Development of Russia’s Far Eastern regions in the context of the nation’s “turn to the East” and its expanding cooperation with Asia-Pacific were discussed at the 4th session of the annual Asian Valdai conference.
Since 2012, Russian President Vladimir Putin has stressed the importance of development of the Far East. The region is rich in natural resources, which creates potential for its economic growth. However, as the session moderator Lee Jae-Young, Vice President of the Korea Institute for International Economic Policy, noted, it is too vast for one country to be able to provide for its fast development. This is a chance for other states of the region to take part in the economic promotion of the Far East.
According to Timofei Bordachev, a programme director at the Valdai Club, the Far East development strategy is based on boosting exports to the neighboring states and increasing the volume of foreign investment to the development of local industries. Here, the key political instruments are the creation of new institutions, territories of accelerated development, promotion of the free port of Vladivostok and involvement of key stakeholders: China, Japan, South Korea, Australia, and Singapore. The designated development spheres are fishery, forest industry, agriculture, transportation and incremental reduction of reliance on natural resources for economic development. Despite certain difficulties and challenges (protectionism, as well as tariff and technical barriers), the volume of exports has grown in physical terms: +7.7% in 2016 compared to +0.6% in 2015, Bordachev said.
Professor Feng Shaolei, Director of the Centre for Russian Studies at the East China Normal University, pointed out that Russia has achieved certain economic success over the past 10 years, although systems of progress measurement may vary. It has improved its position in the rating of the leading external investors to Asia, going up from the 55th place in 2008 to the 34th place in 2017. However, the most successful projects and spheres of cooperation between Russia and China are still untapped, he believes. The process of their creation began quite recently and requires a serious estimate and measurement of the results achieved. At this moment, Russia is an important partner for China and other countries of the region strategically and ideologically, but not economically.
Kim Seok-Hwan, professor at the Hankuk University of Foreign Studies and president of the Korea Institute for Eurasian Studies, stressed the importance of cultural interaction between Russia and Asian countries. According to him, economic development strategies in Asia-Pacific are almost always overlapping and interrelated. Russia has not yet developed a strategy with clearly defined purposes, which prevents it from fully unlocking the potential of cooperation with the region, Kim believes. Russia has not yet fully explored the Asian markets and a lot of work lies ahead, as attraction of foreign investment is not a guarantee of stable development in itself.
Although the idea to create the territories of accelerated development and free ports was correct, the regional and local authorities need a lot of time to learn how to use these novelties, believes Viktor Larin, Director of the Institute of History, Archeology and Ethnography of the Peoples of the Far East, the Russian Academy of Sciences. The problem, according to him, is that living standards in the Far East are much lower than in other Russian regions and the young and educated tend to migrate from there. According to polls, 60 to 70% of young people would opt for living in another Russian region or abroad. Foreign investors in East Siberia and the Far East are mostly interested in the extracting industries. So far, Russia’s “turn to the East” is an abstract notion, professor Larin believes, and Russia will have to do a lot of work to make it more feasible, relying mostly on itself along the way.
Another issue raised during the discussion was the agreement on cooperation in the development of the Tumangan area, involving China, Russia, South Korea, and North Korea. According to Kim, here progress is slower than expected, mostly due to the impossibility of creating an area of free migration. Other issues included the Belt and Road initiative, China-Russia migration and the potential of cooperation between Russia and China in the exploration of the Arctic.