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University of Warsaw. Compensating for Sinocentrism – Russia's foreign policy projects in Asia. Paper presented at the conference 'A Changing Russia in A ...
Marcin Kaczmarski University of Warsaw

Compensating for Sinocentrism – Russia’s foreign policy projects in Asia

Paper presented at the conference ‘A Changing Russia in A Changing World Order’, Strategic Studies Institute, US Army War College, 15-16 May 2012

DRAFT VERSION

1. Introduction Russia’s turn to Asia has been a recurring theme in the Russian foreign policy narratives, present either as a fait accompli (in the Kremlin’s rhetoric) or as a desirable and necessary step (in the view of the pro-Kremlin pundits). Vladimir Putin has vowed to revive the Russian Far East both when starting his reign in the early 2000s as well as when coming back to the presidential “chair”. It was also a recurring theme of Dmitri Medvedev’s public speeches1. Abundant rhetoric notwithstanding, Russia’s approach towards contemporary Asia (the geopolitical landscape of which may be defined as ‘China and the Rest’) is limited to ever closer engagement with China, not accompanied by any kind of hedging strategy. Despite grandiose self-images of Russia as a Euro-Pacific power (to borrow from Lo)2 and its membership in all regional forums (from APEC to the East Asian Summit), Moscow’s overall weakness in Asia has not escaped the attention of both outside observers and Asian political leaders. Russia’s role is negligible whether in the sphere of geopolitical competition (where it remains on the margins of China-US competition for primacy in Asia), crisis management (the case of the Korean nuclear crisis) or in the regional energy market. Relations with Japan have remained in the stalemate over the issue of Kuril islands. The attempt to forge rapprochement with ASEAN states, initiated in the mid-2000s, has not brought expected results3. Strong political and diplomatic support given to Myanmar and Sri Lanka (especially within the UNSC) has so far failed to provide Russia with privileged position of any sort. Taken together, Moscow’s prospects for establishing itself as a major regional player in Asia seem rather bleak. At the same time, the need for a turn toward Asia is strongly advocated by the majority of the Russian foreign policy experts, vowing to design a truly Asian strategy for Russia4. In stark contrast with the official rhetoric, these experts acknowledge Russia’s many weaknesses in the region and refrain from overestimating Russia’s position. ‘Prescriptions’ which they 1

Dmitri Medvedev prinyal uchastiye v Azyatskom Forume Boao, 15.04.2011, www.kremlin.ru. Bobo Lo, Russia’s Euro-Pacific vision – wishful thinking or realistic prospect?, Valdai Club, 26.03.2012. 3 For an optimistic account, see: Vladimir Petrovsky, Russia and ASEAN: 15 years as dialogue partners, RIA Novosti, 20.07.2011. 4 Sergei Karaganov, “Look East”, The Moscow Times, 28.07.2011; Fyodor Lukyanov, “Uncertain World: Russia's Asia challenge”, Johnson's Russia List, 2010-#203, subject 35, 28.10.2010; Dmitri Trenin, Postimperium. A Eurasian Story, Carnegie Endowment for International Peace 2011, pp. 138-140. 2

