ASEAN-Russia: Foundations and Future Prospects 9789814379588

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AS~AN-RUSSIA

The Moscow State Institute of International Relations (MGIMO) was founded on 14 October 1944. It is Russia’s leading diplomatic training institution, with MGIMO academics making major contributions across the fields of international relations, country and regional studies, international law and international economic relations. MGIMO was granted University status in 1994, and every year accepts more than 1,000 new students, from every part of the Russian Federation, and internationally from more than sixty countries. Over 35,000 Russian and global alumni are proud to have graduated from Moscow State Institute of International Relations. Divisions of the MGIMO Alumni Association are active in many countries around the world. The Institute of Southeast Asian Studies (ISEAS) was established as an autonomous organization in 1968. It is a regional centre dedicated to the study of socio-political, security and economic trends and developments in Southeast Asia and its wider geostrategic and economic environment. The Institute’s research programmes are the Regional Economic Studies (RES, including ASEAN and APEC), Regional Strategic and Political Studies (RSPS), and Regional Social and Cultural Studies (RSCS). ISEAS Publishing, an established academic press, has issued more than 2,000 books and journals. It is the largest scholarly publisher of research about Southeast Asia from within the region. ISEAS Publishing works with many other academic and trade publishers and distributors to disseminate important research and analyses from and about Southeast Asia to the rest of the world.

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• FOUNDATIONS AND FUTURE PROSPECTS EDITED BY

VICTOR SUMSKY ·MARK HONG· AMY LUGG

MOSCOW STATE INSTITUTE OF INTERNATIONAL RELATIONS (UNIVERSITY)

I5EI5 INSTITUTE OF SOUTHEAST ASIAN STUDIES Singapore

First published in Singapore in 2012 by ISEAS Publications Institute of Southeast Asian Studies 30 Heng Mui Keng Terrace, Pasir Panjang Singapore 119614 E-mail: [email protected]   •  Website: bookshop.iseas.edu.sg All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the Institute of Southeast Asian Studies. © 2012 Institute of Southeast Asian Studies, Singapore The responsibility for facts and opinions in this publication rests exclusively with the authors and their interpretations do not necessarily reflect the views or the policy of the publishers or their supporters. ISEAS Library Cataloguing-in-Publication Data ASEAN-Russia : foundations and future prospects / edited by Victor Sumsky, Mark Hong   and Amy Lugg.   This volume contains some papers originally presented at a Conference on ASEANRussia: Foundations and Future Prospects, jointly organized by ISEAS and MGIMO, 26–27 April 2011, Singapore.   1. Southeast Asia—Foreign relations—Russia—Congresses.   2. Russia—Foreign relations—Southeast Asia—Congresses.   3. Southeast Asia—Foreign economic relations—Russia—Congresses.   4. Russia—Foreign economic relations—Southeast Asia—Congresses.   5. Asia-Europe Meeting—Congresses.   6. East Asia Summit—Congresses.   7. South China Sea—Congresses.   8. Asia—Foreign relations—Russia—Congresses.   9. Russia—Foreign relations—Asia—Congresses.   I. Sumskiı˘, V. V. (Viktor Vladimirovich)   II. Hong, Mark.   III. Lugg, Amy.   IV. Institute of Southeast Asian Studies.   V. Moskovskiı˘ gosudarstvennyı˘ institut mezhdunarodnykh otnosheniı˘.   VI. Conference on ASEAN-Russia : Foundations and Future Prospects (2011 : Singapore) DS525.9 R9A842      2012 ISBN 978-981-4379-57-1 (soft cover) ISBN 978-981-4379-58-8 (E-book PDF) Typeset by International Typesetters Pte Ltd Printed in Singapore by Markono Print Media Pte Ltd

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CONTENTS

Foreword by Ambassador K. Kesavapany

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Preface by Victor Sumsky

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About the Contributors Keynote Address by HE Sayakane Sisouvong Opening Remarks by HE Andrey N. Rozhkov Keynote Address by Vyacheslav Nikonov Introduction Russia and the ASEAN Member States: Political and Economic Cooperation in Progress Christopher Len

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SECTION I:  Wisemen’s Views From Energy Partnership to Comprehensive Security in the Asia Pacific Gleb A. Ivashentsov

3

The Rise of Asia and Russia’s Options Mark Hong

8

ASEAN Regionalism and the Future of ASEAN-Russia Relations Rodolfo Severino and Moe Thuzar

22

Thoughts on Asian Community Building Rajiv Sikri

31



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Welcoming Russia’s Participation Sabam Siagian

37

SECTION II:  Geopolitics Russia in Southeast Asia: A New “Asian Moment”? Astrid S. Tuminez and Mark Hong

45

ASEAN-Russia Military Ties: Reconfiguring Relations Robert Karniol

58

The Enlargement of the East Asia Summit: The Reasons and Implications of Bringing Russia In Victor Sumsky

70

Russia’s Entry into ASEM: Not Just a Courtesy Call? Ekaterina Koldunova

80

Russia-India-China: Acting in Concert in Southeast Asia? Natalia V. Stapran

90

The South China Sea Issue: A View from Russia Evgeny Kanaev

97

Southeast Asia and Russia: Forging a New Regional Architecture Pushpa Thambipillai

110

Russia-ASEAN Relations: An Indian Perspective Vijay Sakhuja

124

SECTION III:  BILATERAL RELATIONS What Singapore May Offer to Russia? The Present State and the Prospects of Relations Mark Hong

137

Myanmar-Russia Relations in a Changing World: Growing Ties based on Strategic Partnership and Economic Prospects Thaung Tun

150

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Contents

Russian-Myanmar Relations Gleb A. Ivashentsov

156

Russia-Thailand Relations: Historical Background and Contemporary Developments Ekaterina Koldunova and Paradorn Rangsimaporn

160

Russia and Vietnam: Building a Strategic Partnership Vladimir Mazyrin

173

Malaysia-Russia Relations: Revving up a Distant Relationship Johan Saravanamuttu

184

Cambodia and the USSR/Russia: Fifty-five Years of Relations Sok Touch

196

SECTION IV:  Business and Economics Russia and ASEAN-4: Potential and Realms of Cooperation Vladimir Mazyrin

207

Russia’s Economic Relations with the APEC Region Carlos Kuriyama

219

Russia Looks East: Modernization Plans and Cooperation with ASEAN Yaroslav Lissovolik

245

Indonesian and Russian Oilmen: Sharing Experiences and Learning from Each Other Victor Tarusin

254

Towards a Roadmap for Russia-ASEAN Trade and Economic Cooperation Natalia N. Strigunova

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The Best Cities to Buy Into Alexander Karolik-Shlaen

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SECTION V:  Culture and Education Credentials of Literature Vilen Sikorskiy

279

A Sentimental Journey through ASEAN (in the Russian Way) Vladimir Anisimov

285

Food for the Soul and the Stomach Julia Sherstyuk-Viswanathan

290

No Books about Singapore in Russian? Give me a Break! (An Editor’s Note) Victor Sumsky

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National University of Singapore (NUS)-Russia: State of Collaboration Anne Pakir

302

Soft Power: A Comparison between Britain, France and Russia Amy V.R. Lugg

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EPILOGUE Russia’s Search for an Enhanced Role in Southeast Asia Paradorn Rangsimaporn

325

Russia’s Asian Strategy Sergei Karaganov

345

Index

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FOREWORD This volume is the third in the series of ASEAN-Russia relations books published by the Institute of Southeast Asian Studies (ISEAS) and its coun­ terpart Russian institute, formerly with IMEMO and now with MGIMO. We warmly welcome our new Russian partner, with which we organized the third ASEAN-Russia Conference in April 2011. These conferences are particularly useful as Track Two diplomacy efforts to examine the state of relations between both sides, and to share some ideas on how to advance cooperation between ASEAN and Russia. This year’s conference was useful as it precedes Russia’s Chairmanship of APEC in 2012, and as Russia is searching for new ways to add value and substance to its recent membership of the East Asia Summit (EAS) and the Asia-Europe meeting (ASEM). This year’s conference witnessed some stimulating discussions. One of the highlights was an animated discussion on Russian soft power. Another major point of discussion was how to ascertain Russia’s value-adding capability for ASEAN, and vice versa. The presentation of the paper on a roadmap on Russia-ASEAN economic cooperation was especially relevant in this context. Also highly relevant were the discussions on the possible Russia-ASEAN FTA; Trans-Pacific Partnership, including possible Russian participation; and energy cooperation. In the area of geopolitics, there were excellent discussions on Russia-China relations, and how this will impact upon Asia-Pacific regional security. One example was the paper on maritime logistics, an area seldom examined. In the area of educational cooperation, the National University of Singapore paper evoked high interest from the Russian education representatives present, namely, MGIMO, Moscow State University and the Russkiy Mir Foundation. In the area of cultural cooperation, there were diverse and interesting presentations about cooperation on paintings, food, translations of books, and the publication of a bilingual magazine. Many of the topics mentioned above are covered in the papers published in this book.

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Foreword

Lastly, I wish to commend the paper-writers and the co-editors for their hard work and interesting ideas, which have made this volume an illuminating and distinguished book, and a very useful reference for students and scholars of ASEAN-Russia relations. Ambassador K. Kesavapany Director, ISEAS July 2011

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Preface This project — both the book and the conference that preceded it — is dedicated to the 15th Anniversary of the Russia-ASEAN dialogue partnership celebrated in 2011. In moments like these, it is natural to dwell on the past, to register what is happening at present and to look into the future. The title of this volume may not sound too original, but, nonetheless, it is a reflection of these basic attitudes. Just like in some previous joint ventures of the type, the ASEAN input is mobilized and coordinated through ISEAS, the body with a rich institutional memory, focused for almost half a century on all sorts of Southeast Asian studies, be it linguistics and ancient history or modern regionalism and recent manifestations of globalization. Compared to ISEAS, the present coordinator on the Russian side — the ASEAN Centre that was opened in MGIMO-University of Moscow in June 2010 — is still an infant. The April conference was practically its debut on the regional academic scene. Judging by the positive feedback we received (and, I hope, by the contents of this book) the start is not so bad. As you may see, this time the Russian writing and speaking team is bigger and more diverse in terms of professional interests and research special­ izations than in any of the previous encounters with ISEAS. On the list of Russian participants, you will find political scientists and economists, experts on particular countries or groups of countries and those who are dealing with ASEAN as a whole, university professors and business consultants, representatives of the government and civil society groups. The fact that each of them has something to say about Russia-ASEAN relations is an indication that, little by little, the fabric of these relations is becoming thicker and stronger, and they are no longer limited, like in the Soviet era, to intergovernmental contacts. Of the people, who should have been engaged in this project, but missed it due to some unhappy circumstances, I cannot help but mention Professor

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Gennady Chufrin. On our side, he was the driving force of the previous ISEAS-IMEMO projects on Russia-ASEAN relations, and we will be glad to have him back as a key participant and an inspiration for future events and publications. In the same breath, I thank my Singapore colleagues — Mark Hong and Amy Lugg of the ASEAN Studies Centre at ISEAS — for being so competent, cooperative and friendly co-editors. Throughout the rest of 2011 and some of 2012 we will be looking for­ ward to a continuation of dialogues with the ISEAS scholars. Dr Victor Sumsky Director, ASEAN Centre, MGIMO University July 2011

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ABOUT THE ContributORS

Ambassador K. Kesavapany is Director, Institute of Southeast Asian Studies, Singapore. Ambassador Kesavapany has been ISEAS Director since 1 November 2002. Prior to his appointment, Ambassador Kesavapany was Singapore’s High Commissioner to Malaysia. In his thirty-year career in the Foreign Service, he served as Permanent Representative to the United Nations in Geneva (December 1991–March 1997) and held key staff appointments in the Ministry of Foreign Affairs of Singapore. Ambassador Kesavapany was an active participant in the final phase of the Uruguay Round negotiations and was the first Chairman of the WTO’s General Council in 1995. Email: [email protected] Dr Victor Sumsky is Director of the ASEAN Centre at MGIMO-University, Moscow, Russia. He speaks English and Indonesian, holds a Doctorate in history, has published three monographs and many articles. Among his writings in English are publications in such periodicals as Alternatives (New York), Japanese Journal of American Studies (Tokyo), Philippine Studies (Quezon City) and Global Asia (Seoul). In the past he worked for the Soviet Foreign Ministry, Institute of Oriental Studies and Institute of World Economy and International Relations (IMEMO) in Moscow. His overseas working experience includes the University of the Philippines, London School of Economics, and the University of Washington. From 2004 to 2010 Dr Sumsky represented Russia on the Board of the European Association of Southeast Asian Studies (EuroSEAS). Professionally he concentrates on political development of Southeast Asian nations, as well as international relations in East Asia and its security problems. In 2006–07 he contributed to three books, co-published by IMEMO and ISEAS. At the Institute of Asian and African Studies of the Moscow State University where he lectures since the early 2000s his latest courses are “Southeast Asia and 21st Century xiii

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About the Contributors

Challenges” and “Classics of Modern Philippine Literature: Nick Joaquin and Francisco Sionil Jose”. Email: [email protected] His Excellency Sayakane Sisouvong is the ASEAN Deputy SecretaryGeneral, ASEAN Political Security Community. H.E. has been in his current position since February 2009. Prior to his appointment he was Ambassadorat-Large and Laos’ ASEAN SOM Leader (Senior Official for ASEAN Political Affairs), Ministry of Foreign Affairs. H.E. has held various positions within the Laos Ministry of Foreign Affairs including Director-General, ASEAN Department, and Second Secretary, Permanent Mission of the Lao People’s Democratic Republic to the United Nations. H.E. has a Masters degree in International Relations from the Australian National University, Canberra, Australia and a Masters degree (Linguistic) from the Universidad Central de Las Villas, Cuba. Email: [email protected]; [email protected] His Excellency Andrey N. Rozhkov is the Ambassador of the Russian Federation to the Republic of Singapore and holds the diplomatic rank of Ambassador Extraordinary and Plenipotentiary. H.E. has been the Ambassador to Singapore since 25 June 2005 and speaks Chinese and English languages. H.E. joined the Russian Ministry of Foreign Affairs in 1968 having graduated in the same year from the Moscow State Institute of International Relations of the Ministry of Foreign Affairs of the USSR. Email: [email protected] Dr Vyacheslav Nikonov has been the President of the “Polity” Foundation since May 1993. He has a MA in History (1978) and a Ph.D. in History (1982) from Moscow State University. From 1988 to 1991, he was speech­ writer to then Head of the CPSU Central Committee, before joining the Office of the President of the USSR as a member of staff, then as assistant to the Chief of Staff (1991–92). In 1992, he was a professor of Political Science at the California Institute of Technology (USA). He returned to Russia in 1992, where he was Senior Fellow in the “Reforma” Foundation until 1994. Between 1994 and 1996 he was a member of the State Duma and Chairman of the Subcommittee for International Security and Arms Control. In 1996 he became Deputy Chairman of the All-Russian Public Movement to Support then President Yeltsin’s re-election committee. From 1997 to 2001 he was a member of the Presidential Political Consultancy Council, Presidential Human Rights Commission and member of the expert council with the

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About the Contributors

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Presidential Commission on countering political extremism. In 2006–09 he was a member of the Public Chamber of the Russian Federation. Dr Nikonov is also the CEO of the “Russkiy Mir” Foundation, Dean of the School of Public Administration at Moscow State University, President of the “Unity for Russia” Foundation and Dean of History and Political Science at the International University in Moscow. He is also Editor-in-Chief, Russia’s Strategy and Deputy Chairman of Editorial Board, Russia in Global Affairs. Email: [email protected] Christopher Len is a Visiting Associate at the Institute of Southeast Asian Studies (ISEAS), Singapore. He is also Executive Editor of the China and Eurasia Forum , Central Asia-Caucasus Institute and Silk Road Studies Program which is affiliated with the Paul H. Nitze School of Advanced International Studies of Johns Hopkins University in Washington D.C. and the Stockholm-based Institute for Security and Development Policy. He is interested in security and development issues in Asia, the growing political and economic linkages between the various Asian sub-regions, as well as energy cooperation in Asia. Email: [email protected] Ambassador Gleb A. Ivashentsov is the Deputy Director at the Russian Centre for APEC Studies in Moscow. Ambassador Ivashentov graduated from the International Economic Relations Faculty, Moscow State Institute of International Relations, USSR Ministry of Foreign Affairs in 1967 and began his career with the USSR Ministry of Foreign Trade. Ambassador Ivashentsov was the Consul General of USSR/Russia in Bombay, India from 1991 to 1995, Ambassador of Russia to the Union of Myanmar (Burma) from 1997 to 2001 and his most recent ambassadorial posting was to the Republic of Korea. Ambassador Ivashentsov holds the diplomatic rank of Ambassador Extraordinary and Plenipotentiary and was awarded The Order of Friendship (Russia) in 2003 and the Khanhwa Medal for diplomatic merit (Republic of Korea) in 2009. Ambassador Ivashentsov speaks Russian and English and is fluent in Hindi and is a special research fellow at the China Centre for Contemporary World Studies. Email: [email protected] Mark Hong was born in Singapore and educated at the Raffles Institution, Singapore. Mr Hong was awarded the President of the Republic of Singapore’s Scholarship in 1965 and the Humanities Scholarship and Best Entrant Scholarship in Singapore University, after completing his secondary school

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education. He obtained a Bachelor of Arts degree in Economics from Cambridge University, United Kingdom in 1969 and a Master of Science degree in International Relations from Georgetown University in Washington D.C. in 1982 on a Fulbright Scholarship. Mr Hong joined the Ministry of Foreign Affairs in 1969. He served at the Singapore Embassy in Phnom Penh as Charge d’Affaires (1974 to 1975), at the Singapore Commission in Hong Kong as First Secretary (1975 to 1976), at the Singapore Embassy in Paris as Counsellor (1982 to 1986) and at the Singapore Permanent Mission to United Nations in New York as Deputy Permanent Representative (1988 to 1994). In the Ministry of Foreign Affairs Headquarters, he has served in various senior capacities as director of several departments. His last foreign posting was as Singapore Ambassador to Russia and Ukraine from November 1995 to March 2002. From May 2002 to January 2004, he was attached to the Institute of Defence and Strategic Studies, Nanyang Technological University, Singapore, as a visiting senior fellow. He is currently a Vice-Chairman of the International Committee of the Singapore Business Federation, and was a Visiting Research Fellow at Institute of Southeast Asian Studies (ISEAS) from February 2004 to October 2011. After his retirement in October 2011, he was appointed Visiting Senior Lecturer in James Cook University at its Australia and Singapore campuses, and also at Capilano University in Vancouver, and as Senior Visiting Fellow at Asan Institute in Seoul, South Korea. Mr Hong was awarded four scholarships, including the prestigious President Scholarship, Humanities Scholarship and Fulbright Scholarship. He has delivered over 300 conference papers and lectures to various international seminars and conferences, and attended many UN General Assemblies, ASEAN conferences and other regional meetings. He has also edited ten books for ISEAS, five on energy issues, three forthcoming in 2012, three on ASEAN-Russia relations, and one each on Southeast Asia and on Cambodia. He has also contributed many chapters to various books, given lectures to many groups such as the Young PAP, various schools, and visiting delegations. Currently, he is writing a novel and several books of essays. Email: [email protected] Rodolfo Severino is the Head of the ASEAN Studies Centre at the Institute of Southeast Asian Studies (ISEAS) in Singapore and a frequent speaker at international conferences in Asia and Europe. Having been Secretary-General of the Association of Southeast Asian Nations from 1998 to 2002, he has completed a book, entitled Southeast Asia in Search of an ASEAN Community

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and published by ISEAS, on issues facing ASEAN, including the economic, security and other challenges confronting the region. He has produced a book on ASEAN in ISEAS’ Southeast Asia Background Series and one on the ASEAN Regional Forum. His views on ASEAN and Southeast Asia have also been published in ASEAN Today and Tomorrow, a compilation of his speeches and other statements. Severino has co-edited two books: Whither the Philippines in the 21st Century? and Southeast Asia in a New Era, intended for pre-university students. He writes articles for journals and for the press. Before assuming the position of ASEAN Secretary-General, Severino was Undersecretary of Foreign Affairs of the Philippines, the culmination of thirty-two years in the Philippine Foreign Service. He twice served as ASEAN Senior Official for the Philippines and is one of the Philippines’ Experts and Eminent Persons for the ASEAN Regional Forum. Severino has a Bachelor of Arts degree in humanities from the Ateneo de Manila and a Master of Arts degree in international relations from the Johns Hopkins School of Advanced International Studies. He is a member of the Advisory Board of The Fletcher Forum of World Affairs, the journal of the Fletcher School of Tufts University. Email: [email protected] Moe Thuzar is the Lead Researcher, Socio-Cultural Affairs of the ASEAN Studies Centre, ISEAS, Singapore. Before joining the Centre, she headed the ASEAN Secretariat’s Human Development Unit. She has contributed to various ASEAN compendia and publications on social and human development. Moe co-authored with fellow ASC researcher Pavin Chachavalpongpun, Myanmar: Life After Nargis (2009), and is now co-editing reports on the impact of Cyclone Nargis and lessons for disaster management in Southeast Asia, environmental cooperation in EU and ASEAN, and urbanization in Southeast Asian countries. She is also working on a review of Myanmar’s foreign policy, focusing on the post-1988 period. Moe holds a Master’s degree in Public Policy from the National University of Singapore. Email: [email protected] Ambassador Rajiv Sikri was a career diplomat for more than thirty-six years with the Indian Foreign Service. He retired in 2006 as Secretary in India’s Ministry of External Affairs, with overall responsibility for India’s relations with East Asia, ASEAN, Pacific region, Arab world, Israel, Iran, and Central Asia. Earlier, he was Special Secretary for Economic Relations supervising foreign economic relations, including India’s external technical and economic assistance programmes to developing countries in Asia, Africa and Latin America. He has served as India’s Ambassador to Kazakhstan, and

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headed the Departments dealing with West Europe as well as the Soviet Union and East Europe in India’s Ministry of External Affairs. His other diplomatic assignments abroad include Deputy Chief of Mission in Paris, Political Counsellor in Moscow, Deputy Consul General and Commercial Consul in New York, and Political First Secretary in Kathmandu. Now a strategic consultant, Mr Sikri is associated with leading think-tanks in India and abroad. He was a Consultant with the Institute of South Asian Studies at the National University of Singapore in 2007–08, and a Senior Fellow at the Institute for Defence Studies and Analyses in New Delhi in 2000–01. Currently, he is a Member of the Executive Council of the Vivekananda International Foundation. He is also a Member of United Service Institution of India, New Delhi; Institute for Defence Studies and Analyses, New Delhi; and the International Institute for Strategic Studies, London. Mr Sikri is the author of Challenge and Strategy: Rethinking India’s Foreign Policy (2009). He has contributed numerous articles to edited books, journals, newspapers and magazines. Mr Sikri regularly participates in conferences and seminars on foreign policy and security issues, and is a frequent commentator on television and radio, both in India and abroad. Email: [email protected] Ambassador Sabam Siagian is a Senior Editor at the Jakarta Post daily and advisor to the Australian International School, Jakarta. Concurrently he is a Consultant to Kiroyan partners, Jakarta, and sits on the Board of Advisors for The Nature Conservancy, Indonesia. Mr Siagian is a regular contributor of articles on international affairs and Indonesian political development to Indonesian publications. Mr Siagian was the Indonesian Ambassador to Australia from 1991 to 1995 and President of the Indonesia-Australia Business Council from 1996 to 2000. He was also a member of the Tangguh Independent Advisory Panel (TIAP) to British Petroleum’s LNG Project in West-Papua province from 2002 to 2009. Mr Siagian attended the Faculty of Law and Social Sciences, University of Indonesia and the Department of Political Science, Vanderbilt University, Nashville, Tennessee, USA. He is a Nieman Fellow for Journalism Harvard University, Class of 1979 and Visiting Fellow, Centre for International Affairs, Georgetown University, Washington, D.C., 1990. He is currently co-chairman of the Forum of (Retired) Ambassador of Indonesia in charge of security studies. Email: [email protected] Dr Astrid S. Tuminez is the Vice-Dean (Research) of the Lee Kuan Yew School of Public Policy, National University of Singapore. She has over two

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decades of experience in public policy analysis, philanthropy, research and project management, teaching, and venture capital investment. At the LKY School, her research covers women’s leadership in Asia and her teaching includes a wide range of executive education programmes, including those for Russian and Central Asian government officials. Previously, she was Senior Research Associate of the Philippine Facilitation Project of the U.S. Institute of Peace where, with the U.S. State Department funding, she assisted in peace negotiations between the Philippine Government and the Moro Islamic Liberation Front. Dr Tuminez has been a Senior Advisor, Strategy and Programmes, for the Salzburg Global Seminar. She is also the former Director of Research for alternative investments at AIG (American International Group) Global Investment Corp. In the early 1990s, she ran the Moscow office of the Harvard Project on Strengthening Democratic Institutions, where she worked directly with ranking reformist leaders, including former president Mikhail Gorbachev and foreign minister Eduard Shevardnadze. From 1992–98, she was a programme officer at the Carnegie Corporation of New York, responsible for grant-making in conflict prevention, the nonproliferation of weapons of mass destruction, and democratization. She also worked with the Carnegie Commission on Preventing Deadly Conflict, chaired by former U.S. Secretary of State Cyrus Vance and Dr David Hamburg. In 1998–99, Dr Tuminez was a consultant to The World Bank and an institutional sales/research professional at Brunswick Warburg, Inc. She holds a Master’s from Harvard and a Ph.D. from MIT. Dr Tuminez is a former Adjunct Fellow and a member of the Council on Foreign Relations, where she ran a two-year roundtable on Russian nationalism and foreign policy. Her publications include Russian Nationalism since 1856: Ideology and the Making of Foreign Policy (2000), journal articles, and opinion pieces. She has been a U.S. Institute of Peace Scholar, a Freeman Fellow of the Salzburg Seminar, a fellow at the Kennedy School of Government at Harvard, a Distinguished Alumna of Brigham Young University, and the recipient of fellowships from the Social Science Research Council and the MacArthur Foundation. She has done numerous media interviews on various topics. Email: [email protected] Robert Karniol is a Canadian defence writer specializing in the vast Asia-Pacific region, covering an area that extends roughly from Central Asia to Hawaii. He worked for over twenty years as Asia-Pacific editor for the British periodical Jane’s Defence Weekly and has more recently been producing a weekly column for the Straits Times newspaper in Singapore. Karniol first came to the attention of Soviet authorities in 1986, when his

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movements with anti-Vietnamese guerrillas operating behind enemy lines in Cambodia were closely monitored by the signals intelligence station at Cam Ranh Bay. Three years later he travelled to Vladivostok to join a select group of observers invited to view a major naval exercise of the Soviet Pacific Fleet, the first time such an event was opened to outsiders. Together with his work in journalism, Karniol has lectured extensively on Asia-Pacific security. This includes presentations for the U.S. National Defence University, Australian Joint Services Staff College, French Air Force Academy, U.S. Joint Intelligence Centre Pacific, International Committee of the Red Cross and several think-tanks. In early 2011 he was in Honolulu, briefing the U.S. Marine Corps Forces Pacific about the Thai military. Resident in Asia for twenty-six years, initially in Hong Kong and later in Bangkok, Karniol has since 2009 been based in Montreal. Email: [email protected] Dr Ekaterina Koldunova is Deputy Dean at School of Political Affairs and Associate Professor at the Department of Asian and African Studies, MGIMOUniversity. She holds a Ph.D. (Cand.Polit.Sc.) in International Relations. She speaks Thai, Laotian, English, French, Italian and German. Dr Koldunova has published in Russian and English on regional transformations, new security threats in East Asia, international relations in East Asia, Russian foreign policy in the Asia Pacific. Her recent book is titled Security in East Asia: New Challenges (2010). She is the publishing editor of Comparative Politics journal. Her working experience includes participating in projects such as “Energy in International Relations” with BP, “Political Atlas of the Contemporary World” with the Institute of Social Projecting, and “World Politics and Conflicts” with the Russian Association of Political Science and POLIS, the Russian Journal of Political Science, visiting fellowships at Lee Kuan Yew School of Public Policy and London School of Economics and Political Science (Teaching and Learning Centre). Areas of expertise include international relations in Asia, security in the Asia-Pacific region, regional transformations in Asia, and Russian foreign policy in East Asia. Ekaterina Koldunova is a member of International Studies Association (ISA) and Russian Political Science Association (RAPN). Dr Koldunova’s webpage can be accessed at . Email: [email protected] Dr Natalia V. Stapran is Associate Professor at the Department of Oriental Studies, Moscow State Institute of International Relations (MGIMO). Her areas of expertise include Russian foreign policy and international relations

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in the Asia-Pacific region. Her special interest is security and economic cooperation issues in East Asia, Japanese and American strategy in the region. Natalia Stapran holds a Ph.D. in International Relations. In 2002–04 she served as senior analyst at the Russian Embassy in Tokyo. In 2008 Dr Stapran received a Post Graduate certificate in Higher Education of the London School of Economics and Political Science. Since 2010 she has been a Senior Researcher at the Institute of Oriental Studies, Russian Academy of Sciences (IVRAN). Dr Stapran has published in Russian and English on international relations in the Asia-Pacific region, American policy in Asia, and Russian foreign policy in the East. Her latest book is The Integration Processes in the Asia-Pacific Region (2011). Dr Stapran speaks Japanese and English. Email: [email protected] Dr Evgeny Kanaev is a Doctor of Science (History) and a leading re­searcher at the Centre for Asia-Pacific Studies, Institute of World Economy and International Relations, Moscow, Russia. He closely follows current political and economic processes in individual countries of Southeast Asia, multilateral cooperation among the ASEAN states, ASEAN’s relations with dialogue partners and the Southeast Asian vector of Russia’s foreign policy. Among his recent publications are: “Russia’s Policy towards the Countries of Southeast Asia and ASEAN: Positive Developments, but an Uncertain Future”, Russian Analytical Digest (Bremen-Zurich), no. 76/10 (2010); “Southeast Asia in Russia’s Foreign Policy under D. Medvedev: An Interim Assessment”, Eurasian Review, no. 3 (2010); “The Driver’s Seat Phenomenon”, International Affairs, special issue (2010). His individual monograph entitled “Conflict over the South China Sea Islands: The Retrospect, Contours of Solution and Future Prospects” was published in Moscow in 2007 (in Russian). Email: [email protected] Dr Pushpa Thambipillai from Malaysia is presently a Visiting Research Fellow at the Institute of Southeast Asian Studies (ISEAS). She has been till recently with the Faculty of Business Economics and Policy Studies, Universiti Brunei Darussalam, where she taught courses on Politics and International Relations, International Organizations and ASEAN. Her research interests are in regional governance, Asia-Pacific cooperation and Brunei foreign policy. Email: [email protected] Dr Vijay Sakhuja is Director (Research), Indian Council of World Affairs, a leading think-tank in New Delhi. He is also Visiting Senior Research Fellow at the Institute of Southeast Asian Studies (ISEAS), Singapore since

