The Future Is in the East

The Russian media has focused a great deal of attention lately on the deterioration of maritime trade through the Black Sea straits. Russia, whose traditional trade routes pass through the Black Sea, has suffered fundamentally because of new shipping regulations imposed by Turkey. However, this incident is only one episode in a general process that has led to the deterioration of Russia's access to maritime trade routes.


There has also been a dramatic decline in overland communication and trade routes between European Russia and the West. In fact, the situation has generally reached a new nadir. The repercussions of a collapse of trade links between Russia and the rest of the world and the inevitable social and political consequences are becoming increasingly obvious almost daily.


The rise of the newly independent nations of the former U.S.S.R. and the changes in Eastern Europe that accompanied the collapse of Comecon and the Warsaw Pact have created an entirely new trade situation for Russia.


The sharp restriction of Russia's access to the Baltic and Black seas has led to a restriction of access to many trading routes, not only on these seas but in the Mediterranean and in the Atlantic and Indian oceans. In addition, the current overland trade and communication routes with Europe and Central Asia were established under the old Soviet system and now pass through such newly independent states as Ukraine and Kazakhstan. These countries now form an "internal" ring between European Russia and the outside world.


Moreover, an "external ring" has formed along the western borders of the former Soviet Union formed by nations whose policies are causing increasing concern in Russia. It is important to note that this negative trade situation is far from stabilizing, and Russia can only feel uncertain about the reliability of its remaining trade ties with Europe.


Currently, more than one half of all Russian imports and exports are handled by sea. Most of this maritime commerce passes through ports on either the Baltic or Black seas. After the collapse of the Soviet Union, Russia was left with only two -- previously there were seven -- important ports on the Baltic: Kaliningrad and St. Petersburg. Kaliningrad,though, is isolated from Russia by Lithuania and St. Petersburg freezes in winter. On the Black Sea, Russia has retained only two ports of any consequence: Novorossiisk and Tuapse, both quite small.


Russia needs port facilities that handle at least 260 million tons of goods per year. Presently, Russia's ports have an operational capacity of less than 160 million tons. As a result, Russia has had to resort to transporting goods overland through the Baltic States and Ukraine; this wastes considerable amounts of hard currency and poses vast organizational problems.


Also, Russia is forced to rely on the goodwill of these neighboring states. Incidently, Estonia and Latvia have recently begun making territorial demands on Russia. At the same time, Lithuania and Ukraine have been discussing the formation of a "Baltic-Black Sea Economic Community" that would leave Russia even more isolated from the rest of Europe.


Recent developments in Eastern Europe have also caused Russia concern. Many in Russia expected that the collapse of the Warsaw Pact and Russia's withdrawal from Eastern Europe would lead to the independence of these countries from both the East and the West. Events, however, have developed differently and now these countries are applying for membership of NATO. These events are disturbing inasmuch as all of Russia's overland trade with Europe passes through these countries and roughly 40 per cent of all of Russia's trade is conducted with the countries of the former Comecon.


In Russia's south, many regions are locked in conflicts and Russia's trade routes here are, to say the least, unreliable. It seems unlikely that Russia will be able to develop better trade links through this region in the foreseeable future. In the north, of course, adverse natural conditions preclude the development of trade routes.


All of these considerations are increasingly compelling Russia to look toward the East for the development of longterm economic ties. Eastern Russia has direct access to the markets of the Pacific rim, and Russia has three significant trading ports in the East: Vladivostok, Nakhodka and Vostochny. The Far Eastern coast also has a number of harbors that are suitable for development. The distance from the Russian Far Eastern ports to the major ports of the Pacific rim are not much greater than distances between the ports of European Russia and the trade centers of Western Europe.


The use of Russia's Far Eastern ports to improve communications and trade links with the outside world will only be possible when several complex problems are resolved. Among these problems are the development of communication between the Far East region and the rest of Russia, the expansion and modernization of existing port facilities in the region and the development of several related sub-industries. A number of difficult social questions will also arise.


The complexity of these proposals should not be surprising, considering that what we are really talking about is changing the direction of Russia's further development. The Far East must be converted from a distant backwater into the vanguard of the future Russia. In the 21st century, Russia's face will be turned to the Pacific.





Ilya Mogilyovkin is a senior researcher at the Russian Academy of Science's Institute of World Economics and International Relations. He contributed this comment to The Moscow Times.