“Demand and Supply Approach” to Russia’s Integration into Asia-Pacific

Another aspect of relocating Pacific Russia in Asia is elaborated in Chap. 4 by Igor Makarov, who argues that for the development of Russia’s Far East and Siberia and for the overall realisation of Russia’s turn to the East to be deemed successful, extra attention should be paid to the match (or the lack thereof) between the economic demands of Asian countries bordering Russia and Russia’s capacity and potential to meet those demands. The integration, in other words, should, and can only, be founded on mutual interests. While Russia’s view of the prospects for its eastern territories is important, Asia-Pacific countries’ actual demands for Russia cannot be ignored if the goal is to find feasible pathways to increase Pacific Russia’s role in the region. Makarov demonstrates that so far there has been a mismatch between what Asia needs and what Russia is willing to offer, which is the major cause for the existing problems with Russia’s Asian policies. Russia’s programmes of accelerated development for its eastern territories, for instance, seek to resolve the development roadblocks existing in Russia without sufficient consideration of the transformation of economic models in Asia-Pacific countries. Since the development of Russia’s Far East and Siberia requires international cooperation, this neglect has had a considerable detrimental effect. Makarov’s chapter argues that attention should be paid to the economic demands evolving in Russia’s Asian neighbours. He identifies and exposes four ongoing shifts: in the type of economic growth, in the sectorial structure of the economy, in the geography of exports, and in the geography of economic growth. These shifts generate demand for resources, such as energy, land, and water, and for intensive consumer goods, as well as for infrastructure connecting the newly emerging areas of growth in Asia-Pacific with the territories where such goods are produced. To make progress, Russia needs to take these emerging demands into consideration and construct policies accordingly.

This “demand and supply approach” to regional cooperation, but with a narrower focus on the energy sector, is the main theme of Chap. 6 by Satoshi Sakai. The chapter spells out the problems of, at first sight com- monsensical, patterns of complementarity in the energy sphere between Russia’s Far East and East Asian countries. While it is true that abundant natural resources are the key competitive advantage of Russia’s eastern territories, and that the country has started to increase its oil and gas exports as part of its plan to develop the Far East and Siberia, Sakai demonstrates that expanding the delivery of Russia’s resources, such as oil, gas, rare earth metals, coal, and so on to the Asian markets requires large investments and significant infrastructure improvements. These problems are exacerbated by the fall in oil prices and Western sectorial sanctions against Russia that severely undermine the prospects of some energy projects in the eastern part of Russia. As a result, Russia’s energy exports are not always as competitive against other supplies in Northeast Asia as they are believed to be. There are also political issues within East Asian states that may become a barrier for increasing the imports of Russia’s energy resources. Examining the weaknesses in Russia’s position as an energy exporter in East Asia significantly bolsters our understanding of how Russia can use its natural resources and utilise necessary financial instruments for integrating it into the Asia-Pacific region.

 
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