Russia's Far East Looks To Pacific for Business, To Moscow for Politics

Look at the faces in this Eastern port city - the same European features as in Moscow or Minsk. Look at the buildings - the same stolid architecture you find all the way to Poland. There is no doubt you are in Russia.

But look again,at the cars - every one a Japanese sedan. Or at the goods in the shop windows - guava juice from the Philippines, apples from Washington State, and just about everything else from South Korea. You know you are also on Asia's Pacific Rim.

With streetcars climbing hills that overlook a sweeping bay, there is even a touch of San Francisco about Vladivostok. And as the Russian Far East dreams of economic prosperity, it is looking for its future across the ocean, its back turned to the west.

"Everyone is interested in boosting integration with the Asia-Pacific region," says Pyotr Baklanov, head of the Geographical Institute here. "Businessmen and entrepreneurs don't care about the domestic market."

"People have understood that if they want to survive, it is unthinkable to do so by trading with western Russia," adds Viktor Tumanov, a banker who until recently was in charge of Vladivostok's foreign economic ties.

But concerns among centrally minded Kremlin bureaucrats that such attitudes, coupled with the Far East's wealth of natural resources, might ignite separatist passions, have proved unfounded. It is hard to find anyone here who calls Moscow's rule into question, and support for close ties with the heartland is nearly unanimous. If a growing sense of abandonment by Moscow has fed an eagerness for economic independence, it has not fuelled similar political ambitions.

Considering Vladivostok's position on the map - closer to Seattle than to Moscow - it is hardly surprising that the port, and the Primorsky territory it serves, should be seeking to cast it's lot with the neighboring "tiger" economies of the Pacific, rather than the distant and uncertain free market that is emerging in Russia itself.

With fabulous fisheries just offshore, endless fields of valuable timber stretching into the wilderness, and huge, untapped mineral resources including gold, Russia's Far East has a lot to offer.

And the fact that it is making most of its offers to foreign trading partners "is a natural process where economic relations are largely determined by economic expediency," points out Viktor Larin, director of the Institute of History in Vladivostok.

But this is new. During seven decades of Soviet rule, political dictates kept the Far East tied tightly to the heartland, curbing with a wall of state controls any Eastward urges local officials might have felt.

"Our proximity to Asian countries did not affect us ... because we had little freedom to develop ties," explains Professor Baklanov. "The fact is that we are a long, long way from the industrially developed regions of Russia, and very, very close to important regions on the Pacific rim. But in the past, these concrete circumstances did not manifest themselves."

The Soviet authorities sidestepped the "concrete circumstances" of geographic reality in the only way possible, using massive subsidies to make rail transport along the famed trans-Siberian railroad feasible.

When, to take a typical example, an enterprise mining nonferrous metals in the Primorsky territory was required to meet Soviet planning needs, not profit goals, company officials here thought nothing of shipping their ore to the other end of the Soviet Union to be refined in the Caucasus.

Nor did it matter that crude oil from Siberian fields had to be carried 3,000 kilometers by train to refineries in the Far East. Rail freight charges, set by Moscow, were negligible.

So 85 percent of the industrial and consumer goods used in the Far East came from European Russia, and the territory shipped 70 percent of its forestry products, 80 percent of its fish, and all its nonferrous metals west of the Urals.

But when the Soviet Union collapsed in 1991, free market economic reforms began to cut into subsidies, and railroad operators, while still under state control, were obliged to charge market rates. Those rates, across Russian distances, are prohibitive. Vladivostok's trans-Siberian terminal, next to the city's busy harbor, now echoes only faintly with its former activity.

Today the trade figures are upside down. Far East exports 80 percent of its fisheries catch, 75 percent of its ore, and half its timber. And experts here have just completed a study showing that it would be cheaper for the territory to import its oil from the Persian Gulf, rather than continue to purchase and transport it from Russia's own fields in Western Siberia.

"At the same time as domestic prices were freed," drastically disrupting Russia's economy, explains Baklanov, "foreign relations were freed too. Companies were allowed to seek foreign markets, and they had no other choice but to do so."

Now, the prospects for international business are multiplying, and not only in traditional sectors. Moves are afoot, for example, to take advantage of the territory's location and land to raise Russian cattle fed on American feed, for export to Japan.

Despite all the commercial openings, however, Russians are still slow to change their ways and enjoy remarkably little cultural crossover with their foreign neighbors. One American businessman, based in Vladivostok, promoting US products, for example, recalls how he discovered the reason behind unexpectedly sluggish sales of bacon: Russians were mistaking it for salo, pork fat, and were eating it as they eat salo - raw.

Now, a local television program is in production, explaining to consumers how to prepare American food products.

Social and personal ties are equally oriented toward the west of the country, where over half the people who live here were born. "Central Russia is the motherland, and nobody is going to break ties with the motherland," says Mr. Tumanov. At the same time, Moscow has its own reasons for keeping political links intact - its desire to maintain the country's status as a Pacific power. "Vladivostok is a very important point for defending Russia's Eastern borders," he says. The town's name, after all, does mean 'we own the East.'

"There may not be any economic reasons for ties with Western Russia any more," concludes Baklanov, "but there are political reasons. We have to keep some links to Moscow."