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East Economic Forum
Context:
Russian President Vladimir Putin, speaking at the Eastern Economic Forum (EEF) 2024 in Vladivostok , named India as one of the three countries actively engaged in efforts to resolve the Ukraine conflict.
About East Economic Forum:
- Established: In 2015 to encourage foreign investments in Russia’s Far East (RFE).
- Key Focus: Economic potential, business conditions, and investment opportunities.
- Growth: Agreements increased from 217 in 2017 to 380 in 2021 ,worth 3.6 trillion roubles.
- Workforce Challenge: Sparse population limits resource procurement and supply.
Russia’s Primary Objective behind Investment:
- Resource-rich Region: Fish, oil, natural gas, wood, diamonds, minerals—contributing 5% of Russia’s GDP.
- Focus on Asian Economies
- Asian Investments: Russia aims to secure investments from China and other Asian powers to develop the RFE.
- Sanctions Resilience: Russia views cooperation with China and Asian partners as key to mitigating the impact of sanctions due to the Ukraine conflict.
Strategic Importance of RFE for Russia:
- Gateway to Asia: Geographical positioning supports access to Asian trade routes.This positioning is vital for trade diversification and economic growth, especially as Russia seeks to pivot towards Asia amid strained relations with the West due to the Ukraine conflict.
- Anti-Sanctions Alignment: The EEF is seen as fostering ties between nations like Myanmar, Armenia, Russia, and China in opposition to Western sanctions.
Influence of the United States
- U.S.-China Rivalry: The Russian Far East is impacted by U.S.-China tensions, especially over Taiwan. This rivalry could make the region a focal point for military and economic manoeuvres, shaping Asia-Pacific security.
- Military Cooperation: Growing military ties between Russia and China, including joint exercises, could shift the regional power balance, drawing U.S. attention and potential interactions to limit Chinese influence.
Key Strategic Benefits of India’s Investment in the Russian Far East:
- Countering China’s Dominance: India’s investments help counter China’s dominance, providing an alternative to the two-thirds of foreign direct investment China holds in the Russian Far East (RFE).
- Strengthening Indo-Russian Relations: India’s engagement fosters mutual trust with Russia and strengthens ties with Central and East Asia, as the RFE serves as a gateway to these regions.
- Expanding Influence in China’s Neighborhood: By increasing its presence in the RFE, which borders China, India enhances its influence in China’s immediate neighbourhood, countering the Belt and Road Initiative (BRI).
Accessing Strategic Resources
- Energy Security: The resource-rich RFE offers India valuable commodities such as oil, natural gas, coal, and diamonds. Projects like ONGC Videsh’s involvement in the Sakhalin-1 oil field improve India’s energy portfolio.
- Russia’s leading oil producer Rosneft signed a deal with Indian Oil Corp. to boost oil sales.
Improving Connectivity
- Chennai-Vladivostok Route: The proposed maritime route between India and the RFE will reduce shipping times, facilitating trade and enhancing India’s presence in regions like the South China Sea.
- In 2019, Prime Minister Narendra Modi announced a $1 billion line of credit for various projects in the Russian Far East while announcing India’s Act East Policy from Vladivostok.
Employment and Human Resource Development
- Filling Labour Shortages: Indian professionals can help address the labour shortage in the RFE, supporting regional development and balancing Russian concerns about Chinese migration.
India’s Balancing Act: India is actively engaged in both the U.S.-led Indo-Pacific Economic Framework for Prosperity (IPEF) and the Russia-initiated Eastern Economic Forum (EEF), balancing its interests in both regions.
