Prior to the dissolution of the Soviet Union, the deepening relationship between Russia and Turkey showed itself in the first agreement designed to enhance their economic relations. The agreement was signed on March 15, 1977, between them, which mainly embraced the cooperation in the promotion of the industrial development and energy affairs. Meanwhile, the parties also inked an agreement concerning the scientific and technical cooperations.
Therefore, energy had been a significant issue amid the negotiations processes between Russia and Turkey since that time. Although the relations many times have been strained between them with regard to the different geopolitical issues. However, the two parties have always seen each other more than an economic partner. In February 1986, according to an Intergovernmental Agreement traced back to September 18, 1984, a contract was signed with Turkey’s BOTAŞ company for delivering roughly 6 Bcm of gas per year for over 25 years between the period of 1987 and 2011.
By the signing of the agreement, the first shipment of natural gas to Turkey from the territory of the Soviet Union commenced in June 1987, via Romania and Bulgaria using the Trans-Balkan pipeline. The agreement, in fact, opened a new door in Russian-Turkish energy relations for the foreseeable future. Currently, in the light of bilaterally multi-dimensional relations, both parties currently, are eager to boost up their energy collaboration in a growing number of fields, including nuclear power. The increasing bilateral relations between them have always raised the specific questions regarding what are the key factors or elements of these relations. According to the policy analysts and interlocutors, Turkish-Russian relations are based on a pragmatic approach meaning an effective way of maximizing their mutual advantages. Another element of the relations stems from the political identity and the civil society (domestic and foreign policy links). The political identity within Turkey and Russia has recently changed the way that affected their foreign policy strategies and in particular, their bilateral relations. In Turkey, since the adoption of the National Security Strategy of 1997, Russia has not been considered as a threat to the security of the country, instead, the separatist groups and Kurds have been seen as major threats to Turkey.
The political shift toward a more “Eurasianist” orientation in Turkey was not only related to the rapprochement with Russia, however, even within Russia itself, a similar approach has been taken into account as a pivotal conception. Generally, pro-Western attitudes and stances of Russia have continued till the early 1996, after that time, the appointment of Primakov as the Foreign Minister leaded to a significant alteration towards the Eurasianism conception. This orientation had been expressed again and strengthened amid the presidency of Vladimir Putin since the adoption of the 2000 Foreign Policy Concept of the Russian Federation. Currently, as one of the main priorities of the Russian Foreign Policy, Eurasianist orientation rather than Europeanistone has taken a dominant role in Russia considering that it needs to improve its relations ina Eurasian arena with its increasingly major partners like China, India, Iran, Turkey, and etc. In this cooperation, Russia sees Turkey as an important regional counterpart, due to their recent convergent interests in some political issues. Turkey is the second major importer of Russian gas. From the standpoints of some analysts, and policymakers, the relations in economic, especially in energy sphere will last long and it is impossible to break down their relations easily due to the ”mutual interdependence” between these countries.
Having seen from the practice within the political arena, currently, the relations of two parties with the EU is a bit complicated, and also strained many times due to the different political tensions, and perplexing situations. At the same time, the Eurasianist attitudes of both Russia and Turkey once again show that they have convergent interests in any field rather than divergent ones that ignite even today, the geopolitical intrigue with its European partners. Therefore, it seems necessary to comprehend and then analyze their relations emerging from convergent interests. Take a simple example of the Syrian crisis, during the crisis, two parties have been opposed to each other concerning the Assad’s regime in the region. However, the changing political roles and attitudes give a much more place to scrutinize their relations.
As a result of these political changes in their positions towards Syrian crisis, leaded to the brokering the ceasefire agreement on 28 December 2016, and in fact, the West, mainly the Obama Administration were marginalized on this issue and were not given a free place for the Administration to take its chief position on this ceasefire agreement. It is very plausible that Russia, Turkey, and Iran brokered a ceasefire in the region, and undertook the major duties to fight against terrorism. However, in face of many death and casualties, Obama Administration did not do “any significant thing” to reach a deal on a ceasefire in Syria. In fact, Russia and Turkey did well what the Obama Administration didn’t do. Thus, although they demonstrated the different positions in Middle East problems, especially in the Syrian crisis, and even this crisis caused strained relations between them for some time.
However, both Russia and Turkey found a common ground in this issue also, and their collaboration remains supported by the significant economic and energy factors. The reliable relations between them once again revealed that it is possible to reach a deal in common ground and deal with the opposing standpoints and other problems, which showed itself in the example of the Syrian crisis. On the contrary, Turkey and Russia are not able to find out their convergent interests with the EU. The relations between the EU and two parties have soured due to the accession process of Turkey, the Western sanctions on Russia after the annexation of Crimea and etc. (Take an example of coup d’état happened on 15 July, 2016, during military coup attempt, the EU does not give any hand to Turkey to cope with this crisis, instead, Russia was the first country who supported Turkey amid the bloody occasion, in this context it can be said that friend is known only on rainy days or in trouble.)
Despite the souring relations due to the downing of Russian S-24 warplane between Syrian-Turkish border on 24 November 2015, the two counterparts again found a common ground to deal with the problem. Having strained relations of Turkey with the EU, forced Turkey to take a constructive approach toward Russia.
