Dialogue July-September 2008, Volume 10 No. 1
South East Asia
the last 5-6 years under the leadership of the former president Vladimir Putin
has reemerged as a major player in international affairs.
is under the presidency of Dmitri Medvedev who is handpicked by Putin even as
Putin has taken the charge of prime minister since June 2008. Hence in the
’s relations with the Asia-Pacific region in general and South East Asia in
particular it may be worthwhile to enquire into the following—What are the
factors that have contributed to
’s reemergence? What is the state of relations between
and the West and what are their implications for the South East Asian
countries? What are
’s key interests and priorities in South East Asia and what are the likely
under the new team of Medvedev and Putin?
There are a variety of factors that seem to have contributed to the
. Firstly, unlike the crisis conditions that prevailed during the 1990’s,
under the presidency of Vladimir Putin,
has attained substantial political strength and stability. Specifically during
the second term of presidency of
followed several policy measures which have led to—
centralization of political
power which has effectively enhanced the powers of the president, and
weakening of the role of the
political parties, including the Communist party, which offered strong
opposition to the former president Boris Yeltsin.
Hence with the concentration of power with the Kremlin, Putin was able to
pursue an assertive policy both in domestic sphere and also in
’s foreign policy issues. Some western analysts opined that Putin’s policies
were aggressive in nature and content. But Russian analysts opine that Putin
pursued an assertive foreign policy to serve
’s national interest. Policies pursued by Putin increased his popularity at
home as a strong leader. This is also reflected in Russia’s ‘Near Abroad’
policy in which Russia has close relations with the some states such as the
Central Asian States, Belarus, Armenia
with which there is no conflict of interest. But with few other states
such as Georgia, Ukraine etc.
has occasional differences on specific issues and relations are not always
has become economically strong. The country has been able to maintain
relatively high GDP growth rates during the last few years. It was about 8.1
percent in 2007, breaking all records during the last two decades. Russian
economy is booming and as opined by western analysts
is back in the headlines.
has budget surplus of 6 percent in
2007 and the state treasury is overflowing with money. Ruble has become a strong
currency and has appreciated against dollar. Per capita income has nearly
doubled in the last 5 years exceeding $ 900 at present and hence Russians would
like to hold rubles and not dollars. The Russian government has been paying off
international debts in advance. This has become possible due to mainly two
factors—namely huge hard currency earnings by export of oil, natural gas and
export of defense equipments. Being one of the major producers and exporters of
oil and natural gas in the world,
has immensely benefited by the rising international market price for oil from
less than $ 40 per barrel in 2004 to about $ 130 per barrel at present. With
this inflow of petrodollars, Russian policy makers are able to reassert in
domestic economic issues as also in their dealings abroad. The Russian state
sector companies and Russian energy giants such as Gazprom, Rosneft have been
able to invest in the energy sector to acquire assets such as oil fields and
has followed a policy of ‘Resource Nationalism’ to reduce the share of
foreign companies such as British Petroleum in joint ventures in
. Equally important and significant is the fact that Russian companies have
increased their share in companies abroad including
, Venezuela etc. Under Vladimir Putin’s presidency the role of
’s state sector has increased, which is contrary to privatization policy
pursued by Boris Yeltsin. Moreover, the Russian state, energy giants and the new
class of Russian Oligarchs have been working in tandem to achieve the objective
‘Energy Super-power’ in the world. According to some western analysts
Gazprom is often described in media commentary as a lever of Russian foreign
policy, which is an indication of commercial considerations in
’s foreign policy.
has also been a major exporter of ferrous and non-ferrous metals in the global
under Putin’s presidency emphasized on increasing the production of arms and
military equipments and modernization of defense sector. This is evident from
the fact that while Russia’s defense expenditure had gone down by 50 percent
between 1992-97, it shot up from Ruble 95 billion in 2002 to 344 billion Rubles
in 2003 and this trend has continued. The Russian leaders realized the economic
benefits of defense exports, because at a time when the rest of the economy was
facing constraints of growth, defense sector emerged as the major source of
export earnings. Hence in 2003 Putin approved the new military technical policy
for rearmament plan emphasizing R and D of new generation of weapon systems.
