Task Forces

19.04.2017.

FROM THE PIVOT TO THE EAST TO GREATER EURASIA

Sergei Karaganov,

Dean, School of World Economy and International Affairs,

National Research University—Higher School of Economics,

Honorary Chairman of the Presidium of the

Council on Foreign and Defense Policy

 

FROM THE PIVOT TO THE EAST TO GREATER EURASIA

 

Global Context

The current round phase of Russia’s pivot to the East was conceived in the second half of the 2000s as a largely belated economic response to the rise of Asia, which opened up a plethora of opportunities for the development of the country and primarily its eastern regions. This rise offered a chance to turn the territory beyond the Urals and the Russian Far East from predominantly an imperial burden or rear in the confrontation with the West, and sometimes the forefront in the rivalry with Japan or China, into a springboard for the development of the whole country.

The pivot was also motivated by anticipations of an likely economic slowdown in Europe, Russia’s traditional partner, and increasingly complex relations with it and the West in general. The need for diversification of economic ties and external sources of development became more obvious.  

These assessments were backed up by a number of strong tendencies that had developed in the past decade. Firstly, the “world order” the West had been trying to impose upon other nations since what it apparently considered its final “victory” in early 1990-s began to fall apart and slide into a crisis.

Secondly, relative deglobalization and regionalization of the world economy and politics had manifested themselves quite palpably.

Thirdly, there had developed a growing tendency, connected with the previous one, to politicize economic relations, which made mutual dependence and dependence on any one market less lucrative if not entirely dangerous.

Finally, the “Asia for Asia” paradigm replaced the “Asia for the world” one as Asia and China in particular began to rely in their development increasingly on the domestic and regional markets. In parallel, ideological and spiritual emancipation was gaining momentum in once great Asian civilizations that had fallen into colonial or semi-colonial dependence from the West in the past two centuries. Asian countries absorbed many Western achievements, took advantage of the liberal world economic order created by the West, became stronger and began to demand a suitable place not only on the strategic map of the world, but also on the ideostrategic one.

 It was obvious that the United States had become tired of its burdensome role of global hegemon and would inevitably step back, albeit temporarily. In fact, Barack Obama vowed to place more focus on internal renewal, but the old elites and inertia did not allow him to veer away from the costly and ineffective policy of interventionism. Donald Trump has only stepped up this inward refocusing. The United States has turned into a dangerous amalgam of residual interventionism and semi-isolationism, increasingly seeking to create its own center and abandoning some of the disadvantageous international obligations.

Something like a bipolar world has begun to emerge out of a multipolar world with its inherent chaos, with the U.S. being one center and Eurasia, the other. China appears to be its economic center. But the Eurasian center can only be viable if China does not claim hegemonic status in the region.

One way or another, having turned to the East, Russia has opened up many new, previously unexpected, opportunities.

 

First Results

Russia’s pivot to the East, which was declared many times but actually began politically and economically in 2011-2012, has largely occurred. Despite the decline in Russia’s foreign trade and devaluation of the ruble, trade with Asia is on the rise again and its share in the country’s external trade turnover keeps growing.  

Russia is rebalancing the unbeneficial and unbalanced structure of its foreign trade that developed during Soviet times and the subsequent collapse an chaotic reconstruction when the country swapped its energy resources for relatively expensive but economically less effective goods from the West, primarily Europe. Diversification of foreign trade will give Russia better positions in economic and political bargaining, shifting the balance in its favor.

Russia’s eastward export flows include not only hydrocarbons but a growing amount of agricultural and other water-intensive products, and weapons.

There has been a significant increase in investment, so far mainly from China, exceeding $30 billion or probably even $40 billion. Trade and investment will further be boosted by a series of macro energy projects and the Free Port of Vladivostok project which encompasses most of the seaports on Russia’s Pacific coast. There are also 15 advanced development territories operating in the country.

Russia and China have built allied relations de facto but not de jure, but they are increasingly complemented and balanced by stronger ties with Japan, Vietnam, other ASEAN countries, India, South Korea, and Iran.

