Russia’s turn to the east did not start now, nor is it only about the “special relationship” it has developed with China, which has grown closer amid the war in Ukraine, the rift with the West and the imposition of sanctions. On the contrary, it has been Russia’s priority for over a decade.
This has as much to do with Russia’s attempt to develop an alternative grid of economic transactions, bypassing the “Collective West” ie North America, the EU, Oceania and Japan, as it does with simple questions of geography.
We tend to think of Russia as a quintessentially European country, but we overlook how much of its land, wealth, and economic activity lies on the other side of the Urals and all the way to the Pacific Ocean.
All this shows the importance of the Eastern Economic Forum which took place in Vladivostok on September 10-13.
Putin: the importance of the Russian Far East
As Vladimir Putin himself recently emphasized, speaking at the Eastern Economic Forum in Vladivostok, the Far Eastern Federal District includes 40% of Russia’s land area, about half of its forests and gold reserves, over 70% of fish and diamonds, over 30% of titanium and copper reserves.
At the same time, the Russian president underlined that Russia’s trade with the wider Asia-Pacific region increased by 13.7% in 2022 and in the first six months of 2023 it has already increased by 18.3%.
At the same time, the Russian president underlined that thanks to the actions of the Russian government, investment agreements worth more than 7.7 trillion rubles have been signed, of which 3.4 have already been invested, that 125,000 jobs and 700 new jobs have been created in the Russian Far East businesses, including some very large projects such as one of the largest natural gas processing plants in the Amur Region, but also large investments in food processing, shipyards and wind turbines. According to Putin, fixed capital formation in Russia as a whole increased by 13%, but in the Far East the corresponding increase was 39%.
At the same time, Putin underlined the importance of the mineral wealth of the Russian Far East, as only 35% of the subsoil has been explored. At the same time, he recognized that one of the biggest challenges this region will face is that of energy. That is why he underlined the need to move forward with plans to integrate Russia’s western and eastern pipeline network, starting with the integration of the Power of Siberia pipeline and the Sakhalin-Khabarovsk-Vladivostok pipeline and then integrating it with the rest of the network. This will be combined with the acceleration of plans to transport LNG with the plan being to increase LNG production in the Russian Arctic by 200% to 64 million tonnes a year.
All this, Putin underlined, will be reinforced with other infrastructure projects and the offer of similar financing.
The importance of the wider Far East for Russia
But the forum was not just about the situation in the Russian Far East. At the same time, it signaled the importance that Russia attaches to economic relations with Asian countries.
It is characteristic here that China has increased its economic presence and is currently the most important investor in the Free Port of Vladivostok. For its part, Russia uses its railway network as well as its shipping to be able to form a connection between the Northern Sea Corridor and Southeast Asia. Let’s not forget that the Arctic is home to 80% of Russia’s natural gas, 20% of its oil, 30% of its land area, 15% of its GDP, but only 2.5 million people live there.
The closeness of time between the Vladivostok forum and the visit of North Korean leader Kim Jong Un points precisely to how the shift to the East is not only about security and a potential defense cooperation of Russia, China and North Korea, but also about the economy . It is no coincidence that Putin, in the meeting between the two leaders, also emphasized economic cooperation in matters of transport, communications and logistics.
At the same time, Russia is investing heavily in various projects of large transport corridors in the wider region of Asia, such as the International North-South Transport Corridor, a key part of which will be the Russia-Kazakhstan-Turkmenistan-Iran corridor which is expected to be completed in 2027. Accordingly, Russia and India are considering the Eastern Sea Corridor, i.e. the Vladivostok – Chennai route.
All of this is combined with the long-standing open discussion on whether alternative (and external) payment systems will be formed to the dollar, a discussion also taking place in the context of the Shanghai Cooperation Organization. Of course, this presupposes a move away from clearing transactions in dollars and euros, especially on the part of India, which also currently has a very large share of the global digital payments market.
In any case and regardless of individual problems and contradictions, Russia east of the Urals feels much less “isolated” and the concept of a “multipolar” world seems more real the further east we move.