advocate most often include: attracting the whole spectrum of investors to the Russian Far East (to avoid one-sided dependence on China), creating strategic relationship with the U.S. in the Asia-Pacific region, and committing substantial Russian resources to the development of the region. At the same time, the majority agrees that Russia cannot afford to alienate Beijing by entering into the sort of cooperation with the US (or other actors) which might be regarded by the Chinese leaders as directed against China. Russia’s place in Asian politics should be analyzed against the backdrop of the fast pace of changes within the region itself and its increasing weight in the world politics. The regional order is heavily influenced by China’s rise. It is responsible for both great power competition (primarily between China and the U.S.) and creation of new political and economic interdependencies. On the one hand East Asian economies become more and more integrated with the Chinese ‘engine’, but on the other their leaders keep searching for American political and military reassurances. Unresolved territorial disputes, unpredictability and brinkmanship of the entrenched North Korean regime and the lack of institutional security structures add to the instability of the region. Furthermore, it is the Asia-Pacific region and its political arrangements that define the shape of the emerging post-American global order. Given the above, it is not surprising that Russia has been trying to intensify its efforts to improve its position in the Asia-Pacific region. It remains, however, uncertain to what extent Russia’s foreign policy actions directed at the region may be treated as part of an overarching grand strategy. Though Asia is an important and potentially illuminating case in that regard, it is important to recall that there are serious doubts as to whether the Russian foreign policy may at all be interpreted in terms of a grand strategy. Therefore, analyzing Russia’s prospects in Asia, three levels, on which Russia’s foreign policy is pursued should be distinguished. The first is strategic and applies only to China. Notwithstanding all doubts regarding strategic thinking and acting in the Kremlin, one has to admit that Moscow has consequently broadened the scope of engagement with its eastern neighbor, even if to detriment of its national interests. As a result, Russia’s position in Asia is characterized by strong bias towards Beijing. The second level relates to the Asian dimension of Russia’s foreign policy projects, aimed at galvanizing the role of the Russian Federation as a global and regional great power. Having potential for the increase of Russia’s role in Asia, these projects face serious difficulties that can hinder their implementation. At the third level, Russia’s foreign policy in Asia is dictated by tactical motives and opportunistic reactions to external conditions, as well as by domestic economic and political considerations. This paper aims to assess the prospects for Russia’s future position and role in Asia by looking at the problem mainly through the lens of foreign policy projects. I am going to focus on these actions pursued by the Kremlin in the region, which resemble less a grand strategy, but nevertheless should be viewed as more than separate policy actions. As a consequence, it does not aspire to cover all of Russia’s policy toward Asia. The scope of relations with China is covered in a limited way, although as setting the stage for Russia’s actions, cannot be omitted. Such issues as arms sales, civil nuclear industry expansion, diplomatic maneuvering with Japan, which are considered to be of tactical and opportunistic nature, remain beyond the scope of the paper.

2. Sinocentrism: foreign policy by default?

As it was already mentioned, it seems difficult to reconstruct Russia’s strategy towards Asia, especially in the period after 2008 and the global economic crisis. The main doubts concern the extent to which Russia’s policy is driven by short-term opportunism and reactive character rather than long-term strategic thinking. What remains beyond doubt is the fact that Russia’s Asian policy has been increasingly Sinocentric. On this basis it might be justified to claim that certain elements of strategic calculation do exist in Moscow’s approach towards the region. However, Russia’s growing engagement with China resembles rather a foreign policy by default than a genuine grand strategy. Moscow finds itself unable to respond to changes in the international environment and seems to be driven by the choices made in the past and under different circumstances. In the wake of the global economic crisis, Russia’s engagement with China has broadened, which was especially visible in the spheres of energy and regional cooperation, but was also reflected in Moscow’s attitudes towards Asian security, including regional security architecture and the Korean nuclear crisis5. These developments have not, however, transformed into an enhanced position of the Russian Federation in Asia. Contrary to the Kremlin’s expectations, Beijing has not facilitated Russia’s entry into Asia’s regional order. Moreover, the consequences of the overwhelming focus on the relationship with China are felt across a spectrum of Russia’s other bilateral and multilateral relations in the region. After Moscow’s failure to convince Japan not to link economic cooperation with the Kuril islands territorial dispute, the Kremlin adopted a tougher line in its relations with Tokyo. As a result, bilateral relations with Japan can be said to have reached the lowest point in the post-Cold War history. The visit of then-President Dmitri Medvedev on the Kurils in October 2010 was symbolic in this regard. Russia’s offer to redirect energy streams to Japan, which followed the dramatic consequences of the 2011 tsunami6, has not enhanced the relationship in any significant way as it remained in the rhetoric sphere. Moscow has also intended to reach out to the Korean states, but at least until very recently it has remained in China’s fairwater. With regard to the ASEAN states, Russia seems to have lost momentum observable as recently as the mid-2000s. Even Russia’s inclusion as a full member (along with the U.S.) of the East Asian Summit has not acted as a catalyst for Russia’s policy towards South-East Asia. Symptomatic was the fact that neither President Medvedev nor Prime Minister Putin joined the 2011 summit of the EAS, choosing instead to launch another round of the post-Soviet integration. In order to assess the implications of Sinocentrism for Russia’s future place in Asia, it seems necessary to sketch the balance sheet of the current Russian-Chinese relationship. First months of 2012 are illustrative in this regard. Moscow and Beijing staged joint naval exercises in the Yellow Sea in April7 and announced ‘Peace Mission 2012’ exercises (in the SCO framework) to be conducted in June 2012 in northern Tajikistan8. Both states coordinated their attitudes toward the Syrian crisis, firmly opposing any pressure from the part of the UNSC. The current Deputy Prime Minister (and expected Prime Minister) Li Keqiang visited Russia a few days before Putin’s third term inauguration, what resulted in US$ 15 billion deals9. The Chinese side confirmed that it prepared a new offer for Gazprom, 5

