Russia's Far East: Vegas Crap Shoot or Bold New World?

By Phil Butler

Russia's Far East's dynamic growth is a long overdue and foregone conclusion. Despite this fact, the Bloombergs of the world would have us believe the Russians and the Chinese are in some kind of last ditch and frenzied game there. The western think thanks are all "thunk" out apparently. The paid policy experts cannot get past the idea eastern nations want to copy-cat Las Vegas, and American exceptionality notions. What if Vladimir Putin were less a gambler, and a lot more realistic than his counterparts in America and England? It was Martin Luther King Jr. who once said:

"Nothing in all the world is more dangerous than sincere ignorance and conscientious stupidity."

Obsessed with their own venture magic, the powerful elites in the west cannot even fathom how they've bred a whole race of "yes men" to advise. Putin in Vladivostok this week can only mean one thing on Wall Street or in Washington - the Ruskies are out to copy Las Vegas! To these new nincompoops, Mr. Putin's, and Mr. Medvedev's initiatives to fast forward the eastern capital of Vladivostok is a gamble? How silly our policies and politicians now appear to any intelligent human being. Here is the fantasy American billionaires may actually believe:

"Stung by oil's collapse and sanctions, Putin declared the once-closed Pacific city of 600,000 a "free port" last October, slashing red tape and introducing unprecedented legal protections for investors in the hopes of spawning a bustling frontier outpost closer in spirit to Las Vegas than Moscow."

To Henry Meyer and Jake Rudnitsky, harping negativity about Putin and Russia must be akin to working on an assembly line in a bullshit factory. Their mission, their job, is to convince Americans Russia needs to copy them, and to instill in Russians the notion Putin is weak, a beggar to Beijing. What folly. China has one thing Putin needs, money, and that is it. Russia has everything China needs, water, resources, and partnership to further her people's advancement. Who else has aligned so closely with the world's most populous nation? America, Japan, Great Britain? Not even India as so closely aligned itself as mother Russia has. The mutual benefits, the underlying Eurasian Union potential, it has to be obvious to all sentient economists out there!

On Friday Vladimir Putin will begin to forge an eastern alliance of immeasurable impact. Set to meet up in Tokyo for the G20, Putin is not in Vladivostok on some rescue mission, he's there to fulfill a prophesy experts theorized decades ago.

A colleague of mine at a major Russian media network called me earlier this week to ask; "Phil, if you could ask questions of anyone at the Eastern Economic Forum, who would it be?" I was also asked to suggest a question, but my choice was none other than Igor Shuvalov, First Deputy Prime Minister in Dmitry Medvedev's Cabinet, and the "go to" man whenever key projects in Russia need a "kick in the pants" to get rolling. Shuvalov is an enigma and a trusted task master the west knows little about. One thing is certain, his job is absolutely not to bet at the international gambling table, Vladivostok's and Russia's future, "chance" has nothing to do with Igor's mission on federal budgetary and economic policies, and especially not where the new Eurasian Union is concerned. Russia's national projects are under this man's micro-guidance, and especially those with so dramatic potential. Vladivostok as an eastern Eurasia hub, is about more than grandiose gamblers from China and Japan. Let's face it, one cannot play in the big time unless there is money behind. The Chinese and Japanese, the Russians, they're interested in something more vast than building a new Las Vegas.

Examples of an emerging Russian economics and growth infrastructure abound actually. Though Bloomberg and the bank elites in the west seem to ignore it, assertions Putin has a so-called "Third Way" underway in Russia are bearing fruit. Back in June it was Shuvalov who announced Russia's second tech city, Innopolis developing even more successfully and quickly than Skolkovo, the Russian Silicon Valley (again our obsession). Innopolis is a new Russian city, located in the Republic of Tatarstan, one keyed on sustainable living, a hyper focused way forward. I will not get into profiling Innopolis now, but it was just announced in May, that a City Wide network for the Internet of Things (IoT) had been established. Innopolis has become the first Russian city with 100% LoRaWAN network coverage. For those unfamiliar, LoRaWAN is a type of wireless telecommunication network designed to allow long range communications at a low bit rate among things (connected objects), such as sensors operated on a battery. The ultimate end to this kind of connectivity being, "smart cities" that afford unbelievable characteristics for the future. These new "smart cities" will be ultra efficient, environmentally-friendly and ultimately much more cost-effective resource management wise. It is significant to note, Innopolis is far to the east of Moscow, south of the Volga River and Kazan.