Instead of anticipated rivalry in Central Asia, Moscow and Beijing are pairing or integrating, albeit slowly, the Silk Road initiative and the Eurasian Economic Union.

Russia’s policy in Asia is becoming comprehensive and strategic in nature, but there is still a long way to go.

The depopulation of the Russian Far East has slowed down and may stop completely in the years to come.

Naturally, the economic pivot has been slow because of the accrued inertia, including economic mentality, the sluggishness of the Russian government agencies, corrupt elites, but most importantly because of economic stagnation and a weak investment climate, primarily for Russian small- and medium-sized businesses. Siberia has yet to become a land of economic freedom. This is what drove its development in tsarist times. We do hope that there will be no new GULAGs or relocation of industries there as it happened during World War II.

         The government has so far did not deliver on its decision to move the head offices of major corporations and federal agencies to the Far East. And we believe it would be prudent to create a third, Eastern or Pacific, capital of Russia in the region.

         As said, there is a long way ahead. But the most important transformation has already occurred―the Russian ruling elite has changed its geostrategic and geoideological orientation. For more than 300 years, despite the continuous eastward expansion, our elite considered its country a periphery of Europe, attracted or inspired by it. Europe graciously supported this urge, seeking to get economic and political concessions from an aspirant, and often did. The latest example is the abortive effort by the old Soviet and young Russian elites to become Europe’s apprentice and play by its rules.  

         But Brussels’ democratic Messianism and attempts to impose new, often post-European, values discouraged Russia’s European aspirations. This tendency increased in the late 2000s as the European Union grew weaker from within.  

         But, clearly, a key factor in persuading the biggest part of the Russian elite to turn away from Europe was the greedy and reckless neo-Weimar policy that propelled Western alliances farther east into the territories which Russia considers vitally important for its security and for which the Russian Empire and the Soviet Union sacrificed millions of lives. This policy upset plans to create a sustainable system of all European security, a Common European home, or the Union of Europe.  

         Tension and mutual estrangement built up gradually, finally culminating in a dramatic deterioration of relations in 2013-2014.

         Sanctions imposed in order to put pressure on Russia but even more so to stop the disintegration of the European Union by creating “an external enemy” exposed the risk of excessive dependence on the European market and pushed Russia towards new markets in the East.  

         The drift away from Europe continued on the ideological level: old anti-Western and anti-European proponents of Eurasian integration were partly sidelined by former Westernizers. Some of them started to prophesy that “Russia is not Europe,” another part of the elite retorted that no other country but Russia was the “true” Europe, while still others did not go that far but advocated temporary cultural and political estrangement, as leading Russian international relations experts Fyodor Lukyanov and Alexei Miller put it. 

         The question of Russia’s cultural positioning vis-a-vis Europe has not been decided yet, even though the general direction is quite obvious.

         But the most crucial changes have occurred in politics and geostrategic thinking, and they become increasingly manifest in the economy as well. Russia, which used to consider itself a European province, began to view itself as a central Eurasian or probably northern Eurasian power. Eurasia in Russia’s modern geopolitical rationale also includes the western part of the continent and is no longer anti-European as it was construed by old Soviet and Russian Eurasianists.

         Russia’s new geopolitical and geoeconomic self-identity means liberation from the moral and political dependence on the West, qualitative strengthening of positions in the dialogue with the West. But Russia has no plans to give up cooperation with European countries where it can be beneficial for this would be not only economically harmful but actually impossible and ideologically dangerous, threatening the identity of most Russian people who consider themselves Europeans even if they do not like many of the things in modern Europe which is turning into post-Europe by giving up a considerable part of its core values that were believed by Russian as their own.

         Based on the assessments and forecasts of geoeconomic and geostrategic tendencies as well as the first results of the economic, political and mental pivot to the East, Russia has proposed creating a partnership of Greater Eurasia. This idea was officially supported by the leadership of Russia and China and became a bilateral initiative open to other countries.  

         Russia’s new Asian policy will be closely intertwined with its second, European, third, southern, and fourth, Northern or Arctic, dimensions, and naturally with the American one to the extent possible, of course.   

