Will Asia Pacific be torn between the two tigers?

As reported by the Associated Press, during the APEC summit in Vladivostok, the US Secretary of State welcomed Russia's more active Russian role in the Asia-Pacific. Citing an unnamed senior US official traveling with Ms. Clinton, the agency states that the State Secretary is eager to hear what Russian President Vladimir Putin's "goals and ambitions" in the region are and how they might complement US efforts.

The report might seem trivial at first sight – in fact, a "more active role" in the Asia Pacific is one of the core aims of today's Russian foreign policy. But it should be looked upon in a much broader context – that is within the framework of the US strategic shift to the region overtly announced about a year ago.

Dotted red line shows vast area claimed by China. The PHL, which is claiming some islands, has begun calling the region the West Philippine Sea. GMA News

Indeed, the Asia Pacific, and especially the South China Sea, is becoming a center stage for all global politics. While in other areas the dominant confrontation defining the balance of powers in the world might seem subdued and, to a certain extent, peripheral, the Asia Pacific region demonstrates it unequivocally. This is an area where the US and its allies are balancing on the brink of an open confrontation with China and are actively building muscles and trying to forge as strong an alliance as possible with countries of the region with the sole purpose of containing China.

Sometimes, though, cracks appear within what the US would like to see as an unmarried alliance. Territorial disputes do not happen between "China and all others" (although most cases fall within the formula), but between US staunchest allies in the region – like Japan – South Korea row over Dokdo Islands as they are called in Korean, or Takeshima in Japanese.

It should be noted that the US is not a littoral country iwithn regard to any of the seas where the territorial disputes take place. Still, it is obviously striving to establish its strategic presence there clearly fearing that otherwise the frontline of its standoff with China will shift much farther eastward, up to its own Pacific coast.

Well, now what lies behind Ms. Clinton's call for Russia to take a more proactive role in the regional affairs and even to "complement" the US efforts?

One of the reasons may be the fact that in shifting its attention to the Asia Pacific, the US has tried to consume a much bigger lump than it can swallow and digest.

Another lies in the fact that Washington is definitely unhappy with the state of Russian – Chinese affairs, which despite the strains in the not so distant history, have reached a level of full-scale strategic partnership.

Clearly, by urging Russia to take more active role in the affairs of the region, the US Secretary of State implies that the regional issues should be raised from the bilateral level between the countries involved to a multilateral level, and that, in turn means weakening China's stance and increasing the role of the US, with all others playing a subordinate and secondary role.

This kind of US strategy has borne certain fruit in the recent past. It has managed not only to renovate its strategic cooperation with old-time allies like Singapore, Australia or the Philippines by increasing its military presence in respective countries, but also to bring into the orbit of its policies in the region countries like Vietnam which, not really having too warm of an attitude towards the US, at present face no other option as to rely on it in order to get rid of China's dominance.

And this brings us to the most crucial question – are the countries of the region doomed to side with one of the two major players, or is there a third alternative?

Obviously, some of the problems of Russia's participation in the Asia Pacific affairs are rooted in the failures of Russia's foreign policy of the 1990s, which, among other things, resulted in a certain cooling of relations with its traditional allies in Asia, including primarily Vietnam, India and Mongolia.

But the present framework of the global US – Chinese standoff opens a possibility of a "third way" in global politics, including (and probably, primarily) in the Asia Pacific.

So, one answer that Ms. Clinton must have gotten from her appeal to Russia is the following. Russia WILL play an increasingly more active role, but it remains highly doubtful that this role will "complement" the US efforts. Rather, it is going to be a truly independent policy that would enable Russia as well as other countries not willing to be torn between the two tigers to find a real alternative.

Boris Volkhonsky

Putin: Asia can count on Russia for energy supply

VLADIVOSTOK, Russia - President Vladimir Putin promised Asia and Pacific leaders meeting in the seaport of Vladivostok on Friday that they could count on Russia to be a reliable energy supplier and provide a bridge to Europe that can help revitalize regional trade.

Russian President Vladimir Putin speaks during a plenary session at the APEC summit in Vladivostok, Russia, Friday, Sept. 7, 2012. (AP Photo/Mikhail Metzel)

Russia is boosting its exports of oil and gas to Asia after years of focusing almost entirely on supplying Europe. Moscow also has ambitious plans to develop its railroads, roads, seaports and airports in the east of the country with the aim of providing a reliable transportation link between Asia and Europe.

"The first and main thing we're going to do is develop transport infrastructure," Putin told regional business leaders.

He played up Russia's common economic space with neighbors Kazakhstan and Belarus as opening "a direct route to Europe for business in the Pacific region."