Upon the airplane incident, in June 2016, Erdogan called Putin and expressed “deep regret” over last year’s shooting down of a Russian warplane which violated Turkey’s airspace. During the phone talking, Erdogan added that he was eager to return the pre-crisis level of bilateral relations. Turkish spokesman Ibrahim Kalin highlighted that Erdogan used the communication to call for Russia to take decisive steps and joint efforts to solve regional crises and fight against anti-terrorist cooperation. He also added that both parties had agreed to take significant steps to enhance relations at a multi-track level.
After the bloody coup attempt in Turkey, Erdogan did his first visit to Russia. Amid the meeting near St. Petersburg on 9 August 2016, they reached an agreement on lifting the sanctions gradually imposed by Russia after it downed a Russian fighter jet in last November. The two also agreed to prompt-start huge energy projects, including a gas pipeline and a nuclear power plant. (It is needed to mention that the negotiations between Russia and Turkey on Turkish Stream also was suspended after the jet incident and St. Petersburg meeting paved a way to renegotiate on the energy project). During the joint press conference following the meeting, Vladimir Putin in his answer concerning the future relations mentioned: ”Do we want a full-spectrum restoration of relations? Yes, and we will achieve that… “Life changes quickly” he also added. ”Moscow-Ankara axis will again be a line of trust and friendship,” Erdogan also said.
The Petersburg meeting opened a new door towardsRussian-Turkish relations both in economic and energy field. Major steps were taken concerning the reigniting tourism cooperation and two major energy projects which are important for the development of both countries. Key factors among the plans is a Turkish Stream pipeline connecting the two countries and a nuclear power plant that Russia has to build in Turkey that is priced at 18 billion euro altogether. The Peterburg meeting became the initial step toward the future Russian-Turkish relations not only in the economic but also in the energy sector. As a result of this significant meeting, they reached a deal on medium-term agreement from the period of 2016 to 2019. Furthermore, the enhancement of the capacity of bilateral relations from $30 million up to $1 billion was considered one of the key ambitions. At the same time, taking the requests of Turkish and Russian traders and businessmen, Turkey and Russia will do the exchange of Russian ruble and Turkish lira in their trade relations and will be able to use easily rubles and lira in the next phase of their economic cooperation. Within the course of the meeting, they also agreed on several significant issues by signing the agreement composed of 12 key articles. The energy issue is the most significant part of the rapprochement between them. The main goals of 12 Articles are classified below.
Figure 7. showing the key priorities of Petersburg rapprochement based on 12 Articles for coming years.
|The revival of Senior Joint Cooperation Council||7. Acceleration of Akkuyu nuclear energy project.|
|2. Commencement of Charter Flights||8. Establishment of Russia-Turkey Joint Investment Fund (Council) estimated at $1 billion to strengthen economic collaboration|
|3. Removal of prohibitions that restrict bilateral trade, including agricultural products||9. Enhancement of cooperation in the defense industry|
|4. Thelifting of the ban on Turkish entrepreneurs||10. Installment of Turkey-Russia-Azerbaijan tripartite summit mechanism|
|5. Taking steps in common in order to achieve fully regeneration of visa-free regime||11. A line of friendship and trust between Ankara and Moscow|
|6. Giving Akkuyu strategic investment status.||12. Acceleration of Turkish Stream project|
Upon the Petersburg rapprochement, the next significant meeting took place in Istanbul during the 23rd World Energy Congress between 9 and 14 October 2016. It was the Russian leaders’ first visit to Turkey since his attendance at the Group of 20 Summit in Antalya. On 10 October, two parties came together to sign an Intergovernmental Agreement (IGA) on the construction of Turkish Stream Pipeline. The Russian and Turkish leaders have voiced support for the construction of Turkish Stream pipeline which was suspended in the course of the tensions between the two countries. Russian President Vladimir Putin and his Turkish counterpart Recep Tayyip Erdoğan underlined that they want to accelerate the implementation of the natural gas project as much as they can. Even on 10 March 2017, Turkish leader Recep Tayyip Erdoğan visited his Russian counterpart Vladimir Putin in Moscow concerning the development of further bilateral relations in some issues in particular, in Turkish Stream project. The Moscow meeting was largely hailed as a big success both in the Russian and Turkish Governments. According to the Moscow meeting, Turkey will set up an infrastructure to allow Russian National Payment system to be available in Turkey. As a result, Turkish Stream pipeline project will be implemented through the Turkish Deniz Bank. Besides, they reached an agreement on several issues, including the removal of trade sanctions gradually, the construction of the $20 billion Akkuyu nuclear power plant, cross-culturalism, and tourism.
The Turkish Stream pipeline would carry Russian natural gas to Turkey under the Black Sea and then on to European Union countries. The two leaders also agreed on the affordable gas prices in the first initiative of the pipeline project and Russia promised to reduce natural gas prices at the next delivery of gas supplies via the Turkish Stream. This delivery will not be direct, but via Turkey as an energy transit country, natural gas will be shipped to Europe. During the World Energy Congress, Putin in his speech highlighted that Russia has been providing energy for the EU for the past 50 years and again would supply via new gas projects including Nord Stream 2 and Turkish Stream pipeline projects in a more secure and a convenient way.