         It would be beneficial for Russia and Russians to cooperate with other European countries and Europeans on a new level and a new basis. Europe is our customary partner and a comfortable supplier of technologies and goods.

         A new rapprochement with old partners is greatly facilitated by Russia’s latest foreign policy successes: the deadly expansion of Western alliances was halted in Ukraine, albeit belatedly and at a high cost, and the senseless regime change rush was stopped in Syria. Russia has cast off the fetters of a semi-Weimar and defensive country to play its habitual role of a victorious power with regained self-confidence.

 

Greater Eurasia

A partnership or community of Greater Eurasia is, first of all, a conceptual framework that sets the direction for interstate interaction on the continent. It should be aimed at fostering joint economic, political and cultural renewal and development of dozens of Eurasian countries, which were largely backward and suppressed in the past, and turning Eurasia into a center of global economy and politics.  

It will encompass East, Southeast and South Asian countries, central Eurasia, Russia, and apparently a bigger part of the European subcontinent, its countries and their organizations to the extent to which they may be able to develop constructive cooperation.

Secondly, Greater Eurasia is an emerging geoeconomic space engendered by the “Asia for Asia” tendency, China’s westward turn and integration with the Eurasian Economic Union, and Russia’s pivot to the East.  

 A key factor in the development of Greater Eurasia is an accelerated creation of transcontinental transport infrastructure, including East-West routes, and more and more of the North-South ones, which for the most part remain underdeveloped and hinder further growth.

Thirdly, it is an area of civilizational cooperation reemerging after a centuries-long hiatus. It was symbolized by the cultural dimension of the Great Silk Road that embraced the great civilizations of China, India, Persia, and the Arab Near East and connected them with Europe via the Eastern Roman Empire-Byzantium, Venice, and Spain.   

Fourthly, Greater Eurasia means a movement towards a new geostrategic reality―a pan-Eurasian area of development, cooperation, peace, and security called upon to overcome the remaining Cold War-era divisions, prevent new ones, and regulate disagreements and tensions between member states. Its most important possible function is an “immersion” into the network of China’s ties, cooperative relations, balances, and agreements in order to keep it from turning into a potential hegemon against which other Eurasian countries will inevitably close ranks and invite external balancers that are less interested in preserving peace and stability on the continent. At the same time, Greater Eurasia should be open to the rest of the world, another major center emerging around the United States through APEC and similar forums, Atlantic structures, and a Russia-China-U.S. trialogue we recommend for addressing global problems and international strategic stability issues.   

Greater Eurasia should form on the basis of traditional values enshrined in international law and the normal rules of international life, and reject universalism, supremacy of certain values over others, and a priori rightness or hegemony.  

The principles upon which Greater Eurasia (and ideally international relations in general) should be built include:

– Unconditional respect for sovereignty and territorial integrity; rejection of the policy of hegemony, diktat and threats; mutual efforts to maintain peace and stability under the UN auspices; 

– Unconditional respect for political pluralism and the freedom of political choice for people on the continent; refusal to interfere in the internal affairs of each other;

– Economic openness, reduction of barriers to international trade and investment which undermine mutual dependence and “plus-plus” economic cooperation that benefits all;

 – Refusal to create new military alliances and expand existing ones; all-round support for neutrality and non-alignment; security guarantees to countries that have chosen to follow this path;

– Commitment to creating a pan-continental system of development, cooperation and security from Jakarta (or Tokyo) to Lisbon which would cover and make up for the failed pan-European security project, and offer a new format for resolving disagreements in Europe, along China’s borders, on the Korean Peninsula, and in the Middle East;

– Commitment to maintaining military-political stability and preventing conflicts as an imperative prerequisite for development and prosperity, and eventually for ensuring universal human rights;

– Commitment to preserving and developing the diversity of cultures, creating new ones and restoring historical cultural ties; moving towards peace, cooperation and mutual enrichment through a dialogue of Eurasian civilizations;

 – Protection of human rights inseparably from the rights of societies and the states.

