News / Economy

Vladivostok Shifts Into High Gear to Attract Asian Investors

James Brooke
VLADIVOSTOK, Russia - Leaders from 20 nations around the Pacific Basin are gathering for their annual meeting on economic cooperation, held this year in Russia, a nation not often seen as a Pacific power.

To prepare for meetings of the Asia-Pacific Economic Cooperation group, Russia says it spent $22 billion modernizing Vladivostok, its main Pacific port city. That is 50 percent more than Britain spent to prepare London for this summer’s Olympic Games.

Heads of government flying into Vladivostok are arriving at a new international airport built to handle 15 million tourists - 10 times last year’s passenger load.

Major upgrades erected

They will zoom down brand new highways and bridges, including the world’s longest cable-supported bridge. Its one-kilometer-long central span is strung between two towers that are each taller than the Eiffel Tower.

That $1 billion bridge leads to Russian Island, the southernmost part of Vladivostok, and site of a brand new, American-style university campus. The national leaders are holding economic talks there on Saturday and Sunday; next month, when university classes resume, it will be home to 25,000 students.

Professor Artyom Lukin, director of international research at the Far Eastern Federal University, sees the summit as a coming-out party confirming Russia's status as a modern Pacific power.

“Russia wants to be a great Asia Pacific power - not just a great Eurasian power, but a great Asian Pacific power as well,” he said. “If you want to be a great power in the Pacific, you need a developed Pacific coast... the Russian Far East.”

Converting from fortress to gateway

Vladivostok means “to rule the east.” From czarist times to Soviet times, it served as a fortress city, beating back invasions launched from other parts of Asia. From Russian Island, surrounded by the Sea of Japan, six forts and 27 coastal batteries stood guard defiantly.

Now that it hosts the APEC conference, Russia’s biggest outreach to Asia in memory, Vladivostok's role is not to repel those arriving from abroad, but to welcome them as trading partners.
 
Russian authorities say they aim to double their Asia-Pacific trade, increasing it to half of the country's overall trade turnover.

Economic Development Minister Andrei Belousov told VOA the Kremlin’s commitment is clear. Only two years ago the summit site was a completely empty field; since then workers have erected buildings with one million square meters of usable commercial space.

People walk over a tarmac with the Asia-Pacific Economic Cooperation (APEC) logo printed on it, in a central square of Vladivostok, Russia, September 6, 2012.People walk over a tarmac with the Asia-Pacific Economic Cooperation (APEC) logo printed on it, in a central square of Vladivostok, Russia, September 6, 2012.
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People walk over a tarmac with the Asia-Pacific Economic Cooperation (APEC) logo printed on it, in a central square of Vladivostok, Russia, September 6, 2012.
People walk over a tarmac with the Asia-Pacific Economic Cooperation (APEC) logo printed on it, in a central square of Vladivostok, Russia, September 6, 2012.
Overnight transformation

Vladivostok’s upgrade is so abrupt that a cruise ship had to be brought in to house 500 summit participants.

Workers are still building two Hyatt hotels, the first international chain hotels serving the city of 600,000 people.

Aliya Turumbekova, Hyatt's marketing director, said the hotel group has long-range aims. “In the current time, since the Soviet system collapsed and the world opened for development, for trade, and for economic ties, we see Vladivostok as a good bridge between Europe and the bigger Asia."
 
Also under construction is a new opera and ballet theater. There are new gas pipelines and a new city sewage treatment plant. Within a year, work is to start on an oil refinery, a liquefied natural gas plant, and a massive gambling zone for Asian tourists. The goal is to make Vladivostok attractive for young people.

Retaining best, brightest

Lukin said one-third of his students usually leave the Russian Far East to seek jobs elsewhere.
 
“They leave for Moscow, St. Petersburg, Europe, the United States,” he said. “And most of them are the smartest students, unfortunately. So we are losing talent, it is kind of brain drain for the Russian Far East.”
 
But some of Vladivostok’s young people are embracing Russia’s turnaround on Asia. Anastasia Melnikova, just graduated from university, is looking for work at home, in Vladivostok.
 
“If you want to go to Moscow, you have to fly nine hours,” said Melnikova, 22, a publishing major. “If you want to go to Japan, you just have to fly just two hours. We are partners, and we will be partners for a long, long time.”
 
Vladimir Tananikin, a student of English and Spanish, sees China, whose border is only 60 kilometers away, as a plus.

“For me and people here, it is no problem that China is growing, and maybe we will help each other to grow together,” he said.
 
Now, Russia’s goal is to attract Asian investment. At a news conference for foreign reporters, the region’s new governor, Vladimir Miklushevsky, gave his sales pitch to a group of largely Chinese journalists. He said the Vladivostok region is now open for business, offering transparent and unchanging investment rules and a clampdown on corruption.
 
From historically repelling Asian invaders, this one-time fortress city now takes on a new role: attracting Asian investors.

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