The Eastern Economic Forum in 2021 showed a lot of how the interaction between the state and business, primarily at the international level, will look amid the new conditions. The world’s governments are now increasingly focused on how to deal with internal problems and how to resolve existing or potential conflicts at the level of their national institutions, writes Valdai Club Programme Director Timofei Bordachev.
Since 2016, the Eastern Economic Forum (EEF) has been Russia’s main international event in Asia. In 2018 and 2019, it reached its maximum value in terms of the number and names of participants — the main foreign guests were the President of the People’s Republic of China Xi Jinping and Indian Prime Minister Narendra Modi. Unlike other formats that Russia has joined in recent years, the forum could not turn into a discussion of the US-China contradictions, as happened with the East Asia Summit (EAS), or even become a victim of an excessive number of participating countries, as happened with the APEC.
At the same time, the Eastern Economic Forum remained a Russian business event, which was attended by thousands of foreign guests and leaders of regional powers of all ranks. Thus, the EEF was a major international event, but maintained a Russian platform and operated within the framework of the Russian agenda for the development of the Far East and its integration into the global economy.
The event, to a large extent, embodied the nature of the process of “Russia’s pivot to the East”. From the very beginning, ten years ago, it was geared to promote the development of the Far East, a priority for state policy, through the strengthening of trade and economic ties and, at the national level, political relations with Asian countries. First and foremost, it reflected the specific intention of the Russian state at that stage to create conditions for the Far East to keep up with the development of other Russian regions.
The main problem of the territories east of Lake Baikal is geopolitical. First, this part of Russia is far removed from the nation’s main focal points for foreign policy and priority zones. The international military-political situation in Asia is characterised by a number of basic and private conflicts of interest between individual states. Russia, however, does not participate in these conflicts and has no interest in the contradictions that underscore them. The takeover of the Pacific territories by Russia took place during the period of maximum power of the European empires in the middle and second half of the 19th century. The Sino-Russian territorial dispute was settled at the beginning of this century, and the issue of the Kuril Islands in relations with Japan cannot serve as the basis for a dangerous conflict from the Russian point of view.
Second, Russia has no neighbours in Asia that could pose a threat to its national security. Even taking into account the fact that the main struggle between China and the United States will unfold in this region, there are no systemic factors that could become truly troubling for Moscow. The main such factor is the group of states or their alliance, which puts the weakening of Russia at the centre of their foreign policy. However, in this respect, Europe really occupies a special place, since historically it has created the main stimuli for development for Russia while at the same time generating challenges and threats in the sphere of security.
We must add that the Far East is at a considerable distance in relation to the main traditional areas of Russia’s economic ties, and its regional partners do not have such experience and reputations as, for example, the European ones. Despite the fact that over the past twelve years the volume of trade relations with China has even slightly surpassed those between Russia and Germany, both sides have yet to prioritise each other to the degree seen in Russia-Europe relations. Thus, Russia has no objective reasons to pay special attention to this region and it was only artificially possible to create conditions for its self-sustaining development.
This problem could be partially overcome in the context of a favourable global environment and the peculiarities of the development trajectory of the largest Asian countries to new levels of consumption. It is on this hypothesis 10-12 years ago, the main recommendations were issued regarding which sectors of the economy should be prioritised in the Far East. However, by the mid-2010s it was noticeable that the numerous non-tariff restrictions existing in Asian countries were well-grounded, often in the form of long-term ties with other exporting countries, in markets which particularly interested Russia.
It should be kept in mind that the second component of Russia’s pivot to the East — more active ties with the Asian economies — reflected the notion that dominated at that historical stage, that the growth of international trade and consumption in Asia was of a long-term nature and could therefore be considered one of the positive external factors of development. Accordingly, the expectations at the first stage of the development of the new policy in the region were based on this interpretation — the unique resources and capabilities of Russia were considered an entrance ticket to the global investment space, and it was supposed to create products for export and increase the income of the population.
In addition, the linear logic that dominated for a long time after the end of the Cold War really made it possible to establish a direct link between the intensity of economic relations and political presence in a particular region. The foreign policy meaning of “Russia’s pivot to the East” was thus based on balancing its traditionally strong ties in the West. Already in the mid-2010s, many foreign observers opined that Russia was strengthening ties with Asia merely in order to arouse jealousy in Europe and court its favour.
Such comments were not unfounded, even if they had a connection only with the speculative perception of the new policy by some Russian experts. In fact, the meaning of the whole story with the “pivot” was not intended to please Asia or Europe, but to create an agenda for the implementation of the first necessary steps in regional development inside Russia.
This agenda had been created by the time the coronavirus pandemic began, with the related restrictions on international mobility, including problems with trade in a number of important products for the Far East. At the EEFs in 2018 and 2019, high-level Russian representatives had already quite reasonably addressed concrete achievements which had been made that were of an institutional nature. The creation of a regulatory framework, even not perfect, and the launch of a number of new industries within the region could be seen as signs of successful policymaking.
The “pivot” is now complete, but not because Russia has successfully repeated the experience of developing countries in South or Southeast Asia, whose experience in solving development problems by attracting foreign investment 10 years ago was seen by many observers as suitable for copying.
The Eastern Economic Forum in 2021 showed a lot of how the interaction between the state and business, primarily at the international level, will look amid the new conditions. The world’s governments are now increasingly focused on how to deal with internal problems and how to resolve existing or potential conflicts at the level of their national institutions. In this respect, relative isolation from the outside world becomes not a choice, but a necessity. International cooperation within individual regions will inevitably be greatly impacted by this objective process.