russia and eu: scenarios for the future
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Russia and EU: scenarios for the future. Institute of World Economy and International Relations (IMEMO). Prof. Alexander A.Dynkin. Russia is an important partner for the EU. Russia is a growing market for goods from the EU. - PowerPoint PPT PresentationTRANSCRIPT
Institute of World Economy and Institute of World Economy and
International RelationsInternational Relations
(IMEMO)(IMEMO)
Prof. Alexander A.DynkinProf. Alexander A.Dynkin
Russia is an important partner for the EURussia is an important partner for the EU
Russia is a growing market for goods from the EU
Growth of Russian direct investments in the EU (excluding Cyprus)
Russia doesn’t give up high share of euro in foreign-exchange reserves Russia doesn’t give up high share of euro in foreign-exchange reserves ( (moremore 40%) 40%)
Russia builds pipelines to the EU suggesting the future growth of the EU’s economyRussia builds pipelines to the EU suggesting the future growth of the EU’s economy ((though though it might switch over to other countries and home marketit might switch over to other countries and home market))
Russia still insists on speedily abolition of short-term visas to Schengen area that will Russia still insists on speedily abolition of short-term visas to Schengen area that will lead to the growth of tourism to the EU.lead to the growth of tourism to the EU. 2
3
Imports from Russia to the EU (2006-2012), million euro
Exports from the EU to Russia (2006-2012), million euro
GDPGDP, 2009 , 2009 PPP bln USD PPP bln USD GDPGDP, 2009 , 2009 current USD, blncurrent USD, bln
USA EU China Russia
IMEMO ForecastIMEMO Forecast
Source: «Strategic Global Forecast to 2030», IMEMO, 20114 4
Perception of the same facts may be optimistic or Perception of the same facts may be optimistic or pessimistic depending on what we want to pessimistic depending on what we want to
demonstrate. demonstrate. For example, the decline of Russian’s share in EU’s For example, the decline of Russian’s share in EU’s import of natural gas can be interpreted in different import of natural gas can be interpreted in different
ways.ways.
Russia loses its leadership in Russia loses its leadership in EU gas importsEU gas imports
Despite the crises Russia is Despite the crises Russia is still the leaderstill the leader
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Producer Million tones Share of total, %Saudi Arabia 547.0 13.3Russia 526.2 12.8USA 394.9 9.6China 207.5 5.0Iran 174.9 4.2Total World 4118.9 100.0
Producer Billion cubic metres Share of total, %USA 681.4 20.4Russia 592.3 17.6Iran 160.5 4.8Qatar 157.0 4.7Canada 156.5 4.6Total World 3363.9 100.0
Importer Million tonesEU 474.9USA 424.0China 271.3Japan 186.7India 177.1Total World 1927.3
Importer Billion cubic metersJapan 118.8USA 88.7Germany 86.8Italy 66.8South Korea 49.7France 45.3Total World 1033.4
Oil
Gas
Source: BP Statistical Review of World Energy 2013
World Oil and GasWorld Oil and GasProduction and ImportProduction and Import
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Core areas of cooperation Core areas of cooperation between Russia and the EUbetween Russia and the EU
Commodity trade Commodity trade
Investments in technologiesInvestments in technologies
Energy cooperationEnergy cooperation
Humanitarian contacts (tourism, science, culture, etc.)Humanitarian contacts (tourism, science, culture, etc.)
However, there are both optimistic and pessimistic scenarios in each area
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Commodity tradeCommodity trade
Optimistic scenario:EU + Eurasian Union
Free trade agreement after Russian adaptation to WTO’s accession
Road map to the common Eurasian economic area
Pessimistic scenario:EU’s expansion in Ukraine and Belarus
Trade wars between Russia and other European countries
New non-tariff trade borders across Europe
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Detailed elaboration of WTO’s Detailed elaboration of WTO’s norms in mutual Russia-EU tradenorms in mutual Russia-EU trade
Customs administration and customs proceduresCustoms administration and customs procedures (unification of forms and rules of the authorized operators, “one window” principle for submission of papers, “one customs” principle on the border)
Sanitary and phytosanitary Sanitary and phytosanitary measures (an exchange of information, unification of forms, a mutual recognition of documents)Technical Technical regulation (joint development and acceptance of new rules and standards for products of biotechnology and some other new industries, gradual unification of operating rules and procedures)Special protective, anti-dumping and compensatory Special protective, anti-dumping and compensatory measuresmeasures (unification of procedures: regulation of consultations, initiating an anti-dumping duty investigations, granting of proofs, definition of damage, regulation of responding to anti-dumping investigations, etc.)