For the account of the growing engagement of Russia with China see: Marcin Kaczmarski, “Domestic Sources of Russia’s China Policy”, Problems of Post-Communism, Vol. 59, No. 2, March/April 2012, pp. 4-7. 6 All the Japanese nuclear power plants have been shut down after the Fukushima accident. 7 Andrei Ilyashenko, Russia and China are intensifying cooperation in the military sphere, 24.04.2012. 8 Roger McDermott, “Beijing-Moscow Axis Drives Preparations For Peace Mission 2012”, Eurasia Daily Monitor, Vol. 9, Issue 82, 1.05.2012. 9 Ding Qingfen, Cheng Guangjin, “Chinese, Russian local govts to deepen ties”, China Daily, 30.04.2012.

which might enable to move forward stalled negotiations over gas deliveries. In June 2012 both sides should establish a joint investment fund, with US$ 2 billion from each side and additional US$ 2 billion from private Chinese enterprises10, whereas in the previous year Russian-Chinese trade reached US$ 83.5 billion11. Russia became the state in the bilateral relationship who has to accommodate to the changing balance of power. The political-military alliance is out of the question, even for the Russian proponents of rapprochement with China12. Nevertheless, close cooperation on a series of global issues remains of crucial importance for both sides. However, joint naval exercises that have been widely interpreted as the response to the US-Philippines exercises in the South China Sea and to US-Korean in the Yellow Sea indicate that it is China that is playing political-military Russian card against the West, not vice versa as it was the case with the ‘Peace Mission’ exercises in the mid-2000s. The model of economic cooperation is far from adopting a final shape. Moscow attempts to block its evolution into a ‘natural resources appendage’ to China’s booming economy. The joint investment fund, similarly as regional cooperation program, envisions investment in processing of resources on the Russian territory; it remains, however, to be seen, to what extent both initiatives are going to be implemented. The experience with 2009 regional cooperation program does not bode well – only a fraction of more than 200 joint projects has been pursued till date. Energy cooperation in the gas sphere is stalled, as China having secured gas from Central Asia is less prone to strive for the Russian gas and may afford waiting for Gazprom’s concessions. Russia keeps to maintain and broaden its ties with China, regardless of potential risks and growing imbalance between both states. China is on the way to become world’s second superpower, whereas the Russian Federation entered the plateau phase, having troubles to catch up with other BRICS countries and make another leap forward in international politics. In Asian politics, the extent of relations with China limits Russia’s freedom of maneuver towards other players, such as Japan, Korean states, Vietnam and other ASEAN members, or even the U.S. Deliberately or not, Moscow is more and more often enforced to follow China’s steps and to take into account the growing scope of China-defined vital interests in the region. Furthermore, growing economic interdependence between China and its smaller neighbors leaves little place for Russia to set in. On the other hand, Moscow’s ties with Beijing weaken Russia’s potential as an ‘equalizer’ of China’s power in the eyes of other Asian states13.

