Thursday, October 30, 2014


Transmission

Russia Looks East, Yet Again

Russian workers weld a segment of the branch pipeline that runs into China from the Eastern Siberia-Pacific Ocean oil pipeline in 2009. Can Russia expand trade to China beyond natural resources?
Russian workers weld a segment of the branch pipeline that runs into China from the Eastern Siberia-Pacific Ocean oil pipeline in 2009. Can Russia expand trade to China beyond natural resources?
Moscow's efforts to develop its eastern regions over the last couple of centuries could be encapsulated in the rallying cry "Go east, young Russians!" But perhaps nowadays that might be rephrased as "Go east, young Uzbeks," according to EurasiaNet's Evgeny Kuzmin.

Kuzmin notes that more and more Central Asian migrants are heading to Russia's Far East in search of lucrative work opportunities.

Employers in the Amur regional capital Blagoveshchensk, a city of 220,000, say rising wage expectations of Chinese workers make it more cost-effective for them to employ migrants from formerly Soviet republics like Uzbekistan and Kyrgyzstan. China's rapidly rising prosperity at home is putting pressure on Chinese migrants to earn more and send more home to relatives. At the same time, traditional migrant labor markets for Central Asians in Western Russia, especially Moscow and St. Petersburg, are becoming glutted, prompting an increasing number to explore opportunities in the Far East.

"For sure it's the best option to make money in Moscow. But it's too hard to find a place there these days. There are too many of us Uzbeks over there already," said Batyr, a migrant from Uzbekistan who has worked for the past six months in Blagoveshchensk laying asphalt. It's not uncommon to encounter lots of Central Asians in the city these days, mainly in the construction sector. In other Far Eastern cities, including Vladivostok and Petropavlovsk-Kamchatsky, Central Asians have found work driving public buses.

And this is without mentioning other pressures making western Russia less attractive to Central Asians, including increasing official responses to antimigrant nationalism

But recently there has also been more typically Soviet-style talk of economic management and a "pivot to the Pacific" that Russia will use to take advantage of the rise of China and East Asia toward global economic dominance, especially following Russia's hosting of the regional APEC summit in September 2012.

Finance Minister Anton Siluanov told an International Monetary Fund session in October that special economic zones for timber and fish processing are being considered in areas near China along with tax incentives to spur investment.

"We are considering the establishment of similar economic zones in areas next to Chinese territories -- in order to set up manufacturing, especially of timber and fish, to attract investors with easy taxation measures," he said. "We are seriously concerned with encouraging investors to come to us in Siberia and the Far East."

Prime Minister Dmitry Medvedev chimed in, saying, "The Far East accounts for one-third of our territory, it is not only a unique area that boasts great natural wealth, but it is also an enormous and, unfortunately, poorly developed region, which is very important from an economic point of view."

Backing up the rhetoric, a top Russian official suggested in April that the headquarters of state-owned companies might be moved east, especially those exploiting natural resources. "Gas in Moscow is only in the kitchen, and therefore the head office of Gazprom should be moved to Tyumen," Federation Council head Valentina Matviyenko said.

But how much of this talk of Russia becoming a bridge between East and West is just wishful thinking? As Fiona Hill and Bobo Lo observe in "Foreign Affairs:"

For all its posturing about turning Russia into a hub of intra-Asian trade and cooperation, Moscow's strategic focus is still stuck on the West -- its population is mostly in the West, its economic ties are mostly to the West, and its official military doctrine remains fixated on the United States and NATO. That will remain true for the foreseeable future. Old patterns are hard to break, and even the most promising of the new efforts are proving difficult to sustain.

For example, even though Russia has developed significant oil and natural-gas resources on Sakhalin Island in the Pacific and built a major oil pipeline across Siberia to the Pacific coast, which also links to China, its oil exports to China make up just 6 percent of that country's imports. And despite agreeing to several trade deals for gas, Russia has yet to agree on any actual deliveries.

What's more, in seeking to develop its Far East, Russia is fighting the trend of the two decades since the collapse of the Soviet Union. The Primorsky region currently loses 15,000 residents per year, officially, and likely much more than that in reality. An area of 6.2 million square kilometers is now home to 6.2 million people, with 110 million Chinese on the other side of the border.

And all those Chinese across the border make Moscow nervous, notes Aleksandr Gabuyev in China's "Global Times:"

Since the middle of the 2000s, the Russian central government has taken several measures to limit Chinese presence in the Far East, and tried to replace foreign investment with large infrastructure projects like [the] APEC summit.

The attitude of locals in the Far East and Siberia toward Chinese is very mixed.

Younger and more competitive people would welcome more Chinese participation in the local economy. But large parts of the population fear a significant Chinese presence.

Bringing in Central Asian migrants to work in the region can only go so far. As Kuzmin says, the "influx of Central Asian migrants is reaching the point where local officials' comparative tolerance may start to dissipate." Locals are already beginning to complain about places in kindergartens for migrants' children and pregnant women coming to the region to have their babies, placing a strain on the health services.

"Over the long term, the economic and political gap between a dynamic China and a nonmodernizing Russia will be too wide for Moscow to bridge in the Asia-Pacific," Hill and Lo conclude. Will Russia's "pivot to the east" be doomed to do little more than spin its wheels?

-- Dan Wisniewski
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Comment Sorting
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by: Chris from: Ireland
August 06, 2013 15:08
Russia is a huge country with abundant resources of all kinds. Rich in potential engines for economic growth. Perhaps it will take the Russians more than a century to develop its Eastern provinces fully.

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Written by RFE/RL editors and correspondents, Transmission serves up news, comment, and the odd silly dictator story. While our primary concern is with foreign policy, Transmission is also a place for the ideas -- some serious, some irreverent -- that bubble up from our bureaus. The name recognizes RFE/RL's role as a surrogate broadcaster to places without free media. You can write us at transmission+rferl.org

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