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. Russia’s 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. Russia’s options Bandwagoning:pursue 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. Russia’s 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(supplier’s 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 Russia’s control of Caspian oil&gas transportation ※ In East Asia, bilateral influence attracts attention

7. Russia’s policy goal (economy) Short term…expand revenue(through oil, gas and arms export), introduce foreign capital and technology transfer(mainly in energy industry), WTO membership and development Long term…Industrial economy(move away from monoculture) ※ Most of these goals will be achieved through pro-western diplomacy

8. Russia’s 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. Russia’s 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 Russia’s 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 Russia’s 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 Russia’s global strategy Some obstacles to friendship between Japan and Russia Japan’s 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 Russia’s 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 doesn’t 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