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As US-China tussle and joust, Russia moves on SEAsia – As US-China tussle and joust, Russia moves on SEAsia (11/28/2018)

From trade deals to arms sales to nuclear cooperation, Moscow is making its case as a third force competitor in the strategic region


When Russian President Vladimir Putin made his first-ever state visit to Singapore this month for the East Asia Summit (EAS) – a regional gathering never before attended by the Russian leader – observers saw the move as a signal of Moscow’s bid to play a larger role in regional affairs.

Despite a stronger emphasis on developing political and commercial ties with Asia-Pacific nations in recent years, Russia has largely focused on alignment with China and deepening relations with Japan, South Korea and India. The Kremlin has paid comparatively less attention to Southeast Asia, but there are signs that is now changing.

From new trade opportunities to arms purchases and diplomatic protection, members of the Association of Southeast Asian Nations (Asean) appear to broadly welcome greater political, economic and defense cooperation with Russia and its moves to step up participation in the region’s multilateral institutions.

Moscow, for its part, aims to win new markets for its defense industries and vast energy sector amid tightening sanctions leveled by the United States against individuals, entities and third parties for their dealings with the Russian military and targeted defense companies. US attempts to limit Russia’s arms exports could, however, meet resistance from regional buyers.

In Southeast Asia, Russian defense companies sold US$6.64 billion worth of armaments between 2010 and 2017, outpacing their American counterparts’ US$4.58 billion in sales over the same period, according to the Stockholm International Peace Research Institute, a Swedish think tank.

Vietnam is Russia’s largest arms purchaser, trading partner and ally in the region, a legacy of their Cold War ties. Hanoi’s defense purchases accounted for 78% of Russia’s total arms exports to the region over that same period.

Vietnam is also the only Asean member to have signed a free trade agreement (FTA) with the Eurasian Economic Union (EAEU), a trade grouping informally led by Russia but also comprising Kazakhstan, Belarus, Armenia and Kyrgyzstan.

Since the trade deal came into force in 2016, two-way trade between Moscow and Hanoi reached US$5.2 billion in 2017, an increase of 29% from the previous year. Both sides recently agreed to target a US$10 billion turnover by 2020. Similar agreements with other Asean members are in the works and more could follow if Russia intensifies its regional trade push.

Putin’s visit to Singapore saw the Russian leader and his counterpart Prime Minister Lee Hsien Loong reiterate their commitment to conclude an EAEU-Singapore FTA now under negotiation. Bilateral trade has risen from US$1.38 billion to US$5.38 billion over the last decade as Russian companies have expanded their operations in the city-state.

Analysts believe clinching a trade agreement with an advanced economy such as Singapore would be a boon for the EAEU, particularly if the deal facilitates services and investments rather than just tariff reductions on the current relatively small volume of exchanges. As a close strategic partner of the US, Singapore is unlikely to pursue defense purchases from Russia.

Malaysian Prime Minister Mahathir Mohamad, however, signaled his willingness to seek deeper cooperation on defense and trade during a bilateral meeting with the Russian leader during his visit to Singapore. Their discussions saw the Malaysian premier reportedly ask Moscow for help in maintaining the country’s fleet of Russian-made fighter planes.

Mohamad Sabu, Malaysia’s defense minister, said in July that only four out of 28 Russian-made Sukhoi Su-30MKM and MiG-29 fighter jets owned by the Royal Malaysian Air Force (RMAF) are currently operational owing to maintenance problems and a lack of spare parts.

Former premier Najib Razak last year committed to a US$2 billion aircraft purchase of MiG-35 jets to replace the aging fleet of MiG-29s. But Mahathir’s administration suspended the purchase after taking office in May due to budgetary constraints.

Analysts see Putrajaya’s request for fighter maintenance assistance as an opportunity for Russia and Malaysia to deepen military-technical cooperation. Both leaders also affirmed their desire to increase and diversify their trade cooperation.