3. Foreign policy projects: Russia’s ‘upward mobility’ means in Asia? Given the elusiveness of Russia’s strategy, this paper proposes to focus on another analytical framework premised on the concept of foreign policy projects (thereafter denoted simply as ‘projects’). The concept implies a certain extent of rational calculation and longterm planning, but it does not suggest the existence of any overarching strategy. Each of the

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USD 2-4 Billion Russia-China Investment Fund to Be Created by Late June 2012, Sectors to Receive the First Investments by End of 2012 Announced, PRNewswire via Comtex, 28.04.2012. 11 “No irritants in Russia-China relations – Putin”, Interfax [in:] Johnson's Russia List, 2012-#78, subject 22, 27.04.2012. 12 See: The Dragon watches the Bear. The Russian debate on China, OSW Point of View 31, Warsaw: Centre for Eastern Studies (OSW), February 2013. 13 Russia’s acceptance (along with the U.S.) into the East Asian Summit demonstrates that Asian states are looking for potential balancers.

projects has the potential to improve Russia’s international position, but at the same time is a reflection of tangible domestic political and economic interests. Studied through these analytical lens, the Russian foreign policy under Putin (and Medvedev) may be viewed as characterized by three major projects that may result in a qualitative breakthrough in Russia’s international standing. These are: the transformation of energy resources into a political tool, the military modernization, and the integration of the post-Soviet space. The projects are expected to strengthen Russia as a great power in the emerging post-American global order. Regardless of the degree of intent and strategic calculation present in the projects (i.e. to what extent they are a conscious and well-thought through reaction to international pressures as opposed to them being a result of bureaucratic politics and bargaining), it should be admitted that each of them has potential for ‘upgrading’ Russia’s international position. Although these projects are envisioned to serve as engines for Russian foreign policy in general, each of them has tangible, Asia-directed components and, if implemented, may improve Russia’s position in the region.

3.1 Energy project(s) The use of energy as a tool of political influence (reflected in the short-lived notion of ‘energy superpower’, announced by the Kremlin in mid-2000s) is the idea most consequently pursued by Vladimir Putin in his foreign policy. Thus it can be termed as the overarching project. It has been reflected in a series of particular undertakings with regard to oil and gas exploration, transportation and export. The most crucial for Russia’s future role in Asia projects include: the East Siberia-Pacific Ocean (ESPO) oil pipeline; the development of LNG facilities, enabling LNG export; the development of key oil and gas fields located in Asian part of Russia (such as Sakhalin, Kovykta, etc.); the eastern and western gas pipelines to China; the trans-Korean gas pipeline; and securing of access to Mongolian natural resources. The Asian vector of Russia’s energy project(s) was summarized in the Russian Energy Strategy to 2020 as the intention to send to Asia 30% of exported oil and 25% of gas. Russian Energy Strategy to 2030 corrected these ambitions, declaring the goal of increasing share of export of oil and oil products from 6% to 22-25% and of gas from 0% to 19-20%14.

a) Eastern Siberia – a new oil and gas province for the Asian market? The primary challenge for Russia is to develop the resources of the Eastern Siberia as well as shelf resources of the Okhotsk Sea, which would in essence mean the creation of a new oil and gas province. The current stage of oil development in the eastern provinces is limited and may not provide enough resources for the Asian market. Rosneft operates Vankor field (300,000 barrels per day), TNK-BP operates Verkhnechonskoye field (40,000 bpd)15, which in sum contributes only several per cent of Russia’s 10 mbd oil output. Gas fields have not been explored yet. State enterprises present in the region include Gazpromneft’ (which has its licenses and owns Slavneft’ and in effect its licenses for exploration) and Rosneft’ (that has applied for

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Energeticheskaya strategiya Rossii do 2030 goda, utverzhdena rasporiazheniyem Pravitelstva Rossiyskoy Federatsii ot 13 noyabrya 2009 goda, #1715-p, p. 10, available at: www.energystrategy.ru (accessed 5.07.2012). 15 Vladimir Soldatkin, “POLL-Russian oil output growth to slacken in 2011”, Johnson’s Russia List, 2010-#7, subject 24, 11.01.2011.