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Investments in Investments in technologiestechnologies
Optimistic scenario:Competitive EU-Russian global value chains
Modernization of Russian economy
Growth of efficiency and sustainability in the EU’s and Russian economies
Pessimistic scenario:Only market-seeking and resource-seeking EU’s direct investments in Russia
Investment protectionism against Russian high-tech MNEs in the EU
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Distribution of foreign assets of 20 top Russian Distribution of foreign assets of 20 top Russian non-financial transnational corporations by non-financial transnational corporations by
regions (USD billion, end of 2011)regions (USD billion, end of 2011)
R ussian Federation
42.919.3
1.6
6.3
4.4
0.8
3.7 1.1
30.9
The share of the EU is 39% (1st place). Main assets are in Italy, Germany, Bulgaria, etc.The share of the CIS is 28% (2nd place), but more than 1/3 of this volume is in Ukraine.The share of the US and Canada is 17% while the share of Sub-Sahara Africa is 6%.The share of China, Mongolia and Vietnam is 4%. 11
Russia
ChinaFrance
1989
170232152
123
3724
769
Direct investment, stock, Direct investment, stock, 2012 mln USD 2012 mln USD
Source: Bank of Russia, 2013. China Statistical Yearbook 2013.
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Current Russia-EU energy tiesCurrent Russia-EU energy ties
The EU investor Russian company Value
E.ON (Germany) OGK-4 USD 6 billion
Enel (Italy) OGK-5, Rusenergosbyt USD 5,85 billion
Fortum (Finland) TGK-10 USD 4 billion
At the same time Russian companies invest in European refineries
Russia supplies 31 percent of EU gas imports, 27 percent of crude oil imports, 24 percent of EU coal imports,30 percent of total EU uranium imports
The EU is the market for 88 percent of Russia’s oil exports,70 percent of its gas exports,50 percent of its coal exports
Gazprom (51%) Gazprom (50%) *
Wintershall (15.5%) Eni (20%)E.ON Ruhrgas (15.5%) Wintershall (15%)N. V. Nederlandse Gasunie (9%) EdF (15%)GDF Suez (9%) *interest in the offshore section
Significant investment cooperation in the energy field
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Energy cooperationEnergy cooperation
Optimistic scenario:Current achievements will produce a solid base for new fields of cooperation under EU/Russia Roadmap for Energy Cooperation until 2050 (signed in March 2013)Energy efficiency
Renewables
Remote oil and gas fields exploration
Investments in LNG-projects
Pessimistic scenario:Key challenges for cooperation will weigh down all opportunities
Different goals for the energy markets will lead to extreme politicization of energy issues by both sides
The lack of legal basis for Russian long-term investment projects
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Humanitarian contactsHumanitarian contacts
Optimistic scenario:Common Eurasian higher educational and scientific areas and Pan-Europeantouristic boom
Various cultural contacts as a base for strategic political and economic EU-Russia partnership
Pessimistic scenario:Visa regime against Russia and the growth of xenophobia in the EU
Significant decrease of the EU’s global competitiveness; Crisis of multiculturalism
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The importance of cooperation The importance of cooperation between Russian and French between Russian and French specialists in international specialists in international
relationsrelations
Scholars can produce more positive agenda of cooperation in comparison to politicians
Cooperation between scholars can overcome many stereotypes in EU-Russian relations
Joint policy reports will have more influence on EU and Russian officials
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