He also added that his country was ready to decrease the oil production and support OPEC’s initiative to cut production as a way to increase oil prices. In general, what does really Turkish Stream promise both Russia and Turkey for the coming years? What will be the consequences and future perspectives of Turkish Stream for these two countries? In order to answer these questions, first and foremost, it is necessarily needed to analyze the energy relations after the Istanbul Agreement took place on 10 October 2016. First of all, according to the IGA between Russia and Turkey, the construction of two lines of Turkish Stream accounting for 15,75 Bcm each from Russia across the Black Sea has to be started by the end of 2017 and be completed up to 2019. The first line is expected to supply gas to Turkey, while the other would connect the transit routes between Turkey and the EU to provide the EU with natural gas. The cost of the project is estimated to be $6 billion. Both lines will have to be completed by December 2019. Pursuant to the agreement, Turkey will provide special tax exemptions for the marine section of pipeline including the import of vehicles, equipment, and other necessary materials are released from the payment duties in Russia and Turkey. The Turkish side also removed the tax revenues on gas transportation. According to the Energy Minister Alexander Novak, Gazprom will construct and possess the offshore section of the pipeline. Turkey will build and own the first line of the land section for the delivery of gas to its territory. The second line via which the direction will be towards Turkey-Greece border for carrying gas to Europe will be owned by joint actions by Gazprom and BOTAŞ. As Russia mentioned before, Turkey has come to an agreement on the second line of the pipeline in exchange for a discount for gas prices promised by Russia. At the first phase of Turkish Stream project, Russia will finance the two strings of the pipeline. Reportedly, the total cost of Turkish Stream including its four strings will make up for €11.4 billion which is the half cost of South Stream estimated at €23.5 billion. The first line of the project estimated approximately €5 to 6 billion.
If Gazprom goes forward with the construction of the third and fourth lines of the project, beyond the Turkey-Greece border, the company will face the same regulatory obstacles as well as financial obstacles. Gazprom has already fulfilled the environmental impact assessment for the offshore and landline sections of Turkish Stream pipeline. In terms of challenges and perspectives of Turkish Stream, it can be said that the project will encounter several challenges due to falling oil prices, the economic sanctions imposed by the West, which have an impact on Russian companies and banks, financial constraints, and also the cost of the project. Those obstacles make it difficult to find financing for the gas pipeline. It shows itself in the example of South Stream project, in which Russia faced both financial constraints and at the same time, misperceptions with the EU and Bulgarian government caused the suspension of the project.
Regardless all these challenges mentioned above, Russia somehow will finance and complete the Turkish Stream pipeline because it wants to diversify its transit route bypassing Ukraine. Therefore, unlike South Stream, Turkish Stream’s credentials are convincing for both Russia and Turkey. For the future perspective, it seems that Russia is not inclined to politicize the Turkish Stream pipeline in the face of its economic and energy counterpart, Turkey. Both of them would get benefits from the project if they opt for the “flexible energy diplomacy” inclining to the EU. The Ukraine crisis re-emphasized the role of Turkey as an energy interconnector not only for the EU but also for. Russia well understands that via Turkish territory, it will be able to carry gas supplies to Europe and sees Turkish Stream as a potentially successful project in this way.
For the EU, the diversification of energy sources is one of the key priorities and it seeks for newly secure supply countries and considers Turkey as a potential energy hub and a transit country in order to attain the natural gas resources via secure pipelines namely TANAP, TAP constituting for the backbone of Southern Gas Corridor (SGC). Regarding the Turkish Stream pipeline, there are also possibly positive approaches and perspectives which mainly depend on the future relations between the EU and Russia and the EU and Turkey. In fact, the relations between them have been soured for the current time. Turkey is going to do negotiations with the EU concerning the future perspectives of relations after the results of 16 April Referendum, Turkish leader, Recep Tayyip Erdoğan added in his speech. Basically, the Russian-Turkish relations are based on “win-win position” or “positive sum strategy”, while it cannot be said the same for the EU because of current tensions between them.
For the future perspective, the Turkish natural gas appetite will increase significantly, and it will need to provide its natural gas demands in an effective way. In terms of energy relations, Turkish Stream is a good deal between Moscow and Ankara. However, Turkey also has to take a new energy policy to use its effective and generous geothermal energy resources at a domestic level. Before everything else, Turkey has to regulate its natural gas markets and adopt the energy saving program based on energy efficiency rather than supplying its increasing gas demands in the near future. In 2017, its growing gas needs are expected to increase up to 46.6 Bcm out of total 50 Bcm gas consumption.
On the other hand, if Turkey decreases its natural gas consumption in future decades, what will be the benefits of Turkish Stream?- Turkish Stream will be the significant project between the EU, Russia, and Turkey. Turkey will be the third energy party to supply gas from Russian territory along with the Black Sea on to the European countries. In this context, however, the EU side wants Turkey to regulate its gas markets based on the EU prerequisites and eliminate the monopoly on gas prices while delivering to the EU. From Turkey’s perspective, it is not a difficult deal, whereas, it will take a bit time to regulate and adopt the energy frameworks and rules requested from Europe. Regarding the EU, it has to change its way of stances and perceptions toward Turkey and Russia and should have to more elaborate on engagement with both Russia and Turkey.
If the EU wants either Turkey or Russia to undertake responsibilities coming from the EU energy rules, in turn, the EU has to give a room (place) for both countries for the sake of effective energy partnership. In terms of Russia, in the future, Russia will not politicize the Turkish Stream that it has in Ukraine because Turkish is both Russian real counterpart as well as an economic partner in Eurasia and will not restrict the improving role of Turkey in Eurasia.
