RUSSIA-ASIA: Bear Hug for Asian Tigers?

By IPS Correspondents Reprint | | Print |

Sergei Strokan

MOSCOW, Jan 31 1996 (IPS) - Suddenly, Russia is discovering what the rest of the world has known for some time: Asia is where future global economic action will be centred. It wants to get in on the action.

But broad geopolitical concerns partly underpin the thrust to embrace Asia’s ‘Tigers’ – as the region’s booming economies are called. Russia’s objectives are being cast here within a broad geopolitical framework of counterbalancing the influence of the West.

“The eastward orientation is Moscow’s strategic course for the coming decades,” Oleg Davydov, Russia’s vice-premier and minister of foreign economic relations told a meeting of the American Chamber of Commerce here recently.

He added that the policy thrust was approved by President Boris Yeltsin. Essentially, Russia will concentrate on building up trade with Asian economies, though he gave few details.

Davydov said longstanding ties developed with the region during the Cold War era should be an advantage when competing with the West in the Asian marketplace.

“Moscow’s turn to the Asia-Pacific is dictated by the firm conviction that the centre of the world trade will shift in the 21st century to this region, which already accounts for 4O per cent of world turnover,” said Davydov.

He said special attention will be devoted to building economic relations with China. President Yeltsin plans to pay an official visit to Beijing in March. He will sign a package of economic agreements. Davydov listed South Korea, India, Iran and Pakistan as other priority markets for Russian trade.

Davydov’s latest statement which touted Moscow Asian trade plans, further boosted his image as one of the staunchest advocates of cooperation with the countries of Asia-Pacific region. During a visit to Iran in late December, Davydov referred to Tehran as “Moscow’s strategic partner,neighbour and friend”.

That trip caused some consternation in Washington.

During Davydov’s visit, the two sides managed to solve a problem over trade payments that had long been a sore point since 1992 when both countries agreed to settle bills in hard currency basis. Trade with Iran reached 5OO million dollars last year and could skyrocket to between four and 4.5 billion dollars by year 2OOO, experts say.

Davydov’s announcement coincides with a number of factors indicating a clear shift in Russian foreign policy priorities away from the West following the results of the Dec. 17 parliamentary elections.

Communists and ultra-nationalists emerged as big winners in those polls, putting pressure on reformers and their agenda promoting change towards more market-oriented policies.

One of the first signs of change was the selection of Yevgeny Primakov to replace the pro-Western foreign Minister Andrei Kozyrev. A Middle East specialist with an academic background in Oriental studies, Primakov took ups his new job early January.

Observers say he is likely to place more emphasis on the relations with the East.

In another cabinet reshuffle, first vice-premier Anatoly Chubais, Russia’s privatization chief and the last remaining member of the neoliberal team in the Cabinet of Victor Chernomyrdin, was booted out in favour of former director of the “AvtovAZ” automobile plant, Vladimir Kadannikov.

Observers point out that despite all the excitement about trade with Asia, Russia’s trade with the West is still too substantial for a radical shift to occur.

Russian Deputy Minister for Foreign Economic Relations Nikolai Drozdov, quoted by Interfax news agency, said in 1995 Western Europe purchased 56 per cent of all Russian exports and supplied Russia with 48 per cent of its imported goods.

The United States supplied 2.6 billion dollars worth goods to Russia last year, or 8.6 per cent of total imports, and purchased 4.4 billion dollars worth of Russian goods, or 9 per cent of total exports.

Russia’s largest trading partner last year was Germany, followed by the Ukraine and the United States. Total foreign trade posted an 18 per cent gain by comparison with 1994 to reach 123.7 billion dollars, Drozdov said. The Asia-Pacific region currently accounts for nearly 25 percent of that.

Observers also note that the East has remained at the periphery of Russian foreign policy during the last four years. They have expressed serious doubt Moscow can now build up long-lasting relations with Asia-Pacific powers.

“All this lambasting the West and trying to play the Asian card by our politicians is more of a rhetoric, since Russia doesn’t have a proper strategy for the relations with the East,” Konstantin Sarkisov, Head of the Center of Japanese studies told IPS.

Sarkisov says that one of the clear signs that Moscow is lacking new vision of the region is its belief that it can make a breakthrough in the Asia-Pacific without normalizing its relations with Japan.

“Davydov, who mentioned South Korea and Pakistan, at the same time failed to list Japan among Moscow’s foreign policy priorities which Looks strange, Sarkisov said.

“It could be a grave mistake for the Russian policy at this stage to counterbalance its relations with the West to the links with the fast growing Asia-Pacific region. Asian giants, like China, India or Japan do not need Russia’s isolated, poorly integrated in the world economy.”

Alexei Puskov, director of Public and Foreign Affairs at the Russian Public Television (ORT) declared Russia needed to “become a civilized player at the world market, fully integrated into leading international economic institutions” before it could reach its long-standing goals in the East.