National economic interests of Russia in modern geopolitical conditions

The Presidential Decree “On the national security strategy of the Russian Federation until 2020” of May 12, 2009 No. 537 defines the national interests of the Russian Federation as a combination of internal and external needs of the state in ensuring the protection and sustainable development of individuals, society and the state.

However, the interests of individuals, society and the state are so diverse and, at the same time, they are formulated by the elite on the basis of value preferences with regard to various circumstances that it is difficult to talk about the balance of interests. In addition, one usually defines national interests in different areas: for example, as for the international sphere, they include the strengthening of Russia’s position as a great power and one of the most influential centers of the multipolar world. There is a certain separation of the national and geo-economic vectors, which hinders the formation of a single coherent system of national interests and priorities of the country. In this connection it is necessary to consider a geo-economic approach of E. Kochetov, who proposes the term “geo-economic national interests” and defines it as a system of long-term targets, goals, priorities, and directions of activities in the geo-economic space. The current geopolitical situation demonstrates, first, the strong influence of geo-economic challenges on the country’s economic policy and, second, the opportunity to expand significantly the implementation of economic policy with regard to the geo-economic progress.

E.G. Kochetov characterizes the underestimation of the geo-economic factor in determining the country’s national interests and priorities as follows: “Russia is content with its supporting role; it ignores global economic realities and continues to waste its resources on export-import operations, thus structurally undermining its economy. The world economy has imposed this role on Russia and fixed it, and Russia accepts it and does not put a question of its geo-economic interests point-blank before the international community” [10, p. 97].

Russia should adopt a new geo-economic doctrine that would correspond to its national interests and that would link them to global development trends; this idea was voiced by the RF President in his National Security Address to the Federal Assembly back in 1996. It stated that Russia should move to a new geo-economic equilibrium, proclaim its national economic interests, project its strategic objectives and integration alliances, and identify its geo-economic bridgeheads on the global geo-economic map” [12].

It seems that after almost a decade the declared tasks are now being implemented. Russia’s geo-economic situation has entered a new phase characterized by the following geo-economic shifts:

• —    revival of the Eurasian economic integration (Eurasian Economic Union);

• —    development of economic cooperation within the SCO and BRICS due to the community of geo-economic interests of their members;

• —    strengthening the role and importance of Russia in shaping the global economic order.

Let us consider these aspects in more detail.

Eurasian economic integration is characterized by economic prerequisites that have historical roots:

• —    in Soviet times the economy of the USSR was a highly integrated complex; the Russian, Kazakh and Belarusian economies were its parts;

• —    from the Soviet economy the CIS inherited the division of labor common for its constituent economies, and also technological interdependence and common technical standards [11, pp. 325-327]; a free trade zone was established in the framework of the CIS;

Eurasian economic integration in its current composition has been evolving for several years: it emerged in 1995, when the Customs Union of Russia, Belarus and Kazakhstan was established gradually in its initial design. In 1997–1999 Kyrgyzstan and Tajikistan joined the Union. In 2000 the Eurasian Economic Community (EurAsEC) was established; its purpose was to promote the formation of the customs union and of the common economic space. The current Customs Union of Russia, Belarus and Kazakhstan was established on the basis of the EurAsEC in 2010. In 2011 the Eurasian Economic Council adopted the Decision “On entry into force of international treaties that form the Common Economic Space...”. Finally, the agreement on the establishment of the Eurasian Economic Union (EEU) was signed May 29, 2014 and it will come into effect January 1, 2015.

As for the groups of the largest rapidly growing economies, such as the SCO and the BRICS, though they are not international economic integration associations, they have great potential for economic cooperation between their members [17]. The goal of the Program for Multilateral Trade and Economic Cooperation of the SCO countries (approved by the Decision of the Council of Heads of Governments (Prime Ministers) of SCO member states dated September 23, 2003 No. 1) is to implement gradually (up to 2020) the set of measures to support such cooperation, to develop industrial and investment cooperation of the leading sectors of their national economies and on this basis – to improve people’s standard of living.

One of the objectives of the Program is to search for common approaches and ways of mutually beneficial economic and scientific-technological cooperation between the member states, to develop mutual target programs for economic cooperation and so on.

