Russia hosted the seventh Eastern Economic Forum (EEF) in Vladivostok; which provided a platform for entrepreneurs to expand their businesses into Russia’s Far East (RFE).
What is Eastern Economic Forum (EEF)?
The EEF was established in 2015 to encourage foreign investments in Russia.
The forum displays the economic potential, suitable business conditions and investment opportunities in the region.
As of 2022, almost 2,729 investment projects are being planned in the region.
The agreements focus on infrastructure, transportation projects, mineral excavations, construction, industry and agriculture.
Geography of the Region:
The Russian Far East is a region in Northeast Asia.
It is the easternmost part of Russia and the Asian continent; and is administered as part of the Far Eastern Federal District, which is located between Lake Baikal in eastern Siberia and the Pacific Ocean.
Why Russia wants other countries to invest in Far East Region?
Expansion of power: Moscow seeks to strengthen its “administrative and economic footprint in the RFE” through such measures as increased regional investment and the May 2012 creation of a Ministry for the Development of the Russian Far East.
Establishing links with Neighbours: Russia wants to strengthen economic links with its Asia-Pacific neighbours in an effort to tie its economy to the dynamic and growing economies of the Pacific region.
Who are the major actors in the Russia’s far eastern deal?
China is the biggest investor in the region as it sees potential in promoting the Chinese Belt and Road Initiative and the Polar Sea Route in the RFE.
China’s investments in the region account for 90% of the total investments.
South Korea has also been gradually increasing its investments in the region. South Korea has invested in shipbuilding projects, manufacturing of electrical equipment, gas-liquefying plants, agricultural production and fisheries.
In 2017, the Export-Import Bank of Korea and the Far East Development Fund has sanctioned funds for the developments in the region.
Japan is another key trading partner in the Far East. In 2017, Japanese investments through 21 projects amounted to $16 billion.
Japan identified eight areas of economic cooperation and pushed private businesses to invest in the development of the RFE.
What is India’s stand for investing in the region?
India is interested in expanding trade, connectivity and investments in Russia.
India is keen to deepen its cooperation in energy, pharmaceuticals, maritime connectivity, healthcare, tourism, the diamond industry and the Arctic.
In 2019, India also offered a $1 billion line of credit to develop infrastructure in the region.
Through the EEF, India aims to establish a strong inter-state interaction with Russia.
Business representatives of Gujarat and the Republic of Sakha have launched agreements in the diamond and pharmaceuticals industry.
How Russia wants help from India?
Russia wants to cultivate its own connectivity corridors in Eurasia, and in coordination with India and Iran, it is pushing International North-South Transport Corridor (INSTC), a 7,200-km multi-mode network of ship, rail, and roads connecting India, Iran, Azerbaijan, Russia, Central Asia and Europe.
Moscow also wants New Delhi to increase its presence in Central Asia as a balancing power.
India’s act of balancing between EEF and Indo-pacific Economic framework (IPEF)
Though India’s interest in IPEF led by US, is more fulfilling than EEF. However, it seeks to balance out both the economic investments.
The U.S.-led Indo-Pacific Economic Framework for Prosperity (IPEF) and the EEF are incomparable based on its geographic coverage and the partnership with the host-countries.
India has vested interests in both the forums and has worked towards balancing its involvement.
India has given its confirmation and acceptance to three of the four pillars in the IPEF.
Significance of IPEF:
The IPEF plays a key role in building resilient supply chains for India. India’s participation in the forum will help in disengaging from supply chains that are dependent on China and will also make it a part of the global supply chain network.
Additionally, the IPEF partners will act as new sources of raw material and other essential products, further reducing India’s reliance on China for raw materials.