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Russia and the APEC Summit

Russia and the APEC Summit

24 September 2012

Introduction

 

This month’s APEC Summit in Vladivostok received little media coverage, partly because President Obama did not attend, and party because the results were relatively modest. President Putin made much of Russia’s new orientation towards the Asia-Pacific and stressed the important linking role to be played by the Eurasia Union. He also pledged to revitalize the Russian Far East without stating where the finance was to come from.

 

Putin’s Plans

 

In an article ahead of the summit Putin stressed that Russia has long been an intrinsic part of the Asian-Pacific region and that Russia views this dynamic region as the most important factor for the successful future of the whole country, as well as for the development of Siberia and the Far East.

 

He said that Russia would diversify its trade away from Europe (60% currently) to ensure that by 2020 half of it comes from Asian-Pacific region (currently 20%). Gazprom aimed to sell over 50% of its output to Asian countries This new orientation would help stabilize and hopefully increase the Russian population in Siberia and the Far East.

 

At the summit Putin also sought to position Russia as part of the new dynamic Asian-Pacific region and contrasted it with the difficulties of ‘other developed economies’ – a clear reference to the troubled Eurozone. The Russian media picked up on this theme with Vedomosti noting how Putin demonstrated 'in every possible way' the reorientation of Russia’s interests from Europe to Asia. 

 

Putin also plugged the Eurasia Union (Customs Union and the Single Economic Space involving Belarus and Kazakhstan) as a 'bridge' between Asia and Europe He referred to the FTA talks between the Customs Union and New Zealand as a model for other Asian countries. He also looked forward to new transport opportunities by moving trade from the sea to land. With Russia as a new transit hub he forecast that traffic could increase fivefold by 2020. He hinted that Asian countries support this new role for Russia but was silent on the sources of the massive financing required.

 

The Russian president defended his stress on the Eurasia Union by saying that regional integration was the obvious way forward given the difficulties of concluding a global trade deal. In a clear contradiction of the summit declaration he also called for rules to be agreed on ‘fair protectionism’ during periods of acute crisis.

 

Summit

 

The results of the Vladivostok Summit were very limited. The final declaration talked of fighting protectionism, combating corruption, tackling poverty; protecting the environment; reducing energy consumption, stabilizing food prices and even supporting the Eurozone. Obama had a good excuse not to attend with the election campaign – he sent Hillary Clinton instead. There was the usual round of bilateral meetings. Putin met Hu Jintao and Japan’s prime minister Noda. In an effort to rekindle talks on the islands dispute Noda will visit Moscow in December.  Gazprom also signed a deal with Japan to cover the supply of LNG.

 

Conclusion

 

With the upcoming US presidential elections and the change of leadership in China this was inevitable going to be a summit unable to take major decisions. Putin, therefore, seized the opportunity to try and portray Russia as the new bridge between Europe and Asia. But the gap between vision and reality is huge. Siberia and the Russian Far East are virtually empty. The locus of Russian trade and economic activity is Europe and it is difficult to envisage how this can be changed without pouring enormous resources into what could become a bottomless pit in Siberia. It is most unlikely, therefore, that there will be any real Russian pivot towards Asia.