If Russia is "Going East" finally, the drama will play out in much the same way the American West empowered a budding super-power. Of course this is the fear in Washington and London, a paranoia present before the time of the Czars actually. This 2013 Siberian Times piece is a foreboding actually, for energy barons in the west, and Silicon Valley air peddlers like Google and the others. By the time you read about Andrey Donskih's (Deputy Chairman of the Board, Sberbank) role, and about the Smokeless fuel based on lignite - or brown coal you'll begin to realize Russia is not gambling. When Japan's Prime Minister Shinzo Abe meets Russian President Vladimir Putin on the sidelines of a business conference in Vladivostok, the discussion will be on the future, and not about Abe hitting the slots at nearby Tigre de Cristal casino. A much bigger game is afoot, though western bankseter prefer to divert attention.

Key collaborative issues will be discussed by the likes of Russo-Chinese agricultural development fund and joint promotion of international transport corridors, and so on will be hammered out by First Minister Igor Shuvalov, Kwek Ping Yong - Chief Executive Officer, Inventis Investment Holdings (China) Ltd, Siris Holdings' Ran Tao, Russian Railways' Alexander Misharin , and the various China-Russia counterparts. The names matter, but a lot less then the impact these initiatives will have. Returning to my own question for China-Russia collaboration, agricultural and environmental possibilities in the Far East and Siberia are enormous. One potential in particular, an offshoot of an old Soviet plan to deliver water to Central Asia, may be the basis for restarting whole ecosystems. One of the most ambitious engineering and construction projects of the twentieth century, the aptly named "Turn the Russian rivers project" (Поворот сибирских рек) was nixed by Gorbachev in the 80s. Today, with global warming and desertification taking hold of China and Central Asia in a death grip, Russia's most precious commodity is worth more than platinum. While Bloomberg harps about Russia's weak hand at the détente games, the reality is that Putin holds all the cards. The recent announcement underpublicized story that Putin had restarted the program, does not reveal the gravity of these developments. I wrote about this before, but without playing the whole hand. The stated objectives of the original Soviet plan were to:

  • Transport water in Kurgan, Chelyabinsk and Omsk region of Russia for irrigation and provide water to small towns

  • Transport fresh water to Kazakhstan, Uzbekistan and Turkmenistan with the purpose for irrigation

  • And to open the navigation of the channel "Asia" or Kara sea to the Caspian sea, to the Persian Gulf.

The first phase of the undertaking was to cost in the neighborhood of $30 billion US, but it is my belief that a much larger project may now be underway. The refilling of the Aral Sea can be used as a "template" for the reader to understand. The reader may want to study what happens when a so-called endorheic basin is filled, visionaries might best envision the Tarim Basin's potential, if it were once again a lake. But on a more practical note, it is also necessary that those interested reality that Dmitry Medvedev has already approved the rejuvenation of the Soviet initiative. With part of the channels, pumps, damns, and reservoirs already completed before Gorbachev's cancellation, all that remains is the money and initiative to go forward. Any geographer or geologist can tell you, the growing catastrophe if Central Asia continues to dry up. Terrorism as we see it today, will engulf not just the Middle East, but whole swaths of Asia. China, the nations most in need of water, can all be supplied by the world's biggest landlord of H2O, Russia.

This is a much broader and far reaching component of Russia's Far East buildup. However, it's amazing to me the Bloomberg idiots cannot even tell fairytales about the world's most valuable substance? Las Vegas, rumors of a weakened Vladimir Putin, Russia on the brink, it all becomes clear now. As is always the case, even the rich an powerful can have limited vision. Surely there is someone at the Bank of England or in Frankfurt, who can envision freshwater flowing away from melting Polar ice caps, and toward Afghanistan, Iran, and Pakistan? Maybe there is some botanist of environmental genius out there who studies restarted convection, rainforests rebooted with water pumped back into systems? Maybe there's even somebody brighter than my Dutch colleague Holger Eekhof, who can envision seawater filling great basins, clouds forming overhead, and rain falling onto deserts to be transformed?

Then again, maybe the man who has kicked the westerners in the seat of their pants 100 times, is just a stupid roulette wheel gambler. Maybe Putin is planning on reinventing the Las Vegas strip, so Russia can repeat America's folly? Somehow, given all I know, I seriously doubt it. Look for some environmental experts to show their heads, and for Xinjiang to see rainfall one day soon.

Phil Butler

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Author`s name Phil Butler