Russian President Vladimir Putin has stated on several occasions his commitment to make the development of Siberia and the Far East a “national priority for the entire 21st century,” including most recently at the Eastern Economic Forum that took place in Vladivostok in September. In many ways, this strategy dovetails with the nation’s pivot to the East, in the form of stronger trade and economic ties with China and the nations of Southeast Asia. But how realistic are these plans?
In this report, we detail a number of political and economic factors that are complicating Russia’s vision to develop its Far East and become a true player in Asia-Pacific — including geopolitical rivalries, historical grudges, the lack of infrastructure in the Far East and the rise of Central Asia. At the heart of all these issues is one central factor, of course, and that’s energy. In many ways, Russia’s ability to build ties with Asian powers such as China is based on its capacity to supply enough energy to power these growing nations.
And that’s the crux of the matter: Will Russia’s pivot to the East lead to real economic and technological progress? Or will the focus on the energy relationship just lead to the construction of more pipelines and more dependence on oil and gas as an economic lifeline?
In a series of interviews and discussions, the report outlines that Russia’s goal should be greater economic integration with Eurasia and the formation of regional trade partnerships with the nations of Asia-Pacific. To help answer these questions, this report includes a viewpoint on the historical development of Vladivostok in the Far East, which some in Russia have conjectured could become the focal point of a robust technological hub similar to Silicon Valley.
Ultimately, Russia’s ability to develop the Far East will require more than just a fond reminiscence about the past or a doubling down of the nation’s current energy strategy. It will require real investment in infrastructure and telecommunications networks, and a real focus on diversifying the national economy into innovative new IT products. If that happens, Russia could be positioned far better than its Western rivals to make the pivot to the East.
The authors of this report are Alexander Gabuev of the Carnegie Moscow Center, Paul Lirette of the Warsaw-based Center for Social and Economic Research (CASE), Konstantin Simonov of the Financial University under the Government of the Russian Federation, Victoria I. Zhuravleva of the Russian State University for the Humanities, and Ivan Kurilla from the European University at St. Petersburg. The report also features interviews with the Chief Economist of the Eurasian Development Bank Yaroslav Lissovolik, General Director of the Far East and Baikal Region Development Fund Alexei Chekunkov and President and CEO of the American Chamber of Commerce in Russia Alexis Rodzianko.