In accordance with the Concept of Russia’s participation in the BRICS (approved by Russian President V. Putin February 9, 2013) [5], Russia pursues the following goals in several areas of economic interaction:

• 1.    In monetary and financial cooperation: the enhancement of the role of national currencies in mutual settlements between the BRICS. It is also necessary to note that the Treaty for the Establishment of a BRICS Contingent Reserve Arrangement and the Agreement on the New Development Bank of the BRICS were signed at the 6th BRICS Summit (July 15–16, 2014).

• 2.    In trade and economic cooperation: provision of conditions to promote Russian export and to develop investment cooperation with BRICS partners.

• 3.    In industrial cooperation: enhancement of Russia’s export opportunities in aviation, electronic industry, power engineering, metallurgy, machine building, transport and special machinery; import of modern equipment and technologies from the BRICS countries; geographical diversification of Russian export of mineral resources and attraction of investment from the BRICS countries to the Russian mining industry for the purpose of its modernization; and in

other fields of cooperation (scientific-and-technological, agricultural).

Here it can be also noted that, according to the results of the 6th BRICS summit contained in the Fortaleza Declaration, the members of the Group welcomed the proposal to develop the BRICS Economic Cooperation Strategy and the General Principles for Deepening Economic Cooperation between the BRICS countries, which set out the activities to develop economic, trade and investment cooperation within the Group. The Group also expressed its intention to promote the dialogue between the BRICS and South America, including that in the interests of economic progress and sustainable development.

As for this direction of geo-economic changes, it directly determines the next aspect: enhancement of Russia’s participation in the formation of a new model of global governance. The innovative nature of the BRICS consists in the emergence of a prototype of a new model of international relations in which differences are not an obstacle to mutual cooperation. The Chinese article, published after the 4th summit in New Delhi, called the BRICS “the key force in the resolution of the old world order”.

All this substantiates Russia’s urgent necessity to determine its own historical path; it was noted many times by leading Russian and foreign scientists. Academician D.S. L’vov, an outstanding Russian economist, in his 1999 work “Economic manifesto – the future of the Russian economy” made a key conclusion that Russia must follow its own path. Samir Amin, one of the founders of the world-systems approach, writes: “The periphery countries, including Russia, will not be able to develop if they fail to work out their own sovereign project” [1].

Moreover, it should be done without delay. According to S. Gubanov, “economic and geopolitical contradictions are intertwined now in the Gordian knot of a system crisis so acute that it can be resolved only with extreme and alternative outcomes” [7].

G. Vechkanov characterizes the current stage of Russia’s development as a situation “when the country is facing a historically responsible choice of its future” [4].

These approaches in many respects determine the reflection of Russia’s national economic interests in the national and international normative documents (table) .

National economic interests form the basis of national security (food, raw materials, finance, infrastructure, transport) and set development priorities for national economic sectors (industry, scientific and technological development, entrepreneurship, social sphere and innovation development).

Let us consider in detail the highlighted components of national economic interests with regard to the formulation of their goals and objectives both within the country and taking into account the emerging new geo-economic bridgeheads in the current geopolitical conditions.

The provision of the population with safe agricultural products, products of aquatic bioresources and other foodstuffs is the goal in the sphere of food security , according to the Food Security Doctrine of the Russian Federation (January 30, 2010).

The Doctrine takes into account (Section 1, Item 5) the recommendations of the Food and Agriculture Organization of the United Nations on the maximum permissible share of import. The Doctrine points out the following in the sphere of foreign economic policy:

• —    the need to balance exports and imports of agricultural and fishery products;

• —    the need to implement protective measures if the import of these products grows;

• —    the need to gradually reduce the dependence of the domestic agro-industrial complex on imported technologies and equipment (Section 4, Item 15).

Thus, this document corresponds to the fact that in the geo-economic field in August 2014 Russia adopted sanctions against food supplies from a number of EU countries, which should create conditions for development of domestic agriculture, agricultural engineering and food industry. There are certain reserves for this: agriculture and fishery play an important role in the economy of a several Russia’s regions [16, pp. 92-94]. Of course, import substitution will require time and certain investment terms. So far, in order to achieve equilibrium of supply and demand in August – September 2014 Russia concluded agreements with several countries about increasing supplies of these goods to the Russian market.