’s ROSOBORONEXPORT became an active state organization selling arms in various
and South East Asian countries. Asian countries including China, India etc.
purchase more than 90 percent of Russia’s $ 5 billion arms exports annually
Thus Russia has reemerged as a major exporter of arms in the global
market by exporting to a large number of countries including China, India and
many other countries in Asia, Africa and Latin America.
has been actively associated and working in several regional organizations with
the former Soviet republics, present Commonwealth of Independent
States—Collective Security Treaty Organization, Eurasian Economic Community
and so on. Similarly,
has been active in regional organizations such as the Shanghai Co-operation
Organization, APEC, ASEAN which has enabled the Russian leaders to collectively
promote its policy initiatives to counter the policies of the West.
—West- Growing Conflict of
There are ups and downs in
’s relations with the West after the Soviet break-up. At present
’s relations with the West are witnessing a downward phase. This is evident
from the mutual accusations and verbal wars between the two. For instance, the
vice president Dick Cheney considered
as an undependable country and Vladimir Putin as an autocratic leader. In
response to that in July 2007 Russia’s first deputy prime-minister Sergei
Ivanov shot back saying that West was creating a ‘New Berlin Wall’.
’s foreign minister Sergei Lavrov accused the West of adopting virtually
‘New Cold War’ policy towards
. Hence there are different views and perceptions about
’s relations with the West. According to one view as articulated by the
Russian daily paper Vremya Novostei ‘ Europe created as many problems for
as opportunities it offers’. The Russian president Medvedev has reiterated
Putin’s policies towards the West.
is unhappy with the Eastward expansion of NATO which is making efforts to draw
into its military alliance. For
it is a security threat.
’s relations with the European Union are often affected even as the EU is the
largest partner of
for trade and economic relations. There is a view that on certain political
is more sympathetic towards
and hence EU considers that
was trying to bring about division among the EU members. At the same time
’s relations are strained with the Baltic States,
which have joined the EU after the Soviet break-up.
’s agreements with
to build a nuclear power plant at Bushehr and supplying nuclear equipments to
has created great resentment in the West. Linked to this Iranian issue is the
proposal to set up a ‘Missile-Defense Shield’ in Europe by installing 10
anti-missile interceptors in
and a radar unit in the
. In retaliation
has threatened to put anti-missile units in
in the Baltic region targeting
. The Russian president Dmitri Mevedev has strongly reiterated and supported
Putin’s policies and measures initiated on this issue.
’s problems with the West may not have direct bearing for Asian countries and
ASEAN in particular. However, Russian policy makers might be more inclined to
turn towards the East to promote its own political and economic interests.
East Asian Countries- Political Relations
has multi-vectored interest in the Asia-Pacific region—geopolitical,
political, economic and so on.
’s concept of balance of power, which is fundamental to
’s view of the World, has been reflected in
’s Foreign Policy Concept of July 2000 and in subsequent policies and
political decisions. It is determined by the geopolitical interest of
as one of the largest Eurasian power and hence
has tried to assert its position against the Western powers in the region.
This evident from Putin’s objective, who wanted Russia to reemerge as a
major power in the world, whose position was affected in the 1990’s when
Russia faced major problems both at home and abroad.
Secondly, it is important to note that there is recognition on the part
of the Russian policy makers about the growing strategic importance of
Asia-Pacific and ASEAN countries in the world. Hence
’s ‘Look East’ policy has been intended to promote its national interest.
Thus to fulfill its own political objectives there has been significant
intensification in the foreign policy of Russia towards Asia-Pacific region, and
measures were undertaken in the recent years for getting full membership of the
APEC and ASEAN. Thus
’s key interest is to increase space and place for its role in this region.
firmly believes in close co-operation with the South East Asian countries for
mutual benefit and there has been a strong perception among the Russian policy
makers about the reciprocal response of these countries towards
. It is also argued that there is
commonality of views among
and ASEAN countries to maintain political stability and build a multi-polar
world order. Hence ASEAN-Russia political and security cooperation is expected
to strengthen given the convergence in interest in ensuring a peaceful region to
pursue economic development and to combat the menace of terrorism and
’s foreign policy goals, Vladimir Putin pursued active political diplomacy
with regard to these countries which is evident from several visits during his
for 8 years since 2000 to May 2008. For instance, Putin’s visit to Hanoi in
March 2001 was the first official visit to Vietnam by a Russian head of a State
in 50 years and hence has great historic significance not only for Russia’s
relations with Vietnam but for the South East Asian region as well.
pursued a positive external policy under Putin trying to strike a balance
between the East and West.
will continue its active political diplomacy in the region with the new
Dmitry Medvedev and Vladimir Putin as the Prime Minister of the country.
