Russia’s Economic Prospects in the Pacific

Abstract

Abstract Economic backwardness has historically been the weak link in Russian capabilities, and this problem is magnified in the huge and sparsely populated regions of Siberia and the Far East. This chapter assesses the economic dimension of Russia’s pivot eastward, including development programs for the Russian Far East, trade and energy agreements with the Asian Pacific countries, demographic trends, and pipeline politics. Kremlin rhetoric has emphasized trade and investment in Russia’s Asia Pacific policy, but as in the past, political and security considerations frequently outweigh economic imperatives. Hyper-centralized, statist approaches stifle local initiative and entrepreneurial creativity. Bureaucratic mismanagement, a preference for showy state mega-projects over small or medium private businesses, and arbitrary decision-making generate waste and corruption, while the absence of a genuine rule of law discourages foreign investment. Economic potential is central to Moscow’s claim to great power status in the Pacific, but the historical pattern suggests Russian weakness on this power dimension will lead to greater reliance on military instruments.