25.10.2016.

From East to West, or Greater Eurasia

SERGEY KARAGANOV
Dean of the School of World Economics and International Affairs, The National Research University Higher School of Economics

Distinguished officials attending the Eastern Economic Forum recently held in Vladivostok argued at one of its sessions about who was actually the author of the idea of Russia’s pivot to the East. I am glad they did, because I have long been advocating Russia’s economic push towards the growing Asian markets. The discussion became yet another proof that the pivot not only took place but was actually gaining momentum; at least in the minds of the Russian elite. Victory has a thousand fathers, but defeat is an orphan. It will take some time before similar changes take place in the minds of other Russians whose mentality got stuck somewhere in Soviet times, when Asia was generally perceived as something dirty and backward and China was viewed as nothing short of a real threat, or maybe in the 1990s, when we were daydreaming about that the West would come and rescue us and not only nearly ruined our own country but also missed the rise of the East.
A lot of data proudly cited by the Ministry for the Development of the Russian Far East clearly show that the pivot is getting momentum. Investment into the region has exceeded 1.1 trillion rubles in 2016 and another trillion is expected next year; 66,000 new jobs have been created; 14 advanced development territories offer very beneficial terms of investment (quite regular by general standards but rather unique for Russia); most ports in the region have joined the “Free Port of Vladivostok” program, enjoying substantial (actually quite normal by regional standards) privileges. The Fund for the Development of the Russian Far East and the Agency for the Development of Human Resources, Investment and Export Support have become operational. Key laws and a modernistic program for the development of the region have been adopted.
And yet there is still much to be done. The government should not only attract investors but should also offer them a clear foreign economic strategy, based on forecasts (albeit increasingly negative) for the development of the world economy and Southeast Asian markets, in order to create new production facilities for future markets or fit into the emerging technological chains. Otherwise, investments will be useless or loss-making, or, at best, will be directed at the domestic market, failing to boost export and secure access to new markets and external resources needed for development amid shrinking global demand, especially in the old markets.
One may be delighted by a relative increase in Russia’s trade with Asia and by the fact that China is now our number one trade and number two investment partner, but it is time to start diversifying our trade with Asia, too, in order to avoid excessive dependence even on friendly China. Such dependence will weaken Russia’s political positions and cards for economic bargaining. Japan, South Korea, and ASEAN countries can provide modern technologies and financial resources, but most importantly, the freedom of maneuver both in the East and in the West.
The latest Russia-ASEAN summit was quite successful and produced a number of agreements which now need to be fleshed out with economic and, possibly, military-political content.
Progress has also been made west of the Russian Far East. Instead of a clash between the two countries in Central Asia, which many in Russia and China feared, but many outside the region desired, Moscow and Beijing have agreed to "pair" their One Belt, One Road project and the Eurasian Economic Union.
The two countries are now discussing concrete integration details. (As far as I know, the notion of ‘pairing’ of the two initiatives was first proposed by Russian diplomat Igor Morgulov). An agreement has been reached, albeit somewhat belatedly, to create a railway link via Azerbaijan to Iran and India which are set to grow rapidly in the coming years.
But Russia needs to do more in order to achieve the best possible geo-economic and geopolitical position as a center and a link for Eurasia, and to act as a friendly and constructive counterbalance to China to make sure it does not become “too strong” or turn into a potential hegemon scaring its neighbors.
Finally, as the de-globalization gains momentum, the world economic order becomes increasingly fragmented, and the United States increasingly tends to use economic interdependence and economic ties as a weapon for achieve own political gains, it would be vital for Eurasia to avoid these hazards and, hopefully, become the cradle of a new fairer and more stable world order that would replace the crumbling old one.
The world order the United States attempted to build after the collapse of the Soviet Union on the basis of the West’s political, economic and ideological hegemony predictably proved unviable. It started to crumble quite rapidly from the middle of the 2000s both because the West made mistakes, often criminal, like the aggression in Yugoslavia, Iraq, and Libya, and simply because it felt heady with success from what looked like its final victory. All this resulted in imperial overstrain in the United States and a series of blunders or inaction in the European Union when action was critically important, eventually leading to a deep hopeless crisis with no end in sight.
Part of European elites are seeking to hold their melting down union together by trying to consolidate it through anti-Russian rhetoric (now that the policy of sanctions has proved futile, the EU keeps them in place solely in order to show its “unity” under German leadership and also demonstrate Berlin’s loyalty to Washington). But this is too flimsy a basis to keep the union from falling apart. All thinking Europeans can see this quite clearly, but have no solution at hand, and they also foresee an inevitable U.S. withdrawal from Europe, even though with hesitation and even lingering attempts to revive confrontation. Europeans need a chance, at least theoretical, to find a constructive way out of their current impasse.
The crisis of the world order, which the West tried to impose since the 1990s, was badly aggravated in the 2010s when it was challenged, rather straightforwardly by Russia and less so by China and other new leaders but still quite openly, as unfair, disadvantageous for them and dangerous for the world, and, on top of it all, dysfunctional. That’s when new alternative was proposed.
Russia and China came up, jointly and officially, with the concept of a Greater Eurasia partnership or community as a common space for economic, logistic and information cooperation, peace and security from Shanghai to Lisbon and from New Delhi to Murmansk.
In the 19th century Russia extended Europe to the Pacific Ocean. The houses previously occupied by Russian-German and Russian-Dutch companies and banks remain a real adornment to the streets of Vladivostok, Khabarovsk and other Siberian cities up till now.