The Russian leaders have made regular visits at high levels to reiterate
’s policy priority towards the South East Asian countries. The former Russian
President Vladimir Putin’s attendance of the Association of Southeast Asian
Nations summit in December 2005 in
had been described as further evidence that
preferred closer interaction with
over integration with the West because of shared values. Hence at political
is confident about active cooperation with the Asia-Pacific and ASEAN countries
bilaterally and within international associations including the UN, ASEAN
Regional Forum (ARF). Asia-Pacific Economic Cooperation. This has helped the
partnership to become an influential factor in regional politics. This is
reflected on the emphasis that
has paid for the establishment of a mechanism for regional cooperation between
the ASEAN Regional Forum (ARF) and Shanghai Co-operation Organization (SCO) for
effectively tackling issues concerning security and terrorism. The
establishment of a mechanism for cooperation between the ARF and the SCO, has in
practice already proved its effectiveness and relevance in the job of
reinforcing security and combating terrorism in
–ASEAN Economic Relations
’s ‘Look East’ policy is guided by strong economic considerations.
’s increased interest in promoting economic ties with the ASEAN countries is
guided by the region’s enormous economic potentialities.
accounts for about half of the population in the world and about one-fifth of
global trade. It is, therefore, pragmatic on the part of the Russian policy
makers to be a major player in the Asia Pacific and South East Asian region.
Neo-liberals argue that three elements have transformed
into a predominantly regional player in the Asia-Pacific region. Firstly, the
changing character of
’s Far Eastern regions and their relationship with the wider region of
. The second element is a genuine commitment to strengthening relations with
major Asian powers including those in the Asia-Pacific region. The third element
is the ‘Economic Factor’—the contention being that economic instruments
are often more effective than traditional political and military means in
projecting influence. Hence
’s keen interest to increase trade and economic ties with the countries in
and economic factors have also contributed to
’s interest in
, which were rekindled mainly after Putin took over the presidency in 2000.
There was recognition of the importance of South East Asian region for
’s economic development. This was also part of
’s ‘Look East’ policy. For the economic development of Siberia and the
Russian Far East,
wants closer integration with Asian countries and regional institutions
including the ASEAN. It is opined by analysts that
got support from the South East Asian countries including
. It is also important to note that
emerged as a major exporter of defense equipments to many ASEAN countries
’s aggregate trade turnover with the ASEAN, which was not significant in 2002,
has almost doubled in the past six years. But this is only one-third of the
potential of trade and technological cooperation. This is why besides trying to
increase trade relations,
has been looking for new spheres of co-operation with the ASEAN partners. With
significant economic growth during the last few years,
wants to shift the focus to co-operation in the hi-tech areas and in services
sector. An important development in this regard was that in December 2005
foreign ministers from
and the 10-member Association of Southeast Asian Nations signed an economic and
development cooperation agreement setting out programs to deepen ties over the
coming decade. Bilateral agreements are also signed by
with the South East Asian countries from time to time. Moreover, Vladimir
Putin’s regular interaction with several leaders from South East Asian
countries has helped to bolster ties and to strengthen trade and economic ties.
For instance, the ASEAN-Russia Joint Cooperation Committee (ARJCC), oversees
bilateral economic, trade and research-technical cooperation, consisting of
representatives of official bodies and of business and scientific communities.
This Foundation has stepped up its efforts in the past few years, when the Asian
’s foreign policy gained in strength.
bilateral cooperation between
and South East Asian countries has also assumed great economic significance.