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About the Contributors

2006. Earlier, Dr Vijay Sakhuja was Senior Fellow at the Centre for Air Power Studies, Observer Research Foundation, and Research Fellow at the Institute for Defence Studies and Analyses, and United Service Institution of India, all at New Delhi. A former Indian Navy officer, Dr Vijay Sakhuja received his Doctorate from the Jawaharlal Nehru University, New Delhi. Dr Vijay Sakhuja is author of The Rise of Asian Maritime Power in the Twentyfirst Century: Challenges for South East Asian Security (2011) and Confidence Building from the Sea: An Indian Initiative (2000). He is also co-editor of Nagapatinam to Swarndweepa: Reflections on Chola Naval Expedition to Southeast Asia (2010) and Marine Biodiversity and Fisheries Exploitation in the Indian Ocean: Threats and Opportunities (2009). Email: [email protected] Thaung Tun is a retired Foreign Service officer. He joined the Myanmar Foreign Ministry in 1972 and served at headquarters and various diplomatic posts abroad until retirement in April 2010. His overseas postings include Berne, Geneva, New York, Washington, D.C., Manila and Brussels. His last posting was in Brussels where he served concurrently as Ambassador of Myanmar to Belgium, The Netherlands and The European Union from 2008 to 2010. He was Ambassador of Myanmar to The Philippines from 2005 to 2008. At the Myanmar Foreign Ministry, he was DirectorGeneral for Political Affairs and was Leader of the Myanmar delegation to The Association of Southeast Asian Nations (ASEAN) Senior Official Meetings (SOM) from 2001 to 2005. He was also Secretary of the National Commission for Environmental Affairs (NCEA) and the Myanmar Institute of Strategic Studies (MISIS). He has a Bachelor of Science degree from The Rangoon Arts and Science University and an Advanced Diploma in French from the Institute of Foreign Languages, Rangoon. He attended the School of Advanced International Studies (SAIS), The Johns Hopkins University, Washington, D.C. as a Fulbright scholar from 1984 to 1985 and has a Masters in International Public Policy. He is currently a Visiting Senior Research Fellow at the Institute of Southeast Asian Studies (ISEAS), Singapore. Email: [email protected] Paradorn Rangsimaporn is currently First Secretary at the Royal Thai Embassy and Permanent Mission of Thailand in Vienna. He received a B.A. (Hons.) in Philosophy, Politics, and Economics from St. Peter’s College, University of Oxford, and an MPhil. in Russian and East European Studies and a DPhil. in International Relations both from St. Antony’s College, University of Oxford. He was also a recipient of the King’s Scholarship and

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a Ministry of Foreign Affairs of the Kingdom of Thailand’s Scholarship. He has previously worked in the Department of American and South Pacific Affairs and the Department of International Organizations in the Ministry of Foreign Affairs of the Kingdom of Thailand. He has also supervised dissertations by students in the Russian Studies and Southeast Asian Studies Programs at Thammasat and Chulalongkorn Universities. He has published articles on Russian foreign policy and its relations with East and Southeast Asia in refereed journals such as Europe-Asia Studies, Asian Survey, and the International Relations of the Asia-Pacific. His book, based on his DPhil. thesis, entitled Russia as an Aspiring Great Power in East Asia: Perceptions and Policies from Yeltsin to Putin was published in 2009. Email: [email protected] Dr Vladimir Mazyrin was born in 1949 in Moscow. Dr Mazyrin grad­uated from the Institute of Oriental Languages, Moscow State University in 1972, and completed his Ph.D. in History in 1975. He is currently Associate Professor of the Economy and Economic Geography Department, Institute of Asian and African Studies of the Moscow State Lomonossov University and leading research fellow in the Centre for Vietnam and ASEAN Studies, Institute for Far Eastern Studies, Russian Academy of Science. Dr Mazyrin speaks Vietnamese, English and French. From 1976 to 1979, he was the Expert of the Trade Representation in Hanoi, Vietnam (Ministry of Foreign Trade of the USSR), and from 1985 to 1990 he was the First Secretary of the USSR Embassy in Hanoi. On the basis of his field experience, he became a full time researcher on Vietnam, Indochina, and Southeast Asian affairs from 1990. He has published three books in Russian and many articles dealing with different aspects of Vietnam’s public policy and society development, international relations and trade in the Southeast Asian region, and the activities of Association of Southeast Asian Nations (ASEAN). Email: [email protected] Dr Johan Saravanamuttu is currently a Visiting Senior Research Fellow at the Institute of Southeast Asian Studies (ISEAS), Singapore. He formerly was professor of political science at Universiti Sains Malaysia (USM) in Penang where he served as Dean of the School of Social Sciences (1994–96) and as Dean of the Research Platform on Social Transformation (2003–06). In 1997, he was the Visiting Chair in ASEAN and International Studies at the University of Toronto. His published works include New Politics in Malaysia (2003) (edited with Francis Loh) and March 8: Eclipsing May 13 (2008) (with Ooi Kee Beng and Lee Hock Guan). His latest books are Islam and Politics

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About the Contributors

in Southeast Asia, (editor) (2010) and Malaysia’s Foreign Policy, the First 50 Years: Alignment, Neutralism, Islamism (2010). Email: [email protected] Professor Sok Touch is the Acting Director-General of the International Relations Institute of Cambodia (IRIC) and is concurrently the Rector of Khemarak University, Cambodia. Professor Touch holds a Ph.D. in Political Science from Russia and his dissertation focused on the United Nation’s role in Cambodia’s conflicts. Email: [email protected] Carlos Kuriyama joined APEC Policy Support Unit as Senior Analyst in April 2009. He holds a Master of International Affairs from the School of International and Public Affairs at Columbia University, New York, U.S. and a Bachelor’s Degree in Economics from Universidad del Pacífico, Lima, Peru. He was also holder of the Japan Program-Inter-American Development Bank Scholarship. Before coming to APEC, Carlos held important positions in the public and academic sectors in Peru. As a government official, Carlos worked for Peru’s Ministry of Foreign Trade and Tourism, where he served as Lead Negotiator of the Peru-China FTA negotiations, General Coordinator of the Peru-Singapore FTA negotiations and Advisor to the Deputy Minister of Foreign Trade. In addition, he was in charge of the design of Peru’s trade negotiations agenda and implemented Peru’s trade strategy with APEC economies. In the academic sector, he was Associate Researcher and Lecturer in Economics at Universidad del Pacifico. During those years, he wrote extensively and participated in several research projects on trade, investment and integration issues for several domestic and international institutions, such as the Inter-American Development Bank, the Institute of Developing Economies, the Pacific Economic Cooperation Council, and Latin American and Caribbean Economic System. Email: [email protected] Professor Yaroslav Lissovolik is Member of the Management Board of Deutsche Bank Russia, Chief Economist, and Head of Company Research in Russia. Yaroslav Lissovolik joined Deutsche Bank in 2004 as Chief Economist; thereafter he became DB’s Head of Company Research in Russia in 2009 and became a member of the Management Board of Deutsche Bank in Russia in 2011. Prior to joining Deutsche Bank he worked in the International Monetary Fund, where he was Advisor to the Executive Director for the Russian Federation from 2001 to 2004 in Washington. Professor Lissovolik earned a B.A. in Economics from Harvard University;

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an MA in International Economic Relations from Moscow State Institute of International Relations; an MSc. in Economics from the London School of Economics, holds a Ph.D. in Economics and is a professor at the department of World Economy at the Diplomatic Academy. Professor Lissovolik is a member of the Advisory Council of the Central Bank of Russia, a member of the Council on Foreign and Defence Policy and a member of the Bretton Woods Committee. He has published books on Russia’s entry to the WTO and on Russia’s integration into the world economy, as well as numerous articles and papers on economic and policy issues. Email: [email protected] Victor Tarusin had a military career for twenty years, and while in the army, he acquired extensive international experience, served UN peacekeeping missions and multinational forces. He speaks several foreign languages (including English, Chinese, Arabic and Serbo-Croatian). Since 1996 Mr Tarusin has been working in the oil and gas industry. For ten years he was associated with Lukoil, a major Russian oil company and its upstream projects in the northern territories of the Russian Federation (Nenets Autonomous Region). In 2006 he graduated from Gubkin’s Oil and Gas Academy, and from 2006–07 he took part in the implementation of PSC Khariaga (NOCTotal-Norsk-Hydro). In 2007 Mr Tarusin launched his own private project by introducing Russian oil and gas technologies in Enhanced Oil Recovery to Indonesian oil sector through Petros Technologies. Later the scope of his activities expanded to include other high tech industries. He is currently the Executive Director of Petros Technologies LLP, as well as Commissioner for PT Petros Technologies, Indonesia and Director of JSC ARM Group Enterprises. He is also President of the Peacekeeper Charity Fund (for Veterans of UN Peacekeeping Missions). Email: [email protected] Natalia N. Strigunova is Deputy Chief of Department of Asia and Africa, Ministry of Economic Development of the Russian Federation. She is a graduate of the School of Economics, Moscow State University. Since 1991 she has been working for the Russian Government, dealing with the problems of attracting foreign investment and creating a favourable investment climate in the Russian Federation, promotion of exports and organization of exhibitions. Her present activities are focused on issues of multilateral economic cooperation with the countries of Asia and Africa, including interactions with APEC and ASEAN. Email: [email protected]

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About the Contributors

Alexander Karolik-Shlaen is owner of Panache Management, a Singaporebased business that represents manufacturers of luxury and branded products looking to strengthen their niche market in Asia. Shlaen founded Panache Management in 1995 in Hong Kong. Before that, he was in Japan, crafting his style of “East meets West” business management. He also served on the board of directors for Brinks Japan, a joint venture between Nissho Iwai Corporation (at that time the sixth largest company in the world) and Brinks Inc. (a Fortune 500 U.S. corporation). He holds an MBA from the Kellogg School of Management in Illinois, USA, and from the Hong Kong University of Science and Technology, touted as the number one management programme in the world by Financial Times and BusinessWeek. Shlaen’s Panache Management (PM) represents companies that have superb and exquisite products, outstanding in their given niche markets. PM is exclusively representing Aston Martin Interiors, Tonino Lamborghini Casa, Formitalia design lines in Asia. PM is involved in real estate related investment projects with focus on branded luxury projects, as well as providing luxury interiors and accessories for exclusive homes, villas, hotels, offices, private jets and super yachts. Email: [email protected] Professor Vilen Sikorskiy is Head of Department of Asian Languages at the Higher Course of Language Training in the Russian Ministry of Foreign Affairs. As an academic, he has been a lifelong student of Southeast Asian literature and holds a Doctorate in Philology. Professor Sikorskiy is President of Nusantara Society of Moscow. Established almost half a century ago, this society brings together linguists, historians, cultural anthropologists and other Russian specialists working on Southeast Asia, as well as people whose interest in this part of the world is not related to their profession. Among Professor Sikorskiy’s published works are translations of the works of modern Indonesian and Malaysian authors into Russian, as well as translations of Russian classics into Bahasa Indonesia. He is First Vice-Chairman of the Russian Association for Cooperation and Friendship with Indonesia. Email: [email protected] Dr Vladimir Anisimov is a professional drawer and painter, holding the rank of Distinguished Artist of the Russian Federation. In 1991 he founded the Bureau of Creative Expeditions — a non-governmental entity which started to promote trips of his colleagues abroad. The purpose of the artists who took part in these trips was to create artistic images of other countries for presentations to the Russian public and to familiarize foreigners with modern Russian art. Today, after twenty years of work, the Bureau has to

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its credit expeditions to India, Afghanistan, Cuba and Indonesia, scores of colourful albums and numerous exhibitions. Among its latest successes is “The Necklace of Equator” — an exhibition dedicated to the island of Bali. It was displayed in Moscow at the State Museum of Oriental Art in spring 2010. Email: [email protected] Julia Sherstyuk-Viswanathan is founder, publisher and editor-in-chief of 103rd Meridian East, a bilingual quarterly which is Singapore’s first-ever Russian-English magazine about culture, lifestyle, diplomacy and business. Viewing herself as a cultural ambassador of sorts, she strives to bring the two countries together and introduce a sense of mutual understanding through stories by both Russian and Singaporean contributors. After acquiring her master’s degree in English as a second language and American and European Literatures, she carried on with her post-graduate study at St. Petersburg State University (American Women’s Literature) and taught English as a second language and literary translation theory course at Petrozavodsk State University, Russia, before settling down in Singapore more than ten years ago. Today, more than two years of its existence, 103rd Meridian East has become a platform for dialogue between diverse cultures and gained recognition both in Russia and Singapore. One year ago, she decided to bring even more of Russian culture to Singapore by opening an authentic Russian restaurant here, which has a unique concept based on Russian folklore and named after a mythical island, the centre of all vital forces, in ancient beliefs, called Buyan. Email: [email protected] Associate Professor Anne Pakir is the Director of International Relations (IRO) at the National University of Singapore (NUS). She leads the International Relations Office in seeking high quality global opportunities for NUS students and in engaging strategic global networks and alliances for collaborative purposes. Working with the relevant schools/faculties and offices on the NUS campus, IRO coordinates and facilitates the large numbers of inbound and outbound exchange students (SEP) by working with 180 university partners across the world. IRO also seeks new global businesses for students such as i-intern (international internships), i-SP (international summer programmes), and i-Rap (international research attachments) as well as provides some regional and international leadership programmes for local and foreign students. A Fulbright scholar at Berkeley and later at Cornell, USA, Professor Pakir also won a Japan Society for the

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About the Contributors

Promotion of Science (JSPS) award to Tokyo and was an ASEAN University Network (AUN) Distinguished Visiting Professor in Manila. She received the Chevalier dans l’Ordre des Palmes Academiques in 2010 from France. She serves on the editorial boards of Annual Review of Applied Linguistics, AILA Applied Linguistics Book Series, Asian Englishes Today, Current Issues in Language Planning, Language Policy, English Today, World Englishes, and Journal of Studies in International Education having published in these areas of specialization. She was a member of the TOEFL Board, Princeton NJ (2004–09). Email: [email protected] Amy V.R. Lugg is in charge of the ASEAN Studies Centre’s public information and communications. Before joining the Centre, she was an Associate Editor with a leading provider of energy and metals information. Prior to that, she was an Executive Search Director at a boutique executive search company in Singapore with extensive networks in the banking and finance, academia, hospitality, retail and energy sectors. Amy has also been a Visiting Associate at ISEAS since June 2009, with the ISEAS’ Energy Studies Programme. She is co-editor of the ISEAS Energy Series publications with Mark Hong. Amy holds a Master’s degree in International Relations from Curtin University, Australia. Email: [email protected] Dr Sergey Karaganov is the Dean of the School of International Economics and Foreign Affairs of the National Research University–Higher School of Economics (NRU–HSE), Russia. Graduating from the Department of Economics of Moscow State University in 1974, Dr Karaganov went on to obtain his doctorate from the Institute of USA and Canada Studies (US&CSI) of the Academy of Sciences of the USSR in 1978. He specializes in Soviet/Russian foreign and defence policies, and security and economic aspects of Russian-European interaction. He is the author and editor of twenty-two books and brochures and published 450 articles on economics of foreign policy, arms control, national security strategy and Russian foreign and defence policies. In the mid-1990s, he was named by the New York Times as one of the top world foreign policy specialists and ranks among the world’s top 100 public intellectuals, according to the 2005 ranking by Foreign Policy (USA) and The Prospect (UK). Email: [email protected]

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KEYNOTE ADDRESS His Excellency Mr Sayakane Sisouvong Asean Deputy Secretary-General Asean Political Security Community

DELIVERED AT THE “ASEAN-RUSSIA CONFERENCE: FOUNDATIONS AND FUTURE PROSPECTS” INSTITUTE OF SOUTHEAST ASIAN STUDIES SINGAPORE 26–27 April 2011

Ambassador Kesavapany, Director, Institute of Southeast Asian Studies Dr Victor Sumsky, Director, ASEAN Centre, MGIMO University, Moscow Dr Vyacheslav Nikonov, Chairman of Russian National Committee, CSCAP Executive Director, Russkiy Mir Foundation Distinguished Guests and Participants Ladies and Gentlemen I wish to thank the co-organizers, the Institute of Southeast Asian Studies (ISEAS) and the MGIMO (Moscow) for inviting me and giving me the opportunity to take part in this important interactive conference on “ASEAN-Russia: Foundations and Prospects of a 15-Year-Old Dialogue”. It is an honour for me to speak before such distinguished participants and the audience today here in Singapore, the clean, green and beautiful city state. xxix

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I would also like to congratulate the organizers for setting the topic of this meeting, which is very timely and relevant as the Association of Southeast Asian Nations (ASEAN) and the Russian Federation celebrate the 15th Anniversary of bilateral relations. Distinguished Guests and Participants, Ladies and Gentlemen, When ASEAN decided to elevate the Russian Federation to its full Dialogue Partner in 1996, the size of the Russian economy was much smaller than its current one1 and it had just embarked on changes. Today, as we celebrate the 15th Anniversary of ASEAN-Russia dialogue relations, the Russian Federation not only continues to play an active role on the world-stage through the United Nations (UN), but it has also become an important member of the G8, the G20 and the Asia-Europe Meeting (ASEM). By the end of this year, 2011, it will become a full-fledged member of the East Asia Summit (EAS). The Russian Federation has already been playing an important role in the ASEAN Regional Forum (ARF) and the ASEAN Defence Ministers’ Meeting-Plus (ADMM-Plus). Last Thursday (14 April 2011), when the leaders of the world’s largest emerging economies had their BRICS Summit in Hainan, the People’s Republic of China, many commentators came up with the BRICS profile. Regardless of its vast land area of 17 million square kilometres covering two continents, Asia and Europe, the Russian Federation’s GDP in terms of purchasing power parity (PPP) is US$15,806. It is the highest among the BRICS members (Brazil: US$11,289; India: US$3,290; China: US$7,517 and South Africa: US$10,505).2 These are just some examples and figures to support that ASEAN leaders have made a farsighted and strategic decision to embrace the Russian Federation as ASEAN’s full Dialogue Partner. This decision was based on political, economic, socio and culture consideration which increasingly brings greater strategic benefits to both ASEAN and Russia through these areas of cooperation. Distinguished Guests and Participants, Ladies and Gentlemen, While appreciating the Russian Federation’s great achievements in the past years, ASEAN has had its own, no less significant achievements and

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successes. With its geo-strategic location, enormous natural resources, population of nearly 600 million with their fine tradition and cultural heritage, its sustained economic growth and very importantly its Charter, ASEAN has been praised by the international community as one of the most successful regional organizations in the world. In his address to the readers of International Affairs Magazine, Special Issue 2010, President Dmitry Medvedev also states that “… ASEAN has become an authoritative and influential regional organisation.” At the same time, it is important to stress here that while making its utmost effort to build the ASEAN Community by 2015 comprising three pillars, namely political-security community, economic community and socio-cultural community, ASEAN has created greater opportunities and momentum for the Russian Federation and other Dialogue Partners as well as other external partners to take advantage of. Now, given such an important and timely conference, it is crucial to have a brief review of ASEAN-Russia cooperation in the past fifteen years before we exchange our views on its future prospects. ASEAN-Russia cooperation has been guided by the Joint Declaration of the Heads of State/Government of the Member Countries of ASEAN and the Russian Federation on Progressive and Comprehensive Partnership signed at the first ASEAN-Russia Summit in December 2005 in Kuala Lumpur. The Joint Declaration is aimed to promote and strengthen the ASEAN-Russia Dialogue Partnership in a wide range of areas including political and security, economic and development cooperation. ASEAN and Russia also adopted the Comprehensive Programme of Action (CPA) 2005–15 to realize the goals and objectives set out in the Joint Declaration. It is gratifying to witness that significant progress has been made in the relations since the first ASEAN-Russia Summit held on 13 December 2005 in Kuala Lumpur. These include: • the adoption of the Terms of Reference (TOR) of the ASEAN-Russia Joint Working Group (JWG) on Counter Terrorism and Transnational Crime at the 4th SOMTC + Russia Consultations in Kuala Lumpur on 19 June 2008; • Action Plan of the ASEAN-Russian Federation Joint Working Group (ARJWG) on Science and Technology (2007–11); • the adoption of the TOR of the ASEAN-Russia Tourism Consultations at the Second ASEAN-Russia Tourism Consultations held on 7 January 2009 in Hanoi, Vietnam; • the accreditation of the Ambassador of the Russian Federation to ASEAN;

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• signing of the Memorandum of Understanding on the establishment of the ASEAN Centre in the Moscow State Institute of International Relations (MGIMO) by the ASEAN Secretary General Dr Surin Pitsuwan and the Rector of the Russian Foreign Ministry’s MGIMO University Dr Anatoly Torkunov on 23 July 2009; • launching of the ASEAN Centre in MGIMO on 15 June 2010 in Moscow; • the adoption of the ASEAN-Russia Energy Cooperation Work Programme 2010–15 by the First ASEAN Senior Officials on Energy (SOME)-Russia Consultation held in Dalat on 20 July 2010; • the Signing of the Agreement on Cultural Cooperation between the Governments of the Member States of ASEAN and the Government of the Russian Federation on 30 October 2010 at the sidelines of the 2nd ASEAN-Russian Federation Summit in Hanoi; • Russia’s participation in the ASEAN Defence Ministers’ Meeting with Dialogue Partners (ADMM-Plus); • Russia’s participation in the East Asia Summit (EAS). Under the Comprehensive Programme of Action (CPA) to promote cooperation between ASEAN and Russia 2005–15, ASEAN and the Russian Federation have organized a number of joint activities in forms of work­ shops, conferences and training in energy, science and technology, SMEs, education and tourism. The funding for the activities came from the ASEANRussia Dialogue Partnership Financial Fund (DPFF). Russia has expressed its continued commitment in contributing US$1.5 million annually to the DPFF staring in 2011, which would provide a stronger support for funding joint projects in order to effectively and timely implement the Comprehensive Programme of Action (CPA) 2005–15. In terms of political and security cooperation, ASEAN also highly values Russia’s commitment to its cooperation with ASEAN, namely, accession to the Treaty of Amity and Cooperation (TAC), the commitment to addressing the transnational challenges, the active participation in a series of consult­ ative meetings with ASEAN and ASEAN-initiated forums. ASEAN and Russia have held regular meetings and consultations on the issues of mutual interests within the ASEAN-Russian Federation dialogue mechanisms. The key indicators such as total trade and foreign direct investment (FDI) between ASEAN and the Russian Federation have grown over the years. ASEAN’s total trade with Russia has grown from US$5.4 billion in 2007 to US$6.8 billion in 2009. The total FDI from Russia flows to ASEAN has also grown substantially from US$31 million in 2007 to US$157.3 million in 2009.

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To keep momentum and to reaffirm their commitment to further deep­ ening and enhancing ASEAN-Russia dialogue relations, the 2nd ASEANRussia Summit in Hanoi on 30 October 2010 adopted the Joint Statement of the Summit. The Joint Statement provides guidelines for future relations and cooperation between ASEAN and the Russian Federation for the years to come. Distinguished Guests and Participants, Ladies and Gentlemen, While ASEAN-Russia cooperation has made significant progress, much more needs to be done to further tap the enormous potential existing in ASEAN and Russia. Our conference provides an excellent opportunity to identify our strength and weaknesses, to further build upon our success, to improve our weaknesses and to translate all bilateral agreements and decisions into concrete action in order to bring more benefits to our peoples. Being one of the ASEAN Secretariat staff who has been handling this matter for over a decade, I would like to share with the conference a number of observations: 1. There is a very strong political commitment by ASEAN and Russia as demonstrated by two ASEAN-Russia Summits. 2. The two key documents signed and adopted by our leaders during the two summits provide an excellent guidance and direction to ASEANRussia cooperation. 3. There are well established mechanisms to help support the implement­ ation of agreements/decisions. What is needed for the time being is not to create new mechanisms, but to revise the existing ones. 4. There is also a need to improve coordination within ASEAN, within the Russian Federation and between ASEAN and Russia to expedite the process and to be more responsive to the two leaderships’ strong political will and commitment. 5. While ASEAN highly values Russia’s recognition and continued firm support of ASEAN centrality and role in the emerging regional archi­ tecture, ASEAN encourages Russia to be more active in shaping this architecture. 6. While ASEAN-Russia cooperation in the three key areas of politicalsecurity, economic/trade and socio-cultural continues to bring more benefits to both sides, ASEAN believes that greater benefits will be brought about with Russia’s active participation in the implementation of the Master Plan on ASEAN Connectivity. At the same time

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much more needs to be done in the areas of cooperation under the three pillars. 7. While ASEAN welcomes the Russian Federation’s foreign policy in the Asia-Pacific region, ASEAN needs to know more about this policy. For example, is there any element under this policy which corresponds to the Master Plan on ASEAN Connectivity? To this end, a seminar or workshop is suggested. 8. ASEAN welcomes Russia’s consideration to participate in the program­ mes aimed at bridging the development gap between the old and new ASEAN member states including the Greater Mekong Sub-region (GMS) development projects as it will help accelerate ASEAN integration. 9. There is a need to deepen and enhance people-to-people contact between ASEAN and Russia although the Russian Federation has long established its presence in Southeast Asia. The degree of people-to-people contact between each individual ASEAN member state with Russia varies. Russia needs to invest more in this area as well. Distinguished Guests and Participants, Ladies and Gentlemen, I would like to conclude by pointing out that in the past fifteen years, ASEAN and the Russian Federation have developed mutually beneficial cooperative relations on the basis of mutual trust and respect. Although important milestones and the momentum in ASEAN-Russia cooperation has been created and there is strategic guidance given by the leaders of ASEAN and the Russian Federation, I strongly believe that with the rich experience and wisdom of our distinguished participants this conference will contribute to further substantiating the Progressive and Comprehensive Partnership. Once again, I would like to take this opportunity to express my sincere appreciation to ISEAS and MGIMO for the warm welcome and hospitality. My sincere gratitude also goes to all the people who rendered cooper­ ation and assistance to successful convening of this important and timely conference. I wish you a very good health and greater success. Thank you very much for your attention.

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Notes

1



2

According to the Ministry of Foreign Affairs of the People’s Republic of China and the International Monetary Fund, the Russian Federation’s GDP (PPP) was US$0.9 trillion in 1998 and US$2.2 trillion in 2010. Source: Ministry of Foreign Affairs of the PRC and the International Monetary Fund.

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Opening Remarks “RUSSIA-ASEAN ECONOMIC INTEGRATION: A RUSSIAN VIEW FROM SINGAPORE” His Excellency Mr Andrey N. Rozhkov Ambassador of the Russian Federation to the Republic of Singapore

DELIVERED BEFORE THE ECONOMIC COOPERATION PANEL AT THE “ASEAN-RUSSIA CONFERENCE: FOUNDATIONS AND FUTURE PROSPECTS” INSTITUTE OF SOUTHEAST ASIAN STUDIES SINGAPORE 26–27 April 2011

Dear friends, Distinguished panelists, Ladies and Gentlemen, It is my great pleasure to address you prior to the start of a discussion on economic cooperation between Russia and the Association of Southeast Asian Nations (ASEAN). xxxvii

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In my view, this part of the conference might be the most interesting one as it deals with the issues of practical interaction between the partners, the kind of interaction that can be measured in material terms. Previous discussions summarized what we managed to achieve in terms of political, strategic and functional cooperation during the fifteen years of our dialogue partnership. We have to our common credit two summits, numerous joint declarations and statements, and a solid legal framework to regulate cooperation. Russia is now a participant in so many ASEANcentred multilateral formats — the ASEAN Regional Forum (ARF), the ASEAN Defence Ministers Meeting (ADMM) Plus, the Asia-Europe meeting (ASEM) and most recently the East Asia Summit (EAS). No doubt, these are very important achievements reflecting Russia’s growing engagement in Asian affairs and recognition of ASEAN’s central role in the region. At the same time it is very clear that the Russia-ASEAN dialogue is strongly focused on political and security issues, while economic cooperation lags behind. Why is it so? And what needs to be done in order to correct this structural imbalance? Before I share with you some of my thoughts on this subject, I should warn you that the substance and the scope of my views are influenced by my current status as the Russian Ambassador to Singapore. However, I tend to think that whatever positive developments there are in the field of economic cooperation between Russia and Singapore, these could be projected and replicated in the entire ASEAN format for the benefit of both sides. Let me start from the basics. Economic interaction, be it trade, invest­ ments, tourism or services, starts with people, with their very human and natural interest to explore something unknown, with their passion to look for new opportunities, which seem to abound in foreign lands. Of course, huge contracts related to energy or military equipment or infrastructure investment agreements between governments and MNCs form the bulk of trading and investment statistics and its significance should not be overlooked and underestimated. But what I am speaking about now is the individual initiative which, in the end, forms the fabric of material interaction between nations and serves as the main driver for growth and cooperation. Quite often we, the officials and bureaucrats, try to direct this private initiative relying on paper plans that tell the people what to do and where to go. In reality this approach does not work. Why? Because (please, believe me, it is a very hard thing to say) official directives and plans are not always linked to reality, and do not always look profitable to the parties concerned.

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It means that for those, who are supposed to implement all these plans, there is no motivation to go where they are told to go. Only if they are interested in doing certain things, if they find it profitable, attractive and safe, they would risk their hard-earned money, invest their time and efforts and choose particular destinations. Most ASEAN businessmen would first consider China, India, Australia or Vietnam to expand their businesses and make investments, but not Russia. Why? Is it due to language or culture barriers? Is it the lack of information or legal protection? Is there too much red tape? Is something wrong with tax, or even climate? One can only guess. We would never know the real answers, unless we have a dialogue with these businessmen through some established channels of direct and interactive communication. And this is exactly where Governments should step in. To me, it is obvious that the future of economic cooperation between Russia and ASEAN depends on developing an effective private-public partnership, with authorities actually assisting private entrepreneurs in their endeavours, listening to their needs and creating favourable conditions for their businesses to flourish. This is what Russian businessmen find in Singapore and this is what ASEAN businessmen should find in Russia. In other words, the course of economic cooperation between Russia and ASEAN should be formed from the bottom and up and not vice versa. With this in mind, let me make a few more points. Serious lack of reliable information on business opportunities prevents ASEAN businesses from expanding in Russia. Ongoing contacts are sporadic, fragmented and limited to narrow territorial or industry niches. Existing business promotion mechanisms are few and so far not efficient. What are the solutions? Again, let me make some very basic observations: 1. In the era of online communications everything starts from Web repre­ sentation. Please, tell me, do you know any single internet address where one could obtain updated, comprehensive, first-hand information on Russia-ASEAN economic cooperation, structured and categorized trade and investment opportunities, law requirements and legal procedures to set up businesses? Why not start with that? 2. Instead of inventing new vehicles for business promotion, why not use existing ones more effectively? Ambassador Michael Tay, who is here, could confirm that his “baby”, the annual Russia-Singapore Business Forum, has outgrown its initial limits and now serves as a unique platform for interaction between businessmen from all over Asia and the CIS, be it Ukraine and Kazakhstan or Vietnam and Japan. Why not

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upgrade its status and officially transform it into Russia-ASEAN Business Forum? 3. The major ongoing project in bilateral economic relations between Russia and Singapore is creation of special economic zones. Why not widen its geography and give it an inter-regional project status? Why not merge it with the Federal Program of Socio-Economic Development of the Russian Far East? Why not think of developing it into a combined growth strategy? For example, with food and energy security concerns looming all over Asia, why not think of creating, in cooperation with ASEAN countries, special agro-clusters in the Russian Far East? 4. With the entire world moving in the direction of free trade, is it not time for Russia to consider this option? First steps in this direction have been taken: as you know, Russia is considering signing free trade agreements (FTAs) with Vietnam and New Zealand. But, maybe, it would make more sense to do it first with Singapore which is the greatest proponent of free trade in this part of the world? Or even consider concluding a Russia-ASEAN FTA? So, dear friends, as it turns out, there are more questions (some of them rather provocative) than answers at this point, and this is how it should be. After all, we are here for a brainstorming session. Think-tanks should be several steps ahead of the crowd. We should not be afraid of saying something that might sound unconventional or rebellious today. Tomorrow it may become an element of mainstream thinking. With these words I am happy to pass the ball to the next speaker, along with my wishes for a fruitful discussion to all of you. Thank you!

