Vladivostok prepared for spotlight

This week's Apec meeting in Russia is being held at the end of a dodgy road, across a bridge to nowhere.

John Key and the other 20 leaders gathering in the far eastern city of Vladivostok tomorrow will be hoping it's not an omen.

Russia has poured more than $25 billion into Vladivostok - spending second only to the investment in the 2014 Sochi Winter Olympics - to improve infrastructure and facilities, including new conference facilities on Russkiy (Russian) Island where the summit will be held.

It will become the campus of the Far Eastern Federal University after the leaders leave.

But the new $1 billion 40-kilometre highway, built to rush leaders from the airport, has been nicknamed Scandal Rd after it cracked and was undermined during light rain back in June - just days after the director of the company in charge of Apec construction preparations was shot dead.

The flagship project is a 2.4km cable suspension bridge, the largest of its type in the world, linking the mainland with the island and its 5000 inhabitants who had previously relied on ferries - hence the "bridge to nowhere" tag.

It is all part of President Vladimir Putin's plan to present the country's best face to the world and boost the economy in the far east.

That economy, dominated by automotive industries based around imports from Japan, is diversifying and there are even plans for a gaming precinct.

But at 6400km from Moscow (further than Perth is from Wellington) it has been "at the end of the line".

That isolation has fed significant population decline, with the number living in Vladivostok dipping under 600,000 in recent years, but for a country that has traditionally been "Europe-facing" it is key to strengthening links with the most dynamic region in the world, and especially China.

Russian Finance Minister Anton Siluanov said last week that the Apec economies were the most dynamic in the world.

"Against the backdrop of uncertainty Apec members look relatively healthy, the prospects are better for them and they are on a more positive trend than the global economy as a whole."

Vladivostok - once a closed city and best known as the secretive home port of Russia's Pacific fleet - is Russia's key to the door.

It is the terminus for the Trans- Siberian railway. It is now emerging as a gateway for a land link to Europe, welcomed by China as a strategic route for its exports.

Whether the bridge becomes a white elephant (and critics say the projects have been 'a corruption outlet'), the transformation of Vladivostok is a more likely legacy of the Apec meeting than anything the leaders and their foreign and trade ministers hammer out over the next five days.

Little progress is expected towards Apec's holy grail; a pan Asia-Pacific free trade deal. Talks on the 11 member Trans-Pacific Partnership (TPP), seen as a possible stepping stone to a regional trade pact, are still in train, but behind schedule.

United States President Barack Obama joined the TPP talks with much fanfare at Apec in Singapore in 2010, but he has more pressing issues at the Democrat Convention and will not be at this week's meeting.

Secretary of State Hillary Clinton will lead the US delegation, and soundings during her recent visit to the Pacific Islands forum in Rarotonga suggest the US is still hopeful of a conclusion before the end of 2012.

Among New Zealand's delegation the mood remains hopeful of progress on the TPP, but more cautious than to bank on it being signed off by Christmas.

There is equal concern that the target date for a free trade deal with Russia - also pencilled in for 2012 - will slip further amid Russian concerns about the impact of New Zealand agricultural exports.

Exports to Russia are worth less than $300m a year, mostly dairy products and meat. Imports are just over $1.2b, including petroleum, fish and alcoholic drinks.

An FTA with Russia and its customs unions partners Belarus and Kazakhstan - the so-called RBK - is just one of the alphabet soup of acronyms on the international trade negotiations menu.

Trade Negotiations Minister Tim Groser added another last week, announcing that New Zealand would join talks for a 16-member East Asian Regional Comprehensive Economic Partnership deal.

The Apec agenda itself can be equally complex and impenetrable.

This year it is slated to "discuss trade and investment liberalisation, regional economic integration, strengthening food security and establishing reliable supply chains, as well as co- operation to foster innovative growth".

Mr Key said the Apec talks were important because the region was seen as the engine for future global growth.

"New Zealand's current and future economic prosperity depends on how successfully we can integrate into this region."

But against that backdrop, he this week conceded Apec meetings were most valuable for the opportunity to meet other leaders face to face.

With President Obama absent, he has scored the biggest bilateral coup possible - a meeting with President Putin.

It will be the first time the two have met, although Mr Putin has been to New Zealand; as a newly minted prime minister at the Apec meeting in Auckland in 1999, just a year after Russia joined the grouping.

Then he was a barely recognised figure ambling down Auckland with an official and a bodyguard or two - in stark contrast to the Bill Clinton roadshow with its fleet of planes, armoured vehicles, and the media hanging on his every word and purchase.

Mr Putin's influence has soared since then, and for Mr Key it is one of the most coveted bilaterals at Apec.

Other bilateral meetings are yet to be announced, but only talks with China's president Hu Jintao would be of equal standing.


Apec is a forum for Asia-Pacific economies. Its 21 members are Australia, Brunei Darussalam, Canada, Chile, the People's Republic of China, Hong Kong China, Indonesia, Japan, Republic of Korea, Malaysia, Mexico, New Zealand, Papua New Guinea, Peru, the Philippines, Russia, Singapore, Chinese Taipei, Thailand, the United States and Vietnam.