Faltering vital signs in China and elsewhere make pushing ahead with more and freer trade an urgent priority for the 21-member Asia-Pacific Economic Cooperation forum, whose leaders are gathered in the Russian Far East port of Vladivostok for their annual summit.

APEC aims to foster growth by dismantling barriers and bottlenecks that slow trade and business, while nurturing closer economic ties.

Given its status as an organization governed by consensus, APEC is not known for major policy breakthroughs. Election-year politics and territorial spats make this year particularly challenging.

From the Kuril islands to the northeast of Vladivostok all the way to the Spratlys in the South China Sea, various neighbors are squabbling over territories at a time when they most need to be focused on promoting growth.

South Korea is feuding with Japan, Japan with China and Russia, China with many of its Southeast Asian neighbors. With elections due soon in South Korea and Japan, and a once-in-a-decade change in the Communist Party leadership pending in China, lame-duck leaders facing nationalist pressures at home have little room for amicably resolving the disputes.

"It's bad luck that it happens just before all these transitions. Everybody is looking around and saying, `these people won't be at the table in three months,'" said William Overholt, an Asia expert at Harvard University's Kennedy School of Government.

The sharp decline in growth in trade this year - from 12 percent in December to 4.6 percent in May - underscores the importance of pushing ahead with trade initiatives, the APEC Policy Support Unit, an independent data analysis and research unit, said in a report issued Friday.

As hosts, Russian leaders are showcasing their country's recent entry into the rules-setting World Trade Organization - a key step in traditionally Europe-centric Moscow's effort to build trade and investment ties with its neighbors in the Far East.

"What I'd expect from the meeting is Russia trying to show itself to be a global power, and certainly my view and that of many others is that is not true anymore," said Xenia Dormandy, an expert at the London-based think-tank Chatham House.

President Barack Obama's decision to skip this year's gathering - Secretary of State Hillary Clinton is attending in his place - allows Russia greater leeway to shape its agenda, said Peter Drysdale, a professor emeritus at Australia National University who helped set up APEC in 1989.

"After a long time sitting on the sidelines, the Russians have thrown considerable diplomatic firepower into working up a strong APEC agenda," Drysdale said in a commentary on the website East Asia Forum.

Since last year's summit in Honolulu, Canada and Mexico have gotten the go-ahead to join nine other nations involved in talks on forming a U.S.-backed free trade bloc known as the "Trans-Pacific Partnership." But participants have yet to reach their goal of setting a legal framework this year for the initiative, and Japan, its leaders preoccupied with tax reforms and domestic politics, has so far been unable to join the negotiations.

Such difficulties are inevitable given the high standards set out for the arrangement, said New Zealand's prime minister, John Key.

"All governments involved will have to take some tough decisions if we are to get there. But I am convinced that the high quality TPP is not only achievable but critical for growth in the region," Key told a conference on the sidelines of the APEC summit.

China, which some economists say is on course to overtake the U.S. as the world's biggest economy this decade, appears wary of backing a U.S.-led initiative, and it has commitments to rival free trade blocs in East and Southeast Asia.

TPP talks resumed Thursday near Washington, and officials attending APEC were discussing it in their own meetings. But without China or Japan, the world's No. 3 economy, the initiative would have little traction.

Meeting the rigorous standards for open and free trade, and for protection of trademarks and patents, for example, also would be arduous for former centrally-planned economies such as China and Russia.

But Andrei Belousov, Russia's economy minister, said his country was keen to join.

Meanwhile, keen to leaven its European-dominated trade and balance its growing reliance on dealing with China, Russia is also pursuing a customs union that is meant to evolve into a "Eurasian Economic Union" that would stretch from the Atlantic to the Pacific Ocean.

With Europe still mired in its debt crisis, Asia remains the biggest driver of global growth, despite a decline in powerhouse China's economic growth to a three-year low of 7.6 percent in the second quarter - and signs Japan's own export-led recovery is sputtering.

In its latest forecast, the Manila-based Asian Development Bank predicted the region's economies will expand by 6.6 percent this year.

"Russia is looking to Asia. It's not growing as fast as it was two years ago but it's still the bright spot in the global economy," said Tony Nash, managing director at IHS Global Insight in Singapore. "It's still where the action is."

ELAINE KURTENBACH

Vladivostok Shifts Into High Gear to Attract Asian Investors

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.

To prepare for meetings of the Asia-Pacific Economic Cooperation group, Russia says it spent $22 billion modernizing Vladivostok, its main Pacific port city. That is 50 percent more than Britain spent to prepare London for this summer’s Olympic Games.

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.

Russia has splashed out $20 billion preparing for the summit in Vladivostok, its largest but long-neglected Pacific port, as part of a grand plan to become a bigger player in Asian markets. The spending included building the city's first sewage treatment system.

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