Philippine President Rodrigo Duterte visited Russia for a five-day visit in October, his second since taking office. During his most recent visit, he addressed the annual meeting of the Valdai Club, highlighting the desire of his government to develop a comprehensive partnership with Russia while criticising the US for ‘exceptionalism and double standards.’ Since 2014, as relations with the West have deteriorated, Russia too has taken steps to increase its engagement with Asia.
This has included numerous steps including launch of the Eastern Economic Forum (EEF), signing of Eurasian Economic Union’s (EAEU) trade agreements with Vietnam, China and Singapore as well as the successful campaign by Russia for expansion of SCO. The prospect for cooperation between SCO and ASEAN is being discussed and Moscow is focusing on furthering its concept of Greater Eurasia. Apart from multilateral forums, Russia has also sought to enhance bilateral engagement with states in East Asia.
For instance, in the case of Philippines, an agreement on defence cooperation was signed in 2017 resulting in meetings between high-ranking officials as well as first-ever port call by the Philippine navy to Vladivostok in 2018. These developments, three decades since the end of the Cold war, reveal how Russia has remained on the ‘margins’ of foreign policy of Philippines. As is evident from the graph below, the bilateral trade figure touched a mere $1.38 billion in 2018. While Putin hailed the increase 102 percent increase in trade over the previous year and a fourfold increase in Russian exports, the overall volume still remains at a very low level. Russia’s investments in Philippines stand at $23 million.
Russia’s bilateral trade relations with the ten ASEAN states reached a cumulative figure of $19.9 billion in 2018. Given the lower than global average growth projection for the Russian economy in the coming years, it remains to be seen whether economic ties will see significant improvement.
To put the above graph in perspective, the largest external trade partner of ASEAN is China, with whom trade touched $483.1 billion in 2018.
In overall terms, by 2017, Russia made up 0.5 per cent of ASEAN’s total trade in goods.
Russian investment in Southeast Asia (SEA), which received a total FDI of $137 billion in 2017, has also lagged behind as it touched $47.75 million in the same year. Most of Russian investment in SEA is concentrated in Vietnam. Apart from the insufficient size of the economy, Russian economic engagement with the region has also been hampered by the lack of diversification of its economy. To a large extent, Russia has relied on energy - oil, gas and nuclear - and arms exports in order to build its partnerships across the world. In the case of SEA, in both energy and arms sector, the region has maintained diversified sources of import rather than being dependent on one partner.
Top 10 suppliers of major weapons to Southeast Asia
|% share of supplier’s total volume of exports to SEA
Source: SIPRI Yearbook 2018 and 2013
Despite this, Russia emerged as the leading supplier of arms to Indonesia, Malaysia and Vietnam from 2008-18. It stood at second position in the case of Laos and Myanmar and 11th in case of Thailand.
Russia’s weapons transfer to Southeast Asian countries, 2008-18 ($ million)
However, it did not make any breakthrough in arms exports to Singapore, Cambodia, Brunei and Philippines. In 2017, it donated some equipment to Philippines but other orders are yet to materialise. Also, there has been a dip in exports to the region since 2014 - barring Vietnam - as threat of CAATSA has put a dampener on Russian sales. The rise of export of Chinese defence equipment to SEA will be another future challenge for Russia. Russia’s defence networks in Asia are already weak, where it stood at 12th position out of 25 countries in Lowy Institute Asia Power Index, 2019.
Oil and gas, which form the bulk of Russian exports, have been dominated by sales to Northeast Asia. Overall, 31 percent of its crude exports went eastwards, which rose to 36 per cent in 2018. As is evident from the table below, China, Japan and South Korea are major recipients of Russian crude, while Southeast Asia lags. The $400 billion Power of Siberia deal to supply natural gas to China signed in 2014 is expected to deliver its first batch by December 2019.
Russia's crude oil and natural gas exports by destination, 2016
|Crude oil (thousand barrels per day)
|Natural Gas (trillion cubic feet)
|Asia & Oceania (total)
Source: EIA, 2017
Efforts are now being made to improve this situation, as is evident from Rosneft’s forays into Singapore and Indonesia. Already, Russia is a critical player for Vietnam with estimates that ‘up to 30 percent of crude oil and about 25 percent of gas exploited in Vietnam involve Russian investment. There is also a budding cooperation with several SEA states in order to help them build energy infrastructure as well as increase collaboration in nuclear energy.
Despite a resurgence of Russian foreign policy ambitions, it has been classified as a middle power in the region. It is particularly weak in areas of economic relationships and defence networks. This has important implications for its policy in a region that offers the starkest reminder of the changing international order, being home to the rising Chinese power. With enunciation of the Indo-Pacific, the US has indicated its intention to maintain its position in the region even as regional states hedge to avoid the stark choices of either balancing against China or joining its bandwagon.
In this context of hedging, SEA has welcomed the presence of different powers that help it avoid over-dependence on one state while creating inter-dependencies among regional powers in the hope of reducing chances of conflict. Russia has also sought to position itself as an independent party that does not have any direct conflict with regional players. The attempt to improve bilateral relations as well as become more involved in multilateral engagements, is a welcome development.
The fact that it is not seen as a threat in the region is another positive for the former superpower. It has close relations with states like Vietnam, where the two have collaborated on projects in the disputed South China Sea and Russia has supplied 93 percent of Hanoi’s arms imports. If managed successfully, Russia can position itself as a future negotiator in case tensions flare up. On the whole, it has otherwise maintained a neutral position on the dispute.
But as its relations with the US have deteriorated and Moscow has grown increasingly closer to Beijing, the development has the potential to negatively affect its carefully cultivated position as a neutral state in SEA. Since SEA sees the US as an important security partner vis-a-vis China, Russia’s troubles with its former Cold War rival constrain its space to manoeuvre in the region.
While ASEAN has embraced the idea of Indo-Pacific, putting forth its own visi for it, Russia’s cautious stance with it till now could create divergence in the foreign policy priorities of the two entities. It would be helpful for Russia to engage with its ASEAN partners over the idea. Given that Russia has focused on a central role for ASEAN, the discussions should focus on taking it forward.
As Russia concentrates its energies on its immediate neighbourhood, developments in the Middle East, relations with the West and China; its ability to mobilise its limited resources towards Southeast Asia remains to be seen. The presence of other middle level powers who have a more proximate and engaged relations in SEA will be another challenge to Russia’s ambitions of positioning itself as an important player in a region witnessing a major shift in the regional order. Russia would have to significantly improve its economic and defence ties in the region, while also improving ties with other significant powers in the region, if it is to convince SEA about its long-term commitment to the region.
The views expressed above belong to the author(s). ORF research and analyses now available on Telegram! Click here to access our curated content — blogs, longforms and interviews.
Nivedita Kapoor is a Post-doctoral Fellow at the International Laboratory on World Order Studies and the New Regionalism Faculty of World Economy and International Affairs ...Read More +