For instance, the Russian authorities have bilateral cooperation with
to promote interaction in the areas of small and medium enterprises, science
and technology, energy, minerals, transport, finance, agriculture, technical
cooperation, tourism, information and communication technologies, environment
protection and disaster management.
has also signed agreements to hold exhibitions from time to time. Thus Russian
High-Tech Exhibitions held in
were a success. Similarly, Russian research laboratories have also received
for doing research and design projects, including in dual-purpose goods.
important to note that
economic ties have covered many important sectors. This is evident from the
joint project in which
was to invest $25 million in three years to produce leokain and bitomycin,
antibiotics for the treatment of wounds and burns.
is also beginning a project of the Russian company Tana aimed at establishing a
network of tele-medical video monitoring centers for helping patients with grave
infectious diseases, tuberculosis, AIDS, and malaria.
promoting trade there are other economic issues which are of interest for
in the South East Asian region. For instance, according to Russian Think Tank,
Russia could emulate many things from the experience of South East Asian
countries— methods of attracting foreign investment; the establishment of
special economic zones and free trade zones; support to small and medium-sized
businesses; and the creation of a common regional currency, the Asian Currency
Unit (ACU). This is because Russian policymakers are aware that during the last
about 20 years
, Indonesia etc to build SEZ. In order to learn from this experiment in 2006 the
signed a memorandum of understanding on cooperation in establishing special
economic zones. Similarly,
wants to make use of
’s unique experience of attracting foreign investment and investing
substantial funds abroad. This is because
accounts for 39 percent of total investment in
, and has invested over $60 million in the Russian economy. There is an
important aspect that Russian policy makers need to emulate from
, which is a country with low investment risks, and hence it attracted
investment of about $5.35 billion in 2006.
energy is an important sphere of promising cooperation with the Asia-Pacific
and ASEAN countries. According to modest forecasts based on projected rates of
economic and demographic growth, global energy consumption will increase by 20
percent in 20 years and it will double by the middle of the century. This will
’s role as energy provider.
would like to play an important role in the growing energy market of the Asian
countries. As stated by the Russian energy minister Viktor Khristenko in 2007
only 3 percent of
’s energy exports went to
. By 2020
proposes to export 30 percent of its energy exports to Asian countries. This
statement assumes importance considering the fact that Russia is a member of the
Asia-Pacific Economic Cooperation organization and at that bloc’s one of the
summit Moscow’s primary focus was how it could meet Asia’s demand for energy
to fuel the region’s economic development.
The Russian energy giant Gazprom has calculated that Russia, which has
the world’s largest energy reserves, will supply some 110 billion cubic meters
of gas to Southeast Asian countries by 2020, with the share of liquefied natural
gas (LNG) growing considerably.
has signed a memorandum on strategic cooperation with PTT,
’s oil and gas corporation. Gazprom is negotiating with
’s Petronas on participation in the construction of a gas pipeline across
ASEAN and of gas supply infrastructure in the member countries. With close
co-operation in the energy sector, recently
’s Petronas took part in the initial public offering of Russian state-run oil
company Rosneft, buying $1.1 billion worth of its shares, which was more than
British Petroleum or
’s CNPC investment in it.
from exporting oil and natural gas,
would like to export machinery and equipments for power plants in
South East Asia
. For instance,
’s Silovye Mashiny the producer of power machines and equipments, is rapidly
strengthening its foothold in the region. The demand for its equipment has grown
considerably owing to the construction and modernization of thermal and
hydropower plants in
. Russian energy companies are seeking cooperation with the Asia-Pacific and
ASEAN countries in energy related sector for mutual benefit. For instance,
Russian electricity monopoly RAO UES was also actively looking for partners and
investors in Southeast Asian countries. It was also discussing with
for the financing of new electricity assets in
, hoping that Malaysian partners will invest about $2 billion in the Russian
power generation sector.
is one of the leading countries in the world in producing nuclear energy. It
has several years of experience in nuclear technologies, including in designing
and using fast neutron reactors. The average prime cost of electricity produced
by Russian nuclear power plants is $0.014 per kWh. According to Russian
is one of the world’s leaders in the production of small nuclear power units,
and hence its achievements could also be used in other countries. Several
regional countries, notably
, have announced their intention to develop a nuclear sector in their power
industries. It may be mentioned that Russian experts are modernizing the Da Lat
Nuclear Research Reactor and assembling
equipment for the
gamma-ray unit. Nuclear contracts are being negotiated with other countries. In
has proposed to acquire a Russian-made floating nuclear power plant, an
exclusive product of Russian engineers.
is interested in regional projects and hence mutuality of interests between
and the ASEAN countries provides a reliable foundation for the architecture of
future relations between
and the ASEAN. But according to some analysts even as South-East Asia is an old
stamping ground for the Kremlin,
is late in returning to the scene. Many of these countries have close ties with
the Western countries and also with
. Hence situation is not very easy for
to make great success in the region.