Since the 1970s, bilaterally energy relations between Russia and Turkey have been developing to date.(See Annex 25 below) Russia at least for its economic development and energy revenues will provide the EU with its gas in the future. For the present time, there is not a potential alternative for the EU to meet its increasing natural gas demands. It is the overt fact that the Southern and Central European countries have over dependency on Russian gas from 60% to nearly 98%. Some of the European countries (Norway and etc.) produce energy resources for the EU countries, but it is not enough for Europe to meet its energy demands in coming years. When it comes to the revaluation of the EU stances, it should have to change its way of “non-engagement” with Russia.
At least, the EU comprehends well that at the present time it has sell-purchase issues in the energy sphere. Hence, regarding the dynamics of energy relations between Turkey and Russia, it can be said that the successful deal will be continued in the coming decades. Both of them need each other in tourism, trade, economy, and energy fields. In order to pave the way for the future collaboration between Turkey and Russia, they also evaluate the role of the EU and involve it in their projects. The involvement of the EU in Turkish Stream will gain benefits for all parties, if they choose the policy of comprehensive energy diplomacy taking into consideration the interests of each party. Therefore, the energy relations between Turkey and Russia in the foreseeable future are convincing. What will happen in the near future depends mainly on the progress of the relations with its European partners…
When it is needed to take a general view on Russian-Turkish relations, it is clear that their relationship was established on behalf of reaching their specific interests and purposes. Certainly, the relations between them can be considered both convincing and stable, because of the fact that the relationship between states based on ensuring of any kind of interests is more influential than other simple relations without any purposes. In Russian-Turkish energy relations, it is important to mention a key factor called “appropriate balancing” emphasized by Gideon Rose. The appropriate balancing as a key element of neo-classical realism can be applied better in Russian-Turkish energy relations. “Appropriate balancing” arises when a state correctly comprehends another state’s intentions, interests and balances properly. If the appropriate balancing would be applied in the Russian-Turkish energy relations, it can be said that both of them are aware of their purposes and interests toward each other.
This relationship is a kind of preserving the balance of power, ensuring their internal and external security in the region. So that, their relationship can be called purposeful or intentional relations (In Turkish language, it called çıkarlı ilişkiler or çıkarlar) which envisage the serving of both sides’specific purposes and interests. As Russian President Vladimir Putin stated: “States do not have constant friendship relations; states have constant interests and ambitions.” Over the historical period, their relations have had a competitive character more than cooperation in the region. However, on behalf of ensuring their interests,(Turkish growing demands for gas resources, ambition of being an energy hub and energy transit country between East and West, and Russian ambition of taking huge dominance over Eurasian and European regional energy bazaar) domestic incentives and other external factors, the current situation forces them to take a constructive approach in their relations compared to the previous relations of that they had.
At least, if the pragmatic side of relations between Russia and Turkey is taken into consideration, in this case, the development of their relations both in energy and other fields is unavoidable. One of the most important strengths of neo-classical realism is its attention to systemic and unit factors as well as historical clarification simultaneously. This kind of strength makes the theory more relevant and applicable to the chosen research than any other version of the realism theory. In neo-classical realist theory, there are interconnected relations with enticements, motives, perceptions, and the foreign policy of states which make states attempt for maximizing their domestic security issue. (Turkey is eager to maximize its energy security in the region within a domestic policy through collaborating with Russia in the energy field, in turn, Russian interest of maximizing its security issue in the example of diversification of its transit routes bypassing Ukraine) Thus, by taking into consideration specific interests, purposes and security issues (mainly, domestic security which related to the energy security),it is apparent that Russia and Turkey could be strategic, an economic and particularly, energy partner more than so-called “a friendly colleague” within an international system.
Russian Authorities Going Forth and Back with Migration Policy
Deputy Mayor of Moscow for Economic Policy and Property and Land Relations Vladimir Efimov, in an interview published this mid-September in the newspaper Izvestia, a widely circulated and reputable Russian media, lamented that Moscow is still experiencing a shortage of labor migrants at various construction sites, now there is a shortage of about 200 thousand people.
“This problem remains today Moscow lacks about 200 thousand migrants. And we hope that in the near future the restrictions on their entry into the country will be softened,” Yefimov said, answering the question of the publication whether the issue of the shortage of migrant workers for construction sites in Moscow.
According to him, “the lack of labor resources leads to the fact that employers, primarily developers, outbid employees from each other, which increases the cost of their services. If we talk about the period before the pandemic, for several years, housing prices in Moscow have hardly grown. Against the background of the pandemic, the cost of housing has increased, actually catching up with inflation in previous years,” said the Vice Mayor of Moscow.
The announcement simply highlighted the inconsistency dealing with migrant policy and complete lack of foresight, especially what to do with migrants from the former Soviet republics. Thanks to these migrants, mostly employed in the construction fields and (cleaning, sewage disposal or removal services) in various neighborhood or districts, Moscow has won awards for being modern and clean smart-city in Europe. These migrants play an important role, most often underestimated, in building infrastructure and in general development of the society.
According to a survey of Promsvyazbank (PSB), Opora Rossii and Magram Market Research conducted in June 2021 found out that 45% of small and medium-sized businesses in Russia need new employees. Entrepreneurs still consider the unfavorable economic conditions caused by the pandemic to be the main obstacle to business expansion, and employing new staff requires extra cost for training in the social services sector.