licenses in the shelf)16. Foreign investors that are envisioned as potential partners in the development of these resources include: South Korea (KONC), Japan (Inpex Corp. and Japan Far East Gas Co.) and China (mainly CNPC). Russian plans to attract investors comprise also joint industrial projects, such as the LNG processing plant and petrochemical facilities17. Especially after the Fukushima catastrophe in 2011 (and when faced with the Chinese demands to lower the price of oil under contract with Rosneft’), Russia has attempted to reach out to Japan, offering creation of joint ventures for development and processing of the region’s resources18. It has, however, failed to achieve any tangible results. A future gas export to the Asian market requires development of the gas fields in the Eastern Siberia. One of the main candidates is Kovykta gas field, which – having been taken away from TNK-BP - was sold out to Gazprom in 201119. The field is considered a main source of future gas export to China. Another candidate is Chayandinskoye gas field (Chayanda) in Yakutia – Gazprom suggested possibility to start exploration and build a pipeline to the Far East. According to the Russian plans revealed in 2010 by Deputy Prime Minister Igor Sechin, till 2020 East Siberia and the Russian Far East should produce about 150 bcm of gas, which would allow to export of a significant portion20. At the same time Gazprom strives to attract investments from Japan and South Korea for the development of gas fields in Eastern Siberia (Chonskii group of gas fields for the Japanese companies)21. Another element of gas export plans is the Sakhalin-Khabarovsk-Vladivostok pipeline, put into operation in 2011. Its initial capacity is 6 bcm per year, but till 2020 it could reach even 30 bcm, which would allow for export of significant portion22.

b) East Siberia-Pacific Ocean pipeline (ESPO) The East Siberia-Pacific Ocean oil pipeline (ESPO) is considered a crucial element of Russia’s entry into the Asian energy market. Its capacity in the first stage reaches 30 million tons per year and in the second, final, stage – 80 million tons (of which the branch to China would cover 15 and 30 million tons respectively). The first phase of ESPO was inaugurated in December 2009. The impact of ESPO on Russia’s position in Asia may be limited due to the growing interest of the U.S. in the Russian oil – in 2010 the U.S. received 1/3 of 15 million tons sent by this pipeline23. Furthermore, as the ESPO project did not manage to provoke the Sino-Japanese competition for Russian resources (for which the Kremlin hoped), its geopolitical impact, once completed, may be limited. Deliveries of oil from the ESPO to China began in early 2011, amounting to 15 million tons per year. Later China declared its readiness to buy the entire delivery/transport of the first phase (i.e. 30 million tons). This proposal was rejected by Moscow at the same time as both

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Kirill Melnikov, „Gazprom neft’ razvedala Vostochnuyu Sibir’”, Kommersant, No. 189, 10.10.2011, http://www.kommersant.ru/doc/1791579. 17 Alexei Topalov, “«Rosneft’» vmesto «Fukusimy»”, Gazeta.ru, 6.06.2011. 18 Oksana Gavishina, „Zamena Kitayu”, Vedomosti, No. 93, 25.05.2011. 19 Olga Mordyushenko, Kirill Melnikov, “Rosneftegazu perekryli gaz”, Kommersant, No. 36, 2.03.2011. 20 Sergei Blagov, “Russia Plans Far Eastern Energy Drive”, Eurasia Daily Monitor, Vol. 7, Issue 130, 7.07.2010. 21 Alexei Nepomnyashchiy, “Podelyatsya riskami”, Vedomosti, No. 19, 3.02.2012. 22 Anatoly Medetsky, „Gazprom Opens Pipeline to Sakhalin”, The Moscow Times [in:] Johnson’s Russia List, 2011-#163, subject 22, 9.09.2011. 23 Seda Yegikyan, Denis Rebrov, “Vostochnosibirskaya neft’ zavoyevyvayet SShA”, Kommersant, No. 120, 7.07.2010.

sides entered into dispute on pricing. As a result China underpaid for contracted oil deliveries24.