The Chinese firm Baorong is opening the sites for direct shipments of fruit and vegetables to Russia’s market in the Far East (Dili Corporation is planning to do the same) [9]. Russia and Belarus are planning to develop a long-term strategy for supplies of Belarusian agricultural products; Belarus is planning to increase its deliveries [3]. Several agreements with Latin American countries on the supply of food have been signed and are already implemented.

In the sphere of raw materials security, and in particular, energy security, the goal is to use natural energy resources efficiently for promoting sustainable economic

Reflection of Russia’s economic interests in national and international documents

National economic interests	Reflection in the documents
	in national documents (on socio-economic development)	in international documents (on economic cooperation with Russia’s participation)
Food security	Food Security Doctrine of the Russian Federation dated January 30, 2010, Section 1, Item 2	Agreements (August – September 2014) on the increase of food supplies on the Russian food market concluded with China (“Baorong”, “Dili”), countries of East Asia, Belarus, Serbia, Brazil, Tunisia, Morocco, Iran, Georgia, Argentina; planned abolition of restrictions on the supply of livestock products from Mongolia in the near future
Raw materials security	Energy Strategy of Russia for the Period up to 2020, Section 1	Agreement between Gazprom and the Chinese company CNPC on gas supplies for 30 years (2014) Agreement between Rosneft and Cuban oil companies on the joint work to increase oil recovery in Cuban deposits and on the joint development of fields in the Cuban shelf
Financial security	Concept for Long-Term Socio-Economic Development of the Russian Federation for the Period up to 2020, Section 4, Item 3 “Long-term development priorities of financial markets and the banking sector”	Agreement on the New Development Bank of the BRICS (2014); Treaty for the Establishment of a BRICS Contingent Reserve Arrangement (2014). mutual settlements in national currencies between the BRICS member states (Appendix 1 to the EEU Treaty dated May 29, 2014, Section 15, Item 3). China’s assistance in the creation of the Russian national payment system, competing with American systems Visa and MasterCard; Agreement on settlements in national currency in Russia-Vietnam trade
Infrastructure security	Transport Strategy of the Russian Federation for the Period up to 2030, Section 4; Strategy for Development of Information Technology in the Russian Federation for 2014–2020 and for the Period until 2025	EEU Treaty, Article 86 “Coordinated (correlated) transport policy”; modernization of Ulan Bator railway; participation in the construction of the Transatlantic canal in Nicaragua; Project for creation of a transport hub in Cuba and modernization of the port of Mariel
Information security	Federal Law “On information, information technology and information protection» dated July 27, 2006 No. 149-FZ, Article 9, Item 1; State Program “Information society”, the Decree of the RF Government dated April 15, 2014 No. 313	53rd, 54th and 55th sessions of the General Assembly of the United Nations. Resolution A/RES/54/49 of the General Assembly of the United Nations; the Fortaleza Declaration (following the 6th BRICS Summit) dated July 15, 2014, Item 49 “ICT”; EEU Treaty, Section 5 “Information interaction and statistics”
Industrial development	State Program of the Russian Federation “Development of industry and enhancement of its competitiveness in the period up to 2020”; Meeting of the State Council of the Russian Federation of September 18, 2014, (on the plan promoting import substitution in industry and agriculture for 2014–2015)	Treaty on the Eurasian Economic Union (EEU) dated May 29, 2014, Article 92 “Industrial policy and cooperation”; Concept of Participation of the Russian Federation in the Association of BRICS dated February 09, 2013, Item 19 “Cooperation in the sphere of industry”; Program for Multilateral Trade and Economic Cooperation of the SCO countries dated September 23, 2003, Section 1 “Main goals and objectives of the Program”
Development of science and technology	State Program of the Russian Federation “Development of science and technology” for 2013–2020, the passport of the Program	EEU Treaty, Article 92, Paragraph 4, Item 7 (implementation of joint research and development works in industry; Article 95, Paragraph 7, Item 11 (and in agriculture); Concept of Participation of the Russian Federation in the Association of BRICS, Item 23 “Cooperation in the sphere of science, technology and innovation”; the Fortaleza Declaration, Item 23 (on promotion of scientific research), Item 49, Item 53 (on scientific research into new technologies of obtaining energy); Program for Multilateral Trade and Economic Cooperation of the SCO countries, Sections 1 and 2 (about the ways of mutually beneficial cooperation in science and technology)

