect the development of the Russian Far East. Among the former are the outflow of population, the low level of transport and social infrastructure development and the above-average cost of living. External threats also include increasing military-political instability and high competition for investment resources.
The ambassadors of Asian countries in Russia, Indian Ambassador Pankaj Saran and Singaporean Ambassador Lim Kheng Hua, also took part in the discussion. They said that their countries welcome the Russia’s Turn to the East.
Pankaj Saran noted that India's economic growth reflects rapid changes in the region, and expressed confidence that in the coming years we will see increased Indian economic involvement in the Far Eastern of Russia. He called for an increase in the number of successful projects, such as investments in Sakhalin projects for the production of liquefied natural gas. They have become some of India’s most successful investments abroad.
Lim Kheng Hua drew attention to Russia’s extremely low share of trade with the ASEAN countries. At the same time, she said, Russia now comes to ASEAN with concrete proposals, which are welcomed by the countries of the region. According to the ambassador, Russia has become better at understanding the region than it had been several years ago, and it is strengthening its involvement in ASEAN affairs.
Apurva Sanghi, the World Bank's Lead Economist for Russia, talked about the main results of the recent World Bank report "A Rebalancing China and Resurging India: How Will The Pendulum Swing For Russia?" He stressed that Russia’s Turn to the East has succeeded, but it is characterized by a low level of trade. One of the recommendations is to increase the mobility of people and capital in Russia. Experts agreed that efforts to develop Russia in the next decade should be aimed at creating even greater economic freedom in the Far East for both living in the region and conducting business.