30.04.2016 Author: Dmitry Mosyakov

Russia and the Two Roads to the Cooperation with ASEAN

3543444In less than a moth the thrid summit Russia-ASEAN will be held in the city of Sochi. It will mark the twentieth anniversary of partnership between Russia and the countries of this organization. It should be noted that in recent decades ASEAN states have shown a breathtakingly rapid and sustained economic growth. It won’t be an exaggeration to state that today ASEAN is one of the most successful international organizations in the world, which unites 604 million people that produce over 2 trillion dollars in GDP, while the total turnover of the members states has recently reached 1.7 trillion dollars.

By all estimates ASEAN is among the heavyweights of the international politics that functions as a completely separate center of both economic and political power. The development of relations with the ASEAN states would allow Russian to enjoy a sharp increase of investments, on top of Russian companies obtaining a number of preferences while making business in the Southeast Asian countries. Politically, Russia’s bid to strengthen its relations with ASEA would allow it to influence the situation in the Asia-Pacific Region (APR), thereby defending its own interests and those of its allies.

In order to achieve those goals, Russian politicians have recently made a number of significant adjustments over the last couple of years to their policies. For Russia the rapprochement with the ASEAN states can be enhanced in two areas. First area is the partnership with ASEAN as a unit, while there’s yet another dimension – the development of bilateral relations with the member-states of ASEAN. Those areas are tied pretty closely, so the changes taking place today in the Russian-Singapore relations will inevitably have an impact on Russia’s relations with ASEAN states.

For a long time the only link that tied Russia to ASEAN was the state of Vietnam, with which Moscow has always enjoyed special relationships. Today, the development of bilateral relations with Vietnam has become really fast-paced. But there’s new bilateral ties emerging between Russia and ASEAN states now. For instance, Singapore is one of the most successfully developing countries in the world that has harnessed huge financial and trade flows. Singapore could become the second bridge that would tie Russia with ASEAN.

It should be that the road to Singapore will be vastly different from the one to Vietnam for Russia. Bilateral relations between Moscow and Hanoi are both long-standing and trustful, therefore it was Vietnam that has always supported Russia’s policies in Southeast Asia, and it could hardly be replaced in this capacity. For example, in 2010 Hanoi hosted the second Russia – ASEAN summit and it supported Russia in 2010 when it was trying to join one of the key regional organizations – East Asia Summits. A special attention in Vietnam is being paid to its ties with Russia, it’s not a coincidence that the new Prime Minister of Vietnam – Nguyễn Xuân Phúc will go to Moscow on his first foreign trip.

Serious progress in bilateral relations with Vietnam has also been made in economics. The most important step in that domain is the signing of a free trade zone deal, which, once it’s ratified can give a new boost the economic development of both states. Some critics often note that the economic relationship between Russia and Vietnam are negligible (in 2014 the trade turnover between Russia and Vietnam amounted to 3.75 billion dollars), which is nothing in comparison with the turnover Russia has with its major trade partners. The same applies to Russia from the point of view of Vietnam, since it’s far behind China, the United States and the European Union in this domain. Indeed, Vietnam’s turnover with the United States had reached 34.94 billion dollars, while the turnover Vietnam enjoys with China, that amount to 58.77 billion dollars has always ben pretty impressive. However, those figures won’t encompass certain special areas of cooperation, like the delivery of Russian military equipment and spare parts for it. The core of bilateral economic relations between Russia and China are such areas as nuclear energy, mining and processing of oil and gas, tourism and agriculture. Once Russia ratifies the free trade agreement, it will be able to get its turnout with Vietnam to the level of 10 billion dollars by 2020.

As for Singapore, Russia’s relations it differ drastically from those it enjoys with Vietnam, since there’s a minimum number of political matters since the economic cooperation is put at the forefront. This is understandable, since Singapore has never been among Russia’s allies, since it feared the support that the USSR provided to communists worldwide back in the Cold War days. Today, all those fears are in the past; the main economic center of Southeast Asia has 400 Russian companies working in it and over 5000 Russian citizens dwelling in this city-state. A special attention in the cooperation with Singapore should be paid to the banking and processing areas, since Singapore is one of the world leaders in those areas. Back in 2015 the turnover between Russia and Singapore has decreased by almost 28%, reaching the level of 5.5 billion dollars, therefore both sides are interested in strengthening cooperation by signing an agreement on the free trade zone. Consultations between the two countries on this issue have already begun.

Thus, Russia is slowly making its way to ASEAN markets, and it’s highly likely that already at the third summit in Sochi, the establishment of Russian-ASEAN free trade area could be seriously discussed.

Dmitry Mosyakov, Professor, Doctor of Historical Sciences, Director of the Centre for Southeast Asia, Australia and Oceania and the Institute of Oriental Studies of the Russian Academy of Sciences, exclusively for the online magazine “New Eastern Outlook.


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