Russia underperforms at pivoting

High ambitions translate into disappointing irrelevance to the Asia-Pacific agenda

Pavel K Baev

Economics and finance, Trade and industry, International relations | Asia, East Asia, The World

2 September 2016

Russia’s declared pivot to the East has so far proved unimpressive in practice, with the outcomes falling far short of its ambitions, Pavel K Baev writes.

Vladivostok, which had an expensive facelift for the 2012 APEC summit, will this week host the Eastern Economic Forum, and President Vladimir Putin is due to preside over the proceedings. His goal is to reassert Russia’s commitment to playing a major role in Asia-Pacific geopolitics and to reinvigorate business ties with this dynamic region. The provisional results of Russia’s “pivot” to the East, launched two and a half years ago against the backdrop of the Ukraine conflict, are nevertheless quite disappointing. Not only has the volume of trade shrunk by about a third in this time, but Moscow’s ability to engage with the key issues on this hugely complex regional security agenda has proven to be lacking.

The main focus of Russia’s efforts was on upgrading the strategic partnership with China so that it would mature into something approaching an alliance. This hasn’t happened and the friendliness demonstrated by Putin and President Xi Jinping can barely mask the mutual disillusionment.

More on this: Can Russia put itself at the centre of ‘Greater Eurasia’? | David Lewis

Gas exports were supposed to constitute a new solid foundation for the partnership, but the implementation of the deal signed with great fanfare in May 2014 has been delayed, and the second deal connecting the Yamal gas fields with Xinjiang has been indefinitely postponed. Gazprom, Russia’s gas monopoly, is struggling with falling prices and profits – and cannot produce a design that makes new pipelines to China cost-efficient. Beijing has found it opportune to instead put some money into the Yamal-LNG project, but Russia’s entry into the competitive LNG market is set to be very narrow, so the “strategic” value of this enterprise is more in rewarding several sleazy oligarchs, who have direct ties to the Kremlin but are the target of Western sanctions.

The Chinese leadership is monitoring very keenly the trajectory of Russian economic recession in an attempt to gauge the price of sacrificing the goals of modernisation for the sake of geopolitical ambitions, as Russia did with the annexation of Crimea in March 2014. Beijing’s own geopolitical ambitions are centred on the South China Sea, and it was rather disappointed in Moscow’s impeccably neutral response to the verdict issued by the Permanent Court of Arbitration in The Hague on the case presented by the Philippines.

Seeking to redress this disloyalty in its partnership with China, Russia has agreed to partake in joint naval exercises in the South China Sea in mid-September, but the combat capability of its Pacific Fleet is weakened by the collapse of the contract with France for delivery of two Mistral-class amphibious assault ships.

Beijing has refused to send a high-level delegation to the Vladivostok forum and this has reminded Moscow of the need to diversify its ties to the Asia-Pacific, since its dependency on a partnership with China has become too obvious and one-sided. According to Russian media, the main hope is now pinned on the meeting between Putin and Japan’s Prime Minister Shinzo Abe, who comes to Vladivostok with promises to invest in the badly dilapidated infrastructure of the Far East. The deadlocked dispute about the South Kuril Islands, however, is set to remain a stumbling block and Putin has limited space for compromise on this matter, where “patriotic pride” remains a dominant driver.

Economic decline is a major disadvantage for Russia’s engagement with the Asia-Pacific, where growth is often seen as the main criterion for success, but there is also a pronounced shortage of political attention. Putin, for that matter, didn’t attend the ASEAN summit in Kuala Lumpur last November and is not going to go to the Vientiane summit later this month, sending Prime Minister Dmitri Medvedev instead.

This lack of interest is caused by a generally poor understanding of the political dynamics in the region, and even of policy-making in China, in the Kremlin, which remains predominantly Euro-centric in its plottings and prejudices. Paradoxically, the confrontation with the West caused by the Ukraine crisis has only sharpened this preoccupation because the Russian leadership has to focus its attention on countering perceived threats on its own doorstep – and on ensuring that the fortunes evacuated to “safe havens” in Switzerland and London are as secure as they could be against money laundering investigations.

Russia’s ambitions to claim a major role in the Asian concert may be genuine, but declarations about setting political priorities accordingly remain shallow, and the capacity for delivering on such high promises is non-existent.

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Baev, Pavel K. 2016. "Russia Underperforms At Pivoting - Policy Forum". Policy Forum. http://www.policyforum.net/russia-underperforms-pivoting/.

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