September 12, 2007 (the date of publication in Russian)

Yaroslav Butakov


The Russian-Australian uranium accord: a response to Kazakhstan's "multi-vector" policy?

The last summit of the Asia-Pacific Economic Cooperation (APEC) Organization, held in Sydney, Australia, on September 8-9, satisfied the long-time ambition of Russia: the next event, scheduled for 2012, will be held in Vladivostok, the largest city of Russia's Pacific coastline. The choice is quite natural, given Vladivostok's adjacency to China, Japan, and the Koreas.

Already in the beginning of this year, the Russian Government decided to allocate around 100 billion rubles for the event on the Pacific. Sergey Darkin, Governor of Primorsky Kray, the Russian province centered in Vladivostok, eventually estimated the required costs in 147.5 billion rubles. Other options were discussed as well: for instance, Australia's Prime Minister John Howard would prefer Saint Petersburg, the foremost geographically opposite Russian city.

The desire of Primorsky Kray's leadership to use APEC's 2012 summit for boosting direct investments in the region is quite understandable. According to the tradition of the last fifteen years, a large-scale international event serves as a better guaranteed pretext for federal expenses than the regularly re-approved programs of the Far East’s economic development, which have proven insufficient for compensation of the huge economic disproportions between European and Asiatic Russia.

It is true that Primorsky Kray desperately needs large-scale federal assistance. The possibility to attract large-scale international investments could be used for launching long-time strategic projects, involving lots of new jobs and thus solving the problem of the impending depopulation of Russia's Far East, where the Chinese labor force is more and more massively substituting the domestic labor potential.

However, the selection of investment projects, made public by Governor Darkin, raises doubts about the benefit for regional science and industry, as most of the expenses are going to be used for the local hotel and recreation network. Generally, the preparations for the 2012 event resemble so far a banal advertising campaign, and not only because of narrow-mindedness of Russian provincial authorities. APEC's agenda as such does not contain promising development projects for Russia's Far East. The organization has not arrived to any groundbreaking economic decisions. In this year, Australia, the host of the summit, raised mostly the problem of concentration of carbon dioxide in the atmosphere and the supposedly necessary measures for its reduction. Luckily, the United States displayed strong reluctance to cave in to the environmentalist demagogy. It was clear that Washington was not inclined to restrict the level of consumption of its citizens merely in order to bring sacrifice to the idol of global warming, inflated by the global environmentalist community largely as a pretext for undermining America's productive capacity.

New slips of George W. Bush's tongue, confusing APEC with OPEC and Australia with Austria, may reflect the indifference of the incumbent US leadership to the dominating environmental points of the highly speculative agenda. George W. Bush looked more concentrated when endorsing the initiatives of his own, concerning mediation between North and South Korea, which are officially in the state of war since 1953 until today. These proposals of Washington, in their turn, didn’t much inspire the Asiatic delegates.

International meetings like the last APEC summit are more advantageous for regional diplomacy. Mass media extensively covered the agreement on the use of Australian uranium ore for Russian nuclear plants. However, this deal will become operational only after being approved by the parliaments of the two states.

Russia has a possibility to purchase high-quality uranium from Kazakhstan, which is much closer to nuclear energy facilities, mostly concentrated in European Russia. It is noteworthy that nuclear generation plays a minor role in Russia's energy production, and the current plans of this sector's development are relatively modest.

Meanwhile, Kazakhstan has almost wholly re-oriented to the Japanese and potentially South Korea uranium markets. In accordance with a last year's agreement, Kazakhstan intends to export 9500 tons of uranium ore to Japan per year. Exports to Russia, which don't exceed 6000 tons per year, are going to be completely ceased since 2014.

Kazakhstan, the third largest producer of uranium after Australia and Canada, is going to fill at least one third of Japan's industrial demand. Besides, Kazakhstan has established a joint uranium-enrichment venture with South Korea with a potential capacity o 1000 tons per year.

The rapid development of Kazakh-Japanese partnership in uranium production is primarily a result of excessive activity of Japanese firms in Astana, as well as a reflection of Astana's own policy. Kazakhstan is committed to diversify its trade, in accordance with the multi-vector principle of its foreign policy strategy. The Russian-Australian accords on cooperation in uranium deliveries could be thus regarded as a retaliatory move, as well as the bilateral project of an international spaceport on the Christmas Island in the Indian Ocean.

The accord on the spaceport project was reached by Russia and Australia already in 2001-2002. The advantage of the equatorial area is the maximum use of energy of the Earth's rotation, a smaller velocity required to launching satellites to the low-earth orbit, and therefore, smaller costs than in mid-latitudes. These obvious advantages haven't been used for years.

The Russian-Australian space dialogue spectacularly revitalized after Kazakhstan's declaration of its right to unilaterally cancel flights from Baikonur, once major Soviet spaceport in Kazakhstan's Zhezkazgan Region. Moreover, Baikonur has just acquired a new alternative. On his way to Sydney, Vladimir Putin landed in Jakarta. At a joint press conference with his Indonesian counterpart Susilo Bambang Yudhoyono, he enunciated the bilateral project of an equatorial spaceport on Biyak Isle, off the northern coastline of Irian Jaya Barat (Indonesia's Western Papua).

The approval of Russia's bid for hosting the next APEC summit and the bilateral space accords were the major positive results of the Sydney event for Russia. One more result, ostensibly negative, is a relief for major Russian industrial producers. At the concluding press conference, the Russian President made clear that Russia's entry in WTO is going to be postponed into indefinite future – at least later than by 2008. German Gref, Russia's Minister of Economic Development and Trade and WTO's ardent enthusiast, looked quite disappointed.

Is the decision to postpone Russia's entry in WTO serious, or rather reflecting the Russian leadership's intent to downplay the sensitive and highly controversial subject on the eve of the presidential elections? We are going to find out the truth in the nearest future.

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