Main Geopolitical Directions For Urals Are South And East

12.10.2009 — Analysis

Several centuries ago the Urals had been the outpost for conquering Siberia, the Far East and the Central Asia. Today the Urals region is aiming to become one of the pivotal points for the economic integration of Russia with the SCO member countries. What role is assigned to the Urals in Russia's geopolitical security system? Would Ekaterinburg become the centre of Eurasia? These were the questions discussed by Aleksandr Tatarkin, the Director of the Institute of Economics of the Urals Branch of the Russian Academy of Sciences, in the interview with the RusBusinessNews observer.

- Prof. Tatarkin, let's start with determining the place of the Urals region in the world's geopolitical system. Does it actually have a place there?

- Before we start talking about the Urals' geopolitical role I would like to say that in recent times we have been underestimating the gravity of the problems with Russia's geopolitical status. Our authorities, science, many governmental and civil society institutes reckoned that the Great Power status afforded by the world community to the Soviet Union will automatically inherited by the Russian Federation.

The reality proved to be much tougher. Russia today is experiencing great discomfort because the status we are used to is perceived by the world community very differently. This is why one of goals of the conference was to approach the assessment of this status more objectively and with deeper consideration, as well as to review the formats and mechanisms of securing the role our country wants to have at the world community level.

Moreover, the conference posed the question of the role of individual Russian regions in strengthening Russia's geopolitical status. The Urals, although being an old industrial region that needs a serious restructuring and renovation in its development, nevertheless has not lost the important position in securing this status which it had in the times of the Soviet Union.

The Urals is a midland region. This is an area of high concentration of innovation-oriented companies - first of all in the defence industry. This is why our region remains the basis of the geopolitical claims advanced by the Russian Federation.

Today we can not just demonstrate our political will to do something for the sake of peace preservation and development of good neighbourly relations which are mutually beneficial with other countries. We have to prove that we are able to develop our own economy, that we can resolve our own problems in socio-economic development in the interests of each individual. The situation in the Urals as a developed industrial region should reflect these aspirations.

- We do not manage that so far. In the second quarter of 2009 Russia disgraced itself by taking the 19th place among the G20 countries in terms of GDP (minus 10.9%).

- That is so, unfortunately. In particular, it was an ill conceived idea to make the establishment and development of the stock market a priority. It seems that everybody understands that the financial crisis that began in 2008 was man-made due to blowing the financial bubbles, artificially raising shares and bonds prices in the stock market. Nevertheless, in January 2009 the decision is made on the adoption of the concept of the prioritised development of the stock market. In March this concept is validated and converted into a programme; a goal has been set to establish a world financial and securities trading centre in Moscow. Meanwhile, we still assign the real sector of economy a mere supporting role. In essence this is yet another attempt to blow a financial bubble paying no attention to the necessity of the development of the real sector in order to solve many, primarily social, issues.

- Is the lack of attention paid by the Government to the real sector of economy detrimental to the geopolitical status of the Urals?

- It is, undoubtedly. I'll give you one more example. In the end of the previous year the Central Bank of Russia jointly with the Ministry of Finance made a decision on a gradual devaluation of the rouble. It was clear from the start that this is done to protect interests of oil and gas exporters.

- Metal makers in the Urals export their products too...

- Yes, they do. Their exports have diminished sufficiently, though. Before the crisis the Urals metal makers have been actively restructuring their production capacities. Many a company in the metals sector (Sinarsky Pipe Plant, Magnitogorsk Iron and Steel Works, and others), borrowed money abroad in foreign currencies since they could not afford the loans offered by Russian banks due to high interest rates. They purchased equipment and began modernising their production capacities. When the gradual devaluation of the rouble began the companies which were most concerned and made most effort for the technical modernization and restructuring of their production capacities have suffered the most. This is an example of how the care that Government takes of one sector of economy can turn into colossal losses for other sectors.

- Many participants of the conference mentioned the Shanghai Cooperation Organization in their presentations. It seems there is a lot of hope in this organisation raising geopolitical status of the Urals region. Is that so?

