In this article, we discuss the correlation between structural change in the world economy and Russian strategy. The transition to market economy in former socialist countries was the process joining the neo-liberalistic world economy. The liberalization of cross-border capital flow accelerated the expansion of capital markets and outsourcing. It stimulated the economic growth in China and other East Asian countries. Russia also enjoyed its benefits increasing oil price. It has caused a power shift from Europe and United States to Asia.
But the failure of “circulation of growth”—the financial capitalism driven by USA and EU, the export-led quantitative growth in China, and the growth in Russia depended on natural resources—was revealed after the global economic crisis in 2009.
According to the Constellation theory, the Ukraine crisis reflects an unstable hegemonic core of the world economy. In the EU financial institutions were relieved, but the burden is imposed on citizens by the reduced budget. It caused social deficits and anti-EU movements. At the same time, because of developing division of labor between East Asian countries, the East Asia economy is stepping into the way of self-sustained growth.
The competition for hegemony of the world economy is intensified by mega-regions. A Eurasian Union alone could not be a very serious challenge to the hegemonic core. However, Russia’s Pivot to the East will strengthen its economic relations with East Asian countries, and might contribute to development of “counterpoints” with the capitalism model different from the neo-liberal one.
The world energy market is undergoing a structural change through liberalization, development of renewables, and change of demands from Europe to Asia. Russia, depending on resources, must adapt to changes in the energy market and modernize its economic structure. The eastwards shift of Russia may be a wise choice. Its strategy is an adaptation to the structural change in the world economy, even if it costs enormous money to develop Far East regions in Russia. Closer relations between Russia and Asian countries will secure the energy supply in Asia and support their development. The power shift from the West to the East will be accelerated. From the long-term viewpoints, Russian joining the division of labor in Asia could be a chance of modernizing Russian industry.
At the same time, for Russia, being afraid of excessive dependence on China, the cooperation with Japan is more important than ever.