is interested in the South East Asian region to secure support for its entry
into the World Trade organization. Hence as argued by some analysts,
’s intention to increase engagement with the South East Asian countries is no
different from its other foreign policy goals. The Kremlin authorities are
engaged in negotiations with several countries to enter the World Trade
Export of Defense Equipments
As stated above
renewed its interest in promoting defense production and exports primarily
under Putin’s presidency and it will be continued under Medvedev. Hence
has a major stake in the Asian region which includes many South East and
Asia-Pacific countries. Visits of several Russian
leaders including that of Vladimir Putin, former Prime Minister Mikhail Kasyanov
and others to the South East Asian countries since 2000 were intended to promote
strategic partnership with these countries and also to export defense
equipments. These efforts have yielded positive results —Lomo-Corp’
delivered 50 portable SA-18 surface-to-air missiles to Vietnam under $ 64
million contract, Maynamar took delivery of dozens of MiG-29 fighter jets,
Malaysian air force purchased a squadron of general purpose fighter planes
and Sukhoi S-30K fighter planes from
Russia and so on. In
is supplying modern aircraft and helicopters to the region and establishing
technical maintenance centers in
, which meant it was not selling only military equipment. Similarly, to
effectively deal with the destructive force of forest fires in tropical regions,
many Asia-Pacific countries have
been attracted to acquire Russian-made ‘Be-firefighting-amphibious’
’s keen interest in South East Asia was evident when the former president
and signed an arms deal with that country. It important to note that he was the
first Russian leader who visited
since Nikita Khrushev visited way back in 1960. Hence Putin certainly wanted to
renew and revive old political and economic ties with
is also supplying KAMAZ trucks and many other civilian goods to the region. In
the opinion of some defense experts this was one of the main reasons for
pushing its permanent membership in these Asian regional organizations.
In conclusion it may be stated that
has reemerged as a major global power. Under
the former presidency of Vladimir Putin,
has become politically strong with concentration of power in the Kremlin.
has become affluent and prosperous thanks to the export of oil and natural gas
and export of defense equipments. There is growing assertiveness of
both at home and abroad. There are strong indications that there will be
continuity of these policies under the leadership of new President of Russia
Dmitri Medvedev and Prime Minister Vladimir Putin.
is facing a downward phase in its relations with the West. This is due to a
variety of reasons. From Russia’s perspective NATO’s Eastward expansion
policy; differences and misunderstandings with the EU; conflict over Russia’s
supply of nuclear equipment for power plant to Iran leading to proposal of the
West to set up Missile Shield have affected Russia’s relations between the
This has indirectly intensified
’s ‘Look East’ policy with emphasis on relations with the ASEAN countries.
wants to reassert its policy of balance of power with the West so far as the
Asia-Pacific and the ASEAN countries are concerned.
claims to promote co-operation with the ASEAN for mutual benefit in political,
security and economic spheres. To achieve these objectives in the next decade or
would like to enhance its role in the South-East Asian region both through
regional co-operation as well as bilaterally with individual countries. With
emphasis on increase in production and modernization of defense sector,
would increase its exports of arms and equipments. Russia seems to strengthen
ties in the defense sector not only by increasing export of defense equipments
but also in new forms of cooperation such as establishing technical maintenance
centers in Malaysia and Indonesia and so on.
Considering the fact that the share of
’s trade is not significant at present,
might take several measures to increase trade with these countries.
has potentiality to export more oil and natural gas to some of the South East
’s energy giants such as Gazprom, Rosneft might become more active in the
energy sector of the Asia-Pacific region in the next decade through investment
in joint ventures and in acquiring assets in energy related fields in the South
East Asian countries to promote its objective to enhance its role as a energy
super-power in the world.
is likely to actively seek cooperation with ASEAN countries in high-tech areas;
banking and investment areas; development of service sector; creation of SEZ and
so on in which some of them have developed considerable experience and
might also be interested in the participation of qualified and skilled work
force from the South East Asian countries in the economic development of
’s Eastern regions such as Eastern Siberia and the
. This may help reducing the proportion of Chinese work force in
. While there will be no return to cold war era,
would make all efforts to reestablish its position as equal partner with the
in the world affairs. With extensive natural resources, world class technical
expertise and sustained high economic growth during the last few years, Russia
has potentiality to enhance its power and position in the world including
in the South East Asian region.