Nowadays, Russia has an opportunity to reap political and economic benefits from acting as another channel or maybe even a center for integration between rising Asia and Europe, which is still wealthy and technologically advanced but withering in its crises.
But most importantly, it has a chance to gain a new status, not that of European periphery with possessions in Asia, but as an Atlantic-Pacific power committed to the future, as one of the centers in rising Greater Eurasia.
Naturally, a leading role in a new community (if other arguments are still needed) will require Russia to pursue an active policy of economic and technological development. Yet from the very start it will have to be fit into the Eurasian framework and technological chains. In Greater Eurasia, Russia can produce and supply, together with old and new partners, a few high-tech goods, foods, water-intensive products, and a variety of raw materials processed to deep levels. But more importantly, it can become the main security provider on the continent, which it already does, essentially remaining unrecognized in this capacity but angering the “old” leaders by doing so.
The concept of Greater Eurasia can also help solve European security problems created by the expansion of Western alliances and Russia’s natural reaction to that, and unresolvable within the old framework. Real security challenges facing the European subcontinent (apart from residual confrontation which some are trying to revive) such as immigration, terrorism, religious extremism, growing economic inequality or mass unemployment among young people can only be solved if addressed continent-wide.
Clearly, a community or partnership for development, cooperation and security in Greater Eurasia is a joint project of all states wishing to participate in it. Its contours will be adjusted by real life and the search for ways to deal with old and new challenges.
The following elements of geo-economic and geopolitical architecture of Greater Eurasia, a project initiated by Russia and China, appear to be obvious, at least for me, at this point.
Geographically, the project is likely to encompass countries that participate in the Shanghai Cooperation Organization (SCO), the Eurasian Economic Union (EEU), ASEAN, countries involved in the integration of the Silk Road and the EEU, probably including Turkey, Iran, Israel, Egypt, and a new economic space to be created along with the Regional Comprehensive Economic Partnership promoted by China and ASEAN with India, Japan, and South Korea. Russia and its EEU partners will have to decide how they should join in the process of building this soft economic grouping.
Organizationally, Greater Eurasia will, and obviously should, be based on the coordination of several economic and political projects such as the SCO, the EEU, other organizations and rapidly multiplying financial institutions in Eurasia, possibly with the EU eventually hopping on the bandwagon too. The SCO can act as a binder in this construction, with a greater number of observer states and, most importantly, with standing committees and negotiation forums to be created within it to liberalize trade, coordinate technical standards, and economic, financial, and security policies, including the fight against terrorism and cybercrime, as well as migration control efforts. The SCO may also need to create a court of arbitration to resolve economic and political disputes.
A partnership or community of Greater Eurasia should be based on enlightened and realistic principles. These include the following:
Commitment to higher wellbeing of all member states, to be achieved, among other things, through a gradual movement towards a pan-continental free trade area;
Support for a free, that is, liberal, continental and global economic system, and for efforts to prevent its fragmentation and politicization;
Cooperation based on a positive-sum game beneficial for all;
Unconditional respect for the state sovereignty and territorial integrity of all countries making up the community and the world as a whole;
Equally unconditional respect for political pluralism, the right of each nation to choose its own path for development and a way of life, support for freedom from external interference, for cultural pluralism, faith and religious tolerance. The peoples living on the continent and in the rest of the world may one day come up with different versions of one political model, that is, leader democracy. (I borrowed this thought from respected Russian foreign affairs expert Fyodor Lukyanov). Or there may never be any common model at all;
Resistance to the policies of force used to create new or revive old military-political alliances and divisions;
Commitment to cooperation in solving continental and global problems such as environmental pollution and climate change, using advanced, including European, practices.
These are not new principles. They are prompted by common sense and declared in various ways by the UN Charter and other international organizations. The problem is that they are not enforced. The progress of mankind and the world may be reversed by regress, wars and intolerance.
We must make an effort to develop and strengthen these principles within Greater Eurasia at first and then try to extend them, through example and cooperation, to the rest of the world.
Naturally, this project is open to all countries and continents, and it should remain so. It should not seek to isolate the world’s biggest player—the United States. But it is up to America to make its choice. Decades ago it helped a large part of post-war Europe and defeated enemies to their feet, and played a key role in creating the modern global international economic system. But having opted in the 1990s for global hegemony and lost, it is now trying to take revenge. By acting in ways that objectively (and many think, with malicious intent) help destabilize many countries and regions, it has lost its bearings and is living through a political crisis (see Clinton-Trump).
But mankind cannot wait for America to stop fretting and fuming. Along with Russia’s firm action to deter the most dangerous manifestations of American policy, it is necessary to build a constructive alternative to the ruined bipolar world order and the crumbling unipolar one. A partnership or community of Greater Eurasia can and should become one of the key elements of this new world order.
English poet Rudyard Kipling wrote in his poem: “East is East, and West is West, and never the twain shall meet.” Those who have never read this ballad often cite it to say that a conflict of civilizations is inevitable. But at the end of his poem, Kipling says that they can come together by showing mutual respect for each other. There is no doubt that respect is a stepping stone to Greater Eurasia.