Opora Rossii, an organization bringing together Russian small-and medium-sized enterprises (SMEs), and the Institute for Social Analysis and Forecasting of the Russian Presidential Academy of National Economy and Public Administration (RANEPA), among other business organizations and institutions, have been very instrumental on the significant role by migrant force, its combined objective and beneficial impact on the economy of Russia.
Several experts, in addition, have explained that migrants from the former Soviet republics could be useful or resourceful for developing the economy, especially on various infrastructure projects planned for the country. These huge human resources could be used in the vast agricultural fields to boost domestic agricultural production. On the contrary, the Federal Migration Service indiscriminately deports them from Russia.
Within the long-term sustainable development program, Russia has multibillion-dollar plans to address its infrastructure deficit especially in the provinces, and undertake mega projects across its vast territory, and migrant labor could be useful here. The government can ensure steady improvements are consistently made with the strategy of legalizing (regulating legal status) and redeploying the available foreign labor, the majority from the former Soviet republics rather than deporting back to their countries of origin.
Moscow Mayor Sergei Sobyanin has been credited for transforming the city into a very neat and smart modern one, thanks partly to foreign labor – invaluable reliable asset – performing excellently in maintaining cleanliness and on the large-scale construction sites, and in various micro-regions on the edge or outskirts of Moscow.
With its accumulated experience, the Moscow City Hall has now started hosting the Smart Cities Moscow, an international forum dedicated to the development of smart cities and for discussing changes in development strategies, infrastructure challenges and adaptation of the urban environment to the realities of the new normal society.
Kremlin Spokesman Dmitry Peskov has acknowledged that Russia lacks a sufficient number of migrants to fulfil its ambitious development plans. He further underscored the fact that the number of migrants in Russia has declined significantly, and now their numbers are not sufficient to implement ambitious projects in the country.
“I can only speak about the real state of affairs, which suggests that, in fact, we have very few migrants remaining over the past year. Actually, we have a severe dearth of these migrants to implement our ambitious plans,” the Kremlin spokesman pointed out.
In particular, it concerns projects in the agricultural and construction sectors. “We need to build more than we are building now. It should be more tangible, and this requires working hands. There is certainly a shortage of migrants. Now there are few of them due to the pandemic,” Peskov said.
The labor shortage is not only in Moscow but it applies to many regions including the Far East. During the 6th edition of the Eastern Economic Forum (EEF), the demography decline and labor shortage have been identified as factors affecting the development of the vast region. With plans to build residential blocks, establish industrial hubs and fix businesses, these depend largely on the working labor force.
The Russian government continues discussing a wide range of re-population program, hoping to attract in particular Russians there, even incentives such double income, mortgage system, early retirement and free plots of land, but little results have been achieved. Russia’s population is noticeably falling, and now stands at 146 million.
The Far East is almost the size of Canada with its current population (a mixture of natives plus legalized immigrants) more than 38 million. That compared, the Far East with estimated 6.3 million is one of the most sparsely populated areas in the world.
Kremlin has made this its absolute long-term priority, and the challenging task is to create an environment for investment and attract people. President Vladimir Putin acknowledged, at a meeting on the socio-economic development of the Far East, that the speedy outflow of the population from the Far East suggests that the region has not yet received enough support measures. “A lot is being done, but it is still not enough if we observe an outflow of the population.”
President Vladimir Putin has already approved a list of instructions aimed at reforming the migration requirements and the institution of citizenship in Russia, based on the proposals drafted by the working group for implementation of the State Migration Policy Concept of the Russian Federation for 2019-2025.
“Within the framework of the working group for implementation of the State Migration Policy Concept of the Russian Federation for 2019-2025, the Presidential Executive Office of the Russian Federation shall organize work aimed at reforming the migration requirements and the institution of citizenship of the Russian Federation,” an official statement posted to Kremlin website.
In addition, the president ordered the Government, the Interior and Foreign Ministries, the Federal Security Service (FSB), and the Justice Ministry alongside the Presidential Executive Office to make amendments to the plan of action for 2019-2021, aimed at implementing the State Migration Policy Concept of the Russian Federation for 2019-2025.
Russia’s Far East: Transforming the Space into Modern Habitable Region
Early September the 6th edition of the Eastern Economic Forum (EEF) under the theme “New Opportunities for the Far East in a Changed World” was held and considered as vital for strengthening especially economic ties among Asia-Pacific countries and the Far East region of Russia. What is known as the Far East covers approximately 40% of Russia’s territory.
The Far East is almost the size of Canada with its current population (a mixture of natives plus legalized immigrants) more than 38 million. That compared, the Far East with estimated 6.3 million is one of the most sparsely populated areas in the world. The Russian government continues discussing a wide range of re-population programmes, hoping to attract in particular Russians there, even incentives such double income, mortgage system, early retirement and free plots of land, but little results have been recorded.
The September forum, and all the previous ones, focused on raising sustainable development that primarily includes infrastructure, business investment and people. The question is on human habitation and sustenance, but this vast region of the country is sparsely inhabited. Kremlin has made this its absolute long-term priority, and the challenging task is to create an environment for investment and attract people.
President Vladimir Putin acknowledged, at a meeting on the socio-economic development of the Far East, that the speedy outflow of the population from the Far East suggests that the region has not yet received enough support measures. “A lot is being done, but it is still not enough if we observe an outflow of the population.”
