Russia to become mainstay of Asian economy

Several very important things became obvious at the ongoing Vladivostok economic forum (ends on 8 September). That annual gathering has always been a venue for anyone interested in the “Asian angle” of the future trends of global economy. This time the people attending and watching that Vladivostok event have discovered, that Asia may become even more lucky in the nearest decade, than it was previously imagined. It’s mostly about energy, since that is something basic for any economy. Conferences are always a PR event, they are about making certain facts and figures very public, especially if you sign some big energy contracts right there, in the spotlight of attention. So, it was at Vladivostok where certain facts about India and Russian oil became very, very public. Prime Minister Narendra Modi have sent greetings to the attendees, noting great prospects in energy cooperation with Russia. He also stressed India’s interest in Russian coal for Indian metallurgy, as well as in pharmaceutics and hi-tech. Almost anyone attending the forum knew the meaning of these words. Russia has rapidly risen to the position of India’s second oil supplier, next after Iraq, with oil imports from Russia rising 50 (fifty) – fold since April. Some Indian attendees of the forum were talking about all kind of trade between two nations rising fast, spurred on by a new model of payments, rupees to rubles, avoiding dollar settlements. It’s all about the war, of course. For some, it’s a local war between Russia and Ukraine, the latter supported by all that’s the West. For others, it’s a global war of the West against Russia and China, with miserable Ukraine chosen as a proxy and a victim of that process, with a view on Taiwan playing the same role. That war is mainly conducted with so-called economic sanctions against Russia, meant to ruin its economy. The result, if you look at the big picture, is surprising. The West has sanctioned itself, refusing to buy Russia’s oil and gas. The global spot prices for these commodities went up uncontrollably, up to 10 times compared to the previous figures, or more. So, as a result, Russia’s Asian partners are getting their energy much cheaper than their Western colleagues. Which makes their production suddenly extremely competitive, while the problem is, that the buyers of that production, especially in Europe, have suddenly become very poor, and price-conscious, and nervous. That’s the basic shape of the world to come, for the nearest decade at least. So it’s small surprise that the main highlight of the conference were two announcements concerning energy supplies to China. The first is an addition to an earlier contract between China’s CNPC and Russia’s Gazprom about pipeline gas deliveries on the “Siberian Power” route, saying that the payments will be made in rubles and yuans on the 50-50 basis. The second announcement is about the future gas line to China, across Mongolia, being basically agreed upon on everything, prices including. So China will have more guaranteed cheap gas for decades to come, while Russian banks have already started lending programmes in yuans, with the US dollar losing even more ground in global settlements. The Vladivostok forum started in 2015 as a local event, it was mostly about attracting investors to a neglected area of Russia, since most business people at the time were crossing the Siberian spaces to reach the big cities in Russia’s Europe. Now the forum is something else. Enough is to say that this time it has been attended by people from 90 nations, including Americans, Europeans and other Westerners. With all respect to venues like APEC or G20 with their oncoming summits, so far it’s in Vladivostok where one simple idea has become obvious. That idea is, that the war the West has started against Russia and China has not only strengthened at least Russia, but it has given unexpected future advantages to Asia in general. And, obviously, that’s how Russia is becoming a very important mainstay of Asian economy. I would not be too sure to say that the top people in Moscow anticipated anything of this. They may have mostly concentrated on withstanding the first blow to Russia’s economy, that was supposed to blast the nation in March, right after the hostilities started in Ukraine in late February. But in reality Russia’s leaders watched, with total amazement, how sanctions against their country began to murder the Western and global economy, without really hurting Moscow. That tired amazement was manifest in the speech of Vladimir Putin, the Russian president, in Vladivostok. The speech was mostly technical, Putin was quoting figures, mentioning small economic facts, while political-minded folks like me mostly waited for something important, on global scope, to be pronounced. But what he said about things global, was bordering on the obvious. First, it’s about Western leaders’ stubborn inability to accept the facts about the West not being all-powerful. It’s that inability that could well be named as the main reason of Asia-Pacific becoming stronger “by default”. Second, the Russian president noted the fact that, at first, after the start of the war, a lot of Western corporations were announcing their departure from Russia. But the first result of it, so far, is closure of their business at least in Europe. Third, nobody expected the Western financial system to become a big question mark, after it was used as a weapon of war against Russia. But now we all have discovered that rupees and yuans are money, too, and good money at that. The overall picture of the current global confrontation is puzzling – here I have to stray from my main Vladivostok topic. We, Russia, have spent decades fearing the West, hating the West, envying the West, admiring the West… You may very well call it a colonial mentality. And now we see that terrible and wonderful West hurting itself while trying to hurt us, not to mention its moral demise. Isn’t it a very Indian situation of, say, late 30-s and 40-s? Dmitry Kosyrev is a columnist for the Russian State agency website ria.ru, as well as for other publications. Views expressed are personal. Read all the Latest News , Trending News , Cricket News , Bollywood News , India News and Entertainment News here. Follow us on Facebook, Twitter and Instagram.