A Visit of Inspection to the Russian Far East

|China

At the beginning of June, I accompanied the public- and private-sector joint economic mission to the Russian Far East organized by the Ministry of Economy, Trade and Industry and the Japan Association for Trade with Russia and the NIS, and visited Vladivostok, Nakhodka and Khabarovsk. It was a large mission of more than 70 persons in total, with the leader of the delegation being Takashi Nishioka, President of the Japan Association for Trade with Russia & NIS and a Senior Corporate Advisor of Mitsubishi Heavy Industries.

The background to this mission being dispatched was to respond to the cooperation proposal vis-à-vis Japan which Prime Minister Putin suggested during his visit to Japan in May of this year. The objectives included the inspection of the associated infrastructure, such as the suspension bridge, for the APEC summit to be held on Russky Island situated at the mouth of Vladivostok’s Golden Horn in 2012; the understanding of the situation on the ground for the “Federal Program on Economic and Social Development of the Far East and Zabaykalye up to 2013” begun in 2008; and the examination of local industry and the local market.

What I participated in was not that alone. Ever since my former university days, I have had a class on “Asian Economic Theory”, within which I have taught the economy and industry of the Russian Far East. I have long held that the Russian Far East and Mongolia should also be included within “Asian economics” and I have actively also introduced the Tumen River development project and the concept of a Japan-Sea-rim economic subregion. It is unfortunate that comment is lacking on the Russian Far East and Mongolia within much of what is written on “Asian Economic Theory”. It is 18 years since I visited that area as an official for the “Dalian–Harbin–Khabarovsk” delegation (led by the late Setsuya Tabuchi, the President of Nomura Securities) sent by the Japan–China Northeast Development Association immediately before the collapse of the Soviet Union.

The Russian Far East possesses an unparalleled wealth of mineral resources (oil, and natural gas, etc.), timber, and marine resources. All of the key industries, however, are controlled by the central government and consequently the local residents’ feeling of dependence on the center is strong. Supported by the surge in the price of crude oil in recent years, a sense that they receive just a tiny share has been increased yet further. All the more so in such a situation, because hasn’t the essence of China’Ss reform and opening been enlivened by the development of the Russian Far East?

The first thing should be to free the region from the power of the center. All forms of tax collection, the authority to grant permission, and preferential measures for companies, etc., are involved in the strengthening of local governments’ power. The paying of a high rate of duty on secondhand passenger cars has no advantage for the Russian Far East. The vitality possessed by China’s provincial governments, which have boasted that “If there are policies above, there will be countermeasures below”, should be emulated. The second thing is that the formulation of medium- and long-term industrial policy is imperative. Even though there is business, the backing of industrial policy is missing. This involves the practical utilization of the Asian labor force, the development of industrial infrastructure, the reconstruction of the furniture and timber industry exploiting local resources, the high value-added processing of marine products, and petrochemical plants, etc. The third thing is that the cultivation of managerial staff for enterprises is urgent, and the fourth is the completeness of the rule of law. Finally real links with the countries of Asia are being put to question. I hope that APEC in 2012 will be the impetus for that. Now is the time that the Russian Far East should keep its gaze on the Asia-Pacific, and not look to Moscow only.

[Translated by ERINA]