“Our historical task is not only to keep people in the territories that were mastered by our ancestors for centuries, but to increase the population,” the Russian leader said. Putin stated that the rate of the outflow of people had decreased, but had not stopped. He called the growth of the population in the Russian Far East a “historical task.”
For this purpose, it is necessary to develop production capacities, create jobs, and ensure people’s incomes. At the same time, Putin also called on using the resources that have already been allocated to the region. “Considerable resources have been allocated and they need to be used effectively,” he suggested, addressing the opening of the Far East Economic Forum.
The September gathering brought together Russian and foreign entrepreneurs, politicians, experts, and representatives of the media as well as public organizations to exchange experiences and ideas, discuss the most pressing business and development issues and map out useful joint projects and initiatives for the region. Many of the speakers were very frank and objective in speeches, highlighted ways for developing the region.
The average Far Eastern city fares about 10% worse than the Russian average in terms of housing provision and quality of medical services. “We need intensive breakthrough development. Master plans involving the integrated development of the region could provide the key to this development. What is required is a resource center for urban development covering the Far Eastern Federal District. Secondly, the region is facing a severe shortage of highly skilled workers, especially in architecture and urban planning,” Architect and Partner at KB Strelka, Alexey Muratov told the session on Urban Planning.
The Far Eastern Federal District has significant economic potential and is of interest to both local and foreign business, but there is an imbalance between investment and economic potential in the region. For Artem Dovlatov, Deputy Chairman and Member of the Management Board of VEB of the Russian Federation, “the Far East is a very interesting region and of particular importance to the government. This is why the Russian President Vladimir Putin has declared that the Far East will be a priority region for Russia in the 21st century. From the perspective of investors, the region is of serious interest. It benefits from vast resources, proximity to the Asia-Pacific region, and diverse scientific and technological potential.”
“There are certain barriers, of course, and investors still approach investing in the region with a degree of caution, since the barriers are objective. They are associated with the population (a lack of staff) and there are costs related to construction… The Far East is a highly urbanized region. This presents a huge challenge because we need to increase quality of life in the cities in order to prevent outward migration or attract new residents. Strategic planning in cities is needed here,” added Dovlatov.
Further at the different session, Alexey Muratov, Architect and Partner at KB Strelka, simply puts it, “there aren’t enough people in the Far East. The region accounts for 40% of the country’s land mass but only 5.5% of its inhabitants. How can we solve the central challenge, which is to say the imbalance of economic and investment potential? The first and most obvious solution relates to rotation work. Modern workers’ settlements are in no way inferior to cities in terms of comfort. The second option is to attract residents to cities in order to create new jobs. The issue of the urban environment and quality of life is relevant here. According to all polls, quality of life is the key factor behind outward migration.”
Nikolay Kharitonov, Chairman of the Committee for Regional Policy and Issues of the North and Far East, State Duma of the Federal Assembly of the Russian Federation, has, however, expressed worries about to curb migration from the Far East. “Getting a Far Eastern hectare helps people to get settled here [in the Far East] instead of leaving for the south or elsewhere,” he said, adding that for transforming the region, it need transportation network, good infrastructure and social facilities, employment opportunities and conditions for habitation.
Admittedly, lack of social infrastructure constitutes a big hinderance to many projects. “Social infrastructure is of vital importance to the Far East. If people are fleeing the region, how can we motivate them to stay here? They need the right social infrastructure: health care, education, and everything in between,” according to the views of the Chief Executive Officer of VTB Infrastructure Holding Oleg Pankratov.
The Far East offers a platform for Russia’s entry into global markets and attracting international investment. Russia is seeking to take its place in the global system of division of labor, so it’s concentrating on projects with high added value. “Russia currently has the best conditions in the world to attract human resources and financial resources and take the next technological step. Why would you just come to the Russian market? Let’s manufacture things here for the whole world to compete with other centres of power, relatively speaking. The Russian government has to provide the best conditions for this,” pointed out Arnika Holding President Alexander Generalov.
Some foreign participants say it is necessary to expand support measures for business startups, consistently attempt to identify and remove development obstacles. “The Chinese experience is that high technologies and companies always play a very important role in the development of the local economy. We help them with resources, we allocate resources, and you do that too. The tech park should be connected to all resources and the international market. And human resources are very important. If you don’t have a good team to help startups, nothing will happen,” says International Association of Science Parks and Areas of Innovation Vice Chairman Chen Herbert.
On one hand, entrepreneurs have little trust in the government due to its excessive control and supervision. There are still many problems including bureaucracy and red tape. On the other hand, based on the tasks defined by the country’s leadership, a set of measures is being implemented to enhance the business climate.
The regulatory framework is being improved in the most important and problematic areas of government regulation. Institutions and infrastructure are being created for the development of investment activity. The best practices to support entrepreneurship are being introduced, including mechanisms for direct financial assistance, concessional lending, tax incentives, and moratorium on government inspections.
Developing the transport and logistics infrastructure. The carrying capacity of the railways needs to be increased, to develop and upgrade the Trans-Siberian Railway. “Russia’s leadership also has concerns regarding the opportunities offered by the Trans-Siberian Railway. It is indeed a problem, because it is a major factor hindering economic growth in Russia, both in terms of foreign trade, and in terms of domestic transportation. We expect carrying capacity to be expanded in the near future,” believes Sergey Katyrin, President, Chamber of Commerce and Industry of the Russian Federation.
