VLADIVOSTOK, Russia - Leaders from 20 nations around the Pacific Basin are gathering for their annual meeting on economic cooperation, held this year in Russia, a nation not often seen as a Pacific power.
Heads of government flying into Vladivostok are arriving at a new international airport built to handle 15 million tourists - 10 times last year’s passenger load.
Major upgrades erected
They will zoom down brand new highways and bridges, including the world’s longest cable-supported bridge. Its one-kilometer-long central span is strung between two towers that are each taller than the Eiffel Tower.
That $1-billion bridge leads to Russian Island, the southernmost part of Vladivostok, and site of a brand new, American-style university campus. The national leaders are holding economic talks there on Saturday and Sunday; next month, when university classes resume, it will be home to 25,000 students.
Professor Artyom Lukin, director of international research at the Far Eastern Federal University, sees the summit as a coming-out party confirming Russia's status as a modern Pacific power.
“Russia wants to be a great Asia Pacific power - not just a great Eurasian power, but a great Asian Pacific power as well,” he said. “If you want to be a great power in the Pacific, you need a developed Pacific coast... the Russian Far East.”
Converting from door to gateway
Vladivostok means “to rule the east.” From czarist times to Soviet times, it served as a fortress city, beating back invasions launched from other parts of Asia. From Russian Island, surrounded by the Sea of Japan, six forts and 27 coastal batteries stood guard defiantly.
Now that it hosts the APEC conference, Russia’s biggest outreach to Asia in memory, Vladivostok's role is not to repel those arriving from abroad, but to welcome them as trading partners.
Russian authorities say they aim to double their Asia-Pacific trade, increasing it to half of the country's overall trade turnover.
Economic Development Minister Andrei Belousov told VOA the Kremlin’s commitment is clear. Only two years ago the summit site was a completely empty field; since then workers have erected buildings with one million square meters of usable commercial space.
Overnight transformation
Vladivostok’s upgrade is so abrupt that a cruise ship had to be brought in to house 500 summit participants.
Workers are still building two Hyatt hotels, the first international chain hotels serving the city of 600,000 people.
Aliya Turumbekova, Hyatt's marketing director, said the hotel group has long-range aims. “In the current time, since the Soviet system collapsed and the world opened for development, for trade, and for economic ties, we see Vladivostok as a good bridge between Europe and the bigger Asia."
Also under construction is a new opera and ballet theater. There are new gas pipelines and a new city sewage treatment plant. Within a year, work is to start on an oil refinery, a liquefied natural gas plant, and a massive gambling zone for Asian tourists. The goal is to make Vladivostok attractive for young people.
Retaining best, brightest
Lukin said one-third of his students usually leave the Russian Far East to seek jobs elsewhere.
“They leave for Moscow, St. Petersburg, Europe, the United States,” he said. “And most of them are the smartest students, unfortunately. So we are losing talent, it is kind of brain drain for the Russian Far East.”
But some of Vladivostok’s young people are embracing Russia’s turnaround on Asia. Anastasia Melnikova, just graduated from university, is looking for work at home, in Vladivostok.
“If you want to go to Moscow, you have to fly nine hours,” says Melnikova, 22, a publishing major. “If you want to go to Japan, you just have to fly just two hours. We are partners, and we will be partners for a long, long time.”
Vladimir Tananikin, a student of English and Spanish, sees China, whose border is only 60 kilometers away, as a plus.
“For me and people here, it is no problem that China is growing, and maybe we will help each other to grow together,” he said.
Now, Russia’s goal is to attract Asian investment. At a news conference for foreign reporters, the region’s new governor, Vladimir Miklushevsky, gave his sales pitch to a group of largely Chinese journalists. He said the Vladivostok region is now open for business, offering transparent and unchanging investment rules and a clampdown on corruption.
From historically repelling Asian invaders, this one-time fortress city now takes on a new role: attracting Asian investors.
VOA
Russia bets billions on turn toward Asia
VLADIVOSTOK, RUSSIA -- Once a mysterious closed city during Soviet times, Vladivostok is ready to strut in the world spotlight as host of the Asia-Pacific Economic Cooperation summit.
But most of what was built seems intended to impress the heads of state and business executives visiting for this week's meetings. After arriving at a new international airport, they will be whisked into the city on a new highway and then across the world's longest cable-stayed bridge to Russky Island, where a U.S.-style university campus has risen from the rocks. Some of the buildings still reek of fresh paint.
Here they will be welcomed Friday by President Vladimir Putin, who has set out to turn Russia east and tap into the growing Asian economies.
Russia has been largely oriented toward Europe, doing fully half of its foreign trade with the European Union. But a crisis among the 17 countries that use the euro is cutting demand for Russian energy supplies and undermining global growth.
Less than a quarter of Russia's trade is with APEC, whose 21 members include China, Japan and other Asian economies in addition to the United States.
"We will have a future of accelerated growth when we have two strong legs: not just one in Europe, but one in Europe and the other in Asia," said Igor Shuvalov, the first deputy prime minister responsible for economic issues.
Russia has the oil and natural gas that Asia needs to fuel its economic expansion. Until recently, though, all of its export pipelines flowed west to Europe.
Russia wants to be more than a supplier of natural resources to Asia, however, and is eager to attract the investment it needs to diversify and modernize its economy.
The first pipeline to send oil east to China began operation in early 2011. An extension of the pipeline to a port near Vladivostok is scheduled for completion by the end of this year, and Russia wants to build plants there to produce petro-chemicals and fertilizers, adding value to its exports.
The eastern regions of the country also have rich deposits of coal and metals, vast forests and plenty of undeveloped land where grain could be grown to meet rising demand in China.