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keynote address “RUSSIA AND ASEAN” Vyacheslav Nikonov

Chairman of Russian National Committee, CSCAP Executive Director, Russkiy Mir Foundation DELIVERED AT THE “ASEAN-RUSSIA CONFERENCE: FOUNDATIONS AND FUTURE PROSPECTS” INSTITUTE OF SOUTHEAST ASIAN STUDIES SINGAPORE 26–27 April 2011

INTRODUCTION Russia and the Association of Southeast Asian Nations (ASEAN) countries do not have a habit of looking at each other as natural partners. Honestly, only a few of my compatriots, mostly advanced students of international relations, would be able to name the ten ASEAN member states. Looking from this part of the globe, Russia is also not too visible. It is not perceived as a relevant factor in regional affairs. This traditional neglect is short-sighted and outdated on both sides. We do matter to each other.

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WHY DO WE MATTER? Russia matters because it is an important country. Unlike the USSR, it is not a superpower, but it is one of the great powers. It accounts for one-eighth of the Earth’s surface, being the biggest Asian state with the longest Pacific coast. With a population of 142 million people, not too big by Asian standards, Russia is the largest European nation. It is one of the five permanent United Nations (UN) Security Council members. It is number one in the world as the supplier of energy, in natural resources, in nuclear might, and in space research. It is the seventh to eighth largest economy, still much bigger than that of ASEAN’s ten economies combined. Russia has a great culture, and the Russian language (an official one in the UN) is the fifth most frequently spoken on Earth. And now Russia starts looking more and more to the southeast of its borders. ASEAN matters for Russia because it is an extremely important and interesting group of rapidly growing countries, representing a distinct civili­ zation of 600 million people. One of the paradoxes of the Asia Pacific is that although there are many great powers in the region, ASEAN countries have traditionally been the centre and the driving force behind the regional integration processes. The twenty-seven-nation ASEAN Regional Forum (ARF), which includes the Russian Federation, functions as the main venue of regional political dialogues on peace and stability, cooperation in security and confidence-building measures. The dialogues with leading partners (known as ASEAN+1) play an increasingly important role. Cooperation with China, Japan and South Korea in ASEAN+3 has been gaining momentum, and now there is ASEAN+8 (which again includes Russia). So, ASEAN is absolutely crucial for integration schemes in the Asia Pacific, where Russia is now becoming more active, with its chairmanship of the Asia-Pacific Economic Cooperation (APEC) in 2012 and its membership of the Asia-Europe Meeting (ASEM) and the East Asia Summit (EAS).

GO EAST STRATEGY We in Russia have many reasons to go east. Although one still needs to prove that, the proof is there. The shift of the world development to the Asia-Pacific region has been the mega trend of the past few decades. The Asia Pacific is becoming the engine of global development — the role that Europe had been playing for the past five centuries. This is happening due to the economic upturn of the region, which has benefited the most from globalization. The Asia-Pacific region (including North America) accounts

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for more than half of the gross world product. The region hosts the world’s largest economies — American, Chinese and Japanese, which is joined by two more economic giants — India and the Russian Federation. Almost half of the G20 are Asia-Pacific countries: Australia, Canada, China, India, Indonesia, Japan, Russia, South Korea, the United States, and Mexico. Russia’s closer integration with the most rapidly developing part of the globe can bring enormous economic benefit. The Asia-Pacific comprises major geopolitical centres, above all the United States, which has remained the dominant power in the region since World War II. America’s trade and economic relations with the Asia-Pacific countries by far exceed its ties with Europe. China, with a population of over 1.3 billion, has a good reason to aspire to the role of the world’s second superpower. India, an active participant in all processes in the region, is becoming an increasingly important global and regional player. Other AsiaPacific countries include Indonesia, the world’s largest Islamic country, Japan and South Korea, and Australia and New Zealand, which boast the highest level of development in the Southern Hemisphere. The ASEAN part of the Asia Pacific is the world’s key test-range for working out a model of political modernization which is viewed here not as “Westernization”, but as a special way of development based on a synthesis of democratic forms of government and autochthonic political culture. Proceeding along this path, the region has posted impressive economic growth. This model is characterized by the priority establishment of an economic basis and legal groundwork for economic liberalism. It gradually enforces the norms of constitutional law and “measures out” democratiza­ tion, depending on the society’s ability to “digest” political changes. Focusing on traditionalism and ethical values, Asian countries are implementing in practice the concept of a multi-polar world order. There has been a serious potential for conflicts in the Asia-Pacific region, which Russia has to take into account. The first is the rapid growth of defence spending, with China, Japan, India and South Korea maintaining the leading positions. The United States keeps a massive military presence in the region, building up its powerful system of strategic and tactical missile defense system. Second, there has been a dramatic increase in the imports of conventional armaments, defensive and even offensive, such as missiles and aircraft. Third, the problem of proliferation and stockpiling of nuclear weapons has visibly increased. Aside from the official “nuclear club” countries — Russia, the U.S. and China — another three countries — India, Pakistan and North Korea — now have nuclear weapons. Fourth, tensions persist on the Korean Peninsula. Fifth, there is a problem of trust, or even plain animosity, in

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relations between certain Asia-Pacific countries. Territorial disputes abound, involving Japan, Russia, South Korea, China and some ASEAN member states. Conflicts over the use of forest and water resources, fishing and borders of economic zones are not infrequent, and the possibility of the economic confrontation escalating to a political one cannot be ruled out. New crossborder challenges include the aggravation of religious/ethnic conflicts, sea piracy, environmental and natural disasters, and epidemics. Sixth, there is a contradiction between the strengthening of the defensive might of a number of new, more active and stronger players in the Asia-Pacific region and the existing system of bilateral and multilateral military-political alliances, which arbitrarily undertook the responsibility for security in the region. Seventh, fear is felt again in Asia-Pacific of a bipolar confrontation — perhaps hypothetical — between the U.S. and China. Anxious to avoid it, the countries of the region are seeking to incorporate the two powers into the common system, which would guarantee against such a conflict. All this brings to the forefront the need for a regional architecture that would help to prevent and resolve conflicts and create stimuli for cooperation. Having Russia as part of this architecture can make it more stable.

ASIA-PACIFIC RUSSIA The Russian Federation is an Asia-Pacific country, too, although it has not been very aware of this capacity. The main obstacle which has been hard to surmount is the Russians’ — and particularly the Russian political and eco­nomic elites’ — disdainful attitude towards Asia as a secondary region of the world. In the Russian Far East, the people complain that this kind of outlook downgrades the eastern regions to a “raw-materials appendage of the parent state” and a “military-political outpost in an alien and hostile Asia”. Other countries of the region often do not regard Russia as an AsiaPacific country, because its demography, economy and politics largely follow European patterns. So, Russia’s role in the region, although growing, is still marginal. But there is a growing understanding that Russia should integrate into the Asia-Pacific region, mostly through intensive economic and social deve­ lopment of Siberia and its Far East. It is there that the government should channel capital in the first place — along with innovations and human resources — and create a favourable business environment focusing on the Far Eastern region’s competitive advantages: natural resources (above all, fuels), the transit potential, and technological potential (for less developed countries). It is planned now that in Siberia and the easternmost provinces,

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Russian and foreign investors should be offered preferential investment terms and free economic zones. Russia must fully tap its energy, transport, research and development (R&D), innovation and raw material potentials in its own interests and in the interests of the entire Asia-Pacific region. The federal target programme “Economic and Social Development of the [Russian] Far East and TransBaikal for the Period Till 2013” and the strategy for co-development of Eastern Siberia and Russia’s Far East with China’s northeastern regions can play an important role in these efforts. The geopolitical position of Russia as a Eurasian country that can bridge Europe and Asia can also boost its global and regional roles. Today, com­ munication between these two powerful regions is done along bypass routes, through the Indian and Pacific Oceans. Shipping at least part of cargoes by trans-Asian railways and highways would bring tremendous benefits to transit and customer countries, as it would dramatically reduce the cost and timing of cargo transportation. Russia has been involved more and more in the Asia Pacific through regional organizations. It is a member of the Shanghai Cooperation Organi­ zation (SCO). The Asia-Pacific vector of the SCO’s development was codified in the 2004 Tashkent Declaration of Heads of the SCO Member States, which set the task of creating a partnership network with other international bodies and forums active in this region. Russia is a member of BRICS and the G20, which also have a very strong Pacific dimension. Russia’s chairmanship of APEC in 2012 is expected to significantly contribute to its integration with the Asia-Pacific region. The important task is to make the 2012 summit in Vladivostok successful and Russia’s APEC chairmanship effective. Another development was the admission of Russia to the Asia-Europe Meeting (ASEM) at the 8th ASEM summit in Brussels, held in October 2010. And, of course, Moscow steps up its dialogue with ASEAN.

RUSSIA-ASEAN Since 1996, Russia has been a fully-fledged official partner of ASEAN. The list of treaties and agreements is quite impressive: Joint Declaration on partnership for peace and security (Phnom Penh 2003), Joint Declaration on cooperation to fight international terrorism (Jakarta 2004). In 2004, Russia signed the Treaty of Bali. The first Russia-ASEAN summit was held with the participation of President Vladimir Putin in 2005 in Kuala Lumpur, where a number of important documents were worked out:

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• Joint Declaration on advanced and comprehensive partnership; • Intergovernmental agreement on cooperation in economics and develop­ ment; Comprehensive programme of actions to promote cooperation between Russia and ASEAN for 2005–15. It took five more years to hold the second summit, when President Dmitry Medvedev visited Hanoi in October 2010. The Joint Declaration of the Hanoi Summit included mutually agreed approaches towards the architecture of security and cooperation in the Asia Pacific and strategy for the development of the Russia-ASEAN dialogue. An intergovernmental cultural agreement was signed, as well as the working plans and road maps on energy, emergencies, long-term economic and trade cooperation. The Russia-ASEAN partnership has been institutionalized. Since 2009, Russia has its permanent representative in ASEAN (who is also the am­ bassador to Jakarta). The Foreign Minister is participating in the annual post-ministerial conferences of the Association with its dialogue partners in ASEAN+1 format. The permanent mechanisms of the partnership include: • • • • •

Joint committee for cooperation; Joint planning and governing committee; Working group on trade and economic cooperation; Working group on cooperation in science and technology; Moscow ASEAN Committee, comprising of all the ambassadors of the ASEAN countries to Russia.

Ties between the parliamentarians are also becoming more frequent. Members of the Russian Federal Assembly participate as observers at the meetings of the ASEAN Inter-Parliamentary Assembly. It was back in 1998 when the Russia-ASEAN Business Council was launched after the signing of the agreement between Russia’s Chamber of Commerce and Industry and the ASEAN Confederation of such chambers. The economic ties are not too impressive, but they are growing even despite the crisis. The largest partner is Singapore, here we are speaking about US$2.5 billion of investments in real estate, transportation and storage infrastructure, deep sea drilling and special vessels, and food processing. The second largest is Malaysia with cooperation in space launches, aviation, oil and gas, and high-tech. The third is Vietnam, which is Russia’s strategic partner. We cooperate in nuclear projects, energy, raw material extraction, and banking. Thailand is the fourth, but it is definitely number one as a tourist destination. Other promising areas are energy, aerospace, high-tech, agriculture. Russia also has more than US$1 billion worth of trade with

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Indonesia, which is a very promising partner in the aerospace industry, natural resources, clean energy, trade in traditional items, and investment. Trade volume with the rest of the ASEAN countries is also growing. We have begun to study each other more carefully, and the ISEASMGIMO conference in April 2011 is proof of that. Russia is quite advanced in the area of Southeast Asian studies. There are the Institute of the Far East and the Institute of Oriental Studies in the Russian Academy of Sciences; there are special departments in many universities. All the major languages spoken in the ASEAN countries are taught in Russia. The ASEAN Centre was established in Moscow at MGIMO-University. The Council for Security Cooperation in the Asia Pacific (CSCAP) Russia actively operates under my modest coordination. However, Russian studies are not that developed in the ASEAN countries with the obvious exception of Vietnam. ASEAN members rely more on outside sources of information, which are not always reliable. The Russian language is rarely studied even in schools, not to mention at university level. Russkiy Mir Foundation which I also chair is prepared to provide assistance and knowledge to start any Russian studies and/or language programmes in every ASEAN country. We should also have more intellectual exchanges such as the ISEASMGIMO conference. That can bring us closer to the common agenda on major international issues including the new Asia-Pacific architecture.

TOWARDS THE NEW ASIA-PACIFIC ARCHITECTURE Globalization is intensifying economic interdependence and interpenetra­ tion of interests, which is a factor of regional stability. At the same time, the region is economically heterogeneous and fragmented. The Asia-Pacific architecture took several decades to evolve. Still, interaction and coordination of the activities of international organizations and forums within the AsiaPacific region remains an open question. The Asia Pacific is an “alphabet soup” of multiparty institutions at different stages of development, divided and heterogeneous by nature, objectives and composition of their members. There is no pan-Pacific system; each existing format has something or someone missing. APEC, which unites twenty-one member economies, has a prominent place in the hierarchy of regional organizations. But granting broader political and military-political functions to APEC is not on the agenda, although some countries have made such attempts. What we knew until lately as the ASEAN+6, or the East Asia Summit mechanism was not perfect as it lacked

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an economic foundation. Without the U.S. and Russia it was unable to create a balanced inclusive regional architecture. Years-long efforts to promote “preventive diplomacy” in the region for regulating imminent conflicts have had little success due to apprehensions that this may provoke interference from large countries (the U.S. in the first place) in the internal affairs of weaker states that “do not meet the standards”. In addition, ASEAN member states which are in the centre of integration processes are suspicious and jealous about any attempts to create structures that may sideline them in regional integration. A distinctive feature of Asia-Pacific organizations is that they have a loose structure, and their decisions and agreements are not binding. Such organizations function on consensus, trying to take into account the opinions of all the participants. This motley picture can hardly be called a fully-fledged regional archi­ tecture. Unlike Europe, the Asia-Pacific region has no organization with a mandate to seek comprehensive solutions to political, economic or security problems. There are no documents that would regulate certain security aspects, like the Helsinki Final Act, the Vienna documents on confidenceand security-building measures, or the Treaty on Conventional Armed Forces in Europe. Lastly, the Asia Pacific has no large blocs, such as North Atlantic Treaty Organization (NATO), or continental bodies like the Organization for Security and Cooperation in Europe, the Council of Europe or the European Union. Arms control in the region is not regulated within legal or institutional frameworks, and there is no effective mechanism in the region to settle conflicts. Many Asia-Pacific countries increasingly feel the need for a comprehen­ sive model of cooperation and security. The concept of network diplomacy is becoming increasingly popular, i.e. the establishment of a partnership network of multilateral associations in the region. The region is considering merging several regional platforms, for example the ASEAN Regional Forum with the APEC Forum, or the East Asia Summit with APEC, so that regional cooperation acquires both political and economic dimensions. Some have suggested creating an Asia-Pacific G8 comprising the United States, Japan, China, Russia, India, South Korea, Australia and Indonesia. There are also plans to institutionalize ASEAN+8, including defence ministers’ and summit meetings, as an “umbrella” structure that would coordinate security efforts in the region. It looks as though the East Asia Summit will be held in this format, while APEC will continue handling economic issues. There are many supporters of an idea to build a regional architecture on the basis of new or existing free trade zones. The question is which zone

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should be taken as the basis. Some call for setting up a free trade zone for the entire region, while others maintain it should be built around ASEAN+3. One scenario provides for setting up of an entirely new body, but it did not gain much support. Another scenario envisions a security element in APEC. This idea is of interest, yet it has certain limitations, as India does not fit into this format. In addition, China would resent the membership of Hong Kong and Taiwan. Russia has a flexible position on a new regional architecture, holding that a future pan-Pacific system must have a niche for Russia. From our viewpoint, a new security and cooperation architecture should be comprehensive in nature; it should not focus on a narrow range of problems, for example, economic integration. It should also encompass security and other fields, including the humanitarian one. The main task for Asia-Pacific countries is to overcome the existing dividing lines, and build an integral structure using the available “abutment stones” and “bricks” and seeking the estab­ lishment of a common security and cooperation space. In the present conditions, it would be most realistic to go along the way of developing horizontal ties in the spirit of network diplomacy, and creating partnership ties between multilateral organizations and forums. It is a demand of the times that the Asia-Pacific region builds a cooperative, transparent and multi-polar system of regional security and cooperation, which would rest upon the principles of collectivism, norms of international law and indivisible security for all states in the region.

CONCLUSION In the 1990s, Chinese politicians unofficially brought forward the following stratagem: “Lean on the North, stabilise the West and go South”. Russia, for its part, could formulate its geopolitical course for the decades to come as follows: “Lean on the West, stabilize the South and go East”. The West is the prime source of high technologies and high-quality investments; the South packs the key threats to the country’s security, while the East provides markets for energy resources, raw materials and technologies, and offers new areas for bilateral and international cooperation. To conclude, the twenty-first-century imperatives offer a new view of Russia not merely European or Eurasian, but as a Euro-Pacific country.

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InTroduction “RUSSIA AND THE ASEAN MEMBER STATES: POLITICAL AND ECONOMIC COOPERATION IN PROGRESS” Christopher Len

Introduction This paper examines Russia’s engagement with the Association of Southeast Asian Nations (ASEAN) and its member states. The paper will start with a background account of Russia’s pro-Western foreign policy during the 1990s. This is to enable readers to understand the evolution of Russia’s foreign policy from the time of independence in 1991 under President Boris Yeltsin and how it contrasted with the pragmatic foreign policy implemented by his successor, Vladimir Putin and thereafter by Dmitry Medvedev. This account will be followed by an overview of Russia’s foreign policy today at the international level and with the Asian region. It will be pointed out that in contrast to the early days when Russia struggled in its attempts to court the West and “Westernize” itself, Russia is today doing very well

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on the world stage, having adopted a more open, flexible, and balanced foreign policy approach. This is especially apparent in the context of the ASEAN-Russia relationship. It is acknowledged that the political and legal basis for ASEAN-Russia cooperation has developed considerably in recent years. It will then be pointed out that although economic ties between Russia and the ASEAN bloc is presently limited, there are clear areas of growth opportunities, based on the collaborations and deals that are already underway. The author will then give some thoughts on the way forward for ASEANRussia collaboration. It will be argued that in order to further solidify this growing relationship and move from symbolic to substantive cooperation, the next step would be to develop greater economic linkages.

RUSSIA’S FOREiGN POLICY IN THE 1990s UNDER YELTSIN Following the collapse of the Soviet Union in 1991, the newly independent Russia led by President Boris Yeltsin initiated an ambitious process of triple modernization to transform Russia from a command economy to a free market economy, from a dictatorship to a democracy, from a four-century-old empire, to a nation-state.1 The two main aims of Russia’s foreign policy were to first, secure favourable external conditions for domestic reforms; second, to overcome the legacy of the Cold War and to dismantle confrontational structures created during that period.2 The Russian reformers in the Kremlin thought that the best way to achieve these aims was by establishing closer ties with the West; targeted at the United States of America and Western Europe. Moreover, the leaders of the new and still fragile Russian democracy regarded the West, with its technical expertise and financial potential, as a vital source of aid. It was also felt that support from the West could also guard against the comeback of reactionary and nationalist forces, which opposed the new reforms instituted under Yeltsin. As a result, the Kremlin’s main orientation immediately after independence in the early 1990s was skewed towards the West, aimed at acceptance into the Western bloc as an equal partner. By 1996, the hope that Russia would be accepted as a full-fledged partner and ally of the West and that the reforms would translate into tangible political and economic benefits diminished considerably. Many in Russia began to feel that the over-enthusiastic adoption of the Western economic models and the prescription of “shock therapy” through privatization,

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liberalization and tight monetary policy were more likely to lead to “Latin Americanization” than rapid advancement into the “First World”.3 The West also failed to deliver on the expectations of a new “Marshall Plan” of largescale economic and financial assistance to help Russia develop its economy.4 In fact, many Russians believed that the West’s attitude since 1991 was geared, consciously or unconsciously, towards exploiting and undermining their country.5 In August 1998, the Russian rouble devalued, the Russian Central Bank defaulted on its rouble-based debt, and Moscow declared a moratorium on payment to its foreign creditors. The Soviet socialist system had served Russia for over seventy years before it was terminated. On the other hand, Russia’s neo-liberal experiment prescribed by U.S. economists and implemented through the International Monetary Fund lasted just seven years, after which it was rejected. The 1998 Russian debt default marked the start of a new pragmatic approach in Russian foreign policy. In August 1999, Vladimir Putin became Russian Prime Minister and in March 2000, he assumed the Presidency. Under Putin, Russia focused on establishing a more open, flexible, and balanced foreign policy approach, which included the Asia Pacific. In May 2008, Putin became Prime Minister due to the constitutionally mandated term limits for the Russia presidency. His foreign policy approach was nonetheless continued by his successor, Dmitry Medvedev, who became the third president of Russia.

RUSSIA’S FOREIGN POLICY TODAY UNDER PUTIN AND MEDVEDEV Compared to the turmoil experienced by Russia during the 1990s as it underwent triple reforms, Russia is doing relatively well on the world stage today. In contrast to the socio-economic pessimism permeating through the United States, Europe and Japan due to the global financial crisis that hit the world in 2008, Russia’s economy has remained fairly buoyant because it has benefited through the revenues collected from the high oil and gas prices. While these countries are facing serious budget cuts, the Russian Government on the other hand had dramatically increased its military funding in April 2011, by approving RUB20 trillion (estimated at US$704.9 billion) to be spent on the military’s modernization from 2011–20. As doubts over the safety of nuclear power emerged follow­ing the nuclear disaster in Fukushima, Japan, Russia is also in a favourable position to increase its oil and gas supplies to the European and Asian markets.

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Russia’s relations with its neighbour China can also be characterized as stable and friendly. China, which is worried about American strategic encirclement, has worked to ensure that Russia remains on-side as its strategic partner. Beijing also needs Moscow’s tacit acquiescence for its growing engagement in Central Asia. While the recent Arab revolutions in countries such as Tunisia, Egypt, Libya has rattled the Chinese authorities which feared the growing number of “mass incidents” between protestors and police, and the emergence of its own “Jasmine revolution”, the Russian authorities in comparison, are in control of the domestic social and political situation, despite facing its own set of challenges. Finally, Russia’s membership in the G8, G20 and BRIC as well as its winning bids to host the 2014 Winter Olympics and the 2018 FIFA World Cup have all added to Russia’s international prestige. Russia’s Foreign Minister Sergei Lavarov has explained that the main goal of Russia’s Asia-Pacific strategy is “to provide favourable external conditions for modernising Russia, to further friendly relations with the countries in the region, to take an active part in regional affairs, and to join integration processes”.6 Moscow has also made great strides towards this goal. Russia has been a member of the ASEAN Regional Forum (ARF) since its inauguration in 1994, it is a founding member of the Shanghai Cooperation Organization (SCO) set up in 2001 and it became a full member of the Asia-Pacific Economic Cooperation (APEC) in 1998. More recently, it gained admission into the ASEAN-Europe Meeting (ASEM) in 2010 and is due to be admitted into the East Asia Summit (EAS) as a full member in November 2011. Russia is also scheduled to host the 2012 APEC summit in Vladivostock.

THE ASEAN-RUSSIA PARTNERSHIP As the other papers in this edited volume will be covering growing ASEANRussia relations rather comprehensively, only a brief overview of key political events will be provided in this paper.7 Political relations between Russia and ASEAN stretch back to July 1991 when the Deputy Prime Minister of Russia attended the Opening Session of the 24th ASEAN Ministerial Meeting (AMM) in Kuala Lumpur. In July 1996, Russia was elevated to become a full Dialogue Partner of ASEAN during the 29th AMM in Jakarta.8 The inaugural ASEAN-Russia Joint Cooperation Committee Meeting was held in June 1997 during which the two sides agreed to cooperate in the areas of trade and investment, science and technology, environment, tourism, human resources development and

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people-to-people interaction. In November 2004, Russia acceded to ASEAN’s Treaty of Amity and Cooperation in Southeast Asia. In December 2005, the first ASEAN-Russia Summit took place in Kuala Lumpur; then-President Putin also attended as guest of the inaugural East Asia Summit held at the same time. In October 2010, the Second ASEAN-Russian Summit took place. The joint statement released noted that, “ASEAN and the Russian Federation have developed mutually beneficial cooperation on a broad range of areas and have moved to practical implementation of joint projects.” Both sides also made the commitment “to consolidate and further promote ASEANRussia progressive and comprehensive partnership towards enhancement of the relations to a higher plane”.9 The statement also specified in-depth the common grounds with respect to ASEAN-Russia political and security, economic, and socio-cultural cooperation. As evidence of continuing dialogue over the years, the 9th Meeting of the ASEAN-Russia Joint Cooperation Committee (9th ARJCC) took place in April 2011, while the 8th ASEANRussia Senior Officials Meeting took place in Myanmar in June 2011. These meetings led to the signing of a number of significant agreements and also paved the way for ministerial and official contacts between the two sides. In December 2005, the “Comprehensive Programme of Action to Promote Cooperation between the Association of Southeast Asian Nations and the Russian Federation 2005–2015” and the “Agreement between the Governments of the Member Countries of the Association of Southeast Asian Nations and the Government of the Russian Federation on Economic and Development Cooperation” were concluded. More recently in August 2010, the first ASEAN-Russia Economic Ministers Meeting took place during which the parties agreed to develop a possible roadmap to enhance economic relations between ASEAN and Russia. In 2009, as a sign of commitment to deepen relations with ASEAN, Russia appointed its first ambassador to ASEAN while a year later in 2010, an ASEAN Studies Centre was set up at MGIMO (the Moscow State University of International Relations of the Ministry of Foreign Affairs of the Russian Federation) as a research and educational entity to promote understanding between Russia and the ASEAN member states. Russia has also committed itself to allocate US$1.5 million annually as a regular contribution to the ASEAN-Russia Dialogue Partnership Fund (DPFF), which is to be used to promote activities between Russia and the ASEAN region.10 With such bilateral interactions, Foreign Minister Lavarov noted that, “the legal basis and the mechanisms of Russia-ASEAN cooperation have largely been formed”. 11 Despite progress in these areas, economic ties

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continue to lag. Trade between ASEAN and Russia stood at US$10 billion in 2008, and reached US$12.5 billion in 2010. In comparison, ASEAN’s 2009 trade stood at US$178.2 billion with China, US$159 billion with Japan, US$74.7 billion with South Korea, US$58.7 billion with Australia, and US$20.2 billion with India.12 Starting at such a low base, Russia has potential to expand its trading relations with ASEAN for three reasons. First, the ASEAN economies are set to grow further, especially if the ASEAN Economic Community initiative is successful. Second, East Asia’s demand for energy supplies is set to increase in the coming decades and Russia is suitably positioned to serve as a supplier of oil and gas, and to assist in the development of nuclear power to the ASEAN region. Third, the opening up of the Northwest Passage in the Arctic along its Siberian coast presents unique opportunities for Russia to increase manufacturing cargo traffic between Asia and the West, and to channel oil and gas shipments from the remote parts of Russia into East Asia.13 The biggest priority for ASEAN-Russia relations today is how to trans­ late political gains into substantive and meaningful cooperation. There are signs that the two sides are moving in this direction. In 2006, the RussiaSingapore Business Forum (RSBF) was set up to “demystify” Russia. In 2010, with support from the top leaderships of both governments and the participation of the business luminaries from Russia and Asia, the RSBF developed into a business-to-business platform to connect the business communities of Russia, Singapore, the Commonwealth of Independent States and Asia. So what kind of specific economic and trade opportunities are there to be considered between ASEAN and Russia? The examples below illustrate the growing trade, investment and economic linkages between the two sides. These collaborations and deals represent areas for future growth. A point that emerges from these examples is that ASEAN could benefit from Russia’s strengths in the high technology, chemical processing and products, energy and mineral resource wealth, and arms manufacturing. In February 2011, reports from Indonesia indicated that Russia is to build a US$3 billion nickel smelter in Halmahera Island in eastern Indonesia. In November 2010, Russia and ASEAN held an International Workshop on Biotechnology in Food Industry in Hanoi, Vietnam. In 2010, Russian gas giant Gazprom opened an office in Singapore to conduct Liquefied Natural Gas (LNG) trading. There are also reportedly plans for the company to move into oil and carbon trading, and possibly become a gas supplier for Singapore, introduce smart (energy) metres for households, and engage in the trading of alternative energy, such as biomass. In 2010, it was reported that

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Swiss private banking group Julius Baer is setting up a desk in Singapore to serve wealthy Russians seeking to invest in Asia, in competition with UBS AG and Credit Suisse Group AG which have already done the same. It has been estimated that assets in Asia to be managed on behalf of Russians may more than double to at least US$50 billion in five years.14 In 2009, Vietnam was the biggest customer of Russian arms in a package worth US$3.2 billion which included six Kilo-class submarines and naval infrastructure deals development. Later the same year, Hanoi pur­chased another twelve Su-30MKK fighter jets worth US$600 million. The latter arms deal also included an agreement for the construction of Vietnam’s first nuclear power station. In 2007, Russia and Indonesia sealed a US$1 billion arms deals involving the sale of Russian tanks, military helicopters, submarines, and fighter jets. Russia has also been engaged in exploration and production activities in Vietnam, Myanmar and Indonesia.