The potential exists for Russia and South Korea to cooperate across a broad range of areas, including industry, energy, and the environment. “We particularly want to highlight the cooperation that has taken shape in relation to smart city projects, industrial parks, and multimodal terminals for shipping in Primorye Territory. One of our assets is a joint venture with the Zvezda Shipbuilding Complex. We have also acquired a grain terminal and are developing this business in Primorye Territory. Collaboration between our two nations is increasing in energy, fishing, and other areas,” Christopher Koo, Chairman, Korea International Trade Association (KITA).
“South Korea has traversed a fairly long path in relation to the creation of a waste management system in the early 1990s. Since that time, the system has come to closely reflect our own targets in terms of waste disposal. At the start of this journey, virtually 80% of waste in South Korea went to landfill sites. Today, more than 60% is recycled. In Russia, the President has set the objective of processing – i.e., sorting – 100% of waste, and utilizing 50% of it by 2030. Naturally, we would be delighted to employ technological solutions in this area which have been implemented in South Korea,” added Denis Butsayev, General Director, Russian Environmental Operator Public Law Company.
Besides South Korea, a number foreign countries strike deals at the forum, most of from the Asian Pacific region. Russia and Japan signed deals. China also signed several deals there as Russia has fast developing bilateral relations and both are members of BRICS. For instance, China has the following from the documents:
China Railway International Group and Primorye Territory signed a statement of mutual interest and intent to implement an investment project for the Construction of Vladivostok ring road in Primorye Territory. Stage 1: Russky Island – Yelena Island – Ulitsa Kazanskaya in Primorye Territory. Investment volume: RUB 75 billion.
VEB.RF and the ZED Development project company (part of Region Group) signed a cooperation agreement for the construction of an aerial lift across the Amur river at the section of the Russian-Chinese national border linking the cities of Blagoveshchensk (Russia) and Heihe (China). The construction project is being implemented jointly by the Russian investor and its Chinese partner, the China Railway Construction Corporation. VEB.RF will invest RUB 2 billion.
The Ministry of Labour and Social Protection of the Russian Federation and the Ministry of Human Resources and Social Security of the People’s Republic of China signed a memorandum of understanding with the aim of establishing and strengthening cooperation on labour and social security issues of mutual interest.
Pharmeco and the Union of Chinese Entrepreneurs in Russia signed a partnership agreement with the aim of developing cooperation between Russian and Chinese organizations and Asia-Pacific countries in the field of pharmacology and the construction of healthcare facilities.
Zeleny Bulvar and KitayStroy signed a cooperation agreement on the construction of residential real estate in Vladivostok. Two 25-floor apartment buildings are set to be built in the Zeleny Ugol neighbourhood of Vladivostok by 2025.
Stroytransgaz and KitayStroy signed an agreement on the implementation of a project to build a museum and accompanying educational and cultural centre in Vladivostok.
The Ministry for the Development of the Russian Far East and Arctic, VEB.RF, ECN Group and Marubeni Corporation signed an agreement to implement a project to produce ships using methanol fuel at the Zvezda shipyard.
GTLK and Mitsui O.S.K. Lines signed an agreement for Mitsui O.S.K. Lines to make an equity investment in GTLK Asia Maritime.
The Ministry of Energy of the Russian Federation and the Ministry of Economy, Trade and Industry of Japan signed a bilateral agreement on the supply of LNG and gas condensate.
Novatek and the Japan Bank for International Cooperation (JBIC) signed an agreement on strategic cooperation on low-carbon projects.
The Europlast Primorsky Plant and Ryozai Kaihatsu signed a memorandum of cooperation on the expansion of exports to Japan between the parties.
The Europlast Primorsky Plant and Ryozai Kaihatsu signed a contract on the sale and purchase of PET preforms.
It is expected that the Far East will continue attracting investments, both Russian and foreign. “We will continue to try to constantly create new development opportunities, thus securing for the Far East this status of a testing ground for management technologies associated with the development of the region,” Deputy Prime Minister and Presidential Plenipotentiary Envoy to the Far Eastern Federal District Yury Trutnev said at the conference following the forum.
According to the official forum documents: “More than 380 agreements were signed at the forum. International and foreign companies, organizations, ministries and departments have signed 24 documents – 9 with China, 6 with Japan, 3 with Kazakhstan, by one agreement each with Austria, Vietnam, Canada, Serbia and Ethiopia.” And that agreements totaling 3.6 trillion rubles (US$49 billion) were signed at the Eastern Economic Forum (including agreements, the amount of which is not a commercial secret).
Until 2000, the Russian Far East lacked officially defined boundaries, according to historical archival documents. A single term “Siberia and the Far East” often referred to the regions east of the Urals without drawing a clear distinction between “Siberia” and “the Far East” on the territory of Russia. That however, the Far East is generally considered as the easternmost territory of Russia, between Lake Baikal in Eastern Siberia and the Pacific Ocean.
The Fall of Kabul and the Balance of Power in Greater Eurasia
The uniqueness of historical events is determined by the conditions in which they occur. States always act in the same way — what changes is the conditions that force them to act in one way or another, but, most importantly, any change in context leads to fundamentally different consequences of similar events. The withdrawal of Soviet troops from Afghanistan in February 1989 became possible precisely on the eve of truly global political changes — the end of the Cold War as a result of the de facto defeat of the USSR and its subsequent collapse.
