07:33 GMT +321 August 2018
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    Pivot to Asia

    Eurasia Highly Important at the St. Petersburg International Forum 2018

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    John Harrison
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    17,000 delegates from 143 countries participated in this year’s SPIEF, including delegates from the UN, IMF and OPEC. A certain “coming of age” of Eurasian cooperation was one of the central themes.

    One of the many themes discussed was the development of the Russian Far East and of the various Asian organizations which Russia is a member. Mr Yaroslav Lissovolik, a chief economist with the Eurasia Development Bank, an expert in Eurasian economic affairs, joins the program.

    Yaroslav starts the program by taking about the Russian Far East. "The region has been termed as one of the key development areas by the Russian government… We are starting to see an improvement in economic indicators. We are seeing that this is one of the better preforming regions across Russia, and there is tremendous potential for that region to take off…"

    Russia is involved with a number of organizations which not everybody outside of Asia has even heard of. First and foremost, there is the Shanghai Cooperation Organization (SCO) which helps countries try to find common ground. "The SCO (made up of Russian, China, India, Kazakhstan, Kyrgyzstan, Tajikistan, Uzbekistan and Pakistan) is the key platform for bringing together all of the impulses of integration on the Eurasian continent… The SCO is all about economic connectivity and greater cooperation amongst the key heavyweights of the developing world and Eurasia, namely China, India and Russia…. We are going to see cooperation in the development of the East-West transportation corridors that China is keen to see, and the North-South corridors that Russia is keen to develop." Whether or not the SCO is expanding too quickly, is an issue that is discussed in the context of comparing the SCO with the EU, and the SCO is likened to a group of people who are in a room, and who may not get on famously with each other but do at least recognize that they are in the same room. "Once you are in that room you try to focus on the future, not on the past, but on your common interests, and this is what this organization is all about."

    In the past, cooperation between Eurasian countries was scoffed at, even ridiculed, but according to Yaroslav, cooperation is now beginning to actually happen. "In the past several years we have seen a veritable breakthrough in terms of not only commitment but in terms of actual delivery of these integration projects. In particular I would single out the agreement that was signed between the Eurasian Economic Union (EEU) and China… which liberalizes trading agreements and encourages crucial areas such as investment. We are seeing actual projects and agreements that will significantly reduce the number of barriers, and this is vital for the economies of the region, because geographically if you take the Central Asian Republics, the key barrier there is that they are landlocked. That is a major deterrent to economic growth, but the SCO and the ‘One Belt One Road' initiatives allow these economies to intermediate the flows of investment and of trade between the East and the West, and this transforms the geographical position of these countries from weakness into strength…"

    Yaroslav mentions that there seems to be a trend whereby cooperation between Eurasian countries is being encouraged, if not speeded up by the imposition of sanctions between the US and China. "It's not only Russia that is turning to the east and is starting to develop its trade ties more actively; we see that Russia's trade with Asia has increased by several percentage point each year, whereas trade with the EU for example has declined to the same degree. It's broader than that. I would say that it's the entire global south, the developing world. They see these impulses of protectionism in the developed world, and they are starting to become more active in forming their own platforms of integration and seeking to reduce barriers with each other… an example of this is the BRICS Plus initiative that was launched by China last year which potentially could be the largest integration platform in the world comprising of developing economies. Another example which is very recent is the signing of an agreement between the African countries to create essentially a Pan-African free trade area…"

    The impact of the Northern Sea Route on the economy of the Russian Far East is discussed, as is the attitude of some of the VIP's who attended SPIEF, including Christine Lagarde, the Managing Director of the International Monetary Fund. Yaroslav comments: "The message coming from the IMF was quite positive, and I think, justifiably so… the main economic indicators have improved significantly over the past few years… this is a trend that is echoed form many countries throughout Eurasia who feel the effects of Russia's success. The key question is whether Russia will be successful in reaching its own growth target, which increasingly is being set higher and higher, and there is an intention to bring Russia's growth closer to the world average which is now approaching 4% per annum. Russia's growth of 1.5% is seen in Russia as being insufficient, and various initiatives are now being discussed to raise the potential level of growth…."

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    Tags:
    economic affairs, Economy, SPIEF-2018, Eurasia Development Bank, Shanghai Cooperation Organization, BRICS, Eurasia, Russia, Asia, Russian Far East
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