ASEAN-RUSSIAN INTERACTION ASEAN-Russia should work towards all round and comprehensive co­operation based on common interests and mutual benefit. As part of the conclusion, the following are suggestions on the key areas the two sides should prioritize in order to advance and entrench the ASEAN-Russia partnership. First, there is a need to expand economic links. To do so, the two sides should set up people-to-people networks targeting the young and examine establishing free trade agreements (FTAs). The Russian Government also needs to increase its own investments towards the Russian Far East and Siberia to facilitate Asian trade. On setting up people-to-people networks, the governments should move from “demystifying” Russia to “enchanting” the people of ASEAN and Russia from a young age. In order to identify business opportunities and facilitate investments and cooperation, cultural and professional networks are essential. Improved knowledge between people of different countries is a necessary criterion for successful business dealings. There should be a joint ASEANRussia immersion programme to bring the youths from both sides together as a basis to improve the mutual understanding of people and policies. This should include the study of local languages. Such personal networks could over the years form the basis for eventual business-to-business contacts. In addition, this initiative could also lead to increased tourism for both ASEAN and Russia in years to come. MGIMO’s ASEAN Studies Centre could become the contact point for such collaboration between Russia and the various ASEAN member states.

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On the subject of FTAs, the idea of an ASEAN-Russia FTA has been suggested. However, it will probably take a long time to realize since it will involve many parties at the negotiating table. Russia should meanwhile focus its efforts on negotiating FTAs with key ASEAN member states. One is Vietnam, which has a long history of economic cooperation with Russia. The first meeting of the joint working group for the Vietnam-Russia FTA already took place in Hanoi in October 2010. There is clearly a meeting of minds in this regard. Russia thinks that Vietnam can act as a gateway to help Russia enter the ASEAN market. Vietnam on its part has also expressed willingness to have a bilateral FTA with Russia and the Customs Union of Russia-Belarus and Kazakhstan in the belief that it will bring huge economic trade, services and investment benefit.15 The other is Singapore, which is one of the most trade friendly nations in the world with numerous FTAs with key trading partners.16 On the Russian Far East and Siberia, the seaport in Vladivostok can serve as a maritime gateway for Asian trade while the Trans-Siberian railway through Siberia can also function as a transport corridor for moving cargo. For them to realize their full logistics chain potential, Moscow needs to increase investment and reduce the barriers to trade in these areas. Second, the emphasis on ASEAN-Russia cooperation based on mutual interest reflects the recognition today that traditional and non-traditional security challenges require governments to take into account global and regional collective interests. On traditional security, ASEAN member states are not engaged in any territorial disputes with Russia, unlike with China. There is also no “Russia Threat” overshadowing the ASEAN region today. Engagement with ASEAN and its member states represent a good platform for Russia to underline the doctrine of peaceful coexistence of big powers with small and medium-sized states. In this regard, Russia should consciously reach out to ASEAN and its member states and help promote peace and stability in the ASEAN region. Russia should avoid wading into any disputes in the ASEAN region, such as the South China Sea dispute since it will only further complicate the situation. Instead, it can use APEC, ASEM, ARF, and the EAS as constructive diplomatic platforms to ensure that Southeast Asia remains as an open region. On non-traditional security, Russia should further collaborate with its ASEAN counterparts to deal with common challenges namely, natural disasters, climate change, energy security, terrorism, food security, ageing population, and research and management of pandemics.

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CONCLUDING THOUGHTS ON THE WAY FORWARD The year 2011 marks fifteen years of the ASEAN-Russia dialogue partner­ ship. Russia is today a self-confident actor on the international stage. ASEAN meanwhile is currently in the process of transformation with plans to set up the ASEAN Community by 2015, based on three pillars, namely, the ASEAN Security Community, ASEAN Economic Community and an ASEAN Socio-Cultural Community. Russia is poised to assume a new role in the ASEAN region. Moscow’s ongoing engagement with ASEAN and its member states reflect an open, flexible, and balanced foreign policy approach under Putin and Medvedev. It is pragmatic and non-ideological, based on economic and trade opport­ unities, and aimed at creating a favourable external environment to support Russia’s domestic development and to enhance its international image. ASEAN and its member states meanwhile welcome the ASEAN-Russia partnership as it helps keep the region open, and enables them to tap into Russia’s strengths in the fields of high technology, chemical processing and products, energy and mineral resource wealth, and arms manufacturing.

Notes

1



2 3



4 5



6



7



8



9

Daniel Yergin and Thane Gustafson, Russia 2010 (New York: Random House, 1993), p. 4. Richard Sakwa, Russian Politics and Society (London: Routledge, 1996), p. 290. John Gray, False Dawn: The Delusions of Global Capitalism (London: Granta, 1999), p. 150. Vladimir Batuk, “The End of the Cold War”, History Today, April 1999, pp. 31–32. Jacques Sapir, “West’s Autistic View of Russia”, Le Monde Diplomatique, December 1999. Sergei Lavarov, “Russia and ASEAN can Achieve a Great Deal Together”, International Affairs 2010 (Special Issue), p. 12. Additional information can also be found at the ASEAN Secretariat’s webpage on ASEAN’s relations with Russia: Russian Federation, (accessed 15 May 2011). The Embassy of the Russian Federation in the Republic of Indonesia also has further information: Russia-ASEAN Dialogue Partnership, (accessed 15 May 2011). ASEAN-Russia Relations, ASEAN Secretariat, April 2011, (accessed 15 May 2011). “Joint Statement on the Second ASEAN-Russia Federation Summit, Ha Noi, 30 October 2010”, ASEAN Secretariat, (accessed 15 May 2011).

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“Co-Chairs’ Press Release of the 9th Meeting of the ASEAN-Russian Federation Joint Cooperation Committee, Jakarta, 7 April 2011”, ASEAN Secretariat, (accessed 15 May 2011). 11 Sergei Lavrov, “Russia and ASEAN can Achieve a Great Deal Together”, International Affairs 2010 (Special Issue), p. 12. 12 Sergei Lavrov, “Russia and ASEAN can Achieve a Great Deal Together”, International Affairs 2010 (Special Issue), p. 12. 13 Alissa de Carbonnel, “Russian gas tanker forges Arctic passage to China”, Agence France-Presse, 24 August 2010. 14 Joyce Koh, “Julius Baer sets up Russia Desk in Singapore, joining UBS and BSI”, Bloomberg, 27 September 2010. 15 “Negotiations on Vietnam-Russia FTA begins”, Voice of Vietnam, 11 October 2010, (accessed 15 May 2011). 16 Refer to the International Enterprise Singapore website for more information of Singapore FTAs: . 10

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Section I Wisemen’s Views

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FROM ENERGY PARTNERSHIP TO COMPREHENSIVE SECURITY IN THE ASIA PACIFIC Gleb A. Ivashentsov

INTRODUCTION Energy security issues have been continuously raised at various Association of Southeast Asian Nations (ASEAN) forums and East Asia Summits (EAS). Energy serves as a strategic topic in the Russia-ASEAN dialogues as well. The reasons are obvious and clear. The struggle for energy resources has become the focal point of today’s international politics. Energy issues fully relate to the Asia-Pacific area, which is increasingly acquiring the leading positions on the world economic scene.

RISING ASIA According to the calculations of the Russian Academy of Sciences’ Institute of World Economy and International Relations, Asia’s share in world gross domestic product (GDP) will reach 43 per cent in 2020, with China’s share in real purchasing power terms to increase up to 23 per cent and that of India up to 8.4 per cent, while the share of the United States will drop to 18 per cent and that of Germany to 2.9 per cent. The energy requirements of the Asian countries will increase accordingly. The International Energy Agency predicts that China and India will contribute 45 per cent to the growth of 

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world consumption of primary energy in the period up to 2030. The ASEAN members in their totality will become a major importer of energy resources in the near future as well.

RISING ENERGY NEEDS The shortage of oil and natural gas resources in the Asia Pacific combined with the constantly growing consumption of hydrocarbons have on one side led to increasing imports from other parts of the world, first of all from the Middle East, which practically creates a dependency of Northeast Asia on the Middle Eastern oil and gas supplies. On the other side, the lack of hydrocarbons to fuel the traditional production of electrical energy stimu­ lated the advancement of nuclear energy in the region. In addition to Japan, China and South Korea, such countries as Vietnam, Thailand, Indonesia and the Philippines have also started developing plans for the construction of nuclear power stations.

DEVELOPMENT PLANS FOR SIBERIA AND THE RUSSIAN FAR EAST As for Russia, it has set for itself grand tasks of economic, technological and social development of Siberia and the Russian Far East. The implementation of those tasks is impossible without close interaction with neighbours. Energy interaction will have to take a special place, not only in the oil and natural gas sector but also in the sectors of electrical power production and nuclear energy. The export of Russian hydrocarbons to China, Japan and South Korea has been continuously increasing. Russia actively cooperates in the peaceful use of nuclear energy in the region with China and Vietnam (including construction of nuclear power stations), as well as with Japan and South Korea (supplies of nuclear fuel, participation in the International Thermonuclear Experimental Reactor [ITER] project etc.). The events of 2011 have brought serious new nuances and challenges to the energy situation in the Asia Pacific. The Middle East states have been entangled by social and other upheavals which immediately caused the price rises in the oil and natural gas markets. The regularity of shipments has not yet been undermined, but who can guarantee that the wave of instability would not sooner or later impact upon the main suppliers of hydrocarbons to Northeast Asia? The Fukushima nuclear accidents in turn have sharply

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illustrated all the challenges and threats connected with the development of nuclear energy. That challenge that applies not only to Russia and ASEAN but to all of their Asian and Pacific neighbours is the urgent task of working out a regional energy security partnership. A partnership which should aim at securing: • needful supplies of the region in energy, in hydrocarbons as well as in electric power and in fuel for nuclear power stations etc. along with adequate measures to protect the environment; • guarantees for major joint investments in new energy projects. Such investments are vitally important for providing energy security, but the recent global financial crisis and fluctuation of oil prices have made them ever risky; • reliable work of nuclear reactors, immediate reactions to accidents, protection and rehabilitation of territories and population in case of radiation emergencies which has acquired a special significance after the recent events in Fukushima, Japan; • dependable routes of energy resources transportation by land and sea as safe transit are a key element of energy security. The coordination of energy policies between suppliers and consumers as well as mutual exchange of the assets of the energy business should constitute the basic components of the Asia-Pacific energy partnership architecture. The defence and political interests of certain states of the region may not coincide, but all regional actors have one common concern, namely, energy security. By 2020, Northeast Asia alone will consume half of the world’s demand for energy resources. The energy problems of any Asia-Pacific nation will surely affect common security. Just look at North Korea. Russia can offer a lot in regard to regional energy partnership. There are increasing Russian exports to the Asia Pacific of hydrocarbons be it oil, gas or coal, including those from the fields jointly developed with foreign partners, such as in Sakhalin. Russia itself will surely benefit from this energy partnership. Growth of oil, natural gas and coal production along with construction of highways and railways, as well as modernization of airports and seaports would give a boost to industrial and housing construction, the steel industry and machine-building, including shipbuilding for bulk carriers and tankers for oil and gas. At the same time, the creation of new jobs will help to improve the demographic situation. The infrastructural underdevelopment of the regions of Eastern Siberia and the Russian Far East would be overcome as well as certain economic isolation of that area from European Russia, especially during the last two decades. That

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would strengthen the integrity of the whole Eurasian economic space of Russia.

NUCLEAR ENERGY Cooperation in nuclear energy is bound to have its post-Fukushima future. Russia is making serious efforts to retain leadership in at least seven or eight out of nearly fifty technologies, which determine the key directions of world scientific and technological progress. These include utilization of nuclear energy and nuclear machine-building. For instance, the government is planning to increase Russia’s share in global construction of nuclear powerhouses and their exploitation from the present 16 up to 25 per cent. Russia is very interested in promoting its high-tech exports to the AsiaPacific area. There are possibilities of using the Arctic Sea Route for eastward transportation of energy resources from the Russian Arctic area. The test trips along the route have already taken place. For instance, in August 2010 a Russian tanker “Baltika” belonging to the “Sovkomflot” company delivered 70,000 tonnes of natural gas concentrate from the “Novatek” company from Murmansk on the Russian Arctic Coast to the Chinese port of Ningbo, after covering 2,500 miles along the Arctic Sea Route. One can speak of making use of the rich experience accumulated in Russia in securing the safety of nuclear power stations, as well as in facing emergencies and managing the consequences of natural disasters. There are possibilities of implementing an innovative project of a tidal power station with a unique 8,000 megawatt tonne capacity in the Tugursky Bay in Khabarovsky Krai, which could become a basic component in a united intergovernmental energy system of Northeast Asia.

CONCLUSIONS The formation of the Asia-Pacific energy partnership would not only warrant stable economic development of the region. This energy partnership will help to reduce the confrontation between different states or groups of states in the struggle for resources that serves as a basis for most of the territorial disputes in the Asia Pacific. Therefore the task can be set in a broader way. There is no regional structure of comprehensive security in the AsiaPacific area. While in Europe, there is the Organization of Security and Cooperation in Europe (OSCE), the security architecture in the Asia Pacific is limited by a net of bilateral treaties of several states with the U.S.

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The experience of Russia’s relations with Western Europe has proved that long-term economic partnership and joint work on big-scale projects serves as the best way to lessen tensions and promote trust and confidence between states. The formation of an Asia-Pacific energy partnership could be a weighty contribution to a comprehensive regional security. Let us not forget that the history of the European Union started with the formation of the European Coal and Steel Community in 1950.

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THE RISE OF ASIA AND RUSSIA’S OPTIONS Mark Hong

OVERVIEW OF REGIONAL COOPERATION A notable feature — conspicuous by its absence — is the lack of perception of Russia threatening regional peace and stability. Previously, during the Cold War, the Asia-Pacific region was divided between the two camps, and members of one side would perceive the other great power as a security threat. The ending of such perceptions of Russia is a relatively new trend, and it signifies Russia’s post-cold war transformation. This does not in any way diminish the reality of Russia’s profound nuclear and strong conventional military capabilities, factors that will ensure Russia’s strategic significance for decades. Yet perceptions of Russia’s current and future roles differ between Southeast and Northeast Asia. Whereas Southeast Asian countries tend to see post-cold war Russia as a distant but big power with which they want to have dialogue and relations of “equidistance”; the outlook is different in Northeast Asia, where tangible strategic interests and challenges involve Russia and regional countries. In this region, the most challenging issues are the Northern Territories dispute with Japan and the Korean Peninsula problems. Northeast Asia also includes Russia’s most notable foreign policy success in the Asia Pacific — its “strategic partnership” with China. 

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One key question is: how should Asian countries engage Russia in the Asia Pacific? One way perhaps is to help develop the Russian Far East’s economy as the key to integrating Russia successfully in the Asia Pacific. One approach is through energy cooperation: the energy resources of the Russian Far East and Siberia are so great and valuable that they could alleviate the Asia-Pacific region’s dependence on Middle Eastern oil. Russia’s current stable domestic situation — as compared to the Middle East Arab states faced with domestic turmoil — increases the attractiveness of Siberian energy resources to Asia-Pacific countries. But in general, Russia’s engagement with the Asia Pacific will only realize its full potential once Russia is actively engaged in the region. Russia’s place in the Asia-Pacific region (APR) is as yet not well defined, hovering between Moscow’s grand visions of its geopolitical role in balance of power strategies, and Russia’s sometimes “low profile” in the region.

WHAT RUSSIA CAN OFFER TO THE REGION? Russia could take some steps, such as: 1. Using its chairmanship in 2012 of the APEC Summit, Russia can offer its vision of a possible regional architecture, taking into account such trends as the rise of Asia; 2. Russia could also try to offer its views on regional security, which should be based on principles such as: inclusiveness; equality; respect for national sovereignty; respect for international law; deal with potential regional hotspots (Korea); and most importantly, find a framework to handle U.S.-China tensions; 3. Within the context of the G20, of which half are Asia-Pacific countries, Russia could suggest how Asia-Pacific members could cooperate, also in the context of a rising Asia (with large and growing foreign reserves); 4. As a component state of Northeast Asia, Russia should try to help resolve the Korean Peninsula problems, particularly as North Korea faces severe problems (famine; political succession); and help to define a cooperation agenda for this region, such as non-traditional security; 5. Russia should get its domestic affairs in order first, such as socio-economic growth, deal with domestic hotspots (the Caucasus), and further develop its soft power.

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PRELIMINARY STEPS Russia can take some preliminary steps, as follows: 1. Focus on developing its Siberian and Far East provinces, so that they can truly participate in the economic dynamism shown by rising Asia; 2. Develop strategic and friendly, cooperative relations with China, Japan, the two Koreas, perhaps in a Northeast Asia Regional Cooperation architecture — similar to the Greater Mekong Region cooperation; 3. Further strengthen cooperation in the Shanghai Cooperation Organi­ zation (SCO); 4. Be part of the rising Asia developments, such as a potential East Asia free trade agreement (FTA); 5. Further attempt to negotiate a Friendship Treaty with Japan, that should include the end of World War Two formally, and amicably resolve the territorial dispute; 6. By virtue of its geostrategic position as the Eurasian bridge, Russia as an ASEM member could try to strengthen Europe and Asia’s socioeconomic relations and infrastructure connectivity — road and rail and maritime (Arctic) and aviation links; people-to-people and institute-toinstitute links such as MGIMO and ISEAS; 7. After the 2008–09 global financial crisis, one of the greatest global challenges is how to deal with global macroeconomic rebalancing, namely the growth of Asian Forex reserves and the need for western economies to reduce their trade and financial deficits; Russia as an exporter of oil and gas will have growing Forex reserves, and so can play a critical role in global macroeconomic rebalancing as well.

RECENT VIEWS OF RUSSIAN PRESIDENT MEDVEDEV Since the views of the Russian President Medvedev and Russian Foreign Minister Sergei Lavrov are authoritative, we quote their views as follows: according to President Medvedev, during a visit to the Russian Far East in July 2010, Russia should play a bigger role in the Asia-Pacific region and these enhanced ties with the Asia-Pacific region should help increase the living standards and competitiveness of Russia’s Far East. The population in this strategically important region has decreased by a quarter in the past twenty years, Medvedev said:

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We have failed to stop the exodus so far. This is the most dangerous trend which we have to deal with in a permanent regime. Developing strategic ties with countries of the Asia-Pacific region is an important part of the Far Eastern strategy. Russia will play an active role in the regional international organisations. We shall offer our vision of how to build up a polycentric non-bloc security and co-operation architecture in the region.

In the economic sphere, the government may introduce selective pre­ ferences for Far East businesses, Medvedev noted. However, overwhelming preferences for regions were not necessary, he stressed at a meeting with the Jewish Autonomous Region’s small businesses. “If we introduce total preferences for example, for the Far East, the Kaliningrad Region or Siberia, it will not work in the long-term”, he noted. Despite the economic downturn, trade with Asia-Pacific region countries continues to grow. Russia’s bilateral trade with China increased by more than 50 per cent over the first quarter of 2010 compared with the same period in 2009, and Russia’s trade with the Republic of Korea was up by 80 per cent in the same period. He stressed that an important task for Russia in the Asia Pacific was to strengthen its role in the region’s organizations, namely, in Asia-Pacific Economic Cooperation (APEC), the SCO, the Association of Southeast Asian Nations (ASEAN), and the BRIC (Brazil, Russia, India, China) group. Russia was offering its vision of how to build a polycentric and non-bloc based security and cooperation architecture in the region. The APEC forum, of which Russia will hold the presidency soon, offers new opportunities for Russia to strengthen its role in the region and to help it in implementing its long-term social and economic strategy and foreign economic strategy for the period to 2020, he said. Russian Foreign Minister Sergei Lavrov, in an interview published by the Straits Times on 14 March 2011,1 noted that the Asia-Pacific region was one of the most important priorities for Russian foreign policy. Tackling regional security issues is impossible without Russia, he added. During 2010, Russian participation in the multilateral mechanisms of the Asia Pacific had reached a new qualitative level. Russia has joined the East Asia Summit (EAS) and Asia-Europe Meeting (ASEM). Strengthening its participation in the SCO was one of Russia’s policy priorities. Mr Lavrov stressed the principle of equal and indivisible security, which was the idea behind the Russo-China initiative proposed in September 2010 as well as underlying the approach to enhancing regional security agreed upon at the Russo-India Summit in Delhi in December 2010.

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VIEWS OF THE RUSSIAN NATIONAL COMMITTEE OF THE COUNCIL FOR SECURITY COOPERATION IN THE ASIA-PACIFIC (CSCAP) Another source of authoritative views is the views formulated by the Russian National Committee of CSCAP. The Pacific Strategy of Russia was drawn up by the Russian National Committee of the CSCAP for a meeting with President Medvedev in July 2010. Without going into details, the important points stressed were: • The twenty-first century imperatives offer a new view of Russia as a Euro-Pacific country, not merely European or Eurasian. This implies Moscow has to come up with strategic initiatives on a continental scale, using the benefits of the European integration experience. These should be economic initiatives in the first instance. • Economic integration in the Asia-Pacific region is implemented through preferential trade agreements (FTAs), of which more than fifty have been signed. The mushrooming FTAs may spread further. • Russia should integrate into the Asia-Pacific region through intensive economic and social development of Siberia and its Far East. • Moscow should step up its dialogue with ASEAN.

RUSSIA-ASEAN RELATIONS The ASEAN-Russia Dialogue Partnership can be traced back to July 1991 when the then Deputy Prime Minister of the Russian Federation attended the opening session of the 24th ASEAN Ministerial Meeting (AMM) in Kuala Lumpur as a guest of the Malaysian Government. Russia was subsequently elevated to a full Dialogue Partner of ASEAN at the 29th AMM in July 1996 in Jakarta. Hence, 2011 is the 15th anniversary of this partnership. A milestone in ASEAN-Russia dialogue relations was reached when Russia acceded to the ASEAN Treaty of Amity and Cooperation in Southeast Asia (TAC) on 29 November 2004. Following the ASEAN Charter coming into force, and based on the long-standing ASEAN-Russia dialogue relations, Russia accredited Ambassador Alexander A. Ivanov as its ambassador to ASEAN. In December 2005, ASEAN and Russia concluded the agreement between the governments of the member countries of ASEAN and the government of the Russian Federation on economic and development cooperation. The agreement provides for favourable conditions for the development of

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multifaceted cooperation between the two sides in economic, trade and investment, scientific, technological and cultural areas. Key indicators such as total trade and foreign direct investment (FDI) between ASEAN and the Russian Federation have grown over the years. ASEAN’s total trade with Russia has grown from US$4.4 billion in 2006 to US$6.8 billion in 2009. Total FDI from Russia to ASEAN has also grown substantially from US$1.2 million in 2006 to US$157.3 million in 2009. ASEAN-Russia cooperation is undertaken under the framework of the ASEAN-Russia Comprehensive Plan of Action (CPA) to promote cooperation between ASEAN and Russia for the period 2005–15. The CPA is aimed at promoting and enhancing ASEAN-Russia dialogue relations through assisting ASEAN in its efforts in regional economic integration and community building. A roadmap was adopted to improve the implement­ ation of the CPA. The ASEAN Centre at the Moscow State University of International Relations (MGIMO) was officially launched in Moscow on 15 June 2010 to help strengthen ASEAN-Russia relations. In the area of cultural cooperation, ASEAN and Russia have finalized an ASEAN-Russia Agreement on Cultural Cooperation, which promotes and develops cooperation and exchanges in the fields of music, theatre, archives, libraries, museums, cultural heritage, dance, visual arts, film, copyright, folk-crafts, decorative and applied arts, circus and other artistic forms. The agreement was signed at the second ASEAN-Russia Summit held in October 2010 in Hanoi. In the field of science and technology, ASEAN and Russia have adopted a plan of action of the ASEAN-Russia Working Group on Science and Technology (S&T) for 2007–11. This plan provides for enhanced cooperation between ASEAN and Russia in S&T, including the promotion of dialogues among S&T officials, scientists and researchers, and encouragement of technology transfer and exchange. At the ASEAN Post-Ministerial Conference with Russia in Hanoi in July 2010: • The Ministers welcomed the good progress in implementing the ASEANRussia Comprehensive Programme of Action to Promote Cooperation for 2005–15; discussed preparations for the 2nd ASEAN-Russia Summit that will be held later in the year, including recommendation for a draft statement, convening of the Russia-ASEAN Business Forum; the ASEAN-Russia Cultural Cooperation Agreement; discussed and agreed on specific activities in preparations for the commemoration of the 15th Anniversary of ASEAN-Russia Dialogue Relations, including the holding of days of Russian culture in ASEAN member countries.

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On energy cooperation, the ASEAN Senior Officials on Energy (SOME)-Russia Consultation held on 21 July 2010 in Dalat, Vietnam, adopted the ASEAN-Russia Energy Cooperation Work Programme 2010–15. The Work Programme is a significant development, marking the willingness and readiness of ASEAN and Russia to deepen mutual understanding and cooperation, especially on the capacity-building programmes, development of alternative and renewable energy resources, energy infrastructure, peaceful use of nuclear energy, coal, and oil and gas exploration. Several activities have been planned in 2010–11 to begin the implementation of the Work Programme. ASEAN and Russia are also working on an ASEAN-Russia disaster management cooperation work plan as a concrete step to intensify cooper­ ation in this field. The work plan is expected to be adopted at the next ASEAN Committee on Disaster Management (ACDM)-Russia Consultation in 2011. A joint activity, Arrangement with the National Crises Management System in Russia will be implemented in 2011. ASEAN and Russia are also exploring cooperation in other areas including pandemic diseases, sustaining natural resources, environmental conservation, food security, ICT, and Initiative for ASEAN Integration (IAI). For the future, perhaps the two sides should consider discussing a possible ASEAN-Russia FTA. Russia is not prominent in negotiating FTAs, either with Singapore or ASEAN. Secondly, Russia should consider joining the Trans-Pacific Partnership, which is expanding from the present four, to nine members.

RUSSIA-CHINA RELATIONS Entire books have been written about the complexity of Sino-Russian relations, so this paper shall mention only a few salient points. First, there exists a very deep Russian ambivalence about China, centred on fears about the future of Siberia and the Russian Far East, due to demographic trends. There is much Russian concern about Chinese economic power, exempli­ fied by its overtaking Japan, to become the world’s second largest economy in 2010. The essential point to note is that because of nuclear arsenals and other weapons of mass destruction, which all great powers have amassed, it is inconceivable for great powers to go to wars with each other, because of the immense destruction and suffering they can inflict upon each other. Occasional tensions may exist between great powers, as between China and the USA, but the more likely conflicts are between great powers and smaller

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powers, such as the United States and Saddam Hussein of Iraq. Another form of conflict could take the form of economic and trade tensions, such as that between the United States and China over currency, trade deficits, etc. All great powers now recognize these realities, and have taken active steps to create channels, such as the high-level economic and security dialogue between the United States and China, regional organizations such as APEC, the EAS, ASEM, SCO and others, which offer opportunities for dialogue, cooperation and mutual understanding. Ostensible cooperation in the SCO continues, and Russia has agreed to supply oil and gas to China, as well as large arms sales, but it would seem that Russia trusts India more than China. On its part, China is aware that it should not alienate Russia, lest it be completely surrounded by unfriendly countries. China is also interested in Siberia’s fresh water resources, in view of the shortage of fresh water in Northern China. While Russia is busy trying to regain its influence in states once part of the former Soviet Union and in Eastern Europe, it is also warily watching China’s increasing economic influence in Asia and the world. As President Medvedev recently said if Russia does not secure its presence in the Far East, it could eventually “lose everything” to the Chinese. It is in these contexts that we should view Sino-Russian relations, despite the deep ambivalence and suspicion that exists. China needs Russian supplies of oil and gas and advanced military equipment, and Russia needs Chinese markets and funding for some of its energy projects, hence there is mutual dependence as well. Secondly, some observers think that Russia’s integration into the AsiaPacific region has been in part dependent on China’s willingness to agree to, and to make space for Russia to exercise its legitimate political and military presence in the region, and in part on Russia’s own domestic preoccupations, arising after the collapse of the Soviet Union in 1991. Other observers blamed mistakes Russia had made in not fully participating in Asia-Pacific integration from 1992–2005, and expected that post-2009 Russian integration will be different as Moscow attempts to diversify its relations in the region, culminating in Russia’s hosting the APEC 2012 Summit. Thirdly, there is a human security deficit for the people of the Russian Far East, which some Russians believe will be solved by better integration into the AsiaPacific region. Fourthly, China has been very astute in projecting its soft power, for instance with ASEAN, with whom China has signed a FTA. China was the first great power to sign the ASEAN Treaty of Amity and Cooperation; worldwide, China has set up over 350 Confucius Institutes — what about Russia? It is notable that many great powers have various

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media organizations to express their views and to project their soft power, the UK has the BBC; USA has CNN and the New York Times; China has the CCTV; the Arabs have Al-Jazeera: Russia the Russia Today English TV channel.

RUSSO-INDIAN RELATIONS Much has been said and written about Russo-Indian relations as it is an old and time-tested relationship, dating back to the period of Indian Prime Minister Indira Gandhi. There is a long economic and strategic history of partnership between both countries that began in the 1970s when both sides became allies. With so much already written, suffice it to note the following points: India, as a swing state in Asia’s international relations, is well aware that Russia remains the balance holder within the region. During the Russian President Medvedev’s visit to India in December 2010, he and Indian Prime Minister Manmohan Singh signed more than twenty agreements ranging from supplying India with natural gas, reaffirming a commitment for a third Indian nuclear power plant to be built by Russian engineers, and a contract for the joint development of between 250–300 fifth generation fighter planes. Over the next fifteen years, it is estimated that every second overseas nuclear plant built by Russia will be in India, while India will buy more than half of Russian arms exports in the next five years. It is thus no surprise that Russia is making so much effort to court India, after all, its two main exports — energy and arms — are exactly what India wants. But just as Russia sees new opportunities in a rising India, India still sees value in a Russia that might seem to some observers to be declining. There are strong reasons to believe that Russia could play the decisive card in Asia’s future balance of power. First, the common wisdom that Russia is moving closer to China in order to counterbalance the United States and Western Europe and U.S. Asian allies is not correct, meaning that the Russian swing role is still very much in play. Secondly, Russia will have as much reason to balance against China’s rise, as encouraging it. The key is to control the Rimland of (western, southern and eastern parts) Eurasia. President Medvedev in an interview with the Times of India on 20 Dec­ ember 2010 said: High technology is at the top of our agenda. An integrated program of cooperation in the areas of science, technology and innovation for the period to 2020 will be signed during the visit. Major cooperation

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areas include energy, including nuclear energy, metallurgy, oil and gas production, transportation and outer space exploration. We have identified a number of long-term projects in these areas. Cultural and humanitarian exchanges are important as well. An Indian cultural festival is scheduled to be held in Russia in 2011, while a Russian cultural festival in India will take place in 2012.