Likewise, the disastrous end of 20 years’ of the US and allies’ presence in Afghanistan is of fundamental importance not in itself, but in the context of a changing global balance of power and a general reduction in the ability of Western countries to play a decisive role in international politics and the world economy. What matters is not the fact of another defeat of the United States — there have been and will be many victories and failures in the military history of this power, but in what circumstances this happens. Now the events in Afghanistan are unfolding amid the growth of the Chinese power and, at the same time, the ability of Moscow and Beijing to coordinate their actions on the most important issues for the state of affairs in Eurasia.
The effects of important events equally depend on the circumstances — short-term or strategic ones. The coming to power of a radical religious movement in Afghanistan in the mid-1990s prompted an attempt by the United States to consolidate its ability to determine the development of world politics. Then any actions of the Taliban on the sovereign territory of Afghanistan became a legitimate reason for international attention and, most often, condemnation. The military intervention of Western countries in Afghanistan received almost the same support as the international operation to liberate Kuwait in 1991.
In the longer term, the establishment in 1996 of a radical regime in Kabul created conditions for the expansion of the presence of the United States and states close to it in central Eurasia. The vulnerability of the Central Asian countries to influence from Washington has significantly increased. But also in Tashkent or Astana there were own efforts to balance Russian and growing Chinese influence in the region with reliance on the West. Until 2014, the United States maintained a direct military presence in the region in the form of bases and logistics centres where the American military was stationed.
But in 2021, the return of the Taliban to Kabul, following the sudden fall of the republican government of Ashraf Ghani, will have very different consequences. First of all, it leads to the further strengthening of China, to better conditions for Russia and a weakening of the West in its fierce competition with Moscow and Beijing. What the Taliban are doing or can do inside the country is not a reason for the general denial of their right to exist. The international context has changed, including in terms of the value dimension of politics and its role in making the most important decisions. Strategically, the return of the radicals to power could lead to the stabilisation of the region, a significant decrease in the United States’ ability to influence its countries and the relative isolation of India, as the country that most closely connects its future with the West.
We do not know if peace in Afghanistan becomes a reality. However, right now, for the first time in the past 40 years, internal political stabilisation in this country has the most solid foundation. First, it is a military victory for a relatively consolidated political movement with a unified leadership and control system. Second, the agreement of the leading regional powers like Russia and China that the Taliban movement should be given a chance to show prudent behaviour inside and outside. For China, this is cooperation in the implementation of major economic projects and refusal to support those religious groups that pose a threat to the security on the Chinese territory. For Russia, this means the absence of aggressive intentions towards the countries of Central Asia. To independently ensure its security, Moscow cannot have complete confidence, as well as a reduction in the flow of drugs coming from Afghanistan.
We have reason to expect that the stabilisation of the military situation in Afghanistan will lead to a revitalisation of Chinese efforts to rebuild the country economically. In the event that expectations become reality, and the United States and the European Union do not find opportunities to make Afghanistan back to the chaotic state of “war of all against all”, it can be expected that the “arc of instability” that girdles Eurasia will be broken. This will be an important geostrategic change in the region, which since the second half of the 19th century has been a field of rivalry between mainland Russia and the Anglo-Saxon powers — first Britain and later the United States.
But what is happening and will continue to happen in Afghanistan may have more varied consequences. With a high degree of probability, it will strengthen the position of Pakistan, which already closely cooperates with China and relies on its economic opportunities. India will feel more insecure — this country already estimates the fall of the republican government in Kabul as a serious blow to its strategic interests. It is likely that the US and its allies’ attempts to establish a dialogue with Iran will become more active — despite the fact that the current regime in this country is not friendly to the West, the internal situation there may be susceptible to external influence.
For Russia, it matters how the reduced US presence in Eurasia affects Turkey’s position. While this country is trying to behave confidently, it is still closely tied to the United States and Europe economically. In the event of strengthening Sino-Russian control over the space of their common neighbourhood, Ankara may have to restore relations with its NATO allies. Also, one cannot exclude Turkey’s chaotic attempts to restore relations with the countries of Central Asia that are close in language, which will also require some Russian attention.
In general, for Russia, the defeat of the United States in Afghanistan means not only a decrease in the capabilities of the main opponent in international affairs, but also a general change in the strategic situation. In particular, we cannot now exclude the possibility that under the new conditions Russia’s policy towards the countries of Central Asia may change.
Most of them are in one way or another connected with Russia by allied relations, but bilateral cooperation does not always develop smoothly. After the United States has lost an important part of the resources to interfere in the regional affairs, Moscow may even face increasing responsibility for its internal stability.
But the United States itself will be looking for ways to return to the central part of Eurasia in one form or another. The defeat in Afghanistan did not have a serious impact on the military and economic capabilities of this power. After the initial shock wears off, we must be prepared for a new round of regional clout. Now, in this struggle, the objective interests of China are on the side of Russia, and this greatly facilitates the situation in comparison with all previous episodes.
The fall of Kabul on August 15, 2021, was an important historical event because it meant the actual end of the US attempts to exert a determining influence on international politics. Such efforts will continue, albeit under new ideological slogans, and the United States has long since abandoned attempts to create a truly holistic order under its leadership. In fact, we are dealing with yet another change in the dynamic balance of power that is now defining the nature of international relations. And, as in any case, this change brings new opportunities and new questions for Russia, which will need to answer in the very near future.
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