by Pepe Escobar – posted with permission
Modi and Putin discuss business and joint ventures at an economic conference in the Far East
Indian Prime Minister Narendra Modi, left, and Russian President Vladimir Putin review a Kamov KA-226T helicopter painted in Indian Army colors at the Eastern Economic Forum in Vladivostok, Russia on Wednesday. Photo: Grigory Sysoev / Sputnik / AFP
There’s no way to follow the complex inner workings of the Eurasia integration process without considering what takes place annually at the Eastern Economic Forum in Vladivostok.
BRICS for the moment may be dead – considering the nasty cocktail of economic brutalism and social intolerance delivered by the incendiary “Captain” Bolsonaro in Brazil. Yet RIC – Russia-India-China – is alive, well and thriving.
That was more than evident after the Putin-Modi bilateral summit in Vladivostok.
A vast menu was on the table, from aviation to energy. It included the “possibility of setting up joint ventures in India that would design and build passenger aircraft,” defense technologies and military cooperation as the basis for “an especially privileged strategic partnership,” and a long-term agreement to import Russian crude, possibly using the Northern Sea Route and a pipeline system.”
All that seems to spell out a delightful revival of the notorious Soviet-era motto Rusi-Hindi bhai bhai (Russians and Indians are brothers).
And all that would be complemented by what may be described as a new push for a Russia-India Maritime Silk Road – revival of the Chennai-Vladivostok maritime corridor.
Arctic to the Indian Ocean
Chennai-Vladivostok may easily interlock with the Chinese-driven Maritime Silk Road from the South China Sea to the Indian Ocean and beyond, part of the Belt and Road Initiative. Simultaneously, it may add another layer to Russia’s “pivot to Asia”.
The “pivot to Asia” was inevitably discussed in detail in Vladivostok. How is it interpreted across Asia? What do Asians want to buy from Russia? How can we integrate the Russian Far East into the pan-Asian economy?
As energy or trade corridors, the fact is both Chennai-Vladivostok and Belt and Road spell out Eurasia integration. India in this particular case will profit from Russian resources traveling all the way from the Arctic and the Russian Far East, while Russia will profit from more Indian energy companies investing in the Russian Far East.
The fine-print details of the Russia-China “comprehensive strategic partnership” as well as Russia’s push for Greater Eurasia were also discussed at length in Vladivostok. A crucial factor is that as well as China, Russia and India have made sure their trade and economic relationship with Iran – a key node of the ongoing, complex Eurasian integration project – remains.
As Russia and India stressed: “The sides acknowledge the importance of full and efficient implementation of the Joint Comprehensive Plan of Action on the Iranian nuclear program for ensuring regional and international peace, security and stability. They confirm full commitment to Resolution 2231 of the UN Security Council.”
Most of all, Russia and India reaffirmed an essential commitment since BRICS was set up over a decade ago. They will continue to “promote a system of mutual transactions in national currencies,” bypassing the US dollar.
One can easily imagine how this will go down among Washington sectors bent on luring India into the Trump administration’s Indo-Pacific strategy, which is a de facto China containment mechanism.
Luring Chinese capital
In terms of Eurasian integration, what’s happening in the Russian Far East totally interlocks with a special report on China’s grand strategy across the Eurasian heartland presented in Moscow earlier this week.
As for Russia’s own “pivot to Asia,” an essential plank of which is integration of the Russian Far East, inevitably it’s bound to remain a complex issue. A sobering report by the Valdai club meticulously details the pitfalls. Here are the highlights:
– A depopulation phenomenon: “Many well-educated and ambitious young people go to Moscow, St. Petersburg or Shanghai in the hope of finding opportunities for career advancement and personal fulfillment, which they still do not see at home. The overwhelming majority of them do not come back.”
– Who’s benefitting? “The federal mega projects, such as the Eastern Siberia-Pacific Ocean oil pipeline, the Power of Siberia gas pipeline or the Vostochny Cosmodrome produce an increase in gross regional product but have little effect on the living standards of the majority of Far Easterners.”
– What else is new? “Oil and gas projects on Sakhalin account for the lion’s share of FDI. And these are not new investments either – they were made in the late 1990s-2000s, before the proclaimed “turn to the East.”
– The role of Chinese capital: There’s no rush towards the Far East yet, “in part because Chinese companies would like to mine natural resources there on similarly liberal terms as in Third World countries, such as Angola or Laos where they bring their own workforce and do not overly concern themselves with environmental regulations.”
