Russia's Potential for Economic Integration: Three Possible Strategies

Abstract

The present system of the Russian economy has a deep historic background, especially regarding the role of the state which plays a prominent role in economic and social life. Natural resources’ trade is the main source of state revenues as well as central part of Russian foreign trade with its neighbors; CIS countries, EU and China with whom it has developed different kinds of economic and political relationships. Concerning regional economic arrangements the best option for Russia is to build its own Regional Economic bloc made out of the willing CIS countries. Closer economic integration with the EU would be welcomed, and could be realized through the energy trade, but because of Russian size, wealth of natural resources, defense system and different system of values, as well as self perceived greatness and glory, Russia is not likely to participate in any economic or political integration that will try to impose any significant restrictions, unless it enables Russia to take dominant position. The Shanghai cooperation initiative is Russian bid to counter the rising influence of China in the region of Central Asia. Better trade relations with China would be welcomed, and if Russia can take significant role in the energy supply it would gain some leverage in relations with China, which may result in mutually beneficial economic, political and security partnership based on mutually acceptable terms.