Global Corporations and Economy
Here’s How Russia Can Lead Eurasia’s Consolidated Response to the Economic Crisis

From a grand strategic perspective, balancing between BRI and the AAGC would enable Russia to participate in both mainland and maritime Eurasian integration processes, with an eye on facilitating the eventual convergence of these two in Afghanistan for the betterment of the continent’s security after that conflict inevitably ends, writes Andrew Korybko, a Moscow-based American political analyst.

 Eurasian Uncertainty

The long-running process of Eurasian integration is challenged by the economic crisis brought about by the world’s uncoordinated response to COVID-19, but the situation is all the more acute following the recent border clash between China and India. It’s therefore incumbent on Russia, whose 21st-century grand strategy envisions it functioning as the supreme balancing force in Eurasia, to balance between its two strategic partners while taking the lead in organizing Eurasia’s consolidated response to this crisis. This is the only realistic way to effectively advance all three of their shared multipolar interests in the contemporary context.

The Russia-India-China (RIC) triangle is the core of BRICS and the SCO’s synergetic efforts, but the Galwan Incident exacerbated mutual Indo-Sino mistrust that existed before this clash. Furthermore, that deadly skirmish is being exploited by the US to tempt India into disengaging from the Eurasian integration initiatives in which China is also participating. Russia’s goal must naturally be to ensure that India doesn’t drift too far away from Eurasia all while simultaneously retaining both of their hard-earned trust-based relationships with China, which might interpret any overly enthusiastic outreach efforts on Moscow’s part towards Delhi as suspicious.

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On May 15, the Valdai Discussion Club, in partnership with the Observer Research Foundation (ORF), hosted a webinar on Russian-Indian relations.
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The Worst-Case Scenario

The task at hand is made more difficult by the US’ strategic weaponization of what can be described as economic nationalism. India’s preexisting issues with China’s Belt & Road Initiative (BRI) are being taken advantage of by American policymakers to woo the country from the earlier mentioned Eurasian integration initiatives in which China is also participating. In this context, India’s rejection of the Chinese-led Regional Comprehensive Economic Partnership (RCEP) last November, the ongoing Indian-American free trade talks, and the possibility of bringing a multilateral economic dimension to the military-focused “Quad” are concerning.

Without Russia’s visionary leadership, there’s a credible fear that China and India will rapidly move along a possibly irreversible trajectory of rivalry that might culminate in an Asian Cold War between them, which would essentially function as a subset of the New Cold War between the US and China.

The US has an interest in actualizing this scenario because it advances its Indo-Pacific strategy of containing China by dividing and ruling Eurasia across the coming century. Russia must avert that worst-case scenario and do its utmost to ensure that RIC, the core of BRICS and the SCO, remains strong and united at all costs.

Three Steps to Success

What follows are three interconnected policy proposals for responding to this grand strategic challenge:

1. Strongly reaffirm Russia’s strategic neutrality

Russia can’t afford to be perceived by China or India as taking either of their sides otherwise its 21st-century balancing act will fail. Outreaches to one of them must proceed in parallel with symmetrical outreaches to the other. An effective means of maintaining the balance between them would be if Russia attempts to revive the Non-Aligned Movement. The author published a jointly written academic article for MGIMO’s Vestnik journal about pursuing this together with India, but it might now be best to advance this proposal independently considering how negatively China might perceive such a move after the Galwan Incident.

2. Implement and articulate a middle ground between globalization & economic nationalism

There’s no realistic chance of returning to the pre-COVID model of globalization anytime soon because it could prove disastrous for domestic economies after the crippling lockdown, but the US’ weaponization of economic nationalism could reverse Eurasian integration processes if left unchecked. Faced with this dilemma, Russia must urgently implement, articulate, and promote a balance between these seemingly contradictory economic models in order to help bridge the growing Indo-Sino divide before it proves irreconcilable in this respect. Leading by example by implementing this hybrid model at home could prove to be most convincing method.

3. Balance between BRI and the Indo-Japanese Asia-Africa Growth Corridor (AAGC)

China and India are pursuing different, but not necessarily mutually exclusive, trans-regional integration projects, and it would be best for Russia to participate in both of them so as to facilitate the eventual convergence of these two visions through their shared Great Power partner. While the Eurasian Land Bridge and a prospective Russian-Pakistani trans-Afghan trade corridor could be considered as BRI initiatives, the North-South Transport Corridor (NSTC) and Vladivostok-Chennai Maritime Corridor (VCMC) can be regarded as unofficially connected with the AAGC, thus proving that the building blocs for balancing are already present.

Kabul at the Crossroads

Expanding upon the last-mentioned proposal, it should be pointed out that Afghanistan lies at the crossroads of the RIC countries’ three trans-regional trade corridors. BRI’s China-Central Asia-Mideast Economic Corridor can connect the People’s Republic to Afghanistan by rail upon the completion of the proper infrastructure in that country and Kyrgyzstan; India’s Chabahar Corridor is already pursuing such rail connectivity; and a prospective Russian-Pakistani trade corridor (RuPak) could do the same. All three Great Powers have an interest in ensuring Afghanistan’s post-war stability, which can be best achieved by combined economic efforts in this regard.

Special attention should be paid to the importance of the RuPak proposal as a symmetrical Chinese-friendly outreach to be pursued in parallel with expanding the VCMC that was announced during Prime Minister Modi’s attendance at the Eastern Economic Forum last September. It’s the key to retaining goodwill and trust with China since Pakistan hosts BRI’s flagship project of the China-Pakistan Economic Corridor (CPEC). As such, it’s unlikely that Beijing would regard the VCMC in an unfriendly way so long as progress proceeds in parallel with RuPak. This proposal could optimize Russia’s balancing strategy between China and India if implemented. 

Preparing for SPIEF-2021 

Although admittedly ambitious, Russia should plan to make tangible progress on all three of the author’s interconnected policy proposals by next year’s Saint Petersburg International Economic Forum (SPIEF). This would greatly increase the chances that RIC is able to rebound from the unexpected setbacks of the present year (COVID-19 and the Galwan Incident). By applying its envisioned balancing role in a meaningful way, Russia would retain the viability of Eurasian integration processes while offsetting the efforts of external players like the US to interfere with the aforesaid. 

From a grand strategic perspective, balancing between BRI and the AAGC would enable Russia to participate in both mainland and maritime Eurasian integration processes, with an eye on facilitating the eventual convergence of these two in Afghanistan for the betterment of the continent’s security after that conflict inevitably ends. Pioneering a hybrid model between globalization and economic nationalism, as well as reaffirming its strategic neutrality in a symbolic and/or substantive way, could also make Russia a worldwide trendsetter in the New Cold War and immeasurably boost its soft power appeal.

Global Corporations and Economy
Sino-Russian Cooperation: The Risks and Opportunities of a Post-Pandemic World
On July 23, an online discussion, “Strategic Economic Interaction Between China and Russia in the Post-Pandemic Era"”, took place. It was jointly organised by the Valdai Club and the Centre for Sino-Russian Strategic Cooperation at the CITIC Foundation for the Study of Reforms and Development in China. As Andrei Bystritsky, Chairman of the Board of the Foundation for Development and Support of the Valdai Discussion Club, noted in his opening remarks, although the post-pandemic period has not yet arrived, it is obvious that the world will be different and one must learn how to live in this new world. In this regard, the participants examined, from different angles, how Russia and China can interact against the backdrop of the new models of globalisation and the diminishing influence of the United States.
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Views expressed are of individual Members and Contributors, rather than the Club's, unless explicitly stated otherwise.