– The raw material trap: Resources in the Russian Far East “are by no means unique, probably with the exception of Yakutian diamonds. They can be imported from many other countries: coal from Australia, iron ore from Brazil, copper from Chile and wood from New Zealand, all the more so since the costs of maritime shipping are relatively low today.”
– Sanctions: “Many potential investors are scared off by US sanctions on Russia.”
The bottom line is that for all the pledges in the “comprehensive strategic partnership,“ the Russian Far East has not yet built an effective model for cooperation with China.
That will certainly change in the medium term as Beijing is bound to turbo-charge its “escape from Malacca” strategy, to “build up mainland exports of resources from Eurasian countries along its border, including the Russian Far East. The two recently built bridges across the Amur River obviously could be of help in this respect.”
What this means is that Vladivostok may well end up as a major hub for Russia and India after all.
RIC strategic partnership is the core of Eurasian Integration.
Add to that core a second ring of South Korea, Vietnam, Iran and Turkey, and you have a dynamic of developing and partially developed nations each of which will prosper enormously as Eurasia grows into the number one market on the planet.
You can see why the Western capitalists don’t want Iran out from under sanctions and no longer a target for Israeli-Hegemon destabilization. Same with North Korea, which, if it comes in from the cold, would, joined in economic development with South Korea (even though the North would remain under Kim’s control), become an Asian dynamo.
The RIC triad is the liberator for the other Eurasian nations who have been kept undeveloped though they possess great mineral wealth and are geo-located in prime zones with coastlines and ports.
Weak link is the “I” in RIC. ‘They’ are working on it as they did on the “B” in BRICS.
PM Modi is making many mistakes. Likely leading to the breakup of India.
Will the Empire succeed? There is a good chance that they will succeed. And then there will only be the “RC” combo. These two must stick together until the US gives up or suffer an economic collapse.
Sure Simon, the old “India Breaking Up” canard, is more wishful thinking on your part, a projection that doesn’t correlate with the facts: India is more united than ever under the BJP and abrogating the offending clauses of the abomination known as article 370 has only increased national unity; for example, even large blocks of the opposition voted with the BJP to remove 370) and (in case you missed it) Modi increased his majority in this second term.
Look at how smoothly India has handled potential unrest in Kashmir from the civilian population compared to snowballing mess in Hong Kong. Your statement about the breakup of India is about as rational as a China hater projecting the break up of China based on the mass revolt in Hong Kong. Although it’s true that Trump and Western Intelligence have truly cornered Beijing in a virtual checkmate: if Beijing cracks down hard, they lose any chance of unifying with Taiwan under the promise of “one country and two systems”, if they do nothing they continue to lose face and watch Hong Kong set precedents that cannot be rolled back. Looks like some policy makers in Beijing have made many mistakes. Despite these mistakes, it would be equally foolish for anyone to wish or believe that China will break apart due to the mistakes made by Beijing in Hong Kong.
Apparently you seemed to missed out on the theme of the article: Modi is expanding India’s relationship with Russia in direct defiance of neocon diktats from Washington threatening sanctions on India for buying the S-400 and for continuing to buy Iranian oil and for continuing to provide Iranian oil tankers with experienced Indian captains and crew (diplomatically complicating things for the neocon pirates in the West that want to seize more Iranian tankers). Also, India continues to proceed with Chabahar port expansion and expansion of the Iranian transport corridor to Russia and Central Asia.
It is not in Russia’s interest to solely dependent on China and it is not in India’s interest to reduce its relationship options in trade, key technologies, and energy by dropping Russia for minor theoretical incremental benefits that may or may not arise from the USA. Nope, it makes more sense for Modi to maximize India’s options by maintaining beneficial relationships with both Russia and the United States. The same is true for Russia, they are much better off to maximize their options by having relationships with both India and China and not be straitjacketed into an unequal partnership solely with China.
In addition, India has an incentive to strengthen Russia even where the financials in specific projects might be better with a non Russian partner. Why? Because, if Russia loses economies of scale in certain strategic industries (like aviation industry), India will suffer because their only options for manufacturing and technology partners in these industrial sectors will by the USA or the US vassal, the EU. In addition, there are synergies between Russia and India in certain industrial sectors that don’t exist between Russia and China (where both Russia and China are competitors in those sectors but India is not). Modi openly acknowledges that the trade turnover between Russia and India is dangerously small and they want to increase this trade and investment exponentially in the coming years. If India wasn’t serious, Putin wouldn’t be investing so much time and effort in ramping up the relationship.
Sorry but the “I” in RIC is here to stay.
If the “I” stays, sooner or later, the “C” would be out. And in its place, the “US”would be in. Then it would be RIUS or USRI, since the exceptional country wants to be first amongst equals.
