Russia wants "Silk Road" of its own

VILNIUS - At the start of the 21st century it's Russia that is building the Great Wall. And there will be no new "Silk Road," at least for the time being, as the Latvian president has hoped.

Unexpected moves by Russian customs authorities last week brought new disappointments to Baltic businesses. If not reversed, the tendencies may cause great damage to the economies of the three Baltic nations despite the improving economic situation in Russia.

The Russian customs authority on March 15 banned the import of goods from Southeast Asia through the Baltic states and other European countries to protect the interests of Russian ports and local businesses.

According to the customs committee's regulation effective March 17, goods made in China, India, Singapore, South Korea, Thailand, Bangladesh, Vietnam, Indonesia, Cambodia, Laos, Malaysia and Sri Lanka can be imported into Russia only through customs checkpoints set out on a special list, the ITAR-TASS news agency said. The list doesn't include any checkpoints on the border with the Baltic states.

The Russian customs authority said the measure was expected to help prevent tax-evasion schemes.

Customs officials declined comment.

Of the checkpoints designated for entry of Southeast Asian goods, 18 are on the Russia-Kazakhstan border, two railway checkpoints and seven road checkpoints on the border with Mongolia, three rail and 15 road checkpoints on the border with China and one rail checkpoint on the Korean border. Goods can also be imported via Russian ports and airports.

The news emerged late in the week, and officials were reluctant to comment on the spot.

Romas Svedas, the head of the economics department at the Lithuanian Ministry of Foreign Affairs, told BNS he was not aware of the Russian customs decision. If it appeared that the new regulation hurts the interests of Lithuanian businessmen and violated any bilateral treaties, the Ministry of Foreign Affairs would send a note to Russia without delay, Svedas said.

The Russian customs move might harm tiny Estonia and reduce to practically nothing its purposeful diplomatic activities toward China.

China made a remarkable rise among Estonia's imports from 16th place in 1999 to sixth place in 2000. Undoubtedly, part of those imports are turned into Estonian exports to Russia. Transit flows through Estonia have grown in 2000 by 35 percent.

Estonia is becoming an attractive foreign trade and transit partner for China and is an advantageous partner at a time when much more is being produced in China than it can consume, Chairman of the National People's Assembly of China Li Peng said in early March during a meeting with Estonian President Lennart Meri in Beijing.

Last November, senior officials and executives from the Estonian Transport and Communications Ministry, Estonian railway and the Port of Tallinn flew to China to promote business ties. Neither Latvia nor Lithuania has ever sent such a group to China.

However, last September, Latvian President Vaira Vike-Freiberga told visiting Li Peng she wanted a resumption of the "Silk Road" as well as the use of Latvian transit possibilities for the transportation of Chinese goods.

Latvia's Liepaja port administrator Aivars Boja told BNS March 16 most of the cargo reloaded at Liepaja port came from Asian countries and was taken to Russia through Latvia. The loss Liepaja port would incur from the Russian State Customs Committee's decision could be estimated in two weeks, Boja said.

Ventspils free-port administrator Imants Sarmulis told BNS he had not studied the order yet, therefore he could not tell to what extent the decision would affect work at Ventspils port and what share of the total amount of cargo the port would lose.

"It is nothing good for Latvia's ports," he said, adding such an order from Russia is not fully in line with market economy principles.

Riga container terminal commercial division head Grigory Nevdokh told BNS the decision of the Russian customs committee may have a significant effect on Latvia and the work of its big ports. The Riga container terminal operates at Riga port.

The Riga-based newspaper Bizness & Baltija reported that several ships with cargo from Asia that initially were heading for Liepaja already have been forced to divert to St. Petersburg.

The Russian customs move, however, is timely in the sense that it gives Tallinn, Riga and Vilnius more than a week to undertake diplomatic counters ahead of Lithuanian President Valdas Adamkus' official visit to Russia March 29 - 31.

In case those moves are not resolute enough and bring no results, Adamkus will have to table the problem in the name of the three countries when he meets Russian President Vladimir Putin.

It is expected that apart from European Union integration and bilateral issues, Lithuania may try to negotiate long-term crude supplies from Russia for the oil concern Mazeikiu Nafta.

Lithuania's relations with Russia have been better than those of Latvia and Estonia, which have had disputes with Moscow over their large Russian-speaking minorities.