Russia’s Foreign Policy in Northeast Asia

1. Russia’s Foreign Policy in Northeast Asia Mikhail A. Molchanov Associate Professor Department of Political Science St. Thomas University, Fredericton, Canada Visiting Scholar, Waseda University, Tokyo, Japan molchan@stu.ca

2. Grand narratives • Utopian globalism: Gorbachev • Primitive westernism: Yeltsin-Kozyrev • Eurasianism: Primakov (1995-99) • Pragmatism: Putin I • Nationalism/Eurasianism : Putin II • Back to pragmatism and global engagement?

3. Key Priorities • Sovereignty and territorial integrity • Reclaiming the status of a global power • Multilateralism/multipolarity (UN, UNSC) • Economic development • International and regional stability • Active neighborhood policies

4. Regional priorities • Integration in the framework of the CIS • Developing ties with the EU • Containing NATO’s growth • Reviving the Russia-US dialogue • The Asia-Pacific integration (APEC, ARF, SCO) • Strategic partnerships with China and India

5. Russia’s trade with North-East Asia Source: Goskomstat RF

6. Structure of foreign trade (%) Source: Federal Customs Service, RF

7. Trends in Russia’s foreign trade (%)

8. Largest reserves holdings 2007 WDI; IMF; Reuters; CIA; countries

9. Main security concerns • Expansion of NATO: Georgia, Ukraine • U.S. Ballistic Missile Defense (BMD) in Europe • Chinese demographic and economic expansion in RFE (unvoiced) • Political Islam, terrorism and separatism • Nuclear proliferation • Global economic vulnerabilities

10. Russian defense expenditure Source: SIPRI database

11. China’s growth Balancing or bandwagoning? US & NATO expansion Balancing/engaging Unrealized potential in relations with Japan Separating politics from economics The two Koreas The trade/security nexus UN/UNSC N Korea; Six-party talks Japan’s bid for UNSC G7/G8 Hokkaido Toyako summit Russia’s 2006 presidency SCO / CSTO APEC / WTO ASEAN /ARF ACD, EAS, others Regional policy driversBilateralMultilateral

12. Russo-Korean relations: Politics • Key concern – security • Denuclearization of the peninsula: the “Ukraine model” • Equal relationship with both Koreas • Conflict prevention (security cost) • Stability at the borders • Nuclear non-proliferation in NE Asia: Japan, ROK, Taiwan • Geopolitics and the balance of power • Reaffirming Russia’s relevance in NEA • Checking the US hegemonic ambitions • Soft-balancing China together with the South • Establishing spheres of influence in the North

13. Russo-Korean relations: Economy • Korea as Russia’s gate to NE Asia • The “Europe-Korea” railway link (TSR/TKR) • Unified energy system for continental NEA • Gas/oil trade, E&D (Sakhalin/Kamchatka) • A bridgehead to Asia Pacific • A market for high value-added exports • A partner in the development of RFE

14. Relations with Japan: Key areas • “Creative partnership” • Trade/investment/technology • Law enforcement, defense and security • Cultural and interpersonal exchange • Political dialogue, international cooperation, peace treaty • Problem issues • Japan’s “territorial claims” • Insufficient level of trade & investments

15. Trade grows 30-40% a year Reached $19 bln in 2007 Industry leaders started taking interest in Russia Automotive: Toyota (2005), Nissan-Suzuki-Isuzu (2006-07) Banks: Tokyo-Mitsubishi UFJ, Mizuho, Mitsui Sumitomo (2005-2006) Program of development of the Far East and Trans-Baikal region up to 2013 Russian sovereign funds look to invest in Japan Investment < 2% total cumulative $2960.4 mln direct $292.8 mln Sakhalin II: A traumatic experience for Japan The East Siberia-Pacific Ocean Oil Pipeline: A prolonged debate Skovorodino (China) first By rail to Kozmino Bay (Japan) second Japanese SME in Russia suffer from regulatory burden and corruption Relations with Japan: EconomyStrengths Weaknesses

16. China: “a relationship of trust” • Drivers: • First, Russia’s fear, then – admiration • Same vision of key global issues • Economic incentives on both sides • Resisting American hegemonism • Geopolitical positioning in the world and vis-à-vis each other • Super-task: emulating China’s success • Present goals: security, stability, regime preservation, rebuilding of the state, economic revival • Instruments: trade, political and military cooperation, strategic uses of state-led regionalism in Eurasia

17. Trade and investment • Trade: 2006 - $28.7 bln; 2007 - $40.3 bln, 41-48% growth/year • Goal – US$ 60+ bln by 2010 • Interregional ties: 70 out of 89 Russian provinces have direct contacts with their Chinese counterparts. • Good outlook for the future - $5.2bln in trade contracts in 03-10/2007, incl. $500mln to Russia’s machine building industry • Oil – 10 mln ton exported in 2007 (10% of Chinese demand, 4th place in the Chinese market after Saudi Arabia, Angola, and Iran • Gas – an agreement to export 30-38 bln m3/a • Chinese investments in Russia ($5bln pledged) – capital construction, pulp mills, agriculture. Potentially - port renovation & infrastructure projects (Vladivostok-2012, Sochi-2014). By Nov 2007: $1.6 bln in accumulated bilateral investment (Russia’s inward>90%). The goal is $12bln by 2020.

18. Political and military aspects • Treaty of Good-Neighborliness, Friendship, and Cooperation (2001) • Arts. 7-9 on security-related cooperation • The Outline on Implementing the Treaty (2005-2008) • Borders no longer an issue (Oct. 2004) • But Chinese demographic and economic pressure remains: 108 mln in 3 NE provinces vs 27 mln in all of Siberia/RFE • Joint military exercises became routine • Russia’s arms have modernized PLA • Chinese purchases saved Russian military-industrial complex • New tensions over co-production, licensing • Putin: military cooperation "will continue” (03/2007)

19. Shanghai Cooperation Organization • Neither the “Chinese” nor the “Russian” tool • interdependence, complementary interests • Central Asians not easy to push around • From confidence building measures to a multifunctional regional club in 5 years • A new “geopolitical axis” or “we did not plan it that way”? • Prospects for the future: “deepening before widening” • The Iran controversy • India vs Pakistan • Diverging attitudes toward the West

20. Public opinion and foreign policy • What is Russia? • A part of Europe, their 21st century destinies will be closely intertwined – 38% • Not quite European, but a unique Eurasian civilization; in the future, its interests will be shifting to the East – 45% • Russia’s rise and strengthening • Is a threat to the European nations, which do not want this to happen – 49% • Answers the interests of the European nations, since Europe is our common home – 34% • Positive (negative) associations (%): • Europe: 77 (11), CIS: 59 (21), EU: 56 (18), Asia: 56 (24), the UN: 55 (21), the West: 52 (31), WTO: 49 (19), America: 34 (50), NATO: 19 (57) VTsIOM, March 2007 national poll N=1600, p<3.4%

21. Conclusion • Is there a Russian strategy for Asia? • Yes: Putin’s plan, Medvedev’s career • No: inconsistencies, lack of planning • Eurasian regionalism – the main avenue for Russia’s great power revival • SCO remains the key • CIS – Medvedev’s first priority • RFE – “we need to develop, finally, the system of state policies toward the Far East” (Medvedev, 07/02/2008)