End of table

The goal in the sphere of financial security is to create a financial system that would be efficient, globally competitive, capable of providing a high level of investment activity in the economy, and financial support to innovation activities. The recent international documents contain a very clear objective to establish Russia’s financial independence with the participation of strategic partners in the framework of the EEC, BRICS, and a number of countries, such as Vietnam. This target is reflected, for example, in the Agreement on the New Development Bank of the BRICS, which aims to mobilize resources for funding infrastructure projects and projects in the field of sustainable development; and in the

Treaty for the Establishment of a BRICS Contingent Reserve Arrangement, which is to function as an insurance mechanism in case of short-term problems with financial balance in the countries of this group.

In the field of infrastructure security we can distinguish the transport component and the component of information technology. In particular, the aim of transport development according to the Transport Strategy of the Russian Federation is to satisfy the needs of innovation socially-oriented development of economy and society in high-quality transport services. The EEU Treaty (as an international document) recognizes the formation of a common transport space as one of the main priorities in coordinated transport policy. The development of information and communication technologies (ICT) is also recognized as an important area within the Treaty and also within the Fortaleza Declaration of the BRICS.

Information security in modern conditions is gaining particular importance because information becomes an instrument of ideological manipulation. Limited access to information is established by federal laws in order to protect the constitutional system, morality, health, rights and legitimate interests of other persons, national defense and security (Federal Law “On information, information technology and information protection” dated July 27, 2006 No. 149-FZ, Article 9, Item 1). The State Program “Information society” (Decree of the RF Government dated April 15, 2014 No. 313) has been adopted for the implementation of the Law. At the same time, the improvement of the quality of life by using information and communication technology, which is the goal of the program, does not reflect all the importance of this aspect.

Information security began to be governed by international law back in the end of the 20th century. For instance, the 53rd, 54th and 55th sessions of the General Assembly of the United Nations adopted the standard “Achievements in the field of information and telecommunications in the context of international security”. In 1999 the UN General Assembly adopted the resolution A/RES/54/49, which highlighted the growing danger of disseminating and using information technology for destabilizing the global cooperation and violating international security.

The state program of the Russian Federation on the development of industry and enhancement of its competitiveness was adopted in the field of industrial development . However, no significant changes have been observed so far. According to E.M. Primakov, “neo-liberals, in fact, ignore the necessity to restore Russia’s industries (first of all, mechanical engineering) ruined in the 1990s. Post-industrial society is not just high technology and services. For instance, in the current post-industrial United States there is a trend of restoration to cover domestic demand of the industries previously displaced into developing countries” [13].

The current course of events is such that the transition to neoindustrialization is not to be delayed anymore, it is “the most critical problem of our time” [2].

International documents such as the Treaty on the Eurasian Economic Union (EEU) dated May 29, 2014, and other documents (see table) on economic cooperation with Russia’s participation set out priorities for industrial development. The aim of the coordinated industrial policy, according to the EEU Treaty, is to accelerate industrial development of its member states and enhance the competitiveness of their industrial complexes.

The interaction of the Russian Federation with the BRICS member states of in the field of science, technology and innovation implies goals such as cooperation in priority sectors (aeronautics, nanotechnology, food security, biotechnology, exploration of minerals, and others), drafting of programs on scientific and technological cooperation and its legal support (Concept of Participation of the Russian Federation in the Association of BRICS, Section 4, Item 23).

The Fortaleza Declaration of the BRICS member states:

• —    recognizes the need to promote international exchange and cooperation and to foster innovation, research and development for strengthening intraBRICS dialogue (Item 23);

• —    agrees that particular attention should be given to small and medium-sized enterprises, with a view to fostering innovation, ICT research and development. (Item 49);

• —    recognizes the importance of scientific research in the field of new energy technologies (Item 53).