Russia is playing a double game with China. It is teaming up with Vietnam against China in the SCS. This is reflective of the late great USSR’s “Asian Collective Security” ploy against China.
But both Russia and India is wasting their time and resources and possibly making a long-term adversary out of China. And lose China’s economic and political cooperation – which would be an immense loss.
For Russia, India and the US, the big question mark is what would happen after Putin, Modi and Trump is gone from the scene in about 5 years’ time?
For India, abolishing article 370 threatens the entire Indian Federation in that it raises distrusts, already rife, in not only India occupied Kashmir, but also in North-east India and Southern India, especially in Tamil Nadu. Modi’s great Hindutva policies also add to the fire. Not to mention dooming even already minuscule cooperation with Pakistan. And Modi’s economic policies are already a disaster. E.g 7.5% jobless economic ‘growth’ – a very laughable world’s first! It must be remembered that Modi’s initial economic success as CM of Gujerat was under the guidance and investments of China.
For Russia, its size and continuing population degeneration is the problem. No amount of much touted economic “boom” will hide this fact. Russia struggled to even make USD100B trade with China. Russia won’t be able to trade much with India. India’s main trading partner by far is still China. Russia is a python which had swallowed much more than it could digest. Its belly had burst once (the late great USSR). It is likely to burst again after Putin.
For the US, its economy is tottering. It was tottering even without the trade war. The trade fracas with China only hasten its decline. The US is a huge giant – strong-looking from the outside but actually very, very fragile. Made fragile and brittle by its many wars and financial mismanagement. Infrastructurally, it is looking more and more like a third wold nation by the day.
That leaves only China. That’s the forseeable economic-political future. Why risk lousing up relations with China for no good reasons at all? To do so is daft and is a geopolitical mistake.
As for Hong Kong, please remember that it’s per capita income was USD49,000 in 2018. That was as high as the US and 24.5 times higher than India. That should political anchor stability in Hong Kong.
Hong Kong has some problems like housing which the SAR government is addressing. But the housing problems was arguably caused by the democrats in the Legislative Council who blocked any land reclamation for housing.
Also the protests will be addressed and the problems dwelt with economically.
But India’s problems in Kashmir, the Assam states and southern India have only just begun following the very ill-advised repeal of article 370 of its constitution.
The world is finally developing a way to deal with the US Empire bully. Let’s hope it works, in spite of the Empire’s best efforts to thwart it. Our collective global future depends on it!
“A depopulation phenomenon: “Many well-educated and ambitious young people go to Moscow, St. Petersburg or Shanghai in the hope of finding opportunities for career advancement and personal fulfillment, which they still do not see at home. The overwhelming majority of them do not come back.”
That is a problem.But I think it could be fixed by offering benefits to those people to stay in the Far East. Higher salaries,cheaper access to housing and other goods,like cars,tax benefits etc. Higher pension benefits,sooner.More access to high grade schooling and medical care.This type of problem,and the related issue of population increase in general is an “existential” threat to the future of the RF. And I believe that the use of financial and other benefits should be used to help solve the issue of regional depopulation,as in the Far East.And also the crisis of depopulation in the RF in general.
“Who’s benefiting? “The federal mega projects, such as the Eastern Siberia-Pacific Ocean oil pipeline, the Power of Siberia gas pipeline or the Vostochny Cosmodrome produce an increase in gross regional product but have little effect on the living standards of the majority of Far Easterners.”
This problem can be helped by the same solutions as the depopulation issue. As well as a massive federal and private investment program for the region,building roads,schools,and medical centers.
“The role of Chinese capital: There’s no rush towards the Far East yet, “in part because Chinese companies would like to mine natural resources there on similarly liberal terms as in Third World countries, such as Angola or Laos where they bring their own workforce and do not overly concern themselves with environmental regulations.”
I’m not sure I see this as a big problem. The last thing Russia needs is foreign investment that brings a foreign workforce,and harms the environment.They need good jobs for Russians,and industries that don’t harm the environment.Those foreign companies wanting to work within those guidelines should be allowed into the Far East.And those that don’t,kept out.
The raw material trap: Resources in the Russian Far East “are by no means unique, probably with the exception of Yakutian diamonds. They can be imported from many other countries: coal from Australia, iron ore from Brazil, copper from Chile and wood from New Zealand, all the more so since the costs of maritime shipping are relatively low today.”
