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).
Eastern Economic Forum
The EEF was established in 2015 to encourage foreign investments in the RFE. The EEF displays the economic potential, suitable business conditions and investment opportunities in the region.
As of 2022, almost 2,729 investment projects are being planned in the region. The agreements focus on infrastructure, transportation, mineral excavations, construction, industry and agriculture.
The primary objective of the EEF is to increase the Foreign Direct Investments in the RFE. 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.
The sparse population living in the region is another factor for encouraging people to move and work in the Far East. But despite the abundance and availability of materials, procuring and supplying them is an issue due to the unavailability of personnel.
The RFE is geographically placed at a strategic location; acting as a gateway into Asia. The Russian government has strategically developed the region with the aim of connecting Russia to the Asian trading routes.
Major actors in the Forum
This year, the Forum aimed at connecting the Far East with the Asia Pacific region.
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. Russia has been welcoming Chinese investments since 2015; more now than ever due to the economic pressures caused by the invasion in Ukraine.
The Trans-Siberian Railway has further helped Russia and China in advancing trade ties. The countries share a 4000-kilometer-long border, which enables them to tap into each other’s resources with some infrastructural assistance.
Besides China, South Korea has also been gradually increasing its investments in the region. 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 the Far East. Japan seeks to depend on Russian oil and gas resources after the 2011 meltdown in Fukushima which led the government to pull out of nuclear energy.
India seeks to expand its influence in the RFE. During the forum, Prime Minister Narendra 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.
In 2019, India also offered a $1 billion line of credit to develop infrastructure in the region. Through the EEF, India aims to establish a strong inter-state interaction with Russia.
Balance between the EEF and the Indo-Pacific Economic Framework for Prosperity (IPEF)
The U.S.-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 has vested interests in both the forums and has worked towards balancing its involvement. India has not shied away from investing in the Russia-initiated EEF despite the current international conditions.
At the same time, India has given its confirmation and acceptance to three of the four pillars in the IPEF. The country 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.