THE TRILATERAL STRATEGIC BALANCE Long-sighted strategists can see the potential for a grand alliance of convenience that could constrain Chinese influence in Central, South and East Asia. How Russia plays its strategic cards in this context will go a long way in shaping Eurasia. First option: Russia may choose to tilt the balance against China in the future — a view that is also backed by their diverging world views. Second option: should China continue its rise, the other great powers, the United States, Russia, India and Japan might seek a new multipolar balance of power in Asia, even if this is led by the U.S. In contrast, China sees the coming regional and world order as a bipolar one defined by U.S.-China competition, with the other powers relegated to the second tier, something that would be very difficult for Russia to accept. This is because a declining Russia, for instance, in terms of population, still retains significant national and institutional strengths, such as its nuclear arsenal and as an energy superpower. Besides, it is a global supplier of advanced weaponry and technologies. These factors would guarantee Russia a prominent position in any future strategic military balance. Furthermore, Russia will continue to retain its veto as a permanent member of the UN Security Council. Finally, Russia has the perspective of seeing itself as a natural great power. All these factors will ensure that Russia remains a global and Asian actor. It will retain significant ability to influence, disrupt or complicate the plans and aims of the other great powers, even if it is no longer so dominant, as the former Soviet Union was. India and China thus might still view that Russia continues to hold the decisive card in the Asia-Pacific region, and their future behaviour will be premised on this belief. It is probable that China will try to keep Russia on its side, and so will India.

RUSSO-JAPAN RELATIONS This is a conflicted relationship that dates back to the Russo-Japanese war of 1904–05. It grew out of the rival imperial ambitions of the two empires over

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Manchuria and Korea. These relations worsened in late 2010; the main issues are the territorial dispute over the four northern islands and the lack of a formal treaty marking the end of World War II; other issues include the supplies of oil and gas from Siberia. Moscow’s apparently random decision to increase tensions with Tokyo over the disputed Kurile Islands provoked concern in Japan. Yet, the recent surge in bilateral diplomatic heat over the issue should not be regarded as unexpected. The recent visits to the Kuriles by senior Russian defence officials and military personnel were long-planned and consistent with the general course of reforming the conventional armed forces as well as elements of the Russian operational-strategic exercise Vostok 2010. This exercise included a controversial rehearsal of the defence of Etorofu Island (Novvy Region, 6 July 2010). Follow-up trips by Russian defence officials were inevitable, particularly in the aftermath of the controversy elicited by President Dmitry Medvedev’s visit to the islands in November 2010. Observers placed the re-emergence of the dispute in the longer-term context of the bilateral relationship, and linked the toughening of the Kremlin’s position to domestic issues within Japanese politics. The emphatically inflexible Russian posture over the Kuriles is in stark contrast to the foreign policy of the Perestroika era, which in Russian popular perception was regarded as a period of weakness and unilateral concessions. Moreover, Moscow’s paramount interest as it looks east is China. Beijing’s US$25 billion loan to Rosneft and Transneft during the 2008–09 economic crisis in exchange for Moscow building a branch of the East-Siberia-Pacific Ocean pipeline to carry Russian oil to China, promoting the “strategic partnership”, and the unstoppable rise of China are factors driving the Kremlin to view not Japan, but the U.S. as a geopolitical counterbalance to China in the Asia-Pacific region. In sharp contrast to the relatively poor Russo-Japan relations, U.S.Japan relations have been improving, partly due to worsening relations between Japan on the one hand, and China-North Korea, on the other hand. The U.S. 7th Fleet has assisted Japan by putting the full power of the 7th Fleet into assisting with Japanese disaster relief, using 20 ships, 140 aircraft and more than 19,000 sailors and marines. These U.S. personnel worked in support of the Japanese Self-Defence Forces to deliver relief supplies ashore, surveying and clearing ports, providing logistical support to rescuers, and conducting aerial searches and surveys to help the Japanese.

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RUSSIA NEEDS TO GREATLY EXPAND ITS SOFT POWER There are some countries which attract world attention and immigrants, such as the United States, Canada, and Australia because of their economic opportunities, attractive lifestyles, freedoms and positive images. Conversely, there are also other countries from which people run away, like Haiti, Zimbabwe. Soft power is very influential, now that hard military power is almost unthinkable to use between great powers. Russia has tremendous potential for soft power, due in part to its beautiful nature and scenery, its clever people and rich Russian culture, with world famous writers, composers, etc. There have been about twenty-three Russian Nobel Prize winners to date, which illustrate its strengths in science, technology and literature, which should be leveraged. Another source of strength is its strong economy, which is growing well. The Russian economy is the 10th largest in the world by nominal value; it is the 6th largest by Purchasing Power Parity. From 1995 until 2010, Russia’s average annual GDP Growth was 3.27 per cent reaching an historical high of 12.00 per cent in December 1999 and a record low of –10.80 per cent in June 2009. So Russia should play a significant economic role in the world. Furthermore, Russia has an abundance of natural gas, oil, coal, and precious metals and is also rich in agriculture produce. As of 2011, Russia’s capital, Moscow, now has the highest billionaire population of any city in the world. In 2007, there were only 2.2 million visitors in Russia; in 2010, 11.6 million tourists visited Singapore, which attracts many tourists to visit by facilitating and encouraging tourism. For instance, it does not require tourists to obtain a letter of invitation in order to visit Singapore. One country, South Korea, projects its soft power very well. For instance, it organized a successful festival to celebrate South Korea’s diplomatic relations with Russia. The South Korean Culture Ministry, together with its Russian counterpart, held an opening ceremony at the Bolshoi Ballet Theatre in Moscow in April 2010, signalling the beginning of a sevenmonth-long cultural exchange ahead. The Korea-Russia Festival featured colourful performances of drama, music and ballet, as well as exhibitions and a film festival through to the closing ceremony at the National Theatre of Korea on November 2010. Some of the most eagerly awaited program­ mes included a joint performance by the Korea National Ballet and Russia’s Bolshoi Ballet on a single stage for the first time. One good example of Russian soft power was the disaster aid relief provided to Japan’s earthquake/tsunami victims: a Russian flight took fifty

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more rescuers and tonnes of rescue equipment to the tsunami-hit area in northeastern Japan. Two other Russian teams were already in Fukushima. In a related development, Russian nuclear safety experts flew to Japan to provide advice. Singapore also provided a rescue team, supplies and funds for Japan.

IMPLICATIONS OF THE RISE OF RUSSIA In a sense, history has turned full circle with the return to the Asia-Pacific affairs of Russia, now that it has risen. In the 1900s, Russia was a full player and competing with Japan over Manchuria and Korea. Now that Russia has risen post-2000, as evidenced by its current political stability, its sustained economic growth and growing interest in regional affairs, as shown by its membership in APEC, EAS, ASEM, ARF, SCO, Six-Party Talks on North Korea, Russia should match its huge and rich human and natural potential by taking an active role in the region. If it plays its swing role astutely, Russia can help build the Asian community by cooperating with regional partners, such as China, Japan, Korea and ASEAN. Regional states must now factor in Russia and its interests in their calculus and regional policies.

CONCLUSIONS • Russia is a country with fabulously rich, human and natural and mineral resources; it should play a prominent global role in world civilization and the global economy, commensurate with its resource endowment; • But it has constantly underperformed its potential; • The world has also not yet recognized “The Rise of Russia”, especially since the Arab revolts in the Middle East has highlighted the stability and importance of Russian energy resources. • It has the psychology of being a superpower, based on its huge territory, rich resources, nuclear arsenal, powerful Armed Forces, United Nations’ Security Council permanent seat and veto, science and technology and defence industry; space and missile capabilities; one operational aircraft carrier, the Admiral Nikolai Kuznetsov (the U.S. has twenty carriers), but Russia plans to build two others in the near future; • It has a unique bridging role as an Euro-Pacific country, which it should exploit, now that it has joined the EAS and ASEM, by contributing brilliant new ideas in regional security and regional architecture; • Whilst the United States and Japan are perceived to be in relative decline, due to economic and debt problems, China, India, Russia and Brazil

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(BRIC) are described as “The Rising Powers”, in particular, due to the popular revolts in Arab countries (such as Libya). Arab oil production may decline, which is a good opportunity for Russia as an energy exporter. • China knows how to play the game of winning friends and influencing people very well — examples from ASEAN will suffice — Russia should similarly also expand its soft power and cultural influence.

Note

1

Robert Karniol, “Russia ‘homes’ in on Asia-Pacific Ties: Interview with Russian Minister of Foreign Affairs Sergey Lavrov”, Straits Times, 14 March 2011.

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ASEAN REGIONALISM AND THE FUTURE OF ASEAN-RUSSIA RELATIONS Rodolfo Severino and Moe Thuzar

This chapter gives a regional perspective on the prospects of the Association of Southeast Asian Nations’ (ASEAN) relations with Russia. It looks at how the accomplishments of ASEAN and its central role in broader regional arrangements present new opportunities for the future of ASEAN-Russia relations.

ASEAN’s REGIONALISM EFFORTS Mechanisms like the ASEAN Regional Forum (ARF), ASEAN Plus Three (ASEAN+3), and the more recent East Asia Summit (EAS) are where ASEAN procedures and the “ASEAN Way” dominate: ARF for security discussions, ASEAN+3 for community-building in economic and functional areas, and the EAS adding a broader strategic dimension to the ASEAN+3 process. Each of these forums contributes to new approaches in addressing issues and challenges that ASEAN faces, and new opportunities for ASEAN leadership in the twenty-first century. ASEAN is the driver occupying a central seat in these regional processes. It also serves as a bridge between the newer ASEAN states and the Dialogue Partners. ASEAN gave renewed momentum and justification to Dialogue Partners that desired to continue to be politically engaged with Southeast 22

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Asia through development assistance but could not justify to their electorates assistance to a region with members enjoying higher per-capita incomes than they do. The ASEAN Secretariat describes these processes as part of ASEAN’s “concentric approach” to ensuring the peace, security and prosperity of the region. ASEAN is now in transition. The influence of ASEAN’s founding generation has gradually ceded to second or third generation leaders at ASEAN’s helm with different takes on the ASEAN way and regionalism, spurred by the growing imperatives for reform and change in each country. With the entry into force of the ASEAN Charter, ASEAN members will now have to balance issues such as governance, human rights and democracy with tensions generated by the pressures of change. Building on its formal and informal mandates and mechanisms to deal with regional issues, as well as its willingness to learn from its shortcomings and retool itself, ASEAN is now embarking on new forms of regionalism. It is redefining its community-building process; leveraging on its strategic advantage to increase greater interest in regional cooperation as a vehicle for intra- and inter-regional relations; and making a more conscious move from dialogue to action on issues of governance and democracy. ASEAN’s leadership is taking a more proactive stand on these issues, while grappling with the inevitable tensions generated by expanded membership and the dilution of what constitutes an ASEAN identity; maintaining the fine balance between deeper engagement with, and the need for distance from, external partners; and the tug-of-war between sovereignty and the need for functioning independence, especially in the economic arena. The increased socio-cultural diversity brought about by expanded membership also poses a challenge to realizing the ambitious goal ASEAN has set for achieving a single integrated community by 2015. The role that ASEAN has set for Dialogue Partners to play is in assisting it to acquire development cooperation. ASEAN affirms that development cooperation is an integral part of ASEAN’s external relations. It is described as “a glue to bond the strengthening partnership between ASEAN and its dialogue partners” and seen as the necessary means to create a comfort­ able environment for both sides. Development cooperation with Dialogue Partners — carried out largely through collaborative projects that require the participation of all the ASEAN members — falls into four broad categories supporting ASEAN’s integration efforts: strengthening regional economic integration; assisting the narrowing of development gaps through physical

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interconnections and capacity building; addressing transnational concerns; and promoting people-to-people contacts. With the focus on achieving a single market by 2015 (through the ASEAN Economic Community) driving the regional integration agenda, the dialogue process again becomes a useful instrument for collaborative activities between ASEAN and its Dialogue Partners. Many projects and plans deliberated on in each dialogue mechanism are about enhancing economic linkages to tap others’ markets, facilitating investment flows, and promot­ ing tourism and other economic activities, as well as building capacities for carrying out important economic functions. How do ASEAN-Russia relations fit into all of this? And, after fifteen years of dialogue relationship, what does the future hold for ASEAN-Russia relations?

ASEAN AND RUSSIA ASEAN’s relations with Russia are anchored on the dialogue relationship; the ASEAN Regional Forum; the senior officials’ consultations; the Joint Cooperation Committee; science and technology linkages; and the ASEANRussia Summit Meeting.1 ASEAN’s relations with Russia started earlier than the formal estab­ lishment of dialogue partnership. In 1991, the Russian Deputy Prime Minister was invited to the annual meeting of the ASEAN Foreign Ministers as guest of the host and chair, Malaysia. In the capacity of “consultative partner”, Russia became a founding member of the ASEAN Regional Forum (in 1994) before it was formally admitted as an ASEAN Dialogue Partner in 1996 (together with China and India). What sets Russia apart from other Dialogue Partners of ASEAN was the absence of a dialogue partnership fund, the “entrance fee” for a Dialogue Partner to establish relations with ASEAN, from which financial assistance for collaborative projects is drawn. It was not until 2005 that ASEAN and Russia established the ASEAN-Russian Federation Dialogue Partnership Financial Fund or DPFF to support the implementation of projects and activities under the “Progressive and Comprehensive Partnership” agreed to by the First ASEAN-Russia Summit that year. Russia had acceded to the Treaty of Amity and Cooperation in Southeast Asia the year before, in 2004. Even then, the amount of contribution to the DPFF was not worked out. Collaborative projects started only after Russia’s initial contribution of US$500,000 to the DPFF in 2007. In 2010, the total contribution from Russia to the DPFF since 2007 had amounted to US$1.75 million.

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Russia has committed to contribute US$1.5 million to the DPFF annually, starting 2011. In all these processes, the politically-led nature of ASEAN-Russia relations is evident. This is no different from other dialogue relations; a sovereign state — or, in the case of the European Union, a group of sovereign states — enters into a partnership with ASEAN largely because of political and strategic considerations. Russia’s strategic relevance to ASEAN can certainly be invoked. ASEAN’s interest in establishing dialogue relations with Russia arose mainly from strategic reasons, to ensure regional peace and stability in the post-Cold War era. It was not for the official development assistance or the attraction of trade; indeed, ASEAN-Russia trade is a minimal figure compared to Dialogue Partners like China. ASEAN-Russia trade in 2009 was US$6.8 billion compared to the US$178.2 billion of ASEAN-China trade in the same year (Russia’s share of total trade with ASEAN is 0.4 per cent). It was higher in 2008 (US$9.8 billion) but dipped due to the global economic crisis. Still, the trade figures for 2009 indicate a steady increase from the US$4 billion in 2003. It should be noted, however, that this is an aggregate figure which does not reflect the volume of trade between Russia and each ASEAN member. What, then, should ASEAN-Russia relations build on for the future? To rephrase a question posed in earlier essays on ASEAN-Russia relations, are ASEAN-Russia relations “sufficiently substantive”?2

THE PRESENT COURSE: CHARTING NEW DIRECTIONS ASEAN and Russia discuss collaborative activities through the political consultations between senior foreign ministry officials, and through the ASEAN-Russia Joint Cooperation Committee, which was formed to manage development cooperation, supported by a Joint Planning and Management Committee (for projects), a working group on trade and economic cooperation and a working group on science and technology. These were supplemented in 2010 by the ASEAN Senior Officials on Energy (SOM-E)-Russia Consultation which adopted the ASEAN-Russia Energy Cooperation Work Programme; and the consultations between the ASEAN Economic Ministers and their Russian counterpart. Additional areas of development cooperation have been listed in the “Comprehensive Programme of Action to Promote Cooperation” adopted at the Second ASEAN-Russia Summit in 2010. In addition to science and technology

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and energy, ASEAN-Russia cooperation will look at collaboration in building capacity for small and medium enterprises (SMEs), tourism and human resource development, information and communication technology (ICT), connectivity, environment, higher education, culture, sports, disaster management and counter-terrorism. At the Second ASEAN-Russia Summit in October 2010, both sides stressed the importance of cooperation in the fight against terrorism, including implementing strategies to “address underlying causes of terrorism, and exchange of information in the areas of intelligence”.3 The ASEAN-Russia Working Group on Counter-Terrorism was established that year, as was the ASEAN-Russian Federation Senior Officials Meeting on Transnational Crime (SOMTC-Russia), which is now held annually. The ambit of these consultations covers a wide range, including trafficking in persons (mostly women and children), smuggling of migrants, sea piracy, arms smuggling, money laundering and illegal drug trade. The ASEAN-Russia Trade, Economic and Investment Cooperation Roadmap and the ASEAN-Russia Disaster Management Cooperation Work Plan are being finalised. Contact has been established — at the working level — between the National Emergency Management Centre of Russia and the ASEAN Coordinating Centre for Humanitarian Assistance on Disaster Management (AHA Centre). On its part, Russia supports ASEAN’s move for closer regional integration. At both the 2010 ASEAN-Russia Summit and the recent meeting of foreign ministers, the joint statements highlight from the outset Russia’s continued support for maintaining ASEAN centrality in the evolving regional architecture, which includes the East Asia Summit (EAS), ARF and a relatively new mechanism in ASEAN — the ASEAN Defence Ministers Meeting Plus (ADMM-Plus). The ADMM-Plus is so called as it expands the scope of formal consultations that ASEAN Defence Ministers have with counterparts from Dialogue Partner countries into a regional security architecture that involves Russia, the United States and China. Singapore’s Deputy Prime Minister Teo Chee Hean has described the ADMM-Plus as having the potential to “provide a platform for practical cooperation between ASEAN and its partners on key security issues, especially on non-traditional and transnational challenges”. ASEAN-Russia cooperation, whether in defence or in ostensibly economic matters, ought to be seen in strategic terms as well as in terms of practical outcomes. ASEAN thus continues to see Russia as “a powerful country, a global player with a constructive role to play in East Asia”. Russia’s geographical

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location, with much of its territory in Asia extending to the Pacific and abutting East Asia, places it in an ideal position as a bridge between East and West. As a member of the Asia Pacific Economic Cooperation (APEC) and the G-8, Russia can help facilitate trade and investment links between East Asia and Europe. In fact, Russia is a key international actor involved in more international and regional organizations and projects than any other state except the United States. This is a strategic advantage that ASEAN-Russia relations should take into account when formulating future directions for trade and economic relations. A recent statement issued by the ASEAN Foreign Ministers and their Russian counterpart on the occasion of the 15th anniversary of ASEANRussia Dialogue Partnership recognizes this advantage. ASEAN and Russia will “make efforts with a view to developing working relations between ASEAN-led arrangements and other key multilateral fora, such as the Asia-Pacific Economic Cooperation (APEC) and the Shanghai Cooperation Organisation (SCO)”.4 Another leverage is Russia’s interest in networking with the world. This is not in the old hegemonic sense of building imperial hierarchies but based on the more pragmatic purpose of matching national interests and establishing the country’s place in the global community. In fact, Russia still maintains a strong presence on the global scene. It remains — albeit in somewhat diminished form — a major power in terms of global political influence and military might. It has an extensive military presence in the Pacific. It is a Permanent Member of the United Nations Security Council and a leading nuclear power. It possesses the world’s largest store of energy resources, with the technology to match. It is far advanced in several areas of science and technology. After a shaky period, its economy is surging. These are the main “selling points” for any country or regional bloc to engage Russia. Based on these considerations, Russia has also been reaching out to the world, and, in its growing network, the ASEAN region is an increasingly important segment. There is now an ASEAN Centre in Moscow, established in 2009, at the Moscow State Institute of International Relations (MGIMO University) of the Foreign Ministry of Russia, on select more information on the ASEAN-Russia dialogue partnership, exchanges in science, culture and education, people-to-people contacts, and research on ASEAN and its member states. At the broader people-to-people level in each country, MGIMO University offers scholarships to Southeast Asian students. The Russkiy Mir Foundation — which has a broad reach of centres in some seventy countries around the world — has established

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centres in Hanoi and Ho Chi Minh City in Vietnam, but not yet in other ASEAN countries.

WHAT DOES THE FUTURE HOLD? The question asked earlier of whether ASEAN-Russia relations are suffic­iently substantive does not yet have an answer. It seems that ASEAN and Russia have only recently found a workable, practical course of action for meaningful, constructive relations. New working groups and mechanisms set up under ASEAN-Russia cooperation have only just begun their work. Their practical effectiveness remains to be seen. It will be easy for the authors to say that ASEAN-Russia relations will be characterized by cooperation. It is not cooperation for the sake of cooper­ ating or for integrating common interests, although common goals and overlapping interests are important as the foundation for the relationship. Will it be feasible to suggest new areas of cooperation and more windows of opportunity for what is still a nascent relationship despite more than a decade of discussion and dialogue? The future of ASEAN-Russia relations depends on how both sides define what they want out of this relationship and the ability to build on areas of common interest that have been articulated in joint statements at summit and ministerial levels. The key factors determining the harmony of this relationship are national interest on the part of Russia and the national interest of each of the ASEAN members, the perceptions that each side has of the other, and mutual trust built through collaborative activities in various fields. That Russia has much to share in developing technology and building capacity is undeniable. Several ASEAN members have received such sharing since the days of the Soviet Union, and continue to do so today under their separate bilateral arrangements with Russia. Capacity-building assistance offered by Russia to ASEAN as a collective group, however, is still limited despite the strong expertise that Russia can offer. The scope is now wider under the Comprehensive Programme of Action and can draw from the human resource development needs highlighted in the second work plan of the Initiative for ASEAN Integration (IAI). In its support of ASEAN integration, Russia is also offering additional assistance to Cambodia, Laos, Myanmar and Vietnam. ASEAN and Russian Foreign Ministers recently identified additional areas of collaboration, including closer people-to-people contacts, with special regard to intercultural dialogue. These aspirations need to be translated into actionable projects across sectors.

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Another area worth exploring is the deepening of business ties between ASEAN and Russia. Russia and individual ASEAN countries seem to be going about this more under bilateral frameworks, although an ASEAN-Russia Business Council exists and ASEAN-Russia Business forums have been held in the past. The process may gain fresh momentum in the future as the Second ASEAN-Russia Summit Joint Statement has committed both sides to invite Russian businessmen to join the ASEAN Business and Investment Summits, and to convene future ASEAN-Russia Business forums on the sidelines of ASEAN-Russia Summits. Russia’s pragmatic emphasis on business can provide the impetus for more exchanges with ASEAN, dealing with the impact of external shocks that affect economies and societies. Strategically, Russia will continue to be an important part of ASEAN’s engagement with major powers (including the United States and China). The emphasis placed on regional cooperation and community-building indicates how ASEAN-Russia cooperation should be structured; Russia’s readiness for closer dialogue and the development of joint approaches to trans-boundary issues and regional priorities stand in its favour. This will also make for more structured partnerships in carrying out ASEAN-Russia cooperation agreements. Russia’s Prime Minister Vladimir Putin rephrased in 2002 an old adage on the appearance of Russia’s strengths and weaknesses. Attributing the adage to Churchill, Putin rephrased it as, “Russia was never so strong as it wants to be and never so weak as it is thought to be.” The adage could also easily apply to ASEAN. Both ASEAN and Russia would do well to remember this in the conduct of future relations with each other. Cooperative relations should not decline into complacency; nor should comparative strengths lie fallow for lack of a competitive element in the relationship.

Notes

1



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3

Rodolfo Severino, “ASEAN Engages Russia”, in ASEAN-Russia Relations, edited by Gennady Chufrin, Mark Hong and Teo Kah Beng (Singapore: Institute of Southeast Asian Studies, 2006), pp. 3–6. Rodolfo Severino, “Russia, ASEAN and East Asia”, in Russia-ASEAN Relations: New Directions, edited by Gennady Chufrin and Mark Hong (Singapore: Institute of Southeast Asian Studies, 2007), pp. 3–13. ASEAN Secretariat, “Joint Statement of the Second ASEAN-Russia Summit, Ha Noi, 30 October 2010”, (accessed April 2011).

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ASEAN Secretariat, “Joint Statement of the Ministers of Foreign Affairs of the Association of Southeast Asian Nations and the Russian Federation on the Occasion of the 15th Anniversary of the ASEAN-Russia Dialogue Partnership, Bali, 22 July 2011”, (accessed July 2011).

References ASEAN Secretariat. “ASEAN-Russia Dialogue Relations”, updated April 2011 on the ASEAN Secretariat website. (accessed April 2011). ———. “Comprehensive Programme of Action to Promote Cooperation between the Association of Southeast Asian Nations and the Russian Federation, 2005–2015”. (accessed April 2011). ———. “Joint Statement of the Ministers of Foreign Affairs of the Association of Southeast Asian Nations and the Russian Federation on the Occasion of the 15th Anniversary of the ASEAN-Russia Dialogue Partnership, Bali, 22 July 2011”. (accessed July 2011). ———. “Joint Statement of the Second ASEAN-Russia Summit, Ha Noi, 30 October 2010”. (accessed April 2011). Armen Oganaesyan and Eugenia Pyadysheva, eds. “Russia-ASEAN”. International Affairs Special Issue, 2010. Moscow: MGIMO-U, October 2010. Katz, Mark. “Is Russia strong or weak”. Article of 10 July 2006 on Spacewar.com website. (accessed April 2011). Ong Keng Yong. “ASEAN and Russia: Partnership for Peace and Prosperity in Asia-Pacific”. Statement delivered at International Economic Forum, Moscow, 9 October 2006. (accessed July 2011). Pushpanathan, S. “ASEAN’s Strategy Towards Its Dialogue Partners and ASEAN Plus Three Process”. Statement delivered at ASEAN-COCI Seminar on ASEAN New Issues and Challenges, Hanoi, 3–4 September 2003. (accessed July 2011). Severino, Rodolfo. “ASEAN Engages Russia”. In ASEAN-Russia Relations, edited by Gennady Chufrin, Mark Hong and Teo Kah Beng. Singapore: Institute of Southeast Asian Studies, 2006. ———. “Russia, ASEAN and East Asia”. In Russia-ASEAN Relations: New Directions, edited by Gennady Chufrin and Mark Hong. Singapore: Institute of Southeast Asian Studies, 2007. ———. Southeast Asia in Search of an ASEAN Community. Singapore: Institute of Southeast Asian Studies, 2006.

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THOUGHTS ON ASIAN COMMUNITY BUILDING Rajiv Sikri

By now, there is a general global consensus that the world today is in a transitional period of strategic uncertainty. The post-World War II international order is ebbing away. This is not so surprising, since it has been around a long time, and even the post-War baby boomers have begun to retire. But there is still no new clearly discernible world order. It may take another decade or so before the pieces of a new global kaleidoscope fall into place. What are the changes that have taken place? The most important change is that the fulcrum of global politics and economics has inexorably moved towards Asia. This will inevitably lead to a shift in the existing balance of power. Asian countries will play a much larger — and a more independent — role in world affairs. There is a growing view that the twenty-first century will be dominated by Asia. Maybe it will, or maybe it will not. In any case, there is little doubt that Asia will play a much larger role in global affairs in the twenty-first century. Like other countries, Russia too has had to readjust its geostrategic perspective to take into account these new realities of the twenty-first century. For centuries, Russia’s gaze was towards Europe, with occasional glances towards the east. This is not unnatural since Russia shares with Europe many common cultural and philosophical roots. Generations of Russian leaders have aspired for their country to join Europe. Europe has also posed the biggest security threat to Russia. Over the last couple of centuries, the existential battles for Russia’s survival have been fought against European 31

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armies — among others, those against Napoleon and Hitler. More recently, it is Europe that was the battleground of the Cold War. However, Russia cannot do without Asia. The strength and the wealth of Russia come from its eastern domains. Without the strategic depth and the natural resources of Siberia and the Far East, Russia would be a greatly diminished great power. The double-headed eagle symbolizes Russia’s compulsions to look both west and east. In the emerging geopolitical realities of the twenty-first century, Russia seems to realize that there has to be a better balance in its foreign policy perspective. That is why it wanted to be part of the East Asia Summit (EAS) and the Asia-Europe Meeting (ASEM). This foreign policy reorientation will also naturally entail some readjustment of Russia’s domestic priorities. There is much talk nowadays about “Asian community building”. Why is it so important? It is obvious that if Asia is to play a leading role in world affairs in the twenty-first century, Asian countries must try to develop some kind of common Asian identity as well as parallel interests. Only then may it be possible to blunt, and hopefully transcend, nationalistic rivalries. At the same time, in a globalized world, non-Asian powers have significant interests in Asia that cannot be ignored as Asians forge ahead. What is therefore needed is a mechanism that harmonizes competing interests within the framework of a balanced security and economic architecture of the region. This is something new for Asian countries. Many hurdles — and difficult challenges — lie ahead. Some of the questions that come to mind are: • Is there a concomitant shared sense of destiny and purpose that brings Asian countries together? • How will Asia handle and harmonize the incipient intra-Asian tensions and competing interests as countries readjust their positions on the global chessboard? • Do Asian countries have a common strategy to tackle the looming global challenges and non-traditional security threats? • Can greater economic integration and interlocking interests enhance security and ensure stability? First, it is essential to be clear what constitutes “Asia”. It was the Greeks who devised the term “Asia”, which meant non-European. The nonEuropean space of the Eurasian continent is a large and diverse space whose constituents have probably more dissimilarities than commonalities. One thing is common: they are not part of the Greco-Roman Christian heritage of European civilization.

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In the modern context, for the purposes of community building, the focus is on “East Asia”. However, East Asia is not so much a geographical or civilization definition as it is a concept, or a politico-strategic construct. If there is to be a geographical limitation for “East Asia”, it should be the lands and nations east of Central Asia, roughly an area from the Bay of Bengal and the eastern Indian Ocean to the western Pacific Ocean. An important criterion of inclusion in an East Asian community should be economic interests, as well as the willingness and ability of its members to contribute to the security, stability and prosperity of this region. Many of these arguments were fiercely debated before a consensus emerged on including India, Australia and New Zealand in the first EAS in 2005. The EAS is only one of many regional frameworks and institutions in East Asia. Among them are the Association of Southeast Asian Nations (ASEAN), Asia-Pacific Economic Cooperation (APEC), ASEAN Regional Forum (ARF), Asia-Europe Meeting (ASEM), ASEAN+1, ASEAN+3, and Asia Cooperation Dialogue (ACD). Why this alphabet soup of confusion? Why are there so many organizations? Don’t they have overlapping functions? How can they function optimally? All these are understandable and to some extent justifiable criticisms. However, neat structures cannot be developed in a region that is so vast and diverse. We may be frustrated with their functioning, yet can it be denied that they have contributed significantly, and continue to do so, to confidence building? They have ingrained the habit of working together. These are the essential first steps towards community building. Comparisons with Europe are misplaced. The uncluttered simplicity of European regional structures today has evolved over many decades. Besides, it required the tragedy of a cataclysmic war to bring European nations together. These structures could not prevent the bloody wars in Bosnia, Kosovo and Serbia. Many countries, including Russia, still have serious security concerns about the current structure and direction of Europe. Yet in respect of com­ munity building, East Asia is much better placed than, say, West Asia, which remains a region of turbulence, intolerance and instability that radiates exceedingly dangerous threats and tensions around the world. One remarkable characteristic of all the regional mechanisms in East Asia is that they have ASEAN at the core. The only exception is APEC — and it is worth reflecting whether its undistinguished record is in any way attributable to the absence of a core of the kind that ASEAN provides to other regional organizations. Building an organizational structure around ASEAN is not only desirable, but also perhaps essential. Why is this so? ASEAN is the original regional organization in Asia. It was set up in the belief that this would enhance the collective security and promote the economic development of

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its members and of the region as a whole. It is to serve the same objective that ASEAN has doubled its membership over the years. Has the ASEAN experiment been successful? Most people think so. Southeast Asia has been transformed over the last four decades. It is more secure and reasonably prosperous. Without the constraining influence of an ASEAN framework, old differences and conflicts among the individual ASEAN member states might have surfaced, and perhaps led to greater involvement of outside powers in the region. Not so long ago, some ASEAN countries seemed to feel that their national interests were better served outside an ASEAN framework. That moment may have passed. Today, Indonesia, ASEAN’s largest member and current Chairman in 2011, is seeking to defuse recent Thai-Cambodia tensions. This is unprecedented. There is another reason why ASEAN should remain united. A weak and fractious ASEAN would undermine the rationale of, perhaps even unravel, the existing ASEAN-centric institutions. Let us not forget that ASEAN is not only the glue that holds its members together with a sense of common purpose and destiny. It has also served to bring together other powers around it. Its central geographical location enables ASEAN to reach out with equal ease to South Asia, Northeast Asia and the western Pacific. One last thing — ASEAN has sufficient, but not excessive, weight of its own. It provides a stable and balanced platform for other powers on its periphery, which are much larger than ASEAN, to engage with one another and with the region. Its neutrality also enhances its acceptability to other great powers. How do we take forward the process of building an Asian community that enhances peace, stability and prosperity in the region? Perhaps a new body is not called for. In that case, among the existing bodies, the EAS appears to be the most suitable and optimal vehicle. Why? • • • • •

It accepts a broader definition of “East Asia”; It is compact, yet includes all the key players; It is ASEAN-centric; It is avowedly open, inclusive, transparent and outward looking; It seeks to provide a forum for dialogue and cooperation on broad strategic political and economic issues of common concern that would promote peace, stability and prosperity in East Asia; • It is a relatively new organization that is flexible enough to be moulded to suit the changing needs of the times — the recent inclusion of Russia and the United States is clear evidence of that.

