Russia’s Putin Warns On Global Economy, Looks East

President Vladimir Putin issued a warning over the fragile state of the global economy on Friday as he set out plans for Russia to build economic ties with Asia at a time when Europe is battling a debt crisis.

Looking relaxed, Putin fielded questions from businessmen for 90 minutes before a summit with Asia-Pacific leaders, portraying Russia as a reliable energy supplier for Asia and as a gateway to Europe for Asian investors.

Russia sees the weekend summit as a chance to make a pivotal shift away from Europe, increasing political and economic links with countries in Asia that are showing relatively strong economic growth as Europe struggles with its debt crisis.

Citing the risk to economic recovery from high debts and volatility on global markets, he said Russia and the 20 other members of the Asia-Pacific Economic Cooperation (APEC) forum meeting on Saturday and Sunday could shore up their defences against a new crisis by tightening regional cooperation.

Pointedly referring to Chinese President Hu Jintao as his friend, he made repeated references to the importance of trade and energy ties with Beijing. Although Washington is also an APEC member, he hardly mentioned the United States.

“The accumulation of contradictions (in the global economy) has not gone away,” said the 59-year-old leader, who limped into a meeting earlier on Friday, at a question-and-answer session with international business leaders in Russia’s newly spruced up Pacific port city of Vladivostok.

“Russia supports the strengthening of … regional integration built on common understanding and with the mutual interests of close geographical partners taken into account,” he said.

Aides did not say why Putin was limping.

Back in the presidency after four years as prime minister, the Kremlin leader portrayed host city Vladivostok as a bridge to Russia and Europe for other APEC states.

Russia has pumped $21 billion into the long underdeveloped region to attract investors, tourists and gamblers from Asia, and built the world’s biggest cable-stayed bridge – its pylons nearly as tall as the Eiffel Tower in Paris – from mainland Vladivostok to the summit venue on nearby Russky Island.

Although Russian gas monopoly Gazprom is facing a competition investigation by the European Union executive over its pricing policies, and despite price disputes in the past during which it has reduced supplies, Putin held up Russia as a reliable oil and gas supplier for Asia.

“Traditionally, we pay particular attention to regional energy cooperation and ensuring a stable energy balance in the region. Russia as one of the world’s leading and secure energy suppliers is able to play a key role,” Putin said.

“The first thing and the main thing that we are going to do is develop transport infrastructure,” he added.


APEC groups countries around the Pacific Rim which account for 40 percent of the world’s population, 54 percent of its economic output and 44 percent of trade.

Discussions at the weekend meeting are expected to focus on food security and trade liberalisation. An agreement had already been reached before the summit to slash import duties on technologies that can promote economic growth without endangering the environment.

“This is really a significant achievement, in that it shows how APEC can lead,” said Deputy U.S. Trade Representative Demetrios Marantis. “It allows us to accomplish the twin goals of liberalising trade and green growth.”

Ministers agreed on a list of 54 green technologies that will be subject to import duties of 5 percent or less from 2015, following through on a commitment made by leaders at the last APEC summit in Honolulu a year ago.

According to summit documents seen by Reuters, the list includes equipment used in generating power from renewable energy sources such as the sun, wind and biomass; treating waste water; recycling and environmental monitoring.

Breakthroughs are not expected on other trade issues at the summit, which U.S. President Barack Obama is missing. He has been attending the Democratic Party convention and Washington is being represented by Secretary of State Hillary Clinton.

The diverse nature of the Pacific-Rim economies has led some APEC countries to join Washington in pushing for a new free-trade deal called the Trans-Pacific Partnership (TPP).

Marantis said trade ministers from nine nations participating in the TPP talks had met in Vladivostok and affirmed their determination to move ahead at negotiations to be hosted next week by the United States in Leesburg, Virginia.

But China, the world’s second-largest economy, is not a party to the process and Russia – which has only just joined the World Trade Organisation – says it is not ready to look at joining the TPP.

Source: Reuters

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