Greater Eurasia is also a conceptual framework for Russia’s forward-looking geostrategic and geoeconomic self-identification as the center and the north of the rising continent, one of its transport and economic hubs and a key security provider. Owing to its centuries-old experience of cooperation with both the West and the East, peaceful co-existence of many different religions, and openness of its culture, Russia is destined to play a central role in forging and restoring cultural interaction in Eurasia. But Russia will not give up its precious European cultural roots and will keep cultivating them.  

 Greater Eurasia is a conceptual framework for a joint project or, to be more precise, many projects of its member states and their organizations willing to pursue a common goal of building a continent of development, peace, and close cooperation. In its initial stages, a leading role should belong to the Russia-China tandem? whose leaders have officially supported the Greater Eurasia partnership concept. Now the concept needs to be fleshed out in a multilateral format.

This conceptual framework permits to study while using the abovementioned tendencies to direct the efforts of countries, organizations and dialogue formats towards forming and formalizing a new geoeconomic, geopolitical and geocultural reality―a partnership and subsequently a community of Greater Eurasia. The Shanghai Cooperation Organization (SCO) appears to be a natural negotiation platform for that, provided it becomes more dynamic and open and turns from a purely regional construct into an organization of organizations, a forum for discussing problems. Dialogues between the SCO and the European Union and between the Eurasian Economic Union and the EU could also be helpful. Work can start on the expert level and continue in an expert-political forum for Eurasian development, cooperation and security. But it would be much more convenient, of course, to use an existing organization (provided it continues to evolve) than create a new one that has no institutional basis.

Naturally, creating a new structure on the basis of the SCO (if it thrives and evolves) will require effective joint efforts of its members, primarily Russia and China, whose previous activities in the organization were restricted by their attempts to restrict each other in the economic (Russia was apparently wary of China’s dominance) and security (China presumably opposed Russia’s leadership) fields. Presently, development is hindered by disagreements between India and China. There should be a new format that would overcome old differences. Joint efforts to build a partnership of Greater Eurasia could be such a format. It will require all sides concerned to pool their efforts and competitive advantages for their common benefit. 

 

A Road Map for Tomorrow

The progress achieved in the “pivot to Asia” should be followed not only by further development of existing projects but also by new ones. But before that it would be necessary to once again make an in-depth analysis and prognosis of Asian and Pacific markets in order to channel investments, quite modest for the time being, into industries whose products will sell well for a long time.

The pivot to Asia should be tied in with a currently nonexistent strategy of Russia’s economic recovery and development.

For example, it is quite possible that an infrastructure investment boom in Trump’s America and China’s possible massive financial commitments to these projects may boost demand for metals and other energy-intensive commodities traditionally exported by Russia. At the same time, demand for coal is likely to decline in Asia and the rest of the world, and this requires a major overhaul in the coal industry and enormous transport flows associated with it. The pivot to Asia needs to be intensified also because Russia started it belatedly and lost huge profits due to the economic and intellectual turmoil of the 1990s and the early 2000s.

 In addition to the development of latitudinal infrastructure, priority attention should also be paid to North-South transport routes that would hook up not only the Russian Far East but also central and western regions of Siberia and territories around the Urals to the rapidly growing markets in Western China, Iran, India, and Pakistan.

Despite the current slowdown in integration processes in EEU caused by the economic crisis, it needs a new long-term agenda. It could be a common transport and trade policy or integration into a common area of Greater Eurasia on the best possible terms and participation in the development of its standards and rules.

It is necessary to create multilateral technological alliances with different countries both in the west and the east of the continent. Most high-tech industries cannot develop if they focus entirely on the domestic or even allied markets. Technological alliances are also needed for preempting risks of possible further politicization of the world economy, primarily, but not entirely, by the West.

The progress achieved in the pivot to Asia also requires Russia to think about what exactly it expects and demands from its Asian partners. There are elements in the growing cooperation that do not satisfy Russia, such as persisting barriers to many of its goods and investments as well as bureaucratic and political hurdles.

Finally, Russia should decide how and if it is going to participate in integration associations in Asia and the Pacific. The Trans-Pacific Partnership has so far proved abortive. But there is the Regional Comprehensive Economic Partnership led by ASEAN and China and embracing most of the countries in the region. Faced with predicaments in working out a common position and a lack of expertise, Russia and the Eurasian Economic Union have so far abstained from negotiations, giving priority instead to a network of bilateral free trade areas. But it is not clear whether such “abstention” can be beneficial in the long term.   