The goals set out in the Program of Multilateral Trade Economic Cooperation of the SCO Member States (of September 23, 2003), another international document with Russia’s participation, include the establishment of mutually beneficial cooperation in science and technology. The priority areas of cooperation include, among other things, the opportunities for mutually beneficial cooperation in the sphere of geological exploration, information and communication technology, the establishment of mechanisms for the development of innovation cooperation, the general interaction in science and new technology (Sections 1 and 2).

According to its results, 4.7% of respondents plan to start their own business in Russia in the next three years – again this indicator is the lowest among the 70 countries participating in the project. This result in the BRICS was 22% on average, and in Eastern Europe – 21% [5].

Social development. The main objectives of the state program “Social support of citizens” (Decree of the RF Government dated April 15, 2014 No. 296) are as follows: creation of conditions for promotion of welfare of the citizens who receive social support; improvement of social services availability. The target indicators of the program: 1) the number of population with money incomes below the subsistence level in per cent to the total population; 2) the percentage of citizens who received social services in the institutions that provide social services, in the total number of people who applied to social service agencies for obtaining social services, in %. In the international context we should point out the initiative of Russia as part of G-20: in 2013 the Saint Petersburg Declaration of the G-20 Leaders was adopted at the G-20 summit in Saint Petersburg; the declaration established the goal of “strengthening growth and creating jobs”, including “higher performance” jobs, as a priority [15].

In order to make international comparisons, we can look at some well-known studies, for example, the Human Development Index (HDI), and specialized studies like the Social Progress Index developed in 2013 under the leadership of M. Porter. The Index takes into consideration over 50 indicators, arranged into three main groups: basic human needs (food, medicine, dwelling, etc.); fundamentals of human welfare (literacy, information, ecology, etc.); human development opportunities (freedoms, rights, realization of potential, etc.).

Innovation development. The Decree of the President of the Russian Federation dated May 07, 2012, No. 596 sets out five “areas” (directions) of economic policy (Article 2) and five indicators (Article 1) to assess the achievement of economic policy goals. One of the areas is “modernization and innovation development of the economy”. The following indicators are adopted to be implemented: a) establishment and modernization of 25 million highly productive jobs by 2020; b) increase in the volume of investment not less than up to 25% of GDP by 2015 and up to 27% by 2018; b) increase in the share of high-tech and science-intensive industries in GDP by 2018 in 1.3 times as compared to the level of 2011; d) increase in labor productivity by 2018 in 1.5 times as compared to the level of 2011 (Decree of the President of the Russian Federation “On the long-term state economic policy” dated May 07, 2012 No. 596).

It is widely recognized internationally, in particular, by the United Nations, that “innovation is one of the main factors that promote economic growth and address environmental and social challenges, and that innovation contributes to the creation of conditions for sustainable development” (Financing Innovative Development, UNECE).

The European Innovation Scoreboard rating published by the European Commission is used as a landmark for innovative development of the country; the rating includes 29 indicators (number of patent applications, the availability of highly qualified personnel and scientists, expenditure on research, etc.). Thus, the U.S. and Japan remain leaders according to the latest data of this study. The EU is still lagging significantly behind them. China, with its focus on technological upgrading and considerable investments, is close to catch up with Europe. Other BRICS countries, including Russia, are still lagging far behind even China.

Thus, the analysis shows that the country requires the development of a unified conceptual project that would link the priorities of socio-economic development to the strategic objectives of Russia’s national economic development with changing geo-economic conditions. At that, one should not neglect the positive experience of the USSR and COMECON, when the tasks of ensuring the country’s security were a powerful impetus to consolidation of various resources (financial, intellectual, industrial). This sovereign project should represent a set of comprehensive strategies on different levels, and enhance the role and importance of Russia in the new architecture of geo-economic world order; it should provide the country’s participation in collective strategies implemented by the Russian Federation together with other interested countries and new integration groups, and defend conceptual interests of national development.