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You're reading: Putin: Asia can count on Russia for energy supply

VLADIVOSTOK, Russia — President Vladimir Putin promised Asia and Pacific leaders meeting in the seaport of Vladivostok on Friday that they could count on Russia to be a reliable energy supplier and provide a bridge to Europe that can help revitalize regional trade.

Russia is boosting its exports of oil and gas to Asia after years of focusing almost entirely on supplying Europe. Moscow
also has ambitious plans to develop its railroads, roads, seaports and
airports in the east of the country with the aim of providing a reliable
transportation link between Asia and Europe.

“The first and main thing we’re going to do is develop transport infrastructure,” Putin told regional business leaders.

He played up Russia’s common economic space with neighbors Kazakhstan and Belarus as opening “a direct route to Europe for business in the Pacific region.”

Faltering
vital signs in China and elsewhere make pushing ahead with more and
freer trade an urgent priority for the 21-member Asia-Pacific Economic
Cooperation forum, whose leaders are gathered in the Russian Far East port of Vladivostok for their annual summit.

APEC
aims to foster growth by dismantling barriers and bottlenecks that slow
trade and business, while nurturing closer economic ties.

Given
its status as an organization governed by consensus, APEC is not known
for major policy breakthroughs. Election-year politics and territorial
spats make this year particularly challenging.

From the Kuril
islands to the northeast of Vladivostok all the way to the Spratlys in
the South China Sea, various neighbors are squabbling over territories
at a time when they most need to be focused on promoting growth.

South Korea is feuding with Japan, Japan with China and Russia,
China with many of its Southeast Asian neighbors. With elections due
soon in South Korea and Japan, and a once-in-a-decade change in the
Communist Party leadership pending in China, lame-duck leaders facing
nationalist pressures at home have little room for amicably resolving
the disputes.

“It’s bad luck that it happens just before all these
transitions. Everybody is looking around and saying, ‘these people
won’t be at the table in three months,'” said William Overholt, an Asia
expert at Harvard University’s Kennedy School of Government.

The
sharp decline in growth in trade this year — from 12 percent in December
to 4.6 percent in May — underscores the importance of pushing ahead
with trade initiatives, the APEC Policy Support Unit, an independent
data analysis and research unit, said in a report issued Friday.

As hosts, Russian
leaders are showcasing their country’s recent entry into the
rules-setting World Trade Organization — a key step in traditionally
Europe-centric Moscow’s effort to build trade and investment ties with its neighbors in the Far East.

“What I’d expect from the meeting is Russia
trying to show itself to be a global power, and certainly my view and
that of many others is that is not true anymore,” said Xenia Dormandy,
an expert at the London-based think-tank Chatham House.

President
Barack Obama’s decision to skip this year’s gathering — Secretary of
State Hillary Clinton is attending in his place — allows Russia
greater leeway to shape its agenda, said Peter Drysdale, a professor
emeritus at Australia National University who helped set up APEC in
1989.

“After a long time sitting on the sidelines, the Russians
have thrown considerable diplomatic firepower into working up a strong
APEC agenda,” Drysdale said in a commentary on the website East Asia
Forum.

Since last year’s summit in Honolulu, Canada and Mexico
have gotten the go-ahead to join nine other nations involved in talks on
forming a U.S.-backed free trade bloc known as the “Trans-Pacific
Partnership.” But participants have yet to reach their goal of setting a
legal framework this year for the initiative, and Japan, its leaders
preoccupied with tax reforms and domestic politics, has so far been
unable to join the negotiations.

Such difficulties are inevitable
given the high standards set out for the arrangement, said New Zealand’s
prime minister, John Key.

“All governments involved will have to
take some tough decisions if we are to get there. But I am convinced
that the high quality TPP is not only achievable but critical for growth
in the region,” Key told a conference on the sidelines of the APEC
summit.

China, which some economists say is on course to overtake
the U.S. as the world’s biggest economy this decade, appears wary of
backing a U.S.-led initiative, and it has commitments to rival free
trade blocs in East and Southeast Asia.

TPP talks resumed Thursday
near Washington, and officials attending APEC were discussing it in
their own meetings. But without China or Japan, the world’s No. 3
economy, the initiative would have little traction.

Meeting the
rigorous standards for open and free trade, and for protection of
trademarks and patents, for example, also would be arduous for former
centrally-planned economies such as China and Russia.

But Andrei Belousov, Russia’s economy minister, said his country was keen to join.

Meanwhile, keen to leaven its European-dominated trade and balance its growing reliance on dealing with China, Russia
is also pursuing a customs union that is meant to evolve into a
“Eurasian Economic Union” that would stretch from the Atlantic to the
Pacific Ocean.

With Europe still mired in its debt crisis, Asia
remains the biggest driver of global growth, despite a decline in
powerhouse China’s economic growth to a three-year low of 7.6 percent in
the second quarter — and signs Japan’s own export-led recovery is
sputtering.

In its latest forecast, the Manila-based Asian
Development Bank predicted the region’s economies will expand by 6.6
percent this year.

“Russia is looking to
Asia. It’s not growing as fast as it was two years ago but it’s still
the bright spot in the global economy,” said Tony Nash, managing
director at IHS Global Insight in Singapore. “It’s still where the
action is.”

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