- We start with the fact that Russia enjoys great influence over the Shanghai Cooperation Organization. In this international organisation, like in no other, you feel the deep respect to our country. This attitude manifested in that the summit of the SCO heads of state in July 2009 was held in Ekaterinburg. Within the framework of this event the agreement was reached on the allocation of one billion dollars for the Sverdlovsk Oblast by the state-owned China Development Bank for the development, including social infrastructure among other things. This demonstrates that the attitude towards the Urals remains rather respectful, and its profile is high. China, in general, seems very interested in the development of economic, cultural, and academic links with the Urals subjects of the Russian Federation. Our academic delegation will visit three Chinese provinces in October 2009. Harmonizing the research interests is the goal of the visit.

- If this is not a secret, what are these interests aimed at?

- These science and organisational formats of the integration of research and production are as follows: establishing technoparks, technopolises, innovation break-through areas etc. There is also the exchange of opinions in the sphere of monitoring of the effect of external factors on the socio-economic stability of the SCO member countries, positive as well as negative. This monitoring is necessary to warn the authorities of the impending external threats.

By the way, the academia has been predicting the financial crisis. We are going to suggest the establishment of an international group representing legislative and executive bodies of authority, academia, civil society in order to monitor the effect of external and internal factors on the stable and sustainable development, to inform the society in time, and to pose questions to the authorities regarding the undertaking of the necessary steps on the prevention or alleviation of these threats. It may well be that this group will be established within the SCO.

- The fact that the Urals region in recent times is in the very close political and economic embrace of the SCO countries which are not exactly entirely democratic - would this not turn Europe away?

- There is some truth in what you are saying. But I do not see to too much of a contradiction here, the action programme for the SCO member countries differs very little from that of the countries of the European Union or, for that matter, BRIC in which India and Brazil are members as well as Russia and China.

Moreover, we have to take into account the fact that the Russian Federation is a Eurasian country. The location of our country does not allow us to give the exclusive preference to either European or Asian interests. We have to rely on the harmonization of opinions of both the European and the Asian communities, whatever the regimes or government formats. Our position gives us the obligation to play the role of the Eurasian diplomats.

- From the geopolitical point of view, however, the Urals is closer to the Asian countries geographically and economically...

- Purely historically we have already demonstrated our desire for the development of integration along the two main vectors. The Urals industry, especially in the Soviet period, was developing as a centre which integrated the industrial production in the Eastern (Siberia, the Far East) and the Southern (Kazakhstan, the Central Asia) directions. These were the routes along which the Urals approached China and other Asian countries; manufacturing, academic, and cultural links were established.

This is why our region is traditionally well respected in Asian countries. Not long ago we went to Harbin, China, with a governmental delegation. The Chinese gave us a lot of examples that in metals, pipes, Uralmash walking draglines, and defence machinery the Urals is a very familiar and stable partner for them.

- The migration processes within the country and in the Urals in particular have also been mentioned at the conference. How do these processes affect the geopolitical alignment of forces in our region?

- Other processes develop on the basis of migration - manufacturing, science and technical, and infrastructure integration. This is why migration processes have a lot of attention, both in terms of well being of migrants and the attitude of the Urals people to them.

Here we have to report a rather contradictory situation. On the one hand the Urals region, as well as Russia as a whole, needs personnel. This shortage is manifesting in virtually every sector of economy, especially in agriculture, construction, and services industry. So the influx of immigrants from China, Vietnam, Korea, Tajikistan, and other Asian countries helps to solve this problem.

On the other hand the countries which supply us the immigrants are interested in that the status of their citizens in the Russian regions was somehow made official and that their interests are not infringed. These issues have also been discussed in informal bilateral talks of Heads of SCO member states at the Ekaterinburg summit.

Efforts are being made today to achieve a clearer and better balanced legal regulation of the migrants' status. This indicates that the problem does really exist. Our suggestions were based on surveys conducted amongst migrants and the local population of the Urals region. The results demonstrate that what is needed here is a certain compromise in term of the definition of the migrant status, the attitudes of the local authorities, and a clearer definition of types of activities where migrants can be employed.

The interview has been prepared by Pavel Kober