Russia hosted the seventh Eastern Economic Forum- EEF Vladivostok from September 5 to 8. The four-day forum is a platform for entrepreneurs to expand their businesses into Russia’s Far East (RFE).

What is the Eastern Economic Forum-EEF?

• The EEF was established in 2015 aiming to encourage foreign investments in the RFE to display:

1. Economic potential
2. Suitable business conditions and
3. Investment opportunities in the region

• Focus areas: The agreements focus on infrastructure, transportation projects, mineral excavations, construction, industry and agriculture.
• With EEF, Russia is trying to attract the Asian economies in investing and developing the Far East.
• This year, the Forum aimed at connecting the Far East with the Asia-Pacific

What does the EEF aim for?

• FDI inflows: The primary objective of the EEF is to increase the Foreign Direct Investments in the RFE.
• Natural resource exploitation: The region encompasses one-third of Russia’s territory and is rich with natural resources such as fish, oil, natural gas, wood, diamonds and other minerals.
• Demographic revamp: The sparse population living in the region is another factor for encouraging people to move and work in the Far East.
• Unleashing economic potential: The region’s riches and resources contribute to five percent of Russia’s GDP.

Success of EEF

• Agreements signed at the EEF increased from 217 in 2017 to 380 agreements in 2021, worth 3.6 trillion roubles.
• As of 2022, almost 2,729 investment projects are being planned in the region.

Who are the major actors in the EEF?

• China is the biggest investor in the region as it sees potential in promoting the Chinese Belt and Road Initiative and the Polar Sea Route in the RFE.
• China’s investments in the region account for 90% of the total investments.
• South Korea has invested in shipbuilding projects, manufacturing of electrical equipment, gas-liquefying plants, agricultural production and fisheries.
• Japan is another key trading partner. In 2017, its investments through 21 projects amounted to $16 billion.

How does Russia see Chinese investment in EEF?

• Russia has been welcoming Chinese investments since 2015; more now than ever due to the economic pressures caused by the war in Ukraine.
• The Trans-Siberian Railway has further helped Russia and China in advancing trade ties.
• The countries share a 4000-km-long border, which enables them to tap into each other’s resources with some infrastructural assistance.
• China is also looking to develop its Heilongjiang Province which connects with the RFE.
• Both nations have invested in a fund to develop connectivity between the cities of Blagoveshchensk and Heihe.

India and Russia’s Far East

• India seeks to expand its influence in the RFE.
• In 2019, India also offered a $1 billion line of credit to develop infrastructure in the region.
• During the forum, PM Modi expressed the country’s readiness in expanding trade, connectivity and investments in Russia.
• India is keen to deepen its cooperation in energy, pharmaceuticals, maritime connectivity, healthcare, tourism, the diamond industry and the Arctic.

Strategic significance of EEF for Russia

• Gateway to Asia: The RFE is geographically placed at a strategic location; acting as a gateway into Asia.
• Negating the Ukrainian war impact: The Ukraine war is a worrying issue as it affects the economic growth of the country.
• Surviving sanctions: Although, the EEF is an annual gathering, the forum comes at an opportune time for Russia who is dealing with the impact of the sanctions.
• Supply chain resilience: The IPEF will also play a key role in building resilient supply chains.

Will India be able to strike a balance between the EEF and IPEF?

• Both are incomparable: The US-led Indo-Pacific Economic Framework for Prosperity (IPEF) and the EEF are incomparable based on its geographic coverage and the partnership with the host-countries.
• India values both: India has not shied away from investing in the Russia-initiated EEF despite the current international conditions.
• India is firm for its purpose: At the same time, India has given its confirmation and acceptance to three of the four pillars in the IPEF.

Conclusion

• India understands the benefits of being involved in the development in the RFE but it also perceives the IPEF as a vital platform to strengthen its presence in the Indo-Pacific region.
• India’s participation in the forum will help in disengaging from supply chains that are dependent on China and will also make it a part of the global supply chain network.

Also read:

[Sansad TV] Perspective: Russia’s Far East- Opportunities for India

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