English | 中文版 |  Русский

Breaking News:

Source: www.asiaecon.org |

COLLABORATION BETWEEN RUSSIA, CHINA AND INDIA


Russia, China and India are countries whose economic influence is accelerating. As emerging economies, along with Brazil (BRIC), it is predicted that China and India will become the world’s dominant suppliers of manufactured goods and services, respectively, while Brazil and Russia will become essential suppliers of raw materials within the next few decades.


In recent years, Russia has become an important energy and military supply source to China and India, correspondingly. The proximity of the three nations allows cheaper and more efficient trade in the region. The three countries have cooperated throughout the past years and have benefited much from the trade they engage in. Greater economic efficiency in the trade of the countries will boost the overall growth in Asia’s economy.

Russia and China

In February 2009 Russia’s state pipeline monopoly, Transneft, announced that China and Russia signed 20 year $25 billion energy deal in Beijing that would secure 15 million tons of oil (about 300,000 barrels a day) from Moscow in exchange for a loans to two of Russia’s largest oil companies. OAO Rosneft Oil Company is to receive $15 billion dollars and Transneft will receive $10 billion, since both companies have struggled amid the recession and plunging oil prices. The pipeline will stretch from western Siberia, specifically Skovorodino, 45 miles north of the Sino-Russian border. China believes that the oil pipeline will decrease the risks of its oil imports, which mainly come through the Strait of Malacca. Russia’s Prime Minister Vladimir Putin, believes that the oil pipeline will give Russia a steady and certain oil market in the East. This will help Russia become one of the top energy markets in Asia. Alexander Zhukov, Russian Deputy Prime Minister has already hinted that it is “highly possible” for Russia to become China’s largest energy supplier within the next 15 years.

Russia and India

Russia and India have been major trade partners for quite some time now. “Moscow has long been India’s main provider of weapons,” (BBC) among other products such as planes, uranium, infrastructure, tanks and nuclear power.

India is a country whose economy is mainly driven by its service sector. It lacks the natural resources to fuel its growing economy. It is estimated that in about 15 years, India “will consume three times as much oil as it uses today. If it does not get new energy supplies, India’s remarkable economic rise could come to a spluttering halt,” (BBC). Its growing interest for a partnership with Russia has a lot to do with the country’s need for oil and gas, both of which Russia is abundant with.

India’s needs are important to Russia—it has launched many arms and energy contracts, with the U.S as its only main competitor. As a buyer, India’s business has become increasingly important to Russia and the U.S. So far, the Defense News reported on February 2009 that “Russia is banking on its long history arming the Indian military”.

Russian officials have reported that over the last 40 years, Russian-Indian military technical cooperation has surpassed $35 billion. In addition, about 33 percent of Russia’s total arm exports go to India.

Alexander Fomin, first deputy director of State Service for Military Industrial Cooperation, and head of the Russian delegation has said, “The key to our relationship is that we share technology with India”. In fact, India and Russia are known for their high-tech capabilities and have had a long history of “mutually beneficial military-technical cooperation,” according to Viktor Komardin, head of Rosoboronexport’s delegation. They have technology sharing and production agreements each country complies with and benefits from. In February 2009, Russia and India agreed to partner up on technical requirements for an aircraft competition and ”[bring] down production costs”, the Hindu News reported. Mikhail Pogosyan, CEO of the Sukhoi aircraft building company from Russia said, “We have made good progress since concluding an inter-government agreement in 2007 for the joint development and production of the fifth-generation fighter aircraft and are ready to sign detailed contracts this year for implementing the program”. The program is planned to last more than 50 years.

Conclusion: Why Russia Should Focus More on its Neighbors

Russia, China and India’s spurring economies will have a global impact within the next decades. It is estimated that by 2050, the three giants, along with Brazil, will be wealthier than the majority of the current major economic powers. The different strengths of each country—China’s positive current account, Russia’s raw materials and India’s strong service sector are clear examples of how important specialization is to promote efficient deals and trade and promote economic growth. The collaboration between the three emerging economies will soon skyrocket and help realize three giant economies in the east.

Source: www.asiaecon.org |


More Special Articles - Asia Business & Economy Articles