Putin’s Grand Plan for Asia (Page 3 of 3)

Russians are undoubtedly eager to reduce tensions on the Korean Peninsula. Russia’s economic and security interests would be bolstered by a lengthy period of harmony and stability in the Koreas. Russian entrepreneurs envisage converting North Korea into a transit country for Russian energy and economic exports to South Korea and other Asia-Pacific countries. Such a development would further Russia’s integration into East Asia as well as revitalize Moscow’s ties with North Korea. Russians have discussed linking a trans-Korean railroad with Russia’s rail system, which would allow Russia to become a transit country for South Korean trade with Europe, which now involves mostly long-distance shipping. Furthermore, Russian planners want to construct energy pipelines through North Korean territory. Unfortunately, these plans can’t be realized without an end to North Korea’s estrangement from its neighbors, which Moscow alone can do little to change.

So what about Iran? Putin’s return to the presidency is unlikely to see any major change in Moscow’s policy toward Tehran. Russia started voting for sanctions against Tehran in 2006, when Putin was president. Putin, like most Russians, distrusts Iran’s government, doesn’t want Tehran to have nuclear weapons, and resents the way Iran declines to reward Moscow for resisting further sanctions. Still, Moscow could move closer to Tehran if Russia-West relations suffer for other reasons. And Russia has no reason to support additional U.N. sanctions on Tehran in any case since the existing measures have already driven most Western companies out of Iran, allowing Russia and Chinese firms to dominate Iran’s foreign economic ties. Putin and other leaders seem content with the status quo, with Iran alienated from its natural Western economic partners and Iranian-related tensions propping up world oil prices.

Yet at the same time, Putin and other Russian diplomats are making a vigorous effort to affirm Russia’s role as a major Asian player in other sectors besides oil and arms. Having a niche in Iran’s troubled economy is no substitute for integrating Russia further into the Asia’s more dynamic markets. Securing additional South Korean, Chinese, and Japanese investment and trade would help revitalize the Russian economy, especially the lagging but strategically significant region of the Russian Far East. Russia’s trade relations with Japan, South Korea, and China fall far behind these three countries’ economic interactions with each other. Russian leaders are also seeking to establish a more favorable environment for Asian investors that thus far have flocked predominately to China as well as to India, South Korea and other Asian markets.

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Ultimately, the success of Putin’s Asian pivot should become clearer by September 2012, when Russia will host its first APEC Summit in Vladivostok. But any enduring achievements will require Moscow to adopt a more attractive legal and regulatory environment for foreign companies, as well as end its dispute with Japan. Ultimately, although the dispute is a bilateral one, it impedes Russia’s diplomatic flexibility in the region and, by having the same effect on Tokyo, has allowed Beijing and Washington to dominate the restructuring of Asia’s 21st century economic and security architecture.

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