YOU ARE HERE: LAT HomeCollections

PACIFIC REPORT : Moscow Courts Asia Ties : Commerce: The Soviet Union, which long viewed the area as a source of danger, is soliciting its Far East neighbors for investment and economic assistance.


Ever since Genghis Khan, Russians have known little but trouble from Asia. Japan sank their fleet in 1905. Mao Tse-tung betrayed them. Tokyo claims Soviet-held islands, and Taiwan's and South Korea's economic successes have made old Kremlin theories look silly.

While almost everyone in the Pacific Basin was taking a Chamber of Commerce view of the region, Moscow had 50 divisions deployed along the Chinese border and a massive Pacific fleet. The shooting down of Korean Air Lines' Flight 007 over Sakhalin Island was consistent.

To Kremlin eyes, the Pacific region offered danger, a place to avoid--except when armed.

Now, with fanfare, all that is changing.

With the Soviet economy in a downward spiral, inflation mounting, the consumer market failing, the ruble virtually worthless and the budget deficit expanding, Moscow sees Asia as the home of nations growing richer in capital and technology. Even its old nemesis, China, is sufficiently well off to have offered Moscow food aid.

Moscow wants to get aboard. For its own economic salvation, the Kremlin is cultivating greater economic ties with Pacific Rim partners--soliciting trade, credits, investment, economic assistance, technology and joint ventures regardless of ideological lineage.

Toward these ends, Soviet President Mikhail S. Gorbachev has met with the leaders of South Korea and China, and this month he will meet with Japanese Prime Minister Toshiki Kaifu as the first Soviet leader to visit Japan. Soviet trade with South Korea and China is rising, and the two countries have extended credit. And it's not a one-way street; with South Korea, for example, the Soviets have offered to trade technology for consumer goods.

In addition, Moscow would like to see the Soviet Far East's natural resources and other assets developed, even though it means joint ventures with foreign corporations. To some extent, U.S. companies already play a role--Alaska Airlines is starting regular tourist flights to the Soviet Far East this June--and more new ventures are in the cards.

With their old empire of Eastern Europe gone, Asia is a logical place for the Soviets to turn for a nearby market, as well as labor, capital and know-how. And as the Soviet Far East opens up, U.S. companies may find more opportunities. The area is said to be rich in still-unexplored oil and gas reserves.

A Soviet Union more integrated into the Pacific Rim not only represents trade and investment possibilities. As the Soviets reduce military strength in Asia--Soviet army units on China's border are already down--they will further lower tensions.

For the United States, that will mean less pressure to maintain so strong a security presence of forces and bases in South Korea, the Philippines and elsewhere in Asia.

"Over the next five to 10 years, there will be substantial opportunities for foreign companies to participate in the Soviet Far East," predicts James P. Dorian, a research associate who concentrates on Soviet-Pacific Basin affairs at Honolulu's East-West Center. This is more likely to happen sooner if the Soviet Union stays unified, he said.

"But even if it starts coming apart--if two or three republics go independent--it is not necessarily the end of the matter unless civil war breaks out," Dorian said. "The republics will just act in a more independent way."

Moscow, of course, has not given up on Europe. While the Soviet Foreign Ministry's top expert on Asia, Igor Rogachev, referred in a recent article to the Soviet Union sharing an "Asian common home" with the peoples on its eastern borders, Gorbachev has spoken of sharing "a common European home" with all of Europe.

Not everybody is happy with Moscow's accommodations in the East. North Korea is bitter over Moscow's rapprochement with Seoul, China is unsettled over Soviet dealings with Taipei and Soviet conservatives at home are leery of military dilution in sensitive areas, such as on the Chinese border.

Nonetheless, the trend probably will continue. In a vivid demonstration of how important Soviet leaders perceive the region to be for their country's future, Gorbachev and his political archrival Boris N. Yeltsin are conducting parallel and possibly conflicting efforts to woo the Japanese.

Nobody has favored development of Soviet-Pacific Basin relations more strongly than Gorbachev, who chose Vladivostok in 1986 as the site of his first major foreign policy address and focused his speech on the importance of Asia in the Soviets' overall scheme.

By 2000, he predicted, Soviet trade with the Pacific Basin--now only 8% of the nation's total foreign trade--would triple.

"From the beginning, Gorbachev has taken the view that the Soviet Union has a Pacific destiny," said Mark J. Valencia, research associate at the East-West Center.

Asia not only has much to offer in resources and technology; it may also be much easier for Moscow to do business with Asians than with Americans and some Europeans.

Los Angeles Times Articles