On Tuesday, December 5, 2023, the 14th Asian Conference of the Valdai Club ended. On this day, two open sessions were broadcast live on the Club’s website.
The third session was devoted to the issues of globalisation and regionalisation raised the day before. Pornchai Danvivathana, Secretary General of the Asia Cooperation Dialogue, noted that globalisation, which has benefited many countries throughout Asia, has increased connectivity in the region. However, the sustainability of those elements of globalisation that persist despite its general rollback is partly being made possible through good governance, which requires the presence of viable institutions, he emphasised.
According to Rahul Mishra, director of the Centre for ASEAN Regionalism at the University of Malaya, globalisation as a process has reached a stage where it is no longer reversible. Indeed, the concept of an open global economy may have failed, but globalisation itself as a set of tools remains at the regional level: “islands of cooperation will remain intact.”
Fyodor Lukyanov, Research Director of the Valdai Club, noted in his speech that the world remains integral and interconnected, no matter what happens in relations between large countries. “The attempt at a total economic blockade of Russia, which was undertaken last year, did not lead to results,” he emphasised. “Russia remains part of the world economy, despite all the sanctions.”
Lukyanov supported the concept of minilateralism, which envisages that specific problems are solved by those countries that they directly affect. This is the opposite of globalisation because in globalisation all problems are solved by everyone, especially by those who are powerful. In the era of globalisation, the United States was the “neighbour” of every country in the world, but instead of helping resolve conflicts, it brought in its own problems. Minilateralism is the regionalism that is needed for international security, Lukyanov emphasised. The fewer major players and the more interested players are involved, the higher the likelihood is that conflicts will be resolved effectively.
A similar position was expressed by Raashid Wali Janjua, director of research at the Islamabad Policy Research Institute (IPRI), who called regionalism a by-product of countries trying to move away from multilateralism towards minilateralism. He considers the Belt and Road Initiative and the Eurasian Economic Union to be examples of positive regionalism.
Chaotisation of the world system, which requires all players to learn to act amid increased turbulence, was mentioned by Ekaterina Koldunova, director of the ASEAN Centre at MGIMO University. According to her, the whole world is preparing for new forms of interaction, observing the “decoupling” of Russia and the EU. The financial system, which is tailored to the dollar, and other global institutions will not be restructured immediately, Koldunova emphasised. The growth of regionalism is inevitable, since it will be easier to negotiate with those who are nearby.
Participants in the fourth session discussed the achievements and potential of relations between Russia and Asian countries. Over the past 18 months, economic relations have been developing at an unprecedented pace.
As session moderator Anastasia Likhacheva noted, today Asia accounts for two-thirds of Russian foreign trade. De facto, Russia is an Asian economy, but deprived of many preferences in the field of free trade and logistics routes that unite Asia. Our country’s task for the coming years is to bring economic relations with Asian countries to a new level of cooperation.
Perhaps the most striking example of the growing intensity of economic relations between Russia and Asian countries over the past year and a half is Russian-Indian trade. According to Prerna Gandhi, junior researcher at the International Vivekananda Foundation, trade turnover with Russia increased 250% over the year to $50 billion. Of course, this growth is associated with the redirection of Russian oil exports to India, the share of which has grown to 45 percent in the total structure of oil imports to India, and is fraught with certain problems. However, the new trade patterns are beneficial to both parties.
There is also an increase in trade between Russia and the ASEAN countries, although the absolute numbers are not so large, and Russia plays the role of a middle power in Southeast Asia, noted Alexander Korolev, deputy director of the Centre for Comprehensive European and International Studies at the Higher School of Economics. Traditionally, Russia sells weapons and equipment to the region, accounting for 21% of ASEAN imports, but 88% of these are imported by two countries: Vietnam and Myanmar. Others, fearing secondary sanctions, do not participate in military-technical cooperation with Russia. However, there are other promising areas of economic relations, the potential of which will be fully revealed only when the free trade zones are fully operational (the FTA with Vietnam created in 2015, according to Korolev, will actually start working in 2027).
A different case is Japan, which joined the western anti-Russia sanctions, but did not curtail energy cooperation with Russia. According to Taisuke Abiru, a senior fellow at the Sasakawa Peace Foundation, Japan took part in the sanctions to show solidarity with other G7 countries and to send a signal to China about what awaits it if Beijing decides to carry out military action against Taiwan. However, Tokyo does not participate in sanctions against Russian energy, as a result of its energy security considerations: if the Japanese sell their share in Russian oil and gas projects, then China will acquire them, making Beijing the only winner.
Japan demonstrates an equally pragmatic approach in other areas of economic relations. As a result of the US ban on imports of Russian seafood, Russia has redirected crab exports to Asian countries, including Japan. Today, Russian crab accounts for about 70% of Japanese imports, and there are no alternatives capable of providing the required volumes, and therefore trade is likely to only increase.
Shamil Yenikeyeff, professor of the Department of International Relations of the Faculty of World Economy and International Politics at the Higher School of Economics, spoke about the energy aspects of Russia’s interaction with Asia. According to him, while Europe is switching to expensive energy resources, which will make its production unprofitable, cheap resources are flowing to Asia. Russia is interested in cooperation with all consumers of its energy resources in the Asian region, primarily with the largest economies: China, Japan and South Korea. We are moving towards the formation of regional energy clubs, and the key issue is governance: who will manage standards and harmonize strategies. For this, Asia needs mechanisms similar to the International Energy Agency, within the framework of BRICS and the SCO, Yenikeyeff summed up.