c) Reaching out to the Asian gas market The export of gas to the Asian market is a third component of Russia’s energy project, aimed at improving Russia’s position in Asia. It comprises: gas pipelines to China, the trans-Korean gas pipeline, and the new LNG facilities destined for the Asian market. The story of gas pipelines to China keeps unraveling since 2006. In its course two gas pipelines have been considered, the Western (‘Altai’) and the Eastern one. At the same time two major issues with regard to China stand out. Firstly, there is the crucial question of the extent to which China needs Russian gas, especially given the very fast pace of development of the Chinese LNG facilities and gas pipelines from other states, primarily Central Asia and Myanmar. Secondly, the problem of prolonged price negotiations stands in the way of a smooth cooperation. Initially, in 2009 both sides signed a framework agreement on gas deliveries. In the most ambitious version of Russia’s plans, China was to receive about 70 bcm gas per year, which was to be delivered by two pipelines. Over the last months, negotiations have focused on the Western pipeline only, with capacity at about 30 bcm. After two years of intense negotiations, in mid-2011, both sides failed to reach an agreement. The 2012 may witness a new phase of gas talks, as China has allegedly handed over new proposals to the Russian side during the recent visit of the future prime minister, Li Keqiang. It is probable that the focus will be redirected to the Eastern pipeline, in which China seems to be more interested. This pipeline is foreseen to supply north eastern provinces of Heilongjiang, Jilin and Liaoning25. As a part of pressuring China in the negotiation process, Russia has strived to block the sale of gas from Sakhalin-1 project, operated by ExxonMobil. The positions of both sides varied between US$250 and US$350, although this difference was narrowed in late 2011, reportedly to the level of US$6526. The trans-Korean gas pipeline may be interpreted in two ways. On the one hand, its aim is to secure Russia’s influence in the Korean Peninsula. On the other hand, the pipeline is a way to further pressure China to accept the conditions of the negotiated gas contract. In November 2010, Gazprom and Korea Gas signed a memorandum on cooperation and 2011 witnessed high-level political dialogue with regard to the issue. Additionally, Russia’s ambitious plans with regard to Korea go far beyond energy, comprising also railway routes (by-passing China) and electricity sales27. With regard to LNG, Russia aims to broaden its potential (currently at10 million tons in the framework of the Sakhalin-2 project). One way is to increase the capacity of the Sakhalin-2 project by 50 per cent, and the other is to purchase gas to be produced by the Sakhalin-1 consortium. Potentially, with the use of the northern passage, gas from the Yamal-LNG project (led by Novatek, with Gazprom and Total) could be sent to the Asian market. Yet another LNG facility is considered by the Japanese Itochu Group in Vladivostok28. Gazprom 24

China Wants All Oil from Russia's ESPO Pipeline, RIA Novosti, 15.02.2012. Gazprom may start discussing sending gas to China via eastern route, source says, Interfax, 17.10.2011. 26 Gazprom demands $25 bln advance from CNPC in 2011 - source (Part 2), Interfax, 7.07.2011. 27 Lyubov Pronina, “Medvedev Eyeing Energy, Modernization Deals in Asia Trip”, Johnson’s Russia List, 2010#209, subject 32, 9.11.2010. 28 FACTBOX-Russia's LNG capacity to rise over next decade, Reuters, 1.06.2011. 25

considers also the construction of CNG facilities in the Russian Far East, with overall capacity (LNG and CNG) equating about 26 bcm per year29. Russian officials often declared the ambitions to make Vladivostok or Sakhalin the regional hub for LNG trade, but so far the expectations have failed to materialize30.

3.2 Military modernization Military modernization (often termed the military reform) has been a constant exercise in post-Soviet Russia. It has gained pace, however, only after the 2008 Georgian War. Although the general direction of the Russian modernization is aimed at the United States (the development of air and space defense, VKO, and countermeasures against US MD program) and the post-Soviet space (ground forces modernization, which is directed at capabilities ranging from counter-terrorism to intervention in one of the neighboring states)31, it has an important element directed towards Asia. Nonetheless, the Eastern/Asian component of the Russian military modernization is difficult to discern. It includes both the naval modernization (the Pacific Fleet) and ground forces modernization. At the current stage, however, the Russian military modernization with regard to Asia seems to be multidirectional. It is undertaken as an attempt to encompass a variety of possible military threats. In the first row, it is the Pacific Fleet that is going to be strengthened in the Eastern part of the Russian Federation. It is to be provided by two nuclear cruisers, one refurbished, one moved from the Barents Fleet. The acquisition of Mistral class ships is also envisioned for the needs of the Pacific Fleet32. There are, however, serious doubts whether Mistrals are useful for the Eastern flank33. The potential enemy is not obvious. For some analysts, it is joint US and Japanese naval forces34. Other observers point out that the build-up of the Russian fleet is to match that of China35. The Second element of the intended improvement of power projection of the Russian forces is the strengthening of components deployed in the South Kuril islands. According to the 2011 announcements, they should be strengthened in terms of both power projection and defense capabilities. With regard to the latter, the level of air defense should be improved by way of deploying S-400 missile systems. The emphasis put on naval capabilities in the Russian Far East suggests that hedging against China is of little relevance for the Russian leadership. It is rather the presence of Russian flag that is to demonstrate Russia’s role in East Asia. Similarly, the partial withdrawal from conscription and the reduction of ground forces quantity suggests that largescale protracted conflict (with China) is considered of little probability. 29