High on Russia's agenda during the APEC meetings is an ambitious plan to turn Vladivostok into a transportation hub to link Asia to Europe by sea and rail. The main line of the Trans-Siberian Railroad runs between Vladivostok and Moscow, nearly 6,500 kilometers (4,000 miles) to the west.
"Building a reliable transport and logistics hub across Asia to Europe is clearly in Russia's interests, but also is something that APEC leaders want to look at as well," said Myron Brilliant, the senior vice president of international affairs at the U.S. Chamber of Commerce.
He cautioned that although Russia has made progress during the past year, it still lags far behind China and Singapore.
"You recognize that if Russia really wants to be a transportation hub, it's got to pick up its game," Brilliant said. "It's got to invest in the infrastructure."
The Trans-Siberian Railroad needs a major track upgrade before it can handle more traffic, and some of the ships in Vladivostok's ports appear to be losing their battle with rust.
Vladivostok gained 150 kilometers (90 miles) of new roads ahead of the summit, including the four-lane highway from the airport into the city. But the 40-minute ride highlights the blight of a long economic malaise.
Hyundai is building a plant near the airport to produce electrical equipment, but otherwise the road passes desolate villages and the rubble of a defunct collective farm.
In Vladivostok, the facades of gracious old buildings on the main avenues have been refurbished. Also as part of the summit preparations, the city of 600,000 has gotten its first sewage treatment system after years of discharging raw sewage into the sea.
The home of the once mighty Pacific Fleet, Vladivostok was a closed city until after the Soviet Union collapsed in 1991. Since then it has fallen into decline, and residents today complain of low wages and a lack of decent housing. Many have left for Moscow or other more prosperous Russian cities.
Some residents hold out hope that the summit will lead to new investment, but many are cynical.
"Nothing will come of all these big plans," said Irina Makhura, holding her toddler son while shopping at a market where Chinese and Vietnamese shop owners sell cheap goods. "They will forget about us as soon as the summit is over. This is all for you foreigners."
Viktor Ishayev, who was recently appointed to the new post of minister for Far East development, disagrees. Russia invested so heavily in the APEC summit, he said, "so that people, heads of state, will come here and see that they are able to do business here."
Lynn Berry
Eighty Percent of U.S. Asia Policy Is Just Showing Up
With China throwing its weight around the South China Sea, and snapping at Japan for its plans to buy disputed islands, the waters of the Pacific are looking a little choppy these days.
Time for a little high-level diplomacy, you might think -- something that not only eases tensions but also refocuses the nations of the Asia-Pacific on the enormous economic stakes they have in regional peace and stability.
If the administration of President Barack Obama is taking seriously this week’s meetings of the Asia-Pacific Economic Cooperation bloc, however, it has a funny way of showing it. Granted, President Obama has a good excuse for not attending the APEC leaders meeting in Vladivostok, Russia. But why did Treasury Secretary Timothy Geithner not attend the earlier meeting of his fellow finance ministers in Moscow?
More egregiously, why did U.S. Trade Representative Ron Kirk, the ostensible point person for the administration’s lofty goal of doubling U.S. exports by 2015, skip both the APEC meeting and the latest Trans-Pacific Partnership trade talks to attend the Democratic National Convention in his “personal capacity.” His choice fails the crucial Woody Allen test for effective job performance -- the one that says “80 percent of life is just showing up.”
Secretary of State Hillary Clinton has taken Obama’s place at the APEC leaders’ summit; Undersecretary of State Robert Hormats is filling in at APEC’s foreign ministers table; and Deputy U.S. Trade Representative Demetrios Marantis has filled in for Kirk, as Undersecretary of Treasury Lael Brainard did for her boss. So at least there are no empty U.S. chairs at what has been, for the past 30 years, the chief Asia-Pacific venue for economic talks. But as diplomatic signals go, this one doesn’t exactly affirm the administration’s so-called pivot to Asia.
Since its founding in 1989, APEC has done a remarkable job of promoting growth and integration among economies that account for nearly half the world’s trade. The average tariff rate among its members has dropped from 16 percent to 5 percent, in part because of the liberalization measures put forward in APEC’s voluntary Individual Action Plans. The 1994 Bogor Declaration for “free and open trade and investment in the Asia-Pacific” created the consensus and underpinnings for the Trans-Pacific Partnership, which was launched in 2005.
Yes, APEC meetings can be long on set pieces and short on concrete results and the forum has lost some prominence and clout to groupings such as the East Asia Summit. And yes, the incipient Trans-Pacific Partnership offers the prospect of binding commitments to spur trade, not consensus-driven, voluntary measures.
Yet APEC not only remains an invaluable incubator for ideas, it is also the one forum that brings together leaders from both sides of the Pacific. As former Australian Prime Minister Paul Keating, one of APEC’s founding fathers, has pointed out, such gatherings have been particularly useful in breaking the ice between Japan’s and China’s leaders. And just as at the United Nations General Assembly, side meetings have loosened numerous logjams, whether on U.S.-China trade or on getting Indonesia to agree to an international peacekeeping force in East Timor. Even the goofy photo-ops in over-the-top local garb -- a tradition begun by President Bill Clinton that President Obama nixed last year -- can help bridge gaps. That’s not to mention what APEC does at the working level to encourage informal contacts and habits of cooperation.
Perhaps because so many U.S. diplomats are lawyers, or perhaps because the habits of a hegemon are hard to break, U.S. diplomacy often takes on a cold, transactional cast. Still, schmoozing and shoulder-rubbing carry added importance at a time of increased regional tension. Even as Asia’s constellation of regional groupings grows, APEC’s talk shop remains central and deserves more attention from the U.S. than it seems to be getting. As Winston Churchill once said in another context, “To jaw-jaw is always better than to war-war.”
Bloomberg
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