Priorities and opportunities of cooperation between Russia and the Asian-Pacific states

Arctic and Far Eastern Russian macro-regions are key links of regional integration of Russia and its cooperation with Asia-Pacific countries. In the Asia-Pacific region includes countries located around the Pacific Ocean. It is more than 50 states with a population of about 3.5 billion people and fast growing economies.

It is the Asian-Pacific region that forms a dynamic pole of world economic growth. High growth rates, especially among East Asian countries holding an effective economic policy, aimed at increasing exports and attracting investments.

Development of the modern world, especially in neighboring areas, their economic, demographic and political processes and the increasing role of the Asia-Pacific region in the global economy; increase the importance of the North, Siberia and the Russian Far East as the contact area. Its unique geographical location, the Northern Sea Route, the high latitudinal transport systems of the Trans-Siberian and Baikal-Amur mainline railways to the ports of the Far East and Eurasia contribute to the integration of the Russian regions in the world economy, which is particularly important for the strengthening of the geopolitical position of the Russian Federation in the Asia-Pacific region.

Natural resources of the Russian North (including the Russian Arctic), Siberia and Far East are the global geopolitical resources suitable to solve many geo-strategic and geo-economic challenges of Russia [1]. For example, the coastal territory of the Russian Arctic and Far East is not just a concentration of marine economic activities considered for the coastal area. It’s the territory of a complex structural organization with a combination of objective disparity in the territorial-sectoral, production and resource potential. Each part of the area has its domestic, inter-regional and international economic and global factors of development. Its natural resources and the territory of the Arctic zone of the Russian Federation, the North, Siberia and the Far East of Russia, have always been a subject of global economic and geo-strategic interests of the world community. Improvement of the territorial economy of macro-regions’ coastal areas, and strengthening their competitive position are strongly correlated with the development of an innovative economic scenario. But innovations require the fullest use of the competitive advantages of the region, its natural resources and the transit potential, as well as the modernization of transport and energy infrastructure.

The Northern Sea Route goes along the northern coast of the Russian Far East. The resumption of regular shipping there could significantly increase the volume of transit from Europe to Asia-Pacific countries and vice versa. Also this might ensure the northern delivery and the further development of the Russian Arctic. This is an area for maritime transport communication between the Pacific Ocean and the North Atlantic and in the future it might make a successful competition to international trade routes via the Indian Ocean, the Suez, Gibraltar and the Mediterranean Sea. The development of Northern coastal areas is aimed at both the increase in the transit in the Russian Arctic and Far East and increase in the opportunities of the macro-regions of Russia to supply its products for export.

Investment projects and integrated development of the Russian Arctic and Far East is impossible without the implementation of measures to remove governmental restrictions. The decision of social and economic problems and well-being depends on the entire country. And if you do not take serious and drastic measures aimed at developing the regional transport system that ensures the ongoing processes of international economic integration, the alignment of the living standards of population and conditions for business in these macro-regions, it seems to be senseless to talk about effective integration of the Russian economy in the Asia-Pacific economic area. The dominant position is devoted to the logic of partnership and closer economic interaction of Russia and the Asia-Pacific countries for sustainable and mutually beneficial cooperation. However, the absence of transport network along the Russian coast, the short navigation period in the Russian Arctic and undeveloped coastal trade causes great difficulties in communication between the particular areas of the Russian Arctic and Far East Russia.

Benefits of s large area, geographic position between the dynamic regions of the world economy should be accompanied by the development of modern transport infrastructure. Its insufficient level becomes an important factor that slows down the economic development and reduces its competitiveness in the global market. According to calculations made by the specialists from the Organization for Economic Cooperation and Development published in the Russian economic review in January 2014, 10% increase in the efficiency of transport-sector would lead to 0.7% increase of GDP¹. Modernization and efficiency of the transport in Russia is very serious and costly. According to the World Economic Forum, Russia is 93^th among 148 countries in the rating of global competitiveness. Especially weak position demonstrates the quality of the road network — 136^th place in the rating. The quality of airports — 102^nd place, seaports — 88^th, and only the development of railways got a higher rate — 31².

The beginning of 21st century, which will probably go down in history as the “age of the ocean”, was marked by an increased interest of the international community to the development of the marine areas in its geopolitical and geo-economic aspects. Past 15 years of the 21st century had become truly iconic for the Russian Arctic. Modernization, proposed in the state development program for the Russian Arctic3, has become an innovative way to overcome the heterogeneity of northern coastal economy areas through geo-sustainability and macro-projection. The major strategic decisions and concepts are grounded on “green” economy, energy efficiency and sustainable development. These elements allow the leveling of socio-economic differences and make the federal authorities be focused on support of the regional development, which should become “an en-

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gine of growth”4. Northern areas have all the prospects for launching the innovative development, which requires the building of complex of facilities for the processing of natural resources, introduction of a number of innovative technologies along the entire added value chain. Speaking about natural resources, we primarily mean hydrocarbons of the continental shelf and adjacent land areas. Of course, attracting foreign businessmen from Asia-Pacific countries is largely determined by the presence of oil and gas deposits in the Sea of Okhotsk. This opens up new opportunities for the development of the market of petroleum products: domestic ones (supply of petroleum products for Russian consumers) and external ones (large-scale transit traffic). These opportunities could ensure the most productive integration of Russia into the Asian markets, finance system, labor, technology and information space.

