The prince of the East, Vladivostok, may become the focus of Russian Pacific investment. As more and more economic might and influence are moving to Asia, specifically China, Russian Pacific investment would put Russian industry and natural resource development where the money is. As Europe continues in its economic doldrums China continues to grow its economy. Russia owns a huge stretch of Pacific coast, much of it undeveloped because of its distance from the center of power in Moscow. Today Russian president, Vladmir Putin, wants to push development in the Russian East and is hosting a meeting of regional leaders in Vladivostok. For investors fundamental analysis starts with the fact that Russia has huge natural resources close to rapid Asian development. After that the issue is finding companies to invest in.
Eyes on China and the Pacific Basin
Since the demise of so called “monolithic” Communism Russian has embraced a much more free market economy than it ever had. China has done so as well but has retained much more control of its “managed capitalism.” China is the economic success story of the world while Russia lags behind. The Asia Pacific region includes every nation bordering the Pacific Ocean. Thus trade around the Pacific Basin includes Canada and the United States all the way down to Chile on the West. Australia and Russia are nations rich in territory and natural resources. While Australia has prospered dealing with Asian powers such as China, Russian Pacific investment has lagged, until now. The industrial and outsourcing powers of the region include Japan, China, South Korea, Singapore, Taiwan, Indonesia, the Philippines, and others. India, although not on the Pacific is a regional power as is Pakistan. As the central Asian economies grow they promote growth with all countries with whom they trade. Russia sees this and intends to promote Russian Pacific investment. If you are interested in investing in oil consider companies working in this region.
Barren Waste or Potential Economic Stronghold
Historically Vladivostok has been at the end of a really long train trip from Moscow. Much of the Kamchatka Peninsula and Siberia are little explored. The region is far north so that the interior of the region presents technical challenges to extraction of natural resources. However, if Russian Pacific investment brings technology to the region, improved infrastructure, and increases trade with the rest of the region the barren waste could turn into a economic treasure trove. There has already been competition between Japan and China for access to the resources of the Russian East. Think of Alaska and Northern Canada in terms of weather, resources, access, and economic potential. Russian Pacific investment is meant to take advantage of the economic growth of the Asia Pacific in order to develop the Russian East and bring Russia back to a higher economic footing as regards China. What are safe investments in this region? Probably it is best to stick with western companies whose stocks trade on the NYSE or NASDAQ.
How to Invest in the Russian Pacific
Think of investing in Russia. What companies from the West do business there? Which of these trades of the NYSE or NASDAQ? Which Russian companies dealing in natural resource extraction are open to foreign investment? Think of a number of Russian “growth funds.” All of these are ways to invest in companies involved in making money in the Russian East. Direct investment will probably mean speaking Russian and going to work in Vladivostok and parts north. However, when everyone is digging for gold or exploring for oil there is money to be made from the infrastructure that supports these efforts. Port upgrades, shipping upgrades, and more might be good ways to profit from Russian Pacific investment.