The Russian Far East's Economic Integration with Northeast Asia: Problems and Prospects

Abstract

T ^ HE END OF THE COLD WAR and the normalization of relations between Russia and China were perceived as opening up new opportunities for the Russian Far East's integration into the Northeast Asian region. Some analysts anticipated that a revival of economic, touristic and other links between the Russian Far East and three of its neighbours,Japan, China and South Korea, would mitigate tensions in their relations and help establish a solid foundation for bilateral and multilateral regional interaction. It was hoped that growing foreign economic ties would have positive security effects on the Russian Far East raising its level of economic development and reducing its dependence on the military and defence industry. Russian analysts anticipated that their country's increasing economic ties with Northeast Asia would maintain its presence and influence at a time of a decline in its military power. These expectations have been largely disappointed. Trade, investment and other links between the Russian Far East and its neighbours have grown, but not as much as originally anticipated. This paper explores the incentives for and obstacles to the Russian Far East's economic integration with Northeast Asia. It analyzes the reasons for its limited success and the security and economic implications. It argues that Russia's incomplete reform and failure to create an attractive trade and investment climate is one of the main barriers to the Russian Far East's economic integration with the Northeast Asian region.