The EAS started off as a leaders-led forum with a modest and noncontroversial agenda, in other words, as an innocuous talk shop. Five priority

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areas were identified — finance, education, energy, disaster management and avian flu prevention. Since then, the agenda has broadened. New issues that the EAS is looking at are: trade and investment liberalization and facilitation, reform of the international financial architecture, interregional connectivity, health, agriculture and rural development and climate change. Political issues like Myanmar and the situation on the Korean peninsula have also become subjects of discussion. No longer is the EAS a top-down structure. Regular ministerial meetings take place on different issues. Clearly, the EAS has potential to emerge as a serious forum for dialogue on broad strategic political and economic issues as well as an important component of the emerging regional architecture. If that were not the case, it is hard to imagine that Russia and the United States would have wanted to join it. Russia, of course, has been keen from the very beginning, but the change in the U.S. attitude towards the EAS is noteworthy. There are two aspects of community building in Asia. First, there is the economic one. Already, there are many free trade agreements (FTAs) and comprehensive economic cooperation agreements (CECAs) in operation or being negotiated among the member countries of the EAS, spurred on in large part by the failure of the Doha Development Round under the World Trade Organization (WTO) to take off meaningfully. One of the well-understood but little articulated reasons for looking at an East Asian Community was to have a fallback strategy in case the Doha Round fails, as is now increasingly evident. The 2008 global economic and financial crisis has highlighted the role of Asia’s economies in restarting global economic growth. All agree that Asia is going to be the area of economic opportunity in the coming years, and no major country wants to be left out. However, there are going to be some dilemmas on how to comfortably include the two latest entrants to the EAS namely, Russia and the United States in Asian economic community building. Russia is still not a member of the WTO. This poses some difficulties. Perhaps this will change soon. We hope so. Moreover, Russia’s trade with the countries of this region is not very large. It could be much larger, provided Russia is willing to redirect a significant share of its energy resources for the development of the Asian economies. Some choices, perhaps some compromises, may have to be made by Russia. The United States has realized that it must cut down its consumption and increase its exports. It would not want any East Asian economic integration that could affect the access of its products to this large and growing market. For their part, the East Asian countries realize that their export-led model of economic growth depends to a great extent on sales to the huge market of the United States. However, economic

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integration between the United States and East Asia is difficult. The giant U.S. economy can hardly be comfortably integrated with Asian economies even if the United States successfully overcomes internal political hurdles in arriving at economic integration arrangements with other countries. A new mechanism promoted by the U.S. is the Trans-Pacific Partnership. But it is still at a nascent stage, and the major economies of Asia are not yet part of it. At best, it is likely to be yet another addition to the existing cross-cutting regional trading arrangements. There is reason for greater optimism on the security side of community building. The ARF has been around for about fifteen years, but its record has been patchy. Some think it has become too unwieldy. That is where the recent setting up of the ASEAN Defence Ministers’ Meeting+8 (ADMM+8) is significant. The ADMM+8 has the same membership as the EAS, but it is at the ministerial level. In that sense, ADMM+8 has the potential to feed into the EAS and give the latter’s deliberations more strategic content. Understandably, initially the ADMM+8 will look at only non-sensitive issues like humanitarian assistance and disaster relief, peacekeeping, military medicine, maritime security and counter-terrorism. It will take a considerable time before the EAS — or any other body — begins to look at traditional security issues. There are many long-standing territorial disputes. Moreover, the long-standing bilateral security arrangements that the United States has with many Asian countries are likely to remain in place in the foreseeable future, since they provide a strategic umbrella and a hedge to these countries against a rising China. However, as the process of Asian community building gathers momentum, the United States and other concerned countries would have to address the contradictions between the community building approach and bilateral security commitments. After all, if all countries are part of one community, who is the enemy that is the target of the security alliances? It is unlikely that Asian community building will be under the umbrella of a single overarching region-wide agreement, since the region’s large size and diversity precludes neat monolithic structures. What is more probable is a set of linked agreements with a wide agenda and variable membership. Given the complexity of the East Asian region, it would be unrealistic to expect rapid progress. New ideas will be injected into the debate. It is only through such a step-by-step building block approach, rather than a top-down single grand architecture that the contours of a new regional architecture in Asia will take shape.

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WELCOMING RUSSIA’S PARTICIPATION Sabam Siagian

We should welcome Russia’s active participation and constructive role in the development and progress of twenty-first-century Asia, which could lead, in the words of the eminent Australian strategic thinker Hugh White, to the shaping of “A Concert of Asia”.1 Russia, after all, is an Asia-Pacific power that is not a newcomer to the region. Since about the mid-twentieth century, with the rise of anticolonial nationalism that resulted in the emergence of new Asian states e.g. the Republic of Indonesia, this paralleled with the heightening adversity between the victors of the Second World War, usually referred to as the Cold War, the Soviet Union in various models and structures had cooperative agreements with the People’s Republic of China, India, Vietnam, North Korea and Indonesia. It must be noted that the Soviet Union’s active support to Indonesia in the early 1960s, especially by assisting the modernization of Indonesia’s military capability, speeded up the diplomatic solution of the so-called West New Guinea conflict with the Netherlands, a residual colonial problem.2 Thus, when the “new” Russia intends to play a more active and con­ structive role in the dynamics of a progressing Asia, she does not need to start from scratch. The basic data concerning Asian countries and the expertise in dealing with Asians, presumably, are still stored in the archives and in the minds of Russians. 37

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Of course, the strategic setting of twenty-first century Asia is entirely different compared with the final decades of the last century. Let us take the Association of Southeast Asian Nations (ASEAN) as a case in point. When five foreign ministers representing five Southeast Asian countries signed the ASEAN Declaration in Bangkok on 8 August 1967 that was and still is an historical event of grand proportions. First of all, just try to visualize the situation in Southeast Asia during that second half of 1967. Indonesia, the largest country in this region, had just recovered from an abortive coup planned and initiated by the Indonesian Communist Party, resulting in the murder of almost the entire general staff of the Indonesian National Army. The country was still suffering from an inflation burden of about 650 per cent, the legacy of President Sukarno’s economic mismanagement. General Soeharto, the new emerging leader made a sensible decision as a military man and ceased the so-called Konfrontasi, a de facto war against Malaysia and Singapore (understandably, an atmosphere of suspicion was still prevailing among the three countries). Singapore had recently withdrawn from the Malaysian Federation and was conscious of her fragility as a self-proclaimed island state. Both Thailand and the Philippines were hosting sizeable naval and air bases of the United States while the third Vietnam War with U.S. involvement was heating up. Clearly, all in all, it was not a situation conducive to setting up a regional cooperative organization. On top of that, the five main actors who gathered in Bangkok that August 1967: Adam Malik from Indonesia, Tun Abdul Razak from Malaysia, Narciso Ramos from the Philippines, S. Rajaratnam from Singapore and Thanat Khoman from Thailand were all personalities of considerable caliber with different intellectual backgrounds and political outlooks. Yet they managed to muster the required political will and reached a historical decision to establish the Association of Southeast Asia Nations. The following paragraph from the 1967 Bangkok Declaration encapsulates the remarkable political will and farsighted vision of the five leaders: MINDFUL of the existence of mutual interests and common problems among countries of South East Asia and convinced of the need to strengthen further the existing bonds of regional solidarity and cooperation; DESIRING to establish a firm foundation for common action to promote regional cooperation in South East Asia in the spirit of equality and partnership and thereby contribute towards peace, progress and cooperation.3

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Now, ASEAN has ten member countries and the original commitment and intensity of the political will, perhaps not always obvious for those observers from outside the region, are still there. As a matter of fact, ASEAN is determined that by 2015, ASEAN will achieve the creation of the ASEAN community with three main pillars: 1. ASEAN Political and Security Community; 2. ASEAN Economic Community; 3. ASEAN Social-Cultural Community. It is an ambitious vision, probably not 100 per cent of the set goals will be achieved but at least ASEAN has a strategic plan.4 Of course, the development and progress of ASEAN is taking place in a concrete geopolitical environment whose outlook is very much determined by the dramatic rise of India and China, or the preferred phrase, “the peaceful development of India and China”. Zheng Bijan, dubbed as the political theorist of the Chinese Communist party, said that “According to China’s strategic plans, only by 2050 can China be called a modernized, mediumlevel developed country.” ASEAN had better take his words seriously, and the implication of them. It is to be expected, of course, that with both India and China possess­ ing impressive economic clout and credible military capability by 2050, this will create a significant new geopolitical map in the Asia-Pacific region. How to manage these coming strategic shifts and adjustments without critical tensions and sharpening conflicts is a challenge for ASEAN. Out of sheer self-interest, in order to safeguard her strategic vision, ASEAN requires a geopolitical environment that is conducive to realize and safeguard this 2015 vision. That is why the significant and constructive role of the Russian Federation is most welcome. Its advanced stage of science and technology develop­ ment and considerable economic clout, will enable the Russian Federation to enhance its presence in the Asia-Pacific region. Russia is capable to assist ASEAN countries in speeding up their economic development. I also think that a significant presence of the Russian fleet in the Pacific is a welcome addition to reach a “dynamic equilibrium” to borrow Indonesia’s Foreign Minister Marty Natalegawa’s favourite phrase. To cope with the emerging geopolitical situation in the Asia-Pacific region, ASEAN has launched initiatives to enhance multilateral ties by creating new cooperative regional ventures, new institutions or platforms. Russia’s active participation in all these multilateral platforms will enhance

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the efficacy of these ventures, thereby creating the new dynamic equilibrium in the Asia-Pacific region.5 On a more specific matter, Russia could assist ASEAN with its burden of rapidly increasing traffic through the Malacca Strait. Four ASEAN countries — Thailand, Malaysia, Singapore and Indonesia — have the joint responsibility to maintain the secure passage through the Strait of Malacca. China’s President Hu Jintao bemoaned this situation as “China’s dilemma”. Russia could speed up developing the passage through the Artic. Perhaps, initially, the freight volume will be modest but any effort to reduce the traffic through the Malacca Strait should be welcomed.6 Russia needs to restructure its foreign policy priorities if she is indeed entertaining serious strategic intentions to play a significant role in the East Asia/Pacific region, specifically to enhance her relations with the ASEAN countries. As formulated in Russia’s 2008 Revised Foreign Policy Concept, the priorities has not been changed. Russia’s overall diplomacy is still to focus: firstly, on the geopolitically vital Commonwealth of Independent States (CIS); secondly, on Europe, its largest trading partner; and, thirdly, the United States with which she still has residual security problems from the Cold War era. In as much Russia’s diplomacy focuses on Asia, China and India enjoys priority attention. Russia has an expanding energy supply cooperation with China and is promoting the Shanghai Cooperation Organization (SCO).7 Given ASEAN’s increasing economic clout, and the strategic location of her member states in Southeast Asia, particularly that of her largest member state, the archipelagic Republic of Indonesia, there are compelling reasons why Russia should place the East Asia/Pacific region on a higher priority scale in its grand diplomacy strategy. Although it does make economic sense that Russia is making deliberate efforts to enhance its energy supply cooperation with China but the very fact of China’s rise dictates why Russia’s diplomacy in the East Asia/Pacific region should be rebalanced. Hopefully, Russia’s position as Chair of the Asia-Pacific Economic Cooperation Forum in 2012 will accelerate this process of rebalancing the priorities of Russia’s grand diplomacy. President Dmitry Medvedev stated in a widely circulated article that hosting the 2012 APEC Leaders’ Week in Vladivostok was an honour that came “with a great sense of Responsi­ bility. “… Russia is an integral part of the vast and forward-reaching Asia-

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Pacific region, that is crucial for the socio-economic development of Russia, especially Siberia and the Far East”, Medvedev said.8 Since Japan has an enduring trade relations with, and extensive invest­ ment packages plus a variety of social economic aid programmes in most ASEAN member countries, it does make strategic sense if Russia concludes the much delayed peace treaty with Japan. It is difficult to conceive how Russia could play a significant role in the East Asia/Pacific region without developing a full and normal relationship with Japan. There are reasons why Japan will welcome and reciprocate Russia’s offer for a strategic partnership. A new Japan, presumably, is keen to counterbalance — although to a modest degree — its strategic alliance with the United States. Japan as Russia’s strategic partner could make a significant contribution in developing the Far Eastern region. However, a normal and full bilateral relationship that in due time to be enhanced as a strategic partnership could only be realized if a peace treaty will be signed by Moscow and Tokyo. That ideal situation will only be fulfilled if the conflicting claims regard­ ing the Kuril Islands — Japan refer to them as the Northern territories, specifically the islands of Etorofu, Kunashiri, Shikotan and Habomai — will be solved amicably through concentrated efforts of diplomacy. Twenty-first century East Asia and Pacific region will enter a new interesting stage with Russia playing an active strategic role commensurate with her impressive national potentials.

Notes

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6

See “Power Shift: Australia’s future between Washington and Beijing”, Quarterly Essay, Issue 39 (2010). See “The West New Guinea Debacle: Dutch decolonization and Indonesia, 1945–1962”. On the significance of the Soviet Union’s military assistance, see “On the brink of war”, pp. 368–71. See The ASEAN Declaration (Bangkok Declaration), Bangkok, 8 August 1967, available at the ASEAN Secretariat, Jakarta, Indonesia. See Declaration of ASEAN Concord II (Bali Concord II) signed in Bali, Indonesia, on 7 October 2003 by the Heads of Governments of the ten Member States. See Marty M. Natalegawa, “Waging aggressive peace: ASEAN and the Asia Pacific”, Strategic Review, vol. 1, no. 2 (November–December 2011). See “Russia predicts surge in Artic sea route, opening up of region”, Business Times, Singapore, 27 January 2011.

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See “East Asia Strategic Review 2009”, published by The National Institute for Defense Studies and the Japan Times; see (3) A Search for Russia’s Own Brand of East Asia Diplomacy, pp. 199–202. See “Integrate to Grow, Innovate to Prosper”, by Dmitrity Medvedev, President of the Russian Federation, text provided as courtesy of the Embassy Federation in the Republic of Indonesia and Office of the Ambassador of the Russian Federation to ASEAN, sent by email on 31 January 2012.

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Section II Geopolitics

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RUSSIA IN SOUTHEAST ASIA: A NEW “ASIAN MOMENT”? Astrid S. Tuminez1 and Mark Hong2

INTRODUCTION Russia’s role as a power in Asia has seen different iterations over time. Stretching geographically across the north of Eurasia, Russia has always been caught between the influences of East and West, with its own identity and relationships straddling both spheres. Its interactions with East and West show tremendous influence upon both European and Asian history. The Russian factor in European history brings to mind such moments as Peter the Great’s victory over Sweden, Tsar Alexander I’s defeat of Napoleon’s army in 1812, the Soviet routing of Hitler’s forces during World War II, the Cold War confrontation across Eastern and Western Europe, and NATO and EU expansion to include the former USSR’s sphere of influence. Since the end of the Cold War, Russia has occupied a more diminished role overall in Europe, yet it is also undeniable that Russia remains a key player in arms control, energy security, and conflict management in the region. On the Asian side of the equation, moments that stand out include the Mongol invasion of, and rule over, ancient Rus’; Russia’s expansion across Siberia and Central Asia; the Russo-Japanese war of 1904–05; Russia’s foray into China, Manchuria and Korea; the “Great Game” between Britain and Russia in Afghanistan; the Soviet invasion of Afghanistan; Soviet support for

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India and Vietnam during the Cold War; the Sino-Soviet conflict; and the Soviet Union’s (and later, Russia’s) relatively low profile and influence in the Southeast Asian region. Historically, Russia has been a stronger player in Europe than in Asia, with Russian elites traditionally using Europe rather than Asia as a point of reference for Russia’s evolution and role as a great power. In Asia, Russia has had many difficult moments, particularly in the twentieth century. However, after the end of the Cold War, a new chapter may have opened in Russia’s interaction with Asia and its role in the region. At the moment, China and the United States remain the leading powers in Asia, but Russia’s prominence and power in the region is growing and has more room to grow. For example, Russia has become embedded more deeply than ever before in Asian regional organizations. It has become a member of, and a participant in, the ASEAN (Association of Southeast Asian Nations) Regional Forum (ARF), the Russia-ASEAN Dialogue, the Asia-Europe Summit (ASEM), the Asia-Pacific Economic Cooperation grouping (APEC), the Shanghai Cooperation Organization (SCO), the East Asia Summit (EAS) and others. In addition, Russian trade with Asia is growing. Energy supplies from Siberia have become as important to China, Japan and South Korea as Russian gas supplies to Europe. At this juncture, Russia is in a position to rethink comprehensively its role as an Asia-Pacific power. If Russian policy-makers forge a consensus among themselves and make a sustained and concerted effort, in the next decade Russia could create for itself a viable bridging role as a Eurasian power, linking the continents of Asia and Europe via railways, highways, energy connections, maritime sea routes across the Arctic, and economic, political and security dialogues. Although there is a larger context for Russian power and diplomacy in Asia in the twenty-first century, this paper will focus more on Russia in Southeast Asia.

RUSSIA’S ASIAN MOMENTS This paper will use the term “Asian moments” to describe various important junctures in Russia’s engagement with Asia. Most of the moments cited below have been marked by humiliation e.g., Russia’s defeat by Imperial Japan during the Russo-Japanese War of 1904–05. This does not imply that humiliation is the only feature of Russia’s relations with Asia. Rather, Russia’s history in Asia has been fraught with complexity and difficulty. This context is important for understanding why Russia’s evolving relationship

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with Southeast Asia in the past decade and a half may mark a new, different and more hopeful Asian moment for Russia.

EARLY ASIAN MOMENTS The first encounter between the early Russians of the Kievan State with Asia occurred when the Mongols swept across Asia into Eastern and Southern Europe in the thirteenth century. Later, after the collapse of the Mongol Empire (1206–1324), tsarist Russia gradually expanded across Siberia and into Central Asia. Russia, China, and other powers such as Britain expanded into the region, capturing the bulk of Central Asia by the end of the nineteenth century. The second half of the nineteenth century was the era of “the Great Game” of expansion played between Britain and Russia. After the Bolshevik Revolution of 1917, the Central Asian regions were incorporated into the Soviet Union. Mongolia remained independent but later became a Soviet satellite state. The expanding Russian Empire collided with the other great empire in Asia, namely Manchu China, with which it signed treaties on border demarcation.

THE RUSSO-JAPANESE WAR OF 1904–05 In the twentieth century, a major Asia moment was marked by the RussoJapanese war in 1904–05. For Asians, it was a singular moment proving that Asian countries could defeat western powers if their armies were properly led, equipped and motivated. This revelation was a heartening event, after centuries of Asian subjugation to such western colonial powers as Portugal, Holland, France, Britain, Spain, the United States and Russia. For Russia, the war was a low point, marking Russia’s defeat to what was then characterized as a minor power. The defeat significantly shaped debates on Russian identity and national purpose. To be defeated by Japan, denigrated as the “yellow peril”, was a death blow to Russian national pride, and a blow to the rule of the Tsars, thus delegitimizing tsarist Russia and helping pave the way for the revolutionary change that followed in 1917.

INTERNATIONAL SOVIET ACTIVISM The Communist International or Comintern, founded in Moscow in 1919 to spearhead the international struggle for communism, was active in Asia and Southeast Asia in the early decades of the twentieth century. In 1931, a Comintern agent was sent to Singapore to instil discipline into the Malayan

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Communist Party, but was arrested. His confessions led to the widespread arrest and exposure of party members in China, Shanghai, Malaya and Singapore, and Hong Kong. In 1930 the Comintern sent Ho Chi Minh to Hong Kong to coordinate the unification of the three competing Vietnamese communist factions into the Vietnamese Communist Party. Throughout the 1930s and 1940s, Comintern agents were active in India, China, and Southeast Asia. However, these decades were a relatively muted Asian moment for Russia, whose engagement in the region was not decisive.

AFGHANISTAN — THE SOVIET OCCUPATION The next big Asian moment was yet another debacle for the USSR, when it invaded and occupied Afghanistan in December 1979, suffered a long and difficult war, and finally withdrew in February 1989. This war became a quagmire for Moscow, its equivalent of the Vietnam War for the United States. Afghanistan caused many domestic problems for the USSR, including a demoralized army, financial burdens, and restiveness among the population that bore the human costs of war. On the foreign policy front, Afghanistan led to the alienation of Muslims, the rise of the mujahedeen, political isolation (symbolized by the western boycott of the Moscow Olympics in 1980), and a renewed arms race with the United States. It prompted the creation of an anti-USSR coalition led by the United States and included China, Pakistan, NATO countries and other U.S. allies. In short, Afghanistan was a most difficult moment, causing the humiliation of a great power and contributing to the delegitimation of the Communist Party and the eventual collapse of the USSR.3

USSR-CHINA RELATIONS The next Asian moment for Russia involved China and the uneasy and ambivalent relationship between Moscow and Beijing. Their relationship began formally on 2 October 1949, following the official proclamation of the People’s Republic of China one day before, with diplomatic recognition by the then Soviet Government. The Soviet-Chinese Treaty on Friendship, Alliance and Mutual Assistance was signed on 11 February 1950. However, relations had begun earlier with the arrival of General Chiang Kai Shek in Moscow in 1923 as a Kuomintang representative and a personal emissary of Dr Sun Yat Sen. In the 1930s during the Chinese Civil War between the KMT (Kuomintang) and the CCP (Chinese Communist Party), uncertain as to which party would win, Moscow ended up backing both sides. Despite

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their shared communist ideology, leaders in Moscow were uncomfortable with, and suspicious of, Mao’s theory of a peasant-based uprising, which contradicted the Leninist theory of revolution based on the dictatorship of the proletariat. These ideological differences burst into the open during the Sino-Soviet conflict of the 1960s and were exacerbated by the excesses of the Red Guards during the Cultural Revolution. The uneasy relationship finally broke down in 1969, when a seven-month military conflict occurred along the Sino-Russian border demarcated by the Ussuri River.

THE SOVIET UNION IN SOUTHEAST ASIA4 The USSR’s impact in Southeast Asia has manifested in several areas: first, Soviet military and political support for North Vietnam during the Vietnam War; second, the Indo-Soviet friendship, which impacted upon Pakistan, Afghanistan, China and the United States and had spillover effects on the U.S. position in Southeast Asia; and third, the Sino-Soviet split and rivalry, which had an impact on Vietnam, Cambodia and other parts of Southeast Asia. The USSR’s most dramatic move in the region was its use of Cam Ranh Bay naval base in Vietnam, mimicking to some extent the presence of U.S. bases in the Philippines. The Sino-Soviet rivalry created the opening for the U.S. to cultivate ties with China via President Nixon’s recognition of the PRC. In turn, this dramatic American act motivated many Southeast Asian countries to recognize China. The ASEAN-U.S.-China bloc was the primary group that opposed the Soviet-and-India-supported Vietnamese intervention of Cambodia. In other words, the Soviet-Southeast Asia nexus was informed primarily by the geopolitics of the U.S.-Soviet Cold War and had little independent dynamics of its own. The fact that the Soviet Union was not a major player in the anticolonial movement after World War II in Southeast Asia further muted Soviet influence in the region. At that time, Southeast Asian nationalists (who would later lead their countries) fought for independence from their colonial masters. Indonesia, the countries of Indochina, and Burma had all launched revolutions against their western rulers. These local nationalistic uprisings did not have significant input or influence from Moscow, but were more influenced by the Japanese Imperial Army’s promises of independence; the inspiration of Meiji Japan, the KMT and Sun Yat Sen in China; and America’s anti-colonial stance. As U.S.-Soviet rivalry intensified during the Cold War, the United States emerged as the more influential actor in Southeast Asia. Not only was it supportive of independence in the region, but it also had long-term allies like the Philippines and the

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ability to draw the line against perceived Soviet expansionism in Communist China and Vietnam.

THE LATE SOVIET AND EARLY POST-SOVIET PERIODS The late 1980s and early 1990s may be called a new smutnoe vremya or “Time of Troubles” for Russia i.e., a decade of deep national humiliation stemming from the break-up of the Soviet Union, economic difficulties, political turmoil, widespread suffering and dislocation of people, military decline, and diminished prestige on the international stage. Tremendous changes occurred rapidly in the Soviet Union and its Eastern European satellite states. The USSR split into fifteen newly independent states; the Warsaw Pact and the Council for Mutual Economic Assistance (COMECON), multilateral structures that dominated military and economic relations among communist countries, dissolved; and Moscow lost its clout and influence over such allies as India, Vietnam, Cuba and others. Moscow was preoccupied by domestic problems and challenges associated with the end of the USSR and the demise of communist structures, and had meagre time and resources to focus on foreign policy, apart from key issues related to relations with the United States and Europe (e.g., NATO expansion) and its newly independent neighbours. Among Russian thinkers and opinion-makers, this period was marked by a palpable sense of loss and an emerging sense of threat, especially stemming from the predominance of a single hegemon in the international system (i.e., the U.S.) and complex new realities in the “near abroad”. In the immediate aftermath of Soviet disintegration, Russian foreign policy oriented itself towards the West, following the line that the last Soviet president, Mikhail Gorbachev, had launched. Subsequently, Russia under President Boris Yeltsin and Foreign Minister Andrei Kozyrev continued this line, making a bid for Russia to become more integrated into Europe. In Asia, Moscow retrenched from such areas of influence as Vietnam and Cambodia. However, dynamics with the West soon turned sour. For example, NATO expansion fuelled by lingering Western suspicions of Russia and the new influence of states like Poland and the Baltics, led to the perception of Western snobbery in Russia. As a result of this, as well as leadership changes in Russia, Russian diplomacy began to turn more to Asia starting roughly in the mid-1990s. This marked an important Asian moment. Arms and energy exports were a primary initial impetus to the renewed Russian interest in Asia, but a broader and more concerted approach became apparent after Vladimir Putin became president. Under Putin, Russian leaders have focused on ways to correct the erosion of central power, economic decline, and political chaos.

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Russian foreign policy sought to restore friendly relations with countries in the “near abroad” and to rebuild Russian confidence and sense of purpose by finding new partners and friends, particularly in Asia. An important post-Soviet dynamic also involved domestic contestation of national identity.5 Under Putin, a “new” national identity has been emphasized, focusing on state control of politics and the economy. Parts of the old Soviet Union were revived, including the old anthem and strongman rule from the Kremlin. Putin revived a strong state based on booming oil and gas revenues. He also ended many of the liberalizing political reforms that had begun under Gorbachev and continued under Yeltsin. His rule marked turning points in domestic and foreign policies. He first focused on setting things in order in domestic affairs, such as reining in Russian regions, eliminating opposition politics, controlling the mass media, jailing business tycoons who would challenge the state, and “pacifying” Chechnya. In foreign policy, as Putin’s Russia sought to sort out who were Russia’s friends and opponents, Southeast Asia began to gain a new prominence as a partner in trade and other areas.

RUSSIA AND SOUTHEAST ASIA IN THE TWENTY-FIRST CENTURY A NEW ASIAN MOMENT? In 2008, Dmitry A. Medvedev became Russia’s new president. Medvedev’s presidency (along with Putin’s own continuing leadership) has come at a time of intense global interest in, and attention to, Asia. The rise of a powerful China drives this new interest, but Southeast Asia has also gained new prominence. In particular, Russian officials have pointed to the emerging economic and political bloc of ASEAN (ten countries, 550 million people) as showing promise of strategic benefits for Russia. 6 If Southeast Asia presents a pull factor, there is also a push factor arising from greater domestic Russian political stability; steady economic growth based mainly on sales of oil, gas, and arms; and new international political legitimacy manifested in Russian membership in, and/or leadership of, such multilateral institutions as G8, G20, BRICS (Brazil-Russia-India-China-South Africa), SCO, APEC, ASEM, and ARF. Russia’s new foray into Southeast Asia is marked by two dynamics. First is intensive formal diplomacy, marked by meetings, summitry, and formal agreements between Russia and ASEAN countries. In 2004, a special milestone

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102,003

Total trade with world 136,971

1,456.50

108 388 520.5 170 58.4 204.7 1.6 1.5 3.8

2000

140,725

1,760

125.8 424.6 682.5 177 67 241 3.8 4.8 33.5

2001

152,885

2,343.20

193 577 610 323 128.6 403 4.2 3.6 100.8

2002

190,713

2,492.50

418 725 248 431 222.5 433 2.4 1.6 11

2003

257,232

3,092.70

366 537 351 728 267 808 6.7 4 25

2004

339,857

4,204

551 823 626 998 271 913 11 8 3

2005

439,051

4,718.50

607 1,134 1,227 907 167 653 4 10 9.5

2006

552,181

7,028

916 1,903 1,540 1,336 241 1,092 n/a n/a n/a

2007

Source: Paradorn Rangsimaporn, “Russia’s Search for Influence in Southeast Asia,” Asian Survey 49, no. 5 (September/October 2009): 796.

