Pacific Affairs: An International Review of Asia and the Pacific

Volume 72, No. 2

 

The Russian Far East's Economic Integration with Northeast Asia: Problems And Prospects
By Peggy Falkenheim Meyer

 

Abstract

The end of the cold war and the normalization of relations between Russia and China were perceived as opening up new opportunities for the Russian Far East's integration into the Northeast Asian region. Some analysts anticipated that a revival of economic, touristic and other links between the Russian Far East and three of its neighbours, Japan, China and South Korea, would mitigate tensions in their relations and help establish a solid foundation for bilateral and multilateral regional interaction. It was hoped that growing foreign economic ties would have positive security effects on the Russian Far East, raising its level of economic development and reducing its dependence on the military and defence industry. Russian analysts anticipated that their country's increasing economic ties with Northeast Asia would maintain its presence and influence at a time of decline in its military power.

Despite high hopes and significant external as well as domestic political support for an expansion of the Russian Far East's economic integration with East Asia, the results have been disappointing. Trade, investment and other links between the Russian Far East and its neighbours have grown, but not as much as originally anticipated. Russia's incomplete reform and failure to create an attractive trade and investment climate have presented a significant barrier to the Russian Far East's economic integration with the Northeast Asian region. Despite this disappointing background, there are two areas - energy development and trans-shipment through Russian territory - which may attract large-scale foreign investment, but only if Russia creates a more attractive environment.