Some Considerations on Russian Foreign Energy Policy

1
Some Considerations on Russian Foreign Energy
Policy

• Ayako Sugino
• Institute of Energy Economics, Japan
• Oct.25, 2003

2
Questions to be addressed

• Energy as a resource for national power How
  Russia uses it toward East Asia?
• To answer this question, start with another
  question How does Russia view East Asia in its
  global strategy?

3
Russias foreign policy

• Foreign policy defined as perception of
  international system and own ability
• In the case of Russia, current international
  system is US hegemony or uni-lateralism
• How Russia should deal with US and current
  system?
• ? three potential strategic options

4
Russias options

• Bandwagoningpursue economic growth within US
  dominated world order
• Confrontation or completely equal partnership
  return to global power
• Follow reluctantly secure crucial interest
  (influence on neighboring states) within US led
  world order
• ? Follow reluctantly may be rational and
• probable choice

5
Russias abilities

• In terms of military power, economic strength and
  national prestige, Russia is far behind the West
  
• ? Economic development, then military
  reconstruction
• Oil and gas are mercantile, like other
  commodities,
• ?Status as an oil gas exporting country?
• is a political power resource

6
Power derived from energy

• Bilateral influence(suppliers power) e.g. EU
  aims to reduce dependence on Russian energy
• Influence on market balance e.g. OPEC fears
  non-OPEC production increases
• Political expansion as a result of trade and
  investment networks e.g. US concern about
  Russias control of Caspian oilgas
  transportation
• ? In East Asia, bilateral influence attracts
  attention

7
Russias policy goal (economy)

• Short termexpand revenue(through oil, gas and
  arms export), introduce foreign capital and
  technology transfer(mainly in energy industry),
  WTO membership and development
• Long termIndustrial economy(move away from
  monoculture)
• ? Most of these goals will be achieved
• through pro-western diplomacy

8
Russias policy goal (Political military)

• Putin gives significance to military side of
  national power?launched military reform
• Change in perceived threats(terrorism,
  separatism, religious extremism replaced US
  NATO)
• Seek multipolar international system
• ? Most of these goals are common concerns
• of both Russia and China

9
Russias strategy

• To integrate Russia with global economy,
  strengthen Russo-US/EU cooperation
• Strategic partnership and reciprocal friendship
  with Central Asia, and China
• ? Balancing between Atlanticism and
  Eurasianism

10
China within Russias global strategy

• After 9.11, Russo-Sino relations have changed
  from traditional political ties
• Counter-terrorism, unification of nation and
  multipolarism are common concerns. But US-China
  and US-Russia relations have improved
• ? Back away from Anti-American slogan

11
China within Russias global strategy

• Further strengthening of Russo-Sino economic
  cooperation is a priority
• In July 2001, Russia and China signed a
  Friendship and Cooperation Treaty which includes
  an article on construction of an oil pipeline
• 2001 to 2002, Russian-Chinese trade expanded
• Russia aims to de-politicize Russo-Sino
  relations

12
Significance of oil gas pipeline project for
Russo-Sino relations

• Symbol of close ties, not targeting any third
  parties(long term project in non-military sector)
• As merchandise, oil and gas come next to arms
• For China, reduce dependence on Middle East
• For Russia, Far East development
• ? Negative factor for Russia risk involved
• in a single customer

13
Japan within Russias global strategy

• Some obstacles to friendship between Japan and
  Russia
• Japans normalization efforts to link deepening
  economic ties to political improvement
• ? This approach has not succeeded
• For Russia, geo-politically in the east, Japan
  comes after China?

14
Japan within Russias global strategy

• Economically, investment in Far East development
  is required, in terms of technology transfer and
  spill over effects, desirable partners are
  western companies
• Relating to Siberian pipeline route, Russia holds
  Japan card in negotiation with China

15
Conclusion

• Toward China, Russia considers energy to be a
  political commodity
• With Japan, Russia doesnt link energy with
  normalization
• Between Japan and Russia, energy is not a
  commercial matter, but Russia exploits Japan to
  balance Russo-Sino relations
• 
  Thank you