No matter how cheap shipping is,importing a natural resource from “next door” is still easier than bringing it in from thousands of miles away. And as important is getting that resource from a friendly ally,than from a vassal state of your worse enemy.Australia has shown they will take Chinese money from trade.But serve the US in their anti-Chinese policies.There could come a day when Australia,Brazil,Chile,and New Zealand,are ordered by the US to stop their trade with China.While,Russia next door,is a friend and ally.And won’t take orders from the US.
Prior to BRICS, or now RIC, there was a much more populous Nonaligned Movement. With similar ideas,
with India one of its leaders, China participating, Russia mildly encouraging. Why it dissipated?
– Was it a curse of complexity? [too many countries, too many interests, too many cultures, etc]
– Was it corruption of too many countries? That is, pretending to be nonaligned but in fact many being
misaligned, internally or externally by IMF, World Bank and usual suspects.
– Wrong timing (Cold War)?
Perhaps Pepe might have a better insight.
Best regards, Spiral
M. K. BHADRAKUMAR with “Kashmir casts shadows on India-Russia ties” has a very different take on the meeting. Two citations:
“On the whole, the outcome of the Vladivostok visit marks a subtle reversal of trend discernible in the revival of the India-Russia relations pioneered by Modi during the past couple of years. Delhi’s calculus could be that a reboot of the US-Indian strategic partnership has become a dire necessity at the present juncture when Kashmir crisis has touched criticality.”
“Russia will sense that despite all the bravado of nationalism, India’s ruling elite is bending over backward to appease the US to navigate its Kashmir policies through a difficult period.”
Pepe Escobar seems very often dominated by wishful thinking. On the other hand, M.K. Bhadrakumar has a very negative take on the Indian handling of Kashmir, which might influence his outlook.
In general, it would be great to see much more real discussions. All what one has currently are such opinion-pieces, without any further development (which would come from true discussions).
MKB the old Congress hand, sadly does not have the pulse on Indian Politics or current trends like he does/did about CIS and Turkey.
Lately, his comments have been fully towing the old Congress line and on bordeline derogatory on his website.
Obviously the guy cannot get over the mandate given to BJP in the latest election and cannot fathom the voting in the Lower & Upper house of Parliment being overwhelmingly supportive of the abrogation of article 370 and 35A.
Sometimes I wonder he’s part of the ‘Lutyen mob’ Modi tangentially talks about.
He is part of the Indian deep state (Lutyens) who Modi went after in the last few years. The old Indian deep state beurocrats and media are the ones who write for Guardian, Washington Post, NY Times, and Washington Post. They have lost all credibility in India along with their NGO buddies.
Vladivostok should be promoted as the Vancouver of Canada. It has natural beauty and is in a unique location with the rest of Asia. Why this city has been so neglected by the Russian government and private entrepreneurs is beyond me. It should be made the focal point if Russian Asia. A center of technology, business, culture and education. It should be turned into center of tourism too with a modern skyline overlooking the sea. Imagine it’s potential of attracting tourists and investors from all over Asia. Build restaurants on the waterfront as well as other entertainment complexes that take advantage of the sea and surrounding nature. And most importantly get rid of the need for tourists visas. You’d even get heaps of Australians visiting who are attracted by it’s geographical closeness and the exoticness of the mixture of East and West. This city has so much potential to be transformed into one of international standing but whatever reason has been ignored by the powers that are.
I think during a time of coordinated peace that Vladivostok would be a primary location of gathering(s). But during times of agitated trade and misunderstandings which we currently are under, the need to raise money to create such a place takes a back seat to actual needs between progressive trading partners. Beauty is one thing, past history is another once tourist and industrial money gets involved. How many cities did China build and then no one showed up?
I’d like to understand what Vladivostok and the east of Russia are like, both in reality and in the Russian mind. Do Russians look down on the East coast? Do they see it as primitive? Are there far more men than women there, like in Alaska?
Doubt that they see it as primitive; it just seems that it is too far from the centre of things. An after-thought… But VVP took a dusty little sea-side town of Sochi and turned it into an international gathering place. Something similar could be planned for Vladivostok. On a much larger scale, of course… It’d need start money, followed by private investments (with suitably favourable conditions). This could be done, given some will, planning, and enthusiasm. Establish a prestigious outfit in the area – a university, research institute, medical centre, even a music/film festival… anything to attract talent. The rest will follow. The city is in an ideal spot.
This is the point I’m making.while Russians may think it’s too far from the center of things, in reality it’s not. It neighbors Japan, China and Korea. By plane it’s close to the rest of Asia and even Australia with more or less the same time zone. Russians should get over their complexof European superiorly and appreciate what the Eastern coast of this country and its neighbors offers. With the right forward thinking it could be another Singapore.
Vladivostok could become a center of medical tourism.