Gazprom May Form Hub in Far East to Supply Asia, Bloomberg, 11.10.2010. Roman Kupchinsky, Russian LNG – The Future Political Background, Washington, DC: Jamestown Foundation 2009, s. 22-23. 31 Sergei Konovalov, “Armiyu gotovyat k voyne na dva fronta”, Nezavisimaya Gazeta, 28.09.2011. 32 Two new nuclear strategic submarines (Borei class, equipped with Bulava missiles) will be based in the Russian Far East, but they are part of strategic forces, directed first and foremost at deterrence mission against the US. 33 Viktor Litovkin, “Kontrakt na Mistral’ i golovnuyu bol’”, Nezavisimaya Gazeta, 20.06.2011. 34 Pavel Felgenhauer, “Voters Will Pay For a Military Buildup After Electing Putin”, Eurasia Daily Monitor, Vol. 8, Issue 213, 17.11.2011. 35 Stephen Blank, “Russia’s Navy Muscles Up and Looks East”, Eurasia Daily Monitor, Vol. 8, Issue 23, 2.02.2011. 30

Military districts have been replaced by four joint strategic operational commands (SOC), of which ‘the East’ has become responsible for Siberia and the Far East. The former commander of the Pacific Fleet, Admiral Konstantin Sidenko, was appointed the commander of new OSK East, which suggests the high importance attached to the naval dimension of Russia’s military presence in Asia36. The Vostok-2010 military exercises partially reflected the scope of Russia’s leadership ambitions with regard to Asia. At the same time, however, the scenario of the exercises left many doubts as to what the targets were. Some pointed out that Japan might have been considered, as the exercises simulated an amphibious assault on the Kuril Islands. On the other hand, the Russian forces responded to massive conventional attack and counter-strike using tactical nuclear weapons was executed, which suggests that China was the potential target37. The key question is to what extent these modernizations and military exercises may contribute to the improvement of Russia’s position in a future Asia. The balance between power projection capabilities and purely defensive capabilities suggests that the Russian leadership hedges against different possible scenarios of Asia’s political developments. At the same time, Russia aims not to be left behind as a military player, especially given the significant increase in the Chinese and Japanese military expenditures. Military modernization could be also interpreted as a way to throw its weight behind the initiatives in the sphere of regional security. Russia, along with China, proposed new security architecture in 2010,details of which remain, however, unknown. As a result, Russia’s role as a security provider in the region may be assessed as insignificant38.

3.3 Post-Soviet integration The post-Soviet integration, similarly as military modernization, has been an inherent part of long-term pattern of Russia’s foreign policy. Nonetheless, all to-date attempts to reorganize the post-Soviet space have been unsuccessful. A new approach may be traced back to 2009, when in the aftermath of the global economic crisis (that seriously affected all postSoviet states), Moscow introduced a new integration project – the Customs Union. It was soon declared to become the Common Economic Space, which in 2015, is to be turned into the Eurasian Union. Importantly, the current phase of post-Soviet integration is not aimed at the opening of that space in the Asian direction. It is rather designed to foreclose the region and isolate it from Asian (as well as European) competitors. Although the project of the Eurasian Union should not be treated as motivated only by the Chinese inroads into Central Asia, the tide of Beijing’s successes observed for the last several years must have been significant for the Russian decision-makers.