Economic development of the Russian Arctic, the North, Siberia and the Russian Far East mineral sector was actively involved in the ongoing processes of the international economic integration. Mineral resources have been the object of investment interests of large national and international companies that use mining and oil and gas deposits as the stable supplier for export. Management of socio-economic processes in this area requires different target indicators for the effective implementation of the tasks. Therefore, the formation of stable economic relations and allocation of industrial areas in the Russian Arctic, the North, Siberia and Far East with the Asian market participants is a major issue of a nationwide scale. Its decision is possible only due to the stabilization of the current economic situation and new strategy of economic growth of Russia.

A key indicator for the expansion of foreign economic relations and international cooperation is the availability of transport. The federal program “Economic and social development of the Far East and the Baikal region for the period until 2018” indicates the following: 1) widening the highways and road infrastructure by 681.2 km; 2) increase of port capacity by 15.65 million tons; 3) opening the reconstructed airport facilities and 40 landing sites for regional and local airlines; 4) 48 new railway junctions of the Baikal-Amur Railway; 5) The turnover of goods on the East Transrange and Baikal-Amur railways will increase up to 587.6 billion tons-km per year5.

The tasks, indicated below, currently remain uncertain. However, it is clear that Russia needs to develop transport infrastructure, to maximize the use of Russian-Chinese regional transport cooperation. It also means construction of an energy bridge to supply China, North Ko- rea and South Korea with electricity and the development of a Russia’s major transport terminal that may associate the European part of Russia with the countries of the Asia-Pacific region, whose share in the exports and imports of goods is significant.

Globalization necessitates infrastructure projects, construction of roads, railways and transport systems for the mineral resource deposits and plants. This will be an impulse for exploration and development of deposits, increasing their economic value, will give a significant push to the social and economic development and will provide all year round access to natural resources in the North-East part of the Russian Arctic, Siberia and the Far East.

Development of port infrastructure provides an increase in turnover and reduces the costs of loading/unloading the vessels; it also provides cost savings for the construction of facilities and investment projects. Latest fishery projects aimed at creating specialized competitive industries, establishing the marine culture farms, artificial fish farming and waste free processing of seafood based on new technologies. Use of fish in biopharmaceutical products means reducing the losses of fishing industry resources for 55% and a positive environmental effect.

Further development of the Asian-Pacific countries requires more resources. So, they are interested in using Russian resources concentrated in the North (Russian Arctic), in Siberia and the Russian Far East. First of all, these are resources that have not yet played the main role in Russian energy exports. The richest resource potential of the North-East Russia makes it possible to take an advantage of growing resource demand in Asia, to modernize Russian economy and to provide North-East Russia with a new economic specialization and source of income.

Interests of Asia-Pacific countries are not limited by gaining the access to the Russian energy and minerals. Japan, Republic of Korea, Malaysia, Singapore willing to participate in the modernization and development of the timber industry, which could be a determining factor in the industrial growth of the North Russia. The establishment of industries based on foreign investments looks promising. One of the innovative and high-tech projects with Asia-Pacific countries is the cosmodrome “Vostochnyi” in the Amur area. The project might push the establishment of a cluster of space-oriented Far Eastern enterprises, mechanical, engineering and instrument production.

Food markets of China, Japan and Korea are transforming now and the growing demand for agricultural products there makes it necessary to develop cooperation in this field as well. Russia could become a supplier of ecological food and make it a brand of the Eastern part of the country.

Asian countries: China, India, Indonesia, Philippines, Vietnam and others are key drivers of the global economy. However, the situation in the Asia-Pacific region is complicated at the moment. The Trans-Pacific Partnership (TTP) includes 12 countries: Australia, Brunei, Vietnam, Cana- da, Malaysia, Mexico, New Zealand, Peru, Singapore, United States, Chile and Japan. A part of the TTP is a so-called “free trade zone” with almost 40% of the world GDP and a quarter of world trade. TTP certainly has a geopolitical dimension. The USA establish their own rules for world trade, providing global leadership and growth in exports, eliminating more than 18,000 of taxes and trade barriers to the US products in 11 countries 6. President B. Obama considers the USA, not China, a leader of the TTP and the USA use it for changing the economic situation and isolating China and Russia. 17 secret documents on negotiation between the USA, other TTP countries, EU and 23 members of the WTO7 were published. Countries signed the TTP agreement let the TTP control a part of their economies. TTP also able to influence the social sphere, services (incl. water and energy supply), transport, banks, insurance, telecommunications and transport.

Conclusion

Only by using the whole set of management, institutional and financial instrument it seems to be possible to establish conditions for strengthening the economy of the country, to promote effective integration of Russia with the other Asia-Pacific countries and use objective benefits of the North, the Arctic, Siberia and the Russian Far East. A need in the dramatic changes of the existing economy is important. Cooperation with Asia-Pacific countries, use of free trade area of the Trans-Pacific Partnership would allow the government, business, and organizations to invite TTP countries for a new mutually beneficial cooperation aimed at stimulating the investment and economic growth in the North-East of Russia, taking into account the current situation. Now our country has a unique opportunity to give new push to the development of the North-East areas of the country due to the mutually beneficial cooperation and trade and the growing capacity of the Asian countries a. And this opportunity should not be missed by Russia.