Russia is making inroads elsewhere in the region, too, forging closer defense links with the Philippines and Indonesia, the latter of which agreed last year to purchase 11 Sukhoi SU-35 fighter jets worth US$1.14 billion. Russia’s state-owned petroleum company Rosneft and nuclear energy corporation Rosatom are both pursuing multi-billion dollar projects with Jakarta.

Trade between the EAEU and Asean hit US$35.7 billion last year, an increase of 40% from 2016. At the Asean-Russia Summit held alongside the EAS, a memorandum of understanding signed between the two blocs signaled their intent to cooperate on customs procedures, trade facilitation, investments and business development.

Russia shares with Asean a belief in the principle of non-interference in the domestic affairs of other states. Momentum on Russian trade and diplomatic outreach is all the more applauded as certain Asean member states with poor human rights records continue to seek reliable, cost-effective arms without the political conditions or limitations required by Western arms suppliers, including the US.

The prospect of greater Russian engagement with Southeast Asia comes amid rising trade and geopolitical tensions between China and the US that Asean leaders such as Singapore’s Lee believe could lead to the emergence of rival blocs.

Against a backdrop of US-China competition for regional influence, Moscow’s role as a rising major player could be welcomed by states looking to hedge their diplomatic bets.

“There is clearly a demand for balancing arrangements in Southeast Asia,” says Anton Tsvetov, an expert at the Center for Strategic Research, a Moscow-based think tank. Russia is unlikely to be positioning itself as a third force on par with the US and China, he says, as doing so would run the risk of jeopardizing Russia’s burgeoning relations with Beijing.

“Russia is unlikely to project significant military power to the region and cannot afford to lead on major investment like the larger economies,” he told Asia Times. “The Russian foreign policy community orients itself very much along the lines of the president’s signals and his trip may be taken as such a signal, thus launching a ‘campaign’ of sorts,” he believes.

“Russia could put its weight behind Asean-centered multilateral institutions – and it tries to do so. This will benefit what is left of the regional rules-based order and pay credit to Asean as the convening center for regional mechanisms,” says Tsvetov, who believes Russia can play a useful role in counterterrorism, humanitarian assistance and disaster relief.

“The key here for Moscow is not to play power politics in a region where it has a footing not nearly as strong as the US, China or even Japan, focusing instead on concrete issues in demand from Southeast Asian countries.” US-imposed sanctions, however, could turn out to be a major impediment for Russia’s increased presence in Southeast Asia, he says.

In August, US President Donald Trump signed the Countering America’s Adversaries Through Sanctions Act into law, aimed at isolating Moscow and reducing its arms exports by targeting third parties who deal with US sanctioned Russian defense companies.

Critics of the law believe it could backfire on Washington through the unintended effect of enhancing Beijing’s influence by undermining the military capabilities of Southeast Asian countries that have for decades relied on Russian arms and equipment to deter China.

“US sanctions on Russia may turn out to be self-defeating in Southeast Asia. Russian arms provisions to Asean states – most importantly, Vietnam – are exactly what creates the deterrence capability against Chinese assertiveness,” says Tsvetov, referring in particular to Beijing’s militarization of the contested South China Sea to underwrite its sweeping territorial claims.

The CAATSA includes a narrow presidential waiver “intended to wean countries off of Russian equipment and allow for things such as spare parts for previously-purchased equipment”, according to the White House’s National Security Council (NSC). But countries such as Vietnam, Indonesia and India would still be susceptible to US sanctions as they seek multi-billion dollar Russian arms deals to upgrade their capabilities.

Being the target of American sanctions is a risk that some “may not be ready to take” in pursuit of arms deals with Moscow, Tsvetov says. If sanctions inhibit the deterrence capacity of Asean members, however, “regional states are sure to become irritated by the way US differences with Russia over issues elsewhere are transferred into the Southeast Asian context.”


This article originally published here.