4. The role of the Russian Far East: Goskorporatsiya Dalnego Vostoka

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Roger McDermott, “New Russian Strategic Level Commanders: Makarov’s Successor in the Making?”, Eurasia Daily Monitor, Vol. 7, Issue 149, 3.08.2010. 37 Stephen Blank, „ Russia to Deploy S-400 Anti-Aircraft Missiles in Kurile Islands”, Eurasia Daily Monitor, Vol. 8, Issue 52, 16.03.2011. 38 Oksana Antonenko, Russia Emerges as a Big Player in Asia-Pacific, 9.06.2011.

The development of the Russian Far East has gained a new impulse after Vladimir Putin’s return to presidency. The scope of ambitions is reflected in the plans to establish a new political-economic super-structure: the state corporation (goskorporatsiya) for Siberia and the Far East. According to the plans prepared by the Ministry of Economic Development, the state corporation would gain extraordinary powers and the law establishing it would prevail over other normative acts of the Russian Federation39. For the very first time the idea was voiced by Sergei Shoigu, then-head of Ministry for Extraordinary Situations (MChS), in January 2012, following Vladimir Putin’s order of November 2011 to create a new institutional structure that could deal with the development of Russia’s Asian provinces40.

5. Conclusions: prospects for Russia in a future Asia The pursued foreign policy projects cover a wide spectrum of Russia’s foreign policy and as such have the potential to influence Russia’s place in the Asian order, providing Moscow with increased economic-turned-political influence (via energy supplies and regional integration structure) and power projection capabilities. The probability of success remains, however, elusive as all the debated projects have serious drawbacks. The short review of Russian foreign policy projects clearly indicates that Russia is going to improve its position in Asia and increase its influence first and foremost by means of energyrelated initiatives. Assuming that Russia’s goal was to prevent China’s domination of Central Asian energy sector by offering its own energy resources (as claimed by e.g. Kari Liuhto), Moscow has rather failed, being unable to secure agreement with China on natural gas deliveries41. The to-date balance sheet of Russia’s energy project(s) in Asia is limited: deliveries of oil to China (equating to less than 10 per cent of Chinese oil import) and deliveries of LNG to Japan and South Korea (about 7 and 5 per cent of their imports respectively). In addition, the planned energy developments in Asia have to compete with other energy projects – pipelines in Europe and shelf development in the Arctic. The key question that arises with regard to the military modernization is to what extent such modernization is planned with the view to increase the power projection capabilities and to what extent is it devised to strengthen Russia’s defense in the region, including the protection of sea routes for energy transportation. The post-Soviet integration project – in the form of the Eurasian Union – lacks an Asian component and may end up as a way of creating a ‘Eurasian fortress’, thus further distancing Russia from Asia. Two aspects of Russia’s Asian policy that may have significance if approaches from a strategic perspective may deserve closer attention in the years to come: relationship with Japan and partnership with Vietnam. They have not been discussed in the paper, as they still seem to be driven by tactical considerations, either domestic political reasons (as with Japan) or commercial interests of domestic economic actors (as with Vietnam). Nevertheless, if Russia manages to pursue policy with regard to both states more

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The details have been at first revealed by: Kirill Melnikov, Aleksandr Gudkov, Aleksandr Panchenko, “Vsia vlast’ v Sibiri”, Kommersant, No. 71, 20.04.2012. 40 Igor Naumov, “Vostok strany prirastet novoy goskorporatsiyey”, Nezavisimaya Gazeta, 23.01.2012. 41 Kari Liuhto, Energy in Russia’s Foreign Policy, Electronic Publications of Pan-European Institute 10/2010, s. 44.

consistently, it might provide it with broader room for maneuver in East Asia, in particular with regard to China42.

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For an optimistic point of view on Russia’s ties with Vietnam, see: M. K. Bhadrakumar, “A fly in China's Russian ointment”, Asia Times, 17.04.2012 [in:] Johnson's Russia List, 2012-#74, subject 35, 23.04.2012.