Carnegie’s Alex Gabuev and The Financial Times’ Asia editor Jamil Anderlini discuss coronavirus, the ongoing U.S.-China trade war, and the geopolitical dynamics in Asia-Pacific.
This podcast focuses on Russian trade since 2014, when the country started to turn away from the West and increase its exposure to China. Podcast host Alex Gabuev is joined by Tatiana Flegontova and Janis Kluge.
The purchase of a stake in Arctic LNG 2 by a Japanese consortium is certainly a significant step in the development of economic ties between Russia and Japan, but if the Russian government doesn’t quickly begin work on improving the country’s investment climate, this deal will not be the start of a torrent of Japanese investment, but rather a small island of success in a vast sea of missed opportunities.
Despite Russia’s limited toolkit, growing alignment with China, and its broken relationship with the U.S., Moscow will not be written off by Washington and its allies when it comes to the diplomatic process on North Korea.
The Kremlin needs to understand clearly that it is up against not just Japan but also the Russian public—and based on public opinion surveys, two-thirds of Russians do not want to hand over the Kuril Islands. The Kremlin will not be able to coerce the people into accepting its point of view.
In theory, the seizure of a greater share of Sakhalin’s resource wealth by the federal authorities could lead to a fairer distribution of wealth throughout the Russian Far East. The fear, however, is that further centralization of budgetary revenues will merely encourage the pursuit of vanity projects that will not come to fruition for over a decade, if ever.
The window of opportunity for improving Russo-Japanese relations is still open, at least for now. Russia’s main objectives are to attract Japanese investment into its national economic development programs and to continue to diversify its policies in the Asia-Pacific and on the international stage, where Japan plays an important and increasingly independent role.
The Kremlin’s new development program for the Kuril Islands is as generous and extensive as its predecessors. The key difference, however, is that now the military—the one area seemingly immune to cutbacks—will be responsible for making sure the program is implemented.