1,178.70

57.3 475.2 220 163 77.3 183.7 2.2 n/a n/a

Indonesia Malaysia Singapore Thailand Philippines Vietnam Laos Cambodia Myanmar

Total trade with ASEAN

1999

Countries

Table 1 Russian total trade with ASEAN States 1999–2007 (in US$ million)

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Table 2 Rise of Russia in Southeast Asia Major Import Partners (2009)

Major Export Partners (2009)

Major Trade Partners (2009)

  1. EU27 (45.5%)   2. China (14.3%)   3. Ukraine (5.6%)   4. United States (5.4%)   5. Japan (4.6%) 13. Malaysia (0.7%) 16. Thailand (0.6%) 19. Singapore (0.4%) 20. Vietnam (0.4%) 22. Indonesia (0.4%)

  1. EU27 (46.1%)   2. China (5.7%)   3. Turkey (3.6%)   4. Ukraine (3.4%)   5. Kazakhstan (3.1%) 15. Singapore (0.5%) 21. Vietnam (0.3%) 29. Thailand (0.2%) 31. Philippines (0.1%) 39. Indonesia (0.1%)

  1. EU27 (45.8%)   2. China (8.8%)   3. Ukraine (4.2%)   4. United States (3.7%)   5. Japan (3.2%) 14. Singapore (0.5%) 20. Vietnam (0.3%) 21. Thailand (0.3%) 22. Malaysia (0.3%) 26. Indonesia (0.2%)

Source:

Table 3 Top ASEAN Trade Partner Countries/Regions (as of 15 July 2010) Country/region

Total ($mils.)8

China EU Japan United States Republic of Korea Hong Kong India Russia

$178.2 $171.8 $160.9 $149.6 $  74.7 $  67.9 $  39.1 $  6.8

Source: and (accessed 25 June 2011). The figure for Russia represents a decrease from 2008–09 due to the global financial crisis. The 2008 total trade between Russia and ASEAN was $9.8 billion.

occurred when Russia acceded to the Treaty of Amity and Cooperation in Southeast Asia. Following this, Putin addressed the ASEAN summit in 2005; President Medvedev attended the APEC summit in Singapore in 2009; and Russia debuted as a participant in ASEM in 2010. The second ASEAN-Russia

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summit also took place in Hanoi in 2010, and Russia has appointed a fully accredited ambassador to ASEAN. In 2011, Russia (along with the United States) formally joins the East Asia Summit as a new member. Finally, a new milestone is in place with Russia’s forthcoming chairmanship of APEC and hosting of the APEC summit in Vladivostok in 2012.7 The second important dynamic in Russia’s engagement in Southeast Asia involves trade. Tables 1–3 show significant growth in Russia’s total trade with ASEAN states from 1997–2009. They also show the emergence of Malaysia, Singapore, Thailand and Vietnam as Russia’s key trading partners in ASEAN. Regardless of growth and progress in Russia-ASEAN economic relations, however, Russia remains a relatively minor partner for ASEAN when ASEANRussia trade turnover is ranked against ASEAN trade with such partners such as China, Japan, Korea, India, the United States, and Europe.

A FUTURE OF QUESTIONS It is too early to say whether Russia’s increased engagement in Southeast Asia marks a truly new Asian moment i.e., one that will lead to larger, sustained, and mutually beneficial political, economic, and socio-cultural ties. Looking forward, some key questions to ask include: • How important is ASEAN to Russia and are Russian leaders committed to pursuing sustained, strategic engagement with the region? • How important is Russia to ASEAN? What long-term interests would drive ASEAN states’ commitment to engage with Russia? • What is Russia’s value proposition to individual states in ASEAN, given that these states are at highly differentiated stages of political, military and economic development? • How much should Russia engage with ASEAN as a regional grouping versus with individual countries (e.g., Singapore, Malaysia, Thailand and Vietnam) that have already shown the ability to forge closer ties with Russia in trade, tourism and other areas? This short essay precludes a full response to the questions above. How­ ever, three preliminary points are worth highlighting. First, Russia is not yet a critical partner for ASEAN. It has become more important in the past decade, particularly as a supplier of weapons and oil and gas, but it is not yet a truly essential player in the region. Second, Russia’s secondary status is likely to remain because in the areas of deepest national interest for the ASEAN states (e.g., trade, arms, technology, geopolitical stability, aid, counterterrorism, and others), the United States, Europe, Japan and China

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will continue to matter more in the foreseeable future. Third, on critical issues for ASEAN policy-makers e.g., potential flashpoints in the Korean peninsula or the South China Sea, Russia is not yet perceived as a key supporter of ASEAN interests. On another critical issue, balancing the rise of China in the region, ASEAN states look primarily to the United States as the counterbalancing power. On evolving norms, Russia and ASEAN may also be on different trajectories. ASEAN states, for example, while always affirming the norm of non-intervention in internal affairs, are nonetheless making initial steps to codify norms that will eventually have an impact on domestic politics and practices. One example is the establishment of the Working Group for an ASEAN Human Rights Mechanism. Clearly, this body will have many hurdles to overcome to become truly functional and meaningful, but its creation signals the direction to which ASEAN states aspire. It is difficult to imagine how ASEAN states might look to Russia as they progress incrementally towards this kind of normative aspiration and trajectory. On culture and tourism, 500,000 Russian tourists visited ASEAN countries in 2009. This is most welcome, but the numbers are small compared, for example, to the millions of American visitors who visit ASEAN countries yearly. The good news is that culture and tourism represent a genuine area for growth in the Russia-Southeast Asia relationship. As affluence spreads in Russia, Southeast Asia could become a more important destination for Russians seeking the allure of sun, sea, shopping, and great food. These kinds of ties could go a long way towards deepening the stakes that ASEAN and Russia have in their relationship.

NEXT STEPS IN RUSSIA’S CURRENT ASIAN MOMENT There is plenty of room for deepening and expanding Russia’s role in Southeast Asia and for making Russia a more significant partner for the ASEAN states. Russia is no longer a humiliated state, but one whose power is rising on various fronts. The upcoming APEC summit in Vladivostok in 2012 represents an opportunity for Russia to demonstrate anew its AsiaPacific credentials. Policy-makers in Moscow could use the time left until 2012 to ponder their Asia strategy and think of concrete steps to consolidate Russia-ASEAN relations further. Meetings, summitry, declarations and formal agreements are only useful up to a point. Russia must use each of these meetings to achieve concrete, pragmatic results to enhance trade, cooperation in technological innovation and investment, regional security, people-topeople exchanges, and others.

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A key challenge for Russian policy-makers is how and where to focus their efforts to cement a truly durable partnership with ASEAN in security and economic matters. Southeast Asian policy-makers must be convinced that Russia can add value to their interests in ways that are competitive with what such powers as China and the United States have to offer. In turn, Russian leaders must also be convinced that Southeast Asia is worth their long-term investment of time, money and other resources. In the past decade and a half, both sides have created a foundation to build on. But this foundation is still rudimentary and needs to be strengthened. The relative rise of Asia as a region of economic and political power, versus the relative waning of U.S. and European power, presents a moment of opportunity for Russia to define and cement a new place for itself in Asia. The era of endless expansion across Siberia has long since passed; in the process, Russia gained control over immense mineral, oil and gas wealth. During the Soviet period, Russia amassed immense military power. It may be that now is a different moment, one that requires Russia to enhance and exploit its immense human resources as an instrument for deepening and enlarging relations in Southeast Asia, a region where Moscow, traditionally, has not been a critical player. The people of Russia have demonstrated remarkable resilience throughout their history, and they continue to have much to offer in science and technology, art and culture, and other areas. These resources need to be tapped in new ways to add to the current foundation of Russia’s rise in Asia and thus herald a truly new Asian moment for Russia.

Notes

1



2



3



4

Astrid S. Tuminez is the Vice-Dean (Research) at the Lee Kuan Yew School of Public Policy, National University of Singapore and is the author of Russian Nationalism Since 1856: Ideology and the Making of Foreign Policy (Maryland: Rowman and Littlefield, 2000). Mark Hong is Singapore’s former ambassador to Russia, and is Vice-Chairman of the International Committee of the Singapore Business Federation. Hearings in the Duma in 1989 on the war in Afghanistan were the first of its kind, underlining policy mistakes, the tragedies of the war, and the Communist hierarchy’s disregard for the interests of the people. The hearings were conducted as part of openness or glasnost’, but they hastened the delegitimation and unwinding of the Soviet Government and the CPSU (Communist Party of the Soviet Union). For overview articles on this theme, see Leszek Buszynski, “Russia and Southeast Asia: A New Relationship”, Contemporary Southeast Asia 28, no. 2 (August 2006): 1–16 and Evgeny Kanaev, “Southeast Asia in Russia’s Foreign Policy

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5



6 7

57

under D. Medvedev: An Interim Assessment”, Eurasian Review 3 (November 2010): 107–15. For a discussion of competing Russian nationalist discourses in the post-Soviet period, see Astrid S. Tuminez, Russian Nationalism Since 1956: Ideology and the Making of Russian Foreign Policy (Maryland: Rowman and Littlefield, 200), pp. 173–295. Kanaev, Ibid. An overview of Russia-ASEAN relations may be found at (accessed 23 June 2011).

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ASEAN-RUSSIA MILITARY TIES: RECONFIGURING RELATIONS Robert Karniol

On a blustery morning in the summer of 1989, under an overcast sky, a Soviet warship off the port of Vladivostok fired a sophisticated anti-ship missile at a distant target. Unseen from the vessel’s deck, the exercise was being monitored by the U.S. Navy’s Knox-class frigate USS Harold E. Holt. There was some confusion following the launch, punctuated by discussion. A Soviet escort officer eventually turned to the group of assembled observers, which included a scattering of media, to state that a second missile would be fired. “The Japanese television crew missed the shot”, he explained in English, adding ruefully: “Those missiles each cost a quarter of a million dollars.” This event, a major exercise of the Soviet Pacific Fleet conducted on 11–12 July 1989, was deeply significant as the first official opportunity offered foreign observers to view Soviet naval manoeuvres in the Pacific. Coming three years after the seminal Vladivostok address by Soviet leader Mikhail Gorbachev, which saw Moscow turn towards Asia and most notably foreshadowed a rapprochement with China, the exercise aimed to send the region a reassuring message. Soviet staff officers stressed to observers the defensive nature of the exercise, a radical reverse from the offensive stance previously emphasized. But much of the region remained suspicious, understandably confused by the monumental changes under way in the Soviet Union. Moscow invited fifteen Pacific Rim countries to send military observers, but just four complied: India, Indonesia, Malaysia and Vietnam.1 It was 58

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nevertheless a start. “Regardless of how few (foreign military) observers are attending it is quite satisfactory to see the ice being broken”, the fleet commander, Admiral Gennady Khvatov, observed.2

THE REGIONAL CONTEXT “Let us turn our faces towards Asia”, the Soviet icon Vladimir Lenin exhorted his followers when the worker’s uprising in Europe failed to materialize. “The East will help us conquer the West.”3 Of course, Russia had extensive historical contacts with Asia — ranging from migratory movements to trade to imperialist expansion. The Soviet period was characterized by Great Game intrigue and Cold War confront­ ation, but Asian (and Western) competition with Moscow is today the stuff of a more normal national rivalry than the vision promulgated by Lenin. In the post-Soviet era of these past two decades, Moscow has seen relations with its Cold War friends and client states in Asia and elsewhere reconfigured. Its other dealings in the region now emphasize engagement and cooperation across the full spectrum of activity, with defence ties some­ times lagging. The Soviet Union’s collapse naturally unsettled Moscow’s partners in Asia. In military terms this mainly affected Mongolia, Vietnam and the Democratic People’s Republic of Korea (North Korea). It was also felt in Cambodia and Laos, which enjoyed formal Soviet support while in Vietnam’s orbit from 1979. Ulaanbataar and Moscow had agreed in 1989 on the full withdrawal of Soviet forces — once up to 75,000 strong and oriented offensively against China — and this was completed by January 1993. A new agreement on military cooperation was concluded in early 1997 but Mongolia balanced this later that year by finalizing a similar accord with Beijing.4 Hanoi and Moscow signed a new umbrella agreement on defence cooperation in October 1998 but Russia nevertheless began withdrawing from the Cam Ranh Bay naval and air base, which included a massive signals intelligence facility, on 1 January 2002. This anticipated the lease arrangement ending in 2004 without renewal.5 Russia had by then already informed Pyongyang of its intention to abrogate Article 1 of their 1961 friendship treaty, which pledged Moscow to intervene militarily in case of renewed conflict on the Korean peninsula. Notice was served on 29 June 1995, with effect from September 1996.6 As for Cambodia, Soviet (and then Russian) influence waned in the early 1990s due to a combination of factors and has since been superseded

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by China.7 In Laos, military cooperation was suspended when the Soviet Union collapsed in 1991 and was renewed with a new military cooperation accord signed in July 1997.8 An end to Russian defence-related grants and subsidies was central to these revised agreements, with arms sales since conducted on a commercial basis. Strategically, the force pullouts from Mongolia and Vietnam were most significant although the shift in North Korea also had important implications. At the same time, economic and social upheaval in Russia during this period substantially diminished the operational effectiveness of its military forces in the Far East and elsewhere. Russian military involvement, and its broader influence, is still felt in most of these countries but at a level considerably reduced from the Soviet period. It is today all but absent in Cambodia and most strongly apparent in Vietnam, though the latter has diversified its range of contacts and suppliers. The deepest changes occurred in Central Asia. There the Soviet Union’s dissolution saw five republics gain — or, more accurately, regain — their independence.9 Each has established a new and radically different relationship with Moscow but links remain strong. The lynchpin here is Russia’s drive to re-establish a proprietary sphere of influence on its periphery, often referred to as its “near abroad”. The ties are multidimensional but strategic interest lies at their core. In building their armed forces following independence each of the Central Asian republics was highly dependent on contracted ethnic Russian and Ukrainian military officers, at least initially. Their defence equipment was inherited from Soviet stocks and Russia remains their main supplier, support systems follow the Soviet/Russian model and intelligence cooperation was quickly established.10 Institutional structures include the Commonwealth of Independent States (CIS) and the Shanghai Cooperation Organization (SCO). Russia and the five Central Asian republics account for over half the eleven-member CIS, a post-Soviet mechanism that has proven less than fully successful. This includes security components of varying effectiveness, such as the CIS Military Cooperation Coordination Headquarters and the CIS Joint Air Defence System. The SCO grew out of the Shanghai Five, launched in 1996 to resolve longstanding border issues between China and the Soviet successor states along its frontier.11 It was established in 2001 with the addition of Uzbekistan, the original mandate having been refocused to cover economic and security cooperation.12

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Security relations with India represent another important consideration. Moscow was India’s closest ally, as reflected by their 1971 Treaty of Peace, Friendship and Cooperation. Arms transfers further illustrate the significance of this bilateral relationship, with the Soviet Union accounting for nearly three-quarters of major Indian defence imports over the period 1970–91.13 And with New Delhi strongly committed to local production, licensing agreements and technology transfers from Moscow have been critical to the development of India’s defence industrial sector. Relations stuttered for a time after the Soviet collapse but were renewed with the 2000 visit to India by then Russian president Vladimir Putin and reinforced by the arrival in New Delhi in December 2010 of current Russian president Dmitry Medvedev.14 However, India has at the same time moved strategically closer to the United States, while Israel has emerged as an important supplier of defence equipment.15 In South Korea, its 1991 loan to Russia of US$1.47 billion ultimately helped smooth ties between these former adversaries. This saw Moscow four years later transfer to Seoul, under a breakthrough deal, defence equipment worth over US$200 million in partial repayment of the loan, followed in 1996 by a defence-related memorandum of understanding and a second package of arms agreed in 2002.16 Perhaps grown overconfident, Russia tried to bid for several major South Korean defence contracts — including those for advanced jet fighters, submarines and air defence systems — but was stymied by Washington. Instead, in a clever turn, it is providing technology transfers and component elements that significantly bolster Seoul’s defence production capabilities.17 Then there is China. Beijing and Moscow had been estranged since 1961, though problems began to emerge at least five years earlier, the ideological split including border clashes and proxy wars such as their involvement on opposing sides in Cambodia. Beijing was initially suspicious of Soviet overtures under President Mikhail Gorbachev, and of his push for political and economic reform. But China under Deng Xiaoping had by then itself moved towards economic reform and bilateral relations were fully normalized by the mid-1990s. The arms trade reflects this vital shift. The Soviet Union had no major military sales to China between 1969 and 1989, but edged into such exports in 1990 and 1991. The Russian successor state saw this trade increase tenfold in 1992, and from then through 2010, Moscow accounted for fully 86 per cent of Beijing’s major overseas defence acquisitions.18

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Russian defence platforms and systems have been essential to China’s military modernization and to its growing military power — whether through outright equipment sales or through technology transfers.19 Beyond advances relating to defence equipment, Beijing’s normalization of relations with Russia had vast strategic implications. No longer feeling threatened along its northern land border, China revised its military doctrine in the early 1990s and moved its defensive perimeter offshore through significant development of its navy and air force through a process still under way.20 China and Russia have, meanwhile, also begun joint military exercises — normally under the Shanghai Cooperation Organization framework — but it is regularly emphasized that these are not geared against any specific country.21 Elsewhere in the region, there is today no apparent perception of Russia as a security threat. This is exemplified by Japan’s re-orientation of its Cold War defensive posture southward, with the focus on China and North Korea.22

THE ASEAN DIMENSION Bilateral Russian links with members of the Association of Southeast Asian Nations (ASEAN), including those with a military dimension, fall under two categories. Friendships predating the Soviet Union’s 1991 dissolution involve Cambodia, Laos and Vietnam. For a time, Indonesia was included as well. Post-Soviet relationships cover the remainder: Brunei Darussalam, Malaysia, Myanmar, the Philippines, Singapore and Thailand. Communist revolutionary movements in French Indochina enjoyed Moscow’s active support, and this provided a strong foundation for later national ties. Once the Second Indochina War concluded in 1975 with Communist victories in Cambodia, Laos and Vietnam these countries were fixed to the Soviet orbit until the end of the Cold War.23 The founding of ASEAN in 1967 was, meanwhile, partly rooted in com­ mon concern among its five original members over potential Communist expansion during a troubled period. The Philippines and Thailand, in fact, were concurrently members of the Southeast Asia Treaty Organization, a Cold War military pact dissolved in 1977.24 Geopolitical changes clearly evident by the mid-1990s allowed ASEAN’s expansion to its current ten members, but Russia had by then already begun making inroads with several among the original five partners.25 Moscow’s early priorities included potential defence sales — partly as an element of

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normalizing relations but, more critically, because Russia’s defence sector was in crisis.26 Perhaps it was this sense of urgency that prompted Rosvooruzheniye, the newly-established Russian arms trade monopoly, to dip its toe into Southeast Asia with an irrational marketing plan.27 Instead of trying to ease into this virginal market with relatively simple and affordable systems — manportable surface-to-air missiles (SAMs), for example — Rosvooruzheniye pitched its costliest and most complex platforms. These included submarines, advanced fighters and sophisticated air defence systems. Moscow’s first effort to market its defence products to non-Communist Southeast Asia came even before the Soviet Union’s dissolution and before the advent of Rosvooruzheniye. This was through participation at a November 1990 defence exhibition held in Manila, and it was a bizarre choice at which to launch a significant debut.28 The Soviet presence there was significant in two respects: firstly, paralleling the geopolitical changes then underway, it marked Moscow’s entry into a non-traditional market; and then, several of the products on show were excitingly new and little known in the West.29 It was bizarre in two respects: the Philippines was a firm American ally dependent to this day on Washington for its defence equipment and with neither a pressing air defence requirement nor much loose cash; and the exhibition was hardly a prestigious venue at which to showcase Russia’s defence sector, a new event that was never repeated. Once established three years later, Rovooruzheniye appears to have been equally confused in initially approaching non-traditional markets in Southeast Asia. The newly formed arms trade monopoly made technical presentations to Indonesia and Malaysia on its Type 877 EKM “Kilo” diesel-electric patrol submarine in November 1993, within weeks of the company being established. This was followed in January 1994 by a similar presentation to Thailand.30 Jakarta, which bought military equipment from Russia until a split in the 1960s, was said to be lukewarm to the offer. No result came from the formal presentations subsequently requested by Bangkok and Kuala Lumpur, the latter by then in the final stages of negotiating a MiG-29 fighter purchase, although a similar push in China starting about a year earlier ultimately saw Beijing acquire twelve Kilos and much besides. Starting from early 1993, Singapore also got several briefings on Russian defence equipment. Sources told this writer that particular interest was shown

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in missile systems — including the SS-21 “Scarab” surface-to-surface missile and the S-300 family of low- to high-altitude SAM systems. These led in 1997 to Singapore’s breakthrough purchase of the Igla low-altitude SAM system, which is fielded in two versions.31 This initial marketing strategy was inherently flawed because it was pursued without first building confidence among these potential new buyers — for example, by establishing among an unfamiliar audience the reliability of Russian military equipment and after sales support. Beginning with relatively cheap and simple equipment would appear to have been more sensible. Moscow’s first major defence sale to non-Communist Southeast Asia was Malaysia’s acquisition in 1994 of twenty Mikoyan MiG-29 fighters, but this was essentially a political statement by then Prime Minister Mahathir Mohamad. Singapore’s purchase three years later of the Igla SAM reflects a more considered approach: exploratory, and involving a reputable system available at moderate expense. In China, by contrast, Russia found an eager new buyer. This was because the People’s Liberation Army, early into its biggest ever force modernization drive, was looking for major platforms and systems more advanced than the defence equipment locally handy. Western alternatives were unavailable due to sanctions imposed after the 1989 Tiananmen massacre, and still in place. With this activity at its base, Russia has carved out a market for its defence products in Southeast Asia with a cumulative value since 1990 of US$5.49 billion. Vietnam accounts for 43 per cent of the total, followed by Malaysia at 36 per cent and Indonesia at 12 per cent with four other ASEAN members in single digits. Brunei, Cambodia and the Philippines have yet to register on the sales chart, although Bandar Seri Begawan in 2010 opened the door to Moscow through the launch of bilateral talks on establishing defence links.32 Vietnam and Laos account for a combined 45 per cent of these sales, with Cambodia at zero. Russia’s five newer clients in the region account for 55 per cent, with Brunei and the Philippines at zero. However, to put this performance in perspective, Russian defence sales to ASEAN over the past two decades are roughly equal to its business with Algeria over the same period: US$5.49 billion for the former, and US$5.43 billion for the latter (see Table 1). China has been a vital market for Russian defence products these past twenty years but this trade volume is diminishing with advances in local development and production capabilities. It will likely remain significant, particularly in niche areas such as engines, but not on the scale previously seen.

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Table 1 Russian Arms Sales to ASEAN Countries, 1990–2010 in US$ million at constant 1990 prices Brunei 1990 1991 1992 1993 1994 1995 – – – – – – 2001 2002 2003 2004 2005 2006 – – – – – – Cambodia – – – – – – Indonesia 11 231 27 – – – Laos – – – – – – 36 – – – 4 – Malaysia – – – – – 578 1 46 16 – – – Myanmar 47 87 134 14 Philippines – – – – – – – – – – – – Singapore – – – – – – – – – – – – Thailand – – – – – – – – – – – – Vietnam – – – – – 279 77 122 8 294 264 18 ALL ASEAN 1990 1991 1992 1993 1994 1995 – – – – – 904 2001 2002 2003 2004 2005 2006 201 313 255 321 268 32

1996 1997 1998 1999 2000 – – – – – 2007 2008 2009 2010 TOTAL Nil – – – – –

–

–

–

–

–

41

165

180

– –

14 –

21 –

4 –

7

– 437

– 438

– 437

14 –

–

Nil 654 85 1965

34 76

392

– –

– –

– –

– –

–

– –

– –

14 –

14 –

–

– –

– –

– –

– 3

–

Nil 28 3

164 2

98 153

171 63

145 505

2

1996 164 2007 439

1997 112 2008 632

1998 206 2009 665

1999 2000 177 9 2010 764

2363

5490

Note: Data represents deliveries and covers seven categories of major conventional weapons: aircraft; armoured vehicles; artillery of at least 100 mm; sensors; air defence systems; missiles; ships; engines. Figures may not add up due to rounding and exclude deliveries valued under $0.5 million. Source: SIPRI Arms Transfers Database

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This suggests that Moscow will be looking to further develop other markets in order to fill the void, and ASEAN is among those apparently offering opportunities. Indonesia, Malaysia and Vietnam are seen as particularly ripe with potential. Expanding defence sales, in turn, are likely to encourage greater contact in areas such as training, education, reciprocal visits and perhaps even joint exercises. That is, fuller and more broadly-based bilateral relations. In that sense, then, defence sales are a vital tool of diplomacy.

Notes

1



2



3



4



5



6



7



8



9

Those that declined were led by the United States and included Australia, Brunei, Canada, Japan, New Zealand, Philippines, Singapore and Thailand. China and North Korea acknowledged Moscow’s invitation but never responded. The Reagan administration in Washington is thought to have boycotted the exercise mainly to avoid being drawn into discussions with Moscow on reciprocal reductions of Pacific naval forces. Tokyo delayed making such a conciliatory gesture until it could be satisfied that there were significant changes in the Soviet Union’s regional policies. Admiral Khvatov was speaking at a press conference attended by this writer, who was among the media contingent. Quoted in the cover blurb for Peter Hopkirk’s book Setting the East Ablaze: On Secret Service in Bolshevik Asia (Oxford, England: Oxford University Press, 1984). This is a highly readable account of efforts by Communist Internationale revolutionaries to foment Marxism and liberation in Asia during the inter-war period. Mongolia evolved from Soviet client state to a neutral stance with an American bent. See Robert Sae-Liu, “The Jane’s Interview (with foreign minister Nyamosor Tuya)”, Jane’s Defence Weekly, 25 August 1999, p. 32. For a comprehensive discussion of Vietnam’s post-Soviet military posture, see Robert Karniol, “Vietnam: off the ground”, Jane’s Defence Weekly, 4 January 2006, pp. 22–27. “You are on your own, Russia tells N Korea”, Jane’s Defence Weekly, 29 July 1995, p. 4. For insight on the DPRK’s more recent defence posture, see Robert Karniol, “North Korea: rational rogue”, Jane’s Defence Weekly, 5 July 2002, pp. 22–27. Robert Karniol, “Russians re-establish Cambodian contacts”, Jane’s Defence Weekly, 4 February 1995, p. 10. A new defence agreement was finalized in January 1995 but is largely unrealized. Robert Karniol, “Laos widens links with Russian, Indian talks”, Jane’s Defence Weekly, 11 February 1995, p. 18. These are Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan.

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See, for example Robert Karniol, “Russia and Uzbekistan to share intelligence”, Jane’s Defence Weekly, 11 September 1993, p. 21. 11 Robert Karniol, “China to host border talks”, Jane’s Defence Weekly, 17 April 1996, p. 32. The Shanghai Five involved China and Russia along with Kazakhstan, Kyrgyzstan and Tajikistan. 12 For an overview of the SCO, see Robert Karniol, “Shanghai Cooperation Organisation: partners in peace”, Jane’s Defence Weekly, 27 July 2005, pp. 20–23. 13 According to data retrieved from the Stockholm International Peace Research Institute’s (SIPRI) Arms Transfer Database and reflecting the value of deliveries. Soviet arms transfers accounted for US$37.1 billion out of US$51.0 billion in major defence equipment imported by India over this period, as expressed in constant 1990 prices. 14 The Putin visit in October 2000 saw the two sides ink the landmark “Declara­ tion on Strategic Partnership between the Republic of India and the Russian Federation”. Thirty agreements covering a wide range of areas were finalized during the Medvedev visit, including a deal relating to joint design and development of a new Fifth Generation Fighter Aircraft. The two countries have already developed jointly the supersonic BrahMos cruise missile. 15 Major Russian arms sales to India over the period 1992–2010 are nevertheless valued at US$22.2 billion or 71 per cent of New Delhi’s US$31.1 billion in acquisitions, according to SIPRI data and expressed in constant 1990 dollars. 16 For details of the initial deal, see Robert Karniol, “Russian tanks used in part to pay off loan”, Jane’s Defence Weekly, 13 May 1995, p. 3. 17 Joint projects include several surface-to-air missile programmes and South Korea’s Naro-1 space launch vehicle, whose first stage is powered by Russia’s RD-151 engine. For details of the former, see Robert Karniol, “Russia involved in South Korean SAM projects”, Jane’s Defence Weekly, 25 June 2003, p. 14. 18 According to SIPRI data. Russian defence exports to China were valued at US$81 million in 1990 and US$133 million in 1991, and then jumped to US$1.15 billion in 1992. Over the period 1992–2010 Russian arms sales to China were worth US$28.12 billion in constant 1990 prices out of Beijing’s total buys worth US$32.9 billion. However, this trade activity has been dropping: from an annual peak of US$3.23 billion in 2005 it has since slid each year and was worth US$410 million in 2010. 19 For example, Western analysts believe that there has been extensive Russian technical support behind China’s development of its Type 093 nuclear-powered attack submarine and Type 094 nuclear-powered ballistic missile submarine. This is not reflected in the SIPRI arms transfer data, and neither is such activity as China’s development of its Shenyang J-11 fighter aircraft through the unauthorized reverse engineering of Russia’s Sukhoi Su-27. 20 Other influences are also evident, including China’s disastrous performance in a brief 1979 border war with Vietnam and advances in technology highlighted by the American-led 1990/91 Gulf War. This doctrinal shift, and the force 10

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21



22



23



24



25



26



27



28



29



30

Robert Karniol

modernization involved in implementing it, has tremendous implications both regionally and globally. Some commentators see in the SCO a challenge to NATO and the United States. Speaking to this writer in 2005, a senior Russian source was dismissive. “The SCO has no military or police component. It has no joint command, and won’t have one as this is against the charter”, he said. Japan’s current defence White Paper, released December 2010, formalized this trend previously pursued more discretely. See Robert Karniol, “No surprise in Tokyo’s security strategy on China”, Straits Times, 21 February 2011, p. A21. Cambodia’s situation was more complex. The institutionally pro-Chinese Khmer Rouge ruled from 1975 until pro-Soviet Hanoi’s December 1978 invasion, which installed a puppet government anchored by the Khmer Rouge’s pro-Vietnamese (and, by extension, pro-Soviet) faction. The latter remain in power to this day, no longer tied to ideology and ironically most favourable towards China. The other founding members of ASEAN are Indonesia, Malaysia and Singapore. Brunei Darussalam, which joined soon after gaining full independence in January 1984, was also strongly anti-Communist. Vietnam joined ASEAN in 1995, Laos and Myanmar in 1997, and Cambodia in 1999. Together with seeing the domestic procurement of defence equipment slashed for at least a decade after the 1991 Soviet collapse, defence exports also suffered. The latter were valued at US$31.2 billion in 1987 and just US$2.8 billion in 1992, though most of the former figure involved grant aid. See Robert Karniol, “Russian industry hunts out a future for itself ”, Jane’s Defence Weekly, 1 March 2000, p. 19. Rosvooruzheniye State Corporation was established in November 1993. It merged in November 2000 with the smaller Promexport, which dealt mainly in excess defence material, to form Rosoboronexport. The Pacific Region International Defence Exhibition was held at the Philippine International Convention Centre in Manila on 13–16 November 1990. For a summary of Russia’s display, see Robert Karniol, “Weapons detailed in export drive”, Jane Defence Weekly, 15 December 1990, p. 1201. The displayed items were mainly air defence systems and included the SA-16 manportable SAM, which had never before been shown openly. There were also several systems on which information had never previously been made public, including: the SA-15 self-propelled SAM, the vehicle-mounted AT-6 “Spiral” anti-tank guided weapon system and the sophisticated SA-10 “Grumble” SAM system. Robert Karniol, “Kilo goes hunting for East Asia exports”, Jane’s Defence Weekly, 12 February 1994, p. 3. Following this up in 1997, Russia deployed a Kilo submarine and a Sukhoi Su-35 multirole fighter for display at the Thailand International Aerospace, Maritime and Defence Exhibition held on 22–26 October.