A separate set of tasks concerns the vector of Russia’s foreign-policy and military-political participation in Asian and Pacific affairs. With many old conflicts resurfacing in the region, America most likely set to increase its containment policy against China and play upon differences among regional states, and perhaps most importantly, with Beijing’s neighbors getting truly concerned about its growing power, notwithstanding its actual policy and intensions, Russia could play a constructive role as an experienced actor with powerful diplomacy and friendly relationships with the majority of countries. All the more so since there is no well-established and stable security system in the region yet.

Objectively speaking, Russia is potentially the biggest security provider in the region and the world at large through strategic deterrence and dialogue (latter is virtually nonexistent now) with the United States and eventually through a Russia-China-U.S. trialogue, if the sides ever come to realize the need for it.

Russia and China will also have to deepen their “comprehensive, equal and trust-based partnership and strategic cooperation” which is close to allied relations but lacks strong ties on the middle and grassroots levels, particularly among businesses, but most importantly it lacks “strategic depth,” that is, a common long-term co-development goal.   

Interaction to create a partnership or community of Greater Eurasia could become such a goal for both states as well as all Eurasian countries.  

The road map for building the partnership may include the following elements:

– Developing a coordinated transport strategy for Greater Eurasia;

– Creating a system of rating agencies;

– Supporting the development of the Asian Infrastructure Investment Bank and other regional banks, and a system operating in parallel with SWIFT and  excluding the use of the latter as an economic weapon in order to make the global financial system more stable;

– Expanding trade in national currencies, creating independent payment systems;

– Creating an economic information center operating alongside and in cooperation with the OECD;

– Creating a Eurasian mutual assistance network, possibly an organization, to intervene in case of emergency (increasingly frequent lately), climate catastrophes and industrial accidents, as well as post-crisis reconstruction. Syria could be a possible pilot project for the latter;

 – Creating a comprehensive and independent information and analytical mega agency combining information collection and dissemination with analysis, a sort of a mixture of Al Jazeera or the BBC and Stratfor, tentatively called Eurasia News. It could allow countries in the region to gain greater intellectual independence and better resist increasingly politicized information flows.

The purpose of creating such an information and analytical agency is, among other things, to develop a theory of international relations focusing on new realties and the future, and reflecting the interests of Eurasian countries.  

This means, for example, interaction and interpenetration of civilizations instead of their conflict, infinite and recurring development of humankind instead of the end of history etc.

  – Working together in order to restore the historical and cultural narrative shared by all Eurasian states – from the history of the Genghis Khan and Mongol Empire to the economic and cultural phenomena of the Great Silk Road and the Byzantine Empire that fused Asian and European cultural patterns and preserved European culture during its decline. Add the role of Venice as the gateway to Asia and a reassessment of crusades. The purpose is to restore and mold a single historical and cultural identity of Eurasia and the world and complement the predominantly Euro-centric narrative of global history that continues to prevail worldwide;

– As far as security is concerned, it would be advisable to create a continental security system in addition to the existing formats that would partially and gradually replace outdated structures (such as the OSCE). The prevailing way to ensure security in Greater Eurasia should be non-alignment or neutrality guaranteed by the leading international players (above all by Russia, China, and the United States).

The first step towards building such a security system could be, as mentioned, an expert, and subsequently expert-political, forum for cooperation and security in Greater Eurasia.

While building Greater Eurasia and advancing its own pivot to Asia, Russia should definitely think about relaunching interaction with its traditional partner, Europe, on a new political, economic and conceptual basis. This is all the more relevant now that the continuing European project crisis prods many countries on the old subcontinent into revising their counterproductive policy towards Russia. European countries are also contemplating their own “pivot to the East” and many of them have already outrun Russia.      

There is no clarity at this point on how Russia should reset its European policy as the situation in the west of Eurasia remains ambiguous. But there is clearly an objective need for such a reset.

 


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