29 March 2014, 20:31

Russian economy turns to Asia - official

Russian economy turns to Asia - official

In a bid to refocus the Russian economy on partnerships in the East, a group of Russian officials and top managers is touring Asia to establish economic ties. The group is led by Alexei Likhachev, Deputy Minister of Economic Development at Russian Federation who believes that the growth of Russian economy doesn't depend on the US imposed sanctions.

In an interview for the Russian press, Likhachev stressed that strong economic sanctions against Russian will likely hurt the European Union and the United States therefore such sanctions are unlikely. However, Russia should developed stronger economic links with Asia, even if a global "sanctions war" is avoided. According to Likhachev, countries from the Association of Southeast Asian Nations (ASEAN) are attractive for Russia because their markets are "complimentary" to the Russian economy unlike the European ones. He readily admitted that the trade volume with Europe is significant but pointed out that European exports don't contribute to the creation of high-tech jobs in Russia. Concentrating on Asia is warranted because exports in this region include high tech machinery and military equipment not only hydrocarbons. Also, Asian markets, unlike the markets in Europe, have a tremendous growth potential and significant synergies with Russian economy.

Russia's "shift to Asia" is not an ad-hoc response to the pressure coming from the US and the EU. The ASEAN economic tour of government officials and top managers of corporation like AFK Sistema, Rosneft and Glonass was planned in autumn 2013. However, it is obvious that western sanctions have given impetus to this strategic initiative. Alexei Likhachev stressed that the Russia-ASEAN cooperation is very important and its goals are for the long run:

"In august we will have a meeting of economy ministers of Russia and ASEAN countries and the topic will be Russia's participation in the organization's economic agenda. In 2015 we'll have a Russia-ASEAN summit and we will prepare a plan for common projects that will be approved by the countries' leaders in order to have support at the highest possible level. Such pragmatism is our end goal."

It seems that the US sanctions will only strengthen the desire of the Russian government to develop stronger ties with Asian partners. The net loser in this context is the European Union because losing its key trading partner will be a painful blow to the European economy.

    and share via