Russia tangles with Japan and
China By Sergei Blagov
MOSCOW - Russia has joined a purely Central
Asian grouping to push its agenda in the strategically
located and energy-rich region. However, Moscow's move
comes against a backdrop of impediments in its Asian
policy, notably increased Japanese pressure over a
territorial dispute and a measure of unease in energy
negotiations with China.
Four Central Asian
nations at the weekend formally endorsed Russia's
membership to their economic bloc, the Central Asian
Cooperation Organization (CACO), which was set up three
years ago by Kazakhstan, Kyrgyzstan, Uzbekistan and
Tajikistan.
Just prior to this, the four CACO
members inked a cooperation agreement with Japan. At a
meeting with Japanese Foreign Minister Yoriko Kawaguchi,
the four foreign ministers agreed to boost political and
economic contacts under a new Central Asia-Japan
formula. Kawaguchi said this would allow Japan to assist
in solving regional problems.
In terms of
geopolitics, the four CACO states are sandwiched between
Russia and China, despite recent American inroads into
the strategic region. However, the new framework for
dialogue with Japan is seen as a move to give Tokyo a
counter to Chinese and Russian clout in Eurasia, ie to
contain Russia and China.
Meanwhile, Moscow has
been upset by Prime Minister Junichiro Koizumi's
decision to take a boat tour around four disputed Kuril
Islands. Koizumi has said that on September 2 he will
view the Russian-held Kunashiri, Etorofu, Shikotan and
Habomai islands that Japan claims as its own. Russian
officials, notably the ambassador to Tokyo, Alexander
Losyukov, lashed out at the idea, stating that Koizumi's
"unproductive" trip would not resolve the dispute, but
only create new problems.
Tokyo insists that the
dispute should dominate bilateral talks, while Moscow
prefers discussions concerning economic cooperation,
notably to develop Russia's Far East.
Tokyo's
increased pressure over the Kurils is particularly
upsetting given Moscow's recent decision to build a
Siberian oil pipeline to the Pacific port of Nakhodka,
along a Tokyo-backed route, that would enable Russia to
export oil to Japan, as well as other Asian countries
and the US. Beijing favors an alternative pipeline that
would bring the oil to Daqing in northwest China.
To get its way on the pipeline route, Tokyo has
held out the promise of major investment in developing
untapped oilfields in Russia. In March, Russia rejected
a previous version of the Japan-backed project,
Angarsk-Nakhodka, in favor of Taishet-Nakhodka,
involving 4,200 kilometers of oil pipeline at a cost of
US$16.2 billion. To back up its lobbying, Japan
reportedly promised up to $14 billion in funding the
pipeline, as well as $8 billion in investment in the
Sakhalin-1 and Sakhalin-2 oil and gas projects,
according to Russian media reports.
Moscow
appeared to prefer the Tokyo-backed pipeline not only
because of the economic carrots, but also due to
Russia's reluctance to depend on a single buyer, as
would be the case with the Chinese option.
To
date, Chinese officials have remained diplomatic and
refrained from overt criticism of Moscow's decision in
favor of Tokyo. Officially, Beijing accepted the Russian
explanation that the construction of an oil pipeline to
China had been included in the strategy for developing
the Russian energy sector until 2020.
However,
the termination of the Angarsk-Daqing project could be
viewed as a breach of trust in Beijing. Construction of
the pipeline from the Russian city of Angarsk in the
Irkutsk region to Daqing in northeastern China has been
under discussion for years, and it was supposed to be
commissioned by 2005.
It could have funneled 30
million tons of oil a year to China - or roughly a
quarter of its current oil imports. This loss is
unlikely to be forgotten in Beijing, which covets land
pipelines that circumvent US-dominated shipping lanes.
However, problems with the China-bound pipeline
could be partially attributed to the seemingly
inevitable demise of Russia's besieged oil major, Yukos,
which had favored the China route. Yukos faces possible
selloff after being hit with a multi-billion dollar tax
bill from the government.
In the first half of
this year, Russia became China's fifth-biggest crude oil
supplier, accounting for 8.5% of total imports. In
April, Russia's state-owned Russian Railways Co, or RZD,
agreed to more than double rail crude oil exports to
130,200 barrels a day (b/d - 6.46 million tons) this
year, up from 60,000 b/d in 2003. In February, Russian
President Vladimir Putin supported RZD plans to boost
oil exports to China by rail. RZD has said it would be
feasible to boost rail shipments to China to 600,000
b/d.
No wonder that Beijing has sought
reassurances from the Kremlin that deliveries to China
would not be disrupted. Russian officials say China
recently agreed to pay Russian rail fees to ensure that
they continue to receive Yukos oil even if the
beleaguered company goes bust.
On August 28,
Russian Prime Minister Mikhail Fradkov reiterated that
Russia would honor its oil export commitments to China.
"Oil products will keep going to China the way they have
been," Interfax quoted Fradkov as saying.
To
give energy ties with China some extra boost, Russian
industry and energy minister Viktor Khristenko traveled
to Beijing on August 25-26. Notably, he promised to
boost Russian oil exports to China to 8.6 million tons
by 2006, adding that the figure could reach 15 million
tons only by 2010.
Russia has previously pledged
to raise its oil exports to China by rail to 302,200 b/d
(15 million tons) by 2006. As now promised, increased
crude supplies from Russia are set to take four years
longer than expected. The delay is unlikely to bolster
Russia's image in Beijing's eyes in the wake of the loss
of the Angarsk-Daqing project.
Hence, Russia's
East Asian policy now seems to be wedged between a rock
of Japanese pressure over the Kurils and a hard place of
Chinese unease over energy supplies. It remains to be
seen whether Russia's tactical drift towards its
perceived Eurasian backyard, the Central Asian
Cooperation Organization, will help it get out of this
tight geopolitical spot.
Sergei Blagov
covers Russia and post-Soviet states, with special
attention to Asia-related issues. He has contributed to
Asia Times Online since1996. Between 1983 and 1997, he
was based in Southeast Asia. In 2001 and 2002, Nova
Science Publishers, NY, published two of his books on
Vietnamese history.
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