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Robert Karniol, “SAM sale marks Russia’s debut deal in Singapore”, Jane’s Defence Weekly, 22 October 1997, p. 3. The two versions include a manportable system and a locally developed mechanized version mounting four missiles. 32 This data is drawn from the Stockholm International Peace Research Institute’s arms transfer database, which covers only major platforms and systems. Items such as small arms, ammunition and spare parts, and technology transfers are excluded but the data is nevertheless indicative. For a breakdown by country and by year, see Table 4. 31

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THE ENLARGEMENT OF THE EAST ASIA SUMMIT: THE REASONS AND IMPLICATIONS OF BRINGING RUSSIA IN Victor Sumsky

INTRODUCTION During the Association of Southeast Asian Nations’ (ASEAN) Summits in Hanoi in October 2010, the Russian Federation was officially invited to accede to the East Asia Summit (EAS). A similar invitation was extended then and there to the United States. Addressing the EAS leaders on that occasion, both the Russian Foreign Minister Sergei Lavrov and the U.S. Secretary of State Hillary Clinton pointed to the readiness of their nations to contribute to the strengthening of this forum as a vehicle for promotion of the regional strategic dialog and security cooperation.1 The EAS is a fairly new phenomenon. Seven years ago, its first session in Kuala Lumpur brought together the heads of states and governments of the ten ASEAN members, along with their colleagues from China, Japan, South Korea, India, Australia and New Zealand — the combination of participants often referred to as ASEAN+6. As regards the U.S., way back in 2005, it did not claim a place at the discussion table. More than that, Washington actually made it known that it was not supportive of the idea to convene the EAS. By contrast, Russia not only indicated its interest in becoming a member, but 70

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fulfilled a major precondition of membership by signing the Treaty of Amity and Cooperation in Southeast Asia. This document, also known as the Bali Treaty of 1976, had always been, and remains in the eyes of ASEAN, the most important legal regulator of regional behaviour. Nevertheless, Moscow’s official application was politely declined. To explain this, it was said that Russia’s relations with ASEAN nations (who enjoy the privilege of determining the EAS agenda and accepting new members) were not quite “substantive”. Basically, it implied that Russia-ASEAN trade was too small, compared to that between ASEAN and its key trading partners such as China, Japan and the United States. Since the launching of EAS was presented to the world as a measure to speed up regional economic integration and the birth of East Asian Community, saying “no” to Russia seemed justified — at least, to some extent. Now that the invitation has been finally issued, one may ask what has actually changed. Are Russia’s trade and economic relations with ASEAN more “substantive” today than in the middle of the last decade? According to some optimistic estimates, in 2010, Russia’s total trade turnover with these partners was more than twice as big as in 2005: from about US$5 billion this indicator has gone up to US$12.5 billion. It looks like real progress, doesn’t it? Yes, of course — until one starts comparing these numbers to the trade statistics of the really big players. From that point of view, Russia’s presence in Southeast Asia is still not too meaningful, to put it mildly. Why then was Russia invited to join EAS? As far as I know, this decep­ tively simple question has never been posed in the media. One possible explanation is that the answer really does not lie on the surface, and anyone who is looking for it will have to dig a bit deeper than usual. In any case, it is fair to assume that EAS membership is not given easily. Free lunches are not the norm of international relations, and Russia in particular has not been famous as a recipient of such gifts in any period of its history. If just a few years ago its application was turned down and now it has been approved, there has to be a serious reason behind that — or even a whole set of reasons. Maybe, back then the assessment of Russia-ASEAN relations as not “substantive” was more of a plausible pretext than a real explanation for Russia’s non-admittance? Some people saw it exactly that way. Apart from that, perceptions of Russia as an external partner may be changing with the shifts in the regional and global environment. And, just because of these same shifts, today’s ideas about the EAS role and objectives may not be quite what they were a while ago. Let us explore these topics one by one.

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MAKING IT WITH AMERICA OR WITHOUT IT? The “long march” towards the EAS was starting when the Cold War was ending. At that time, the proponents of East Asian regionalism had to choose between Washington’s calls for a systemic liberalization of trade and the bold ideas of Dr Mahathir Mohamad — Prime Minister of Malaysia who believed that Asians should keep the U.S. out of their integration schemes, because otherwise America’s rules of the game would be imposed on their economies. The emergence of the body known as the Asia-Pacific Economic Cooperation (APEC) and a number of declarations made at its summits in the first half of the 1990s seemed to prove that the U.S. was winning that debate. However, with time it was becoming clearer that APEC’s nonWestern participants, be they members of ASEAN or their Northeast Asian neighbours, were actually not too compliant. The Asian Crisis of 1997–98 and the dubious attitude of the United States towards its victims had the effect of vindicating Dr Mahathir’s position. A multilateral dialogue along the ASEAN+3 lines (where the “three” stood for China, Japan and South Korea) quickly gained what was missing in APEC discussions — the practical edge. Although officially the ASEAN+3 agenda focused on economic cooper­ ation, one point that was latently there from the start was the need for a regional balance of political and economic power. Initiating a new dialogue platform, ASEAN was fully aware of the contradictions between the Northeast Asians. Probably, the game plan was to capitalize on them by manoeuvering between those three, getting closer to one or the other, depending upon the situation, and to secure in that manner, ASEAN’s role as the regional stability guarantor. Is it so necessary to note that the aim of sustaining stability through a balance of power system has more to do with security in the broader sense of the term than with economic cooperation as such? However, the spectacular dynamism of China was making this manoeu­ vering trickier. China was growing with so much force and determination, that at the dawn of the twenty-first century, the aggregate potential of all its partners in ASEAN+3 seemed no longer sufficient to counterbalance it. This uneasy feeling resulted in the move from ASEAN+3 to ASEAN+6 — remarkably, by bringing in the countries that were linked to the United States by special or visibly improving relations. No wonder that China had no particular enthusiasm for the newly born EAS. To Beijing’s satisfaction, the formation of EAS did not result in the vanishing of ASEAN+3, and it is

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no secret that the latter, not the former, is perceived by the Chinese as the prototype of the future East Asian Community. As for the America of George W. Bush with its overseas military adventures and disdain for international law, it received no invitation to the first East Asian Summit. Media friends of the Republican administra­ tion responded by mounting criticisms of ASEAN as a mere “talk shop” and denunciations of the EAS as an ill-conceived project smacking of “Mahathirism”. According to the opinion that I consider justified, the absence of the United States at the inaugural summit was the real reason for ASEAN’s reluctance to approve the Russian membership application. Rodolfo Severino, the former Secretary General of ASEAN, wrote in 2006, when memories of the Kuala Lumpur session were still fresh: “Should Russia become a regular participant, that development would make the absence of the United States all the more conspicuous to those who feel that Washington should be part of the East Asian process.”2

EAST ASIAN TRENDS To the extent that the urge to preserve the regional equilibrium led to the emergence of ASEAN+6, the security issues became a de facto EAS priority right away, although at first without any public acknowledgement. Between the summits in Kuala Lumpur and Hanoi, at least three developments contributed to the eventual inclusion of strategic and security issues in the official EAS agenda. China’s unstoppable drive: As Beijing continued to consolidate its regional positions, its vibrant growth, more than anything else, supported the belief that the centre of the global economy was moving away from the West to the East — or, more precisely, to East Asia. Thus, China’s self-transformation into a regional superpower and a force of global importance was basically a twofold process. With the advent of the Global Crisis, China once again shocked the world by its ability to succeed where all others had failed. Ironically, there was a price to pay for looking so absolutely winning: apprehensions that China’s newly developed self-confidence might sooner or later find expression in trouble-making behaviour were becoming an idée fixe among the China-watchers of Southeast Asia. America’s regional counteroffensive: These growing suspicions about China’s “real intentions” were shrewdly detected by the new Obama administration

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and used to the full. No sooner had the Democrats come to power as Mrs Clinton declared that the United States was eager to be “back in Asia” — naturally, as the top player. In a very short time the U.S. managed to energize its ties with almost every single ASEAN nation. Even Myanmar, only recently labelled “an outpost of tyranny” and often denounced as China’s client, did not become an exception. There was no lack of gestures, either, in support of ASEAN as a “driver” of various regional “vehicles”, and in 2010 the long-awaited American decision to sign the Bali Treaty materialized. In parallel fashion, the U.S. expertly triggered another round of animosities over the territorial disputes in the South China Sea — to underscore against this background its value as the only real barrier against the “inherently aggressive” China.3 The Rudd and Hatoyama initiatives: In the second half of the decade, at the time when the EAS, just like ASEAN, was dismissed by its critics as a “talk shop”, two leaders — Australian Kevin Rudd who served as Prime Minister from 2007–10 and Japanese Yukio Hatoyama who led the government from 2009–10 — took advantage of the moment to promote alternative blueprints for East Asia’s common future. Rudd proposed to form the Asia-Pacific Community that would be open to all the large players — the U.S., China and Russia. Hatoyama initially outlined a plan for a body with the same sixteen members as in EAS, but later added one more participant to his list, the United States. While it might seem that America’s allies were going out of their way to please “the boss”, that impression was not quite correct. According to some analysts, Rudd’s real purpose was to use the new organization in order to contain the U.S.-China rivalry and to give Australia the role of a mediator between the two great powers. As for Hatoyama, his primary aim was not to let China build its version of an East Asian Community on the basis of ASEAN+3 and to promote Japan, with support from India, Australia and New Zealand, as the future regional leader.4 Although both Rudd and Hatoyama paid lip service to ASEAN, their initiatives did not ring any bells in the capitals of the ASEAN member states. It was clear that if any one of those two prevailed, ASEAN would quietly fade away as a regional force.5 To retain its proverbial “driver’s seat”, ASEAN had to respond to all these challenges. Essentially, it had to come to terms with two facts of life. First, due to East Asia’s new centrality in the world economy, its regional problems were acquiring a global dimension, and dealing with them in earnest required the involvement of all the global players in the neighbourhood. Second, the disturbing prospect of sharpening contradictions between the U.S. and

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China was making it essential for the EAS to start addressing strategic and security issues openly.

ASEAN’s CONCERNS AND RESPONSES Discussions about ASEAN’s options quickly revealed that the idea of adding the players of the U.S.’ and Russia’s calibre to the ASEAN+6 evoked its own anxieties. In May 2010 some of these were summarized by K. Kesavapany, Director of the Institute of Southeast Asian Studies (ISEAS) in Singapore. He drew attention to the possibility that the expansion of EAS might result in the blurring of its economic integration perspectives (including formation of the region-wide free trade area) and overloading of the enlarged forum with the issues not immediately related to East Asia. In the author’s view, a good way to combine the need for the efficient EAS with the raising of its global profile through Washington’s and Moscow’s participation was not to incorporate them in EAS, but to create an additional ASEAN+8 group that would meet once every three or four years.6 Obviously, this was more than just a personal opinion. Nevertheless, in October 2010 in Hanoi, another option was chosen: both the U.S. and Russia were invited to join the EAS as full-time participants. What influenced this choice more — impressions created by various displays of American activism in East Asia throughout 2009–10 and China’s sometimes emotional reactions to it, or the sense that a methodical splitting of the regional from the global had no practical meaning these days, or even a feeling that East Asia already had too many dialogue platforms to create still one more? Whatever it might be, the decision to enlarge the EAS effectively brought to their logical conclusion no less than three themes in the current East Asian process: 1. Sustaining the regional balance of power; 2. Making EAS security-oriented; and 3. “Globalizing” this platform (and, by implication, ASEAN). True, there was some residual debate at the ASEAN Foreign Ministers Meeting in April 2011 on the wisdom of focusing EAS on security issues.7 But statements made at the 18th ASEAN Summit that followed in May 2011, confirmed that ASEAN was eager to develop a vision of its own future “in the global community of nations” and that security issues would be part of the official EAS agenda.8 If all of the above makes any sense, then the reasons for inviting Russia to EAS are becoming somewhat clearer.

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BACK TO RUSSIA To say that the future of East Asia and the world is dependent on the course of U.S.-China competition is not to say that this competition is always a threat to the region and the world. If the ASEAN members could tell Washington and Beijing how to behave, they would probably ask them to move somewhere in the middle between open hostility and outright alliance (which is still, more or less, the situation of today). The preferred model would be based on considerable, but not antagonistic contradictions between the two powers, so that the ASEAN nations could exploit these differences for their own benefit without running any formidable risks and for the sake of greater influence in their own location. But if and when the competition that we talk about gets out of hand (which is not improbable, considering how much is at stake), it will surely cause a threat. Therefore, creation of such an international environment in which the destructive aspects of U.S.-China competition are minimized must be a key objective for anyone who cares about regional and global peace. With all the variety and gradations in the foreign policies of East Asian nations, not a single one of them is willing to associate itself fully and finally with either the U.S. or China. In that sense, the examples of the ASEAN members and ASEAN as a whole are most typical: more than once they had shown that for them a decisive choice between the two dominating forces was not just undesirable or painful, but unthinkable. In the present state of things, they will have to hold that middle ground in the regional set-up that means so much for the stability of East Asia as a geopolitical and economic entity. In the EAS format, the players in this group until recently lacked a like-minded partner with a global status. Maybe, this is the role which is offered to Russia (for understandable reasons, silently) along with the EAS membership? Is Russia capable of living up to these expectations? Maybe, it is easier to figure it out by reformulating the question and asking under what conditions Russia’s entry into EAS would never have taken place? First of all, it would be inconceivable if the major trends of Russia’s political and economic development were utterly different from those in East Asia and the world. No matter how critically we may refer to the present state of our democracy and our market, it is undeniable that the foundations of both have been laid. We may not be happy with the quality of economic growth or state governance, but we have to admit that in the early twenty-first century, our economy is growing, the chaos of the first post-Soviet decade is curbed, and the country is governed better than before.

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Our socio-economic modernization may not be proceeding too well, but its promotion is now an official policy. The sum of these observations suggests that today’s Russia is not an alien to the region. Second, had Russian foreign policy been aggressive, confrontational or compromised by abuse of force, an invitation to EAS would have been out of question. The accumulated conflict potential of East Asia is already big enough, and new additions to it are not welcome. If peace is grossly violated, East Asian countries may not preserve their economic dynamism — the advantage that makes them so attractive to Russia as partners in modernization and development, especially as regards Siberia and the Far East. Russia is brought in precisely because of its obvious interest in regional peace. Third, what East Asia definitely does not need is a new player whose huge territory, enormous resources and military potential are not backed by an independent foreign policy. At a time when the crucial constituent of the regional (and global) system is the U.S.-China relationship, such a player, in pursuit of mercantile short-term gains, would sooner or later succumb to the temptation of throwing its weight behind one of the two great powers. This could only lead to a geopolitical polarization of dangerous proportions, because, for all its dependence, the player in question would still be a very significant element in the game.9 Shall we assume, then, that the invitation to join EAS is a sign of ASEAN’s belief in Russia’s independent stand in world affairs? Probably, not only Europe, but Asia too, paid due attention to the difficult but necessary demonstrations of Russia’s independence — such as Vladimir Putin’s Munich speech of February 2007 or Moscow’s willingness in August 2008 to defend its own peacekeepers and the people of South Ossetia from the assault by “you know who’s darling” in the Caucasus region.

CONCLUSION Thus, responding to the question why Russia was invited to join the EAS, one may say that it is a country compatible with the rest of the region, a country wishing to share in East Asia’s prosperity and to add to its economic momentum, a country whose political position will contribute to peace and balance in the region, a country supportive of ASEAN’s regional centrality and capable of helping ASEAN to buttress the middle ground in the East Asian geopolitical space. Russia’s global status makes it a natural participant in the EAS as a forum addressing not just regional but global issues. In a sense, Russia’s quest for

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a decent place in East Asia and the world is the opposite of China’s: while the latter acquires a global role relying very much on its growing regional influence, the former tries to convert its global importance into a regional presence. So far it works, but no lasting success is possible unless political prestige is augmented by much livelier economic interactions with the region — and with ASEAN, of course.

Notes

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See “Vystupleniye Ministra inostrannykh del Rossii S V Lavrova na 5-m Vostochnoaziatskom sammite, Khanoi, 30 oktyabrya 2010 goda”, Address of the Minister of Foreign Affairs of Russia S.V. Lavrov to the 5th East Asia Summit, Hanoi, 30 October 2010 (in Russian), ; “Secretary Clinton on Engagement at East Asia Summit”, . Rodolfo C. Severino, Southeast Asia in Search of an ASEAN Community: Insights from the Former ASEAN Secretary-General (Singapore: Institute of Southeast Asian Studies, 2006), p. 272. On the U.S. policy of stirring up new controversies related to the South China Sea disputes, see Peter Lee, “US Goes Fishing for Trouble”, and . See Joel Rathus, “Squaring the Japanese and Australia Proposals for an East Asian and Asia Pacific Community: Is America in or out?”, . Neither of the two prime ministers had the chance to take his initiative further, and not just because they both lost their jobs too soon. The fact that these proposals were too vague and muddled — and thus at least as flawed as, according to some critics of ASEAN, the latter’s concepts — was largely inevitable. Rudd and Hatoyama were forced to keep maneuvering because elites in both their countries were increasingly split into pro-American factions and those supporting closer ties with China. See Peter Symonds, “WikiLeaks Cables Expose U.S. Hostility to Rudd’s Asia Pacific Community Plan”, . See K. Kesavapany, “ASEAN+8: A Recipe for a New Regional Architecture”, . See “EAS should not be Regional Security Mechanism: M’sia”, .

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See “ASEAN Community in the Global Community of Nations”, Chair’s Statement of the 18th ASEAN Summit, Jakarta, 7–8 May 2011, . See also Victor Sumsky, “Modernisation of Russia, East Asia Geopolitics and the ASEAN Factor”, International Affairs (Moscow 2010, Special Issue): 18–22; Victor Sumsky, “East Asian Summit and Russia: Long-Awaited Invitation”, Security Index vol. 17, no. 2 (Spring 2011): 63–68.

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RUSSIA’S ENTRY INTO ASEM: NOT JUST A COURTESY CALL?1 Ekaterina Koldunova

INTRODUCTION The global financial crisis has highlighted significant imbalances in the modern developmental pattern of many states. It has become a test for the global political and economic system, for the old and new regional centres of power. In this context, many countries have started to look around for more opportunities in terms of international economic cooperation. When the group of emerging economies came to the fore during the early crisis period, it was a clear sign that geo-economics was going to play a central role in international relations. The new growth centres are not so much individual spearhead countries, as nations forming networks of economic and political relationships in the regions they belong to. East Asian emerging markets are a good example of such new centres. By contrast, the European Union is a model of technologically advanced development, based on economic and political regionalism. Looking at these two cases, it would be natural to focus at some point on the prospects of inter-regional connections. Let’s consider, in particular, the potential of Asia-Europe Meeting (ASEM) and Russia’s relationship with it.

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INTER-REGIONAL AND TRANS-REGIONAL COOPERATION The Asia-Europe Meeting (ASEM) was one of the earliest forums based on the idea of cooperation between several regional organizations, and this initiative has given much food for thought to practitioners and theorists alike. They view ASEM as a step towards globalization through regional integration, and have discussed prospects for binding the world’s three economic growth centres — Europe, East Asia, and North America more tightly.2 In the midst of post-Cold War uncertainty, the idea of a tripartite union of this type seemed overwhelming and over optimistic at the same time. In fact, the links between the United States and Europe or between the United States and East Asia were much stronger than they were between Europe and East Asia. Special mechanisms already existed to promote interaction across the Pacific (APEC)3 as well as the United States and Europe cooperation (The New Transatlantic Agenda).4 The United States regarded ASEM sceptically from the start.5 As for Russia, it was just ignored. It seemed almost axiomatic that Europe and Asia could manage well without it. The traditional approach to an analysis of ASEM grew out of interregional studies that focused on institutionalized relationships between groups of countries in different regions of the world.6 Some scholars distinguished inter-regionalism from trans-regionalism, noting that the first one implied a more narrow form of cooperation in a particular area (like trade), while the second one meant broader interaction between regional organizations and its members. One such approach directly linked inter-regional cooperation with the progress of free trade in the WTO framework.7 A group of researchers considered inter-regional relations as a stage on the way to global multi-polar unity. However, the poles in this model were not the great powers but large and relatively homogeneous regional clusters.8 Co-hegemony of the three political and economic powers mentioned above was a variant of this system.9 For some, inter-regionalism was also linked to the search for regional identities. This was, perhaps, less of a problem for Europe than it was for East Asia, where regional integration followed an indigenous scenario.10 One more school of thought regarded inter-regional initiatives as elements of a multi-tiered management structure, evolving at the global level.11 Alongside such new formats as the Group of 20 and BRIC/ BRICS, these initiatives gained development impetus from the world crisis. Here the interests of the emerging centres of power were somehow bound with those of the old development centres.

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Inter-regional (and regional, too, for that matter) associations can provide discussion platforms for debating and settling various issues before they are introduced at higher levels.12 In this sense, they can be more effective than interest groups arising spontaneously at global governance forums. Indeed, one way or another, members of such associations have already agreed to cooperate, sketched a roadmap for their continued development, and settled on decision-making methods. The phenomenon of inter-regional associations calls for a review of the established views of regions and regionalism. It is high time to look at Europe and Asia as macro-regions in formation and to regard them, just like contemporary Russia, as parts of the global political and economic space.13 These macro-regions should work out a co-development strategy reflecting not a mere sum of what is happening at bilateral levels, but rather a new quality of interaction. With this in mind, let us quickly review the history of ASEM and evaluate its prospects after its expansion in 2010.

ASEM THEN AND NOW Although the geographical, cultural, and historical realms of Europe and Asia are larger than those belonging to ASEAN and the European Union, these two regional groups are precisely the ones that form the core of ASEM. Why then do they have a special role in this set-up? The concept of an inter-regional dialogue between Europe and Asia did not crop up overnight. It dates back to the 1970s when the dialogue between the European Community and ASEAN was fine-tuned. In 1975, the ASEAN-European Community Mixed Working Group was established. Its aim was to consider the possibilities of bilateral cooperation. Sometime later the dimensions of an incipient Europe-Asia dialogue were discussed at the World Economic Forum in Switzerland, and the EU and ASEAN delegates borrowed the idea. In 1994, the EU released a document entitled “Towards a New Asian Strategy”, with an emphasis on a dramatic change in world economic power due to Asia’s rise. The strategy stated that: …the establishment of a strong, coordinated presence in the different regions of Asia will allow Europe at the beginning of the 21st century to ensure that its interests are taken fully into account there…14

Following the preliminary arrangements at the ministerial level, the first ASEM Summit was held in Bangkok in March 1996, with successive summits hosted every two years in rotation by countries representing the

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European and Asian parts of the forum.15 Different views were voiced on ASEM membership criteria. The criteria formalized for new members by the end of the 1990s required a country to be located geographically in either Europe or Asia, to maintain close political and economic ties with ASEM members, and to be able to contribute to the forum’s development. It was also assumed that a country applying for membership had to be approved by the countries in its area first.16 Being the biggest country straddling the dividing line between Europe and Asia and having vital interests in both, Russia expressed its desire to join the forum very early on. Nevertheless, it was kept waiting for its turn to be admitted to ASEM for a long time. The delay called into question the credibility of Europe-Asia cooperation minus Russia. Today, ASEM comprises the European Commission, the Secretariat of the Association of Southeast Asian Countries, the EU and ASEAN members, the Association’s partners in the ASEAN+3 formats (that is, China, Japan, and South Korea), India, Pakistan, Mongolia and from 2010 — Russia, Australia and New Zealand. ASEM discusses political and economic cooperation, security issues, culture, and education. Apart from collaboration at the interstate level, contacts are developed between the general public, and business forums are an indispensible part of every ASEM Summit. The Asia-Europe Foundation (ASEF) headquartered in Singapore and financed by ASEM members is responsible for supporting joint projects in the fields of culture, education and science. The 8th ASEM Summit took place in Brussels from 4–5 October 2010 under the motto “Improving the quality of life, achieving greater well-being and more dignity for all citizens”. Its agenda covered issues such as promotion of cooperation between the regions in the face of the world crisis, problems of climate change, and cultural dialogue. The summit also stimulated expansion of ties between Europe and Asia by admitting new members — Russia, Australia and New Zealand. As the world crisis continues, the need to invigorate relations between the two macro-regions is felt more and more acutely. Mired in structural problems, the European economy may need the positive impulses from developing Asian markets.17 In a way, the situation is a mirror image of what was happening in 1997–98, at the peak of the Asian crisis. As Kishore Mahbubani notes, it was East Asia that was regarded then as a partner in trouble: The rich European countries had offered to form a partnership with the East Asian countries on the assumption that the East Asian

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economies would be success stories. Once they began to fail, Europe lost interest.18

Thus ASEM failed to make progress due to the situation within the Asian bloc. However, it is quite unreasonable to neglect this form of cooperation now. ASEM expansion offers a good occasion to reappraise the content of this format and to give a new quality to inter-regional relations. No matter how ASEM’s performance is assessed today, its concept is basically in line with a key world trend — movement towards co-development that utilizes the competitive strengths of neighbours and more distant partners as an alternative to the development in the confines of a single country or region. Trends and structures of internal development within the main regional integration centres are now more or less clear. The experience gained can be used to build up inter-regional ties and to look for the ways to institutionalize them optimally. This is why ASEM could be held up as a positive example of inter-regional cooperation. The emergence of new global and regional mechanisms is a sign that the international community is searching for cooperation formats in which members use their resources and capabilities in the best possible and mutually advantageous ways. In turn, this suggests that formats patterned on ASEM will be increasingly in demand. Hopefully, Russia is not seeking ASEM membership just to be on the list of yet another international club, but is really running with the times.

RUSSIA IN ASEM: MORE THAN A COURTESY CALL? After Russia applied for ASEM membership, it was told to “cool its heels” when waiting on the pretext that its geographical location did not make it fully European or fully Asian. No one seemed to remember, though, that its Eurasian landmass holds these two continents physically together, and thus the Asia-Europe Meeting without Russia is a challenge to commonsense. No wonder that in Russia, ASEM was viewed as an example of “closed regionalism”.19 Interestingly, Russia was admitted to ASEM at a time when the traditional concept of regions and integration models were changing under the impact of macro-regionalization and the global financial crisis. It was no longer important to give a precise answer to the question of where a country belongs geographically. Brussels did not insist on it from either Russia, or Australia, or New Zealand.

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In a sense, accession to ASEM is a sign of “normalization” in Russia’s foreign policy, and, by the same token, “normalization” of the attitude to Russia itself, and recognition of its potential to contribute to inter-regional cooperation. If both Europe and Asia are regarded as macro-regions in the making, Russia as an area full of opportunities to link the EU and East Asia is not going to be an also-ran in ASEM. It will not be a stranger at the party — it already has a treaty of partnership and cooperation with the EU and many years of experience in APEC and ARF, and it is also a dialogue partner of ASEAN. Russia can expand its cooperation with ASEM by joining or supporting the ASEAN initiatives as well as the already existing patterns of Europe-Asia interaction. This will contribute not just to the strengthening of ASEM but to the Russia-ASEAN dialogue partnership as well. In fact, Russia has a reason to look more closely at Europe’s experience of interaction with Asia and particularly, with Southeast Asia. One traditional way to explain the absence of substantial economic ties between Russia and Southeast Asia is to refer to their geographical remoteness. Large distances, though, did not prevent the EU states from becoming one of ASEAN’s main trade and investment partners.20 The idea of linking Europe and Asia across Russia is nothing new, of course. Nevertheless, it would be strange not to use ASEM membership for promoting and completing infrastructure projects of a Eurasian scale with Russia’s involvement. But Russia should act quicker before China and Central Asian countries build their own tracks where it suits them best. The mechanism of the ASEM Ministerial Meeting on Transportation launched in 2009 is a good opportunity to revise Russia’s potential and actual facilities to provide trans-Eurasian transportation services. Among the most important routes for Russia are the following inter­ national transport corridors (ITCs), according to international classification: ITC No. 2, ITC “East-West” and ITC “North-South”. ITC No. 2 connects Europe with the European part of Russia (Berlin-Warsaw-Minsk-MoscowNijniy Novgorod) and can supplement with the routes uniting Russia with Kazakhstan and China. ITC “East-West” plan is aimed at connecting Japan, Russia and Europe using the facilities of Trans-Siberian Railroad and ITC No. 2. Some steps are already being taken to implement the ITC “NorthSouth” project (South Asia-Middle East-Russia-Europe). Further expansion of such routes in close cooperation with ASEAN and other ASEM partners may suit Russia with its emphasis on innovative development very well: such infrastructure projects can be integrated with modern navigation systems such as the Global Navigation Satellite System (GLONASS).

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Another example of the existing pattern of cooperation between Europe, Russia and Asia is represented by the Trans-Asia/Trans-Siberia/Cross-Polar Routes High Level Steering Group (ITASPS) established in 1997 by the International Civil Aviation Organization, with the aim to coordinate a coherent structure of aviation routes linking Europe and Asia, Europe and North America, Asia and North America. Russia has been an active partici­ pant in this group as a great number of routes linking Europe with the Far East and Southeast Asia run across its territory. How realistic is it for Russia to use ASEM as an additional mechanism for integrating into world economic relations on fair terms?21 This is a question not so much of theory as of practice and the answer depends to a great extent on the Russian private sector. ASEM business forums offer them an opportunity to seek out suppliers of technologies and investments, and buyers of both, and to put forward initiatives to numerous potential investors in the East and West at the same time. In humanitarian cooperation, we expect, among other things, Russian experts and scientists to be in high demand for science research programmes sponsored by ASEM.

CONCLUSION Accession to ASEM is a reminder to the Russian Government and political elite of the need to coordinate the country’s Western and Eastern policy, an important concept that has not yet been grasped. To put it in simple terms, Russia’s Asian policy has to be related to its basic foreign policy objectives in the Atlantic area, and the other way round. Regarded by some experts as an emerging power along with China and India, Russia differs from these states in terms of its economic growth pattern. However, it can maintain this status by finding new sources of growth due to livelier regional and macro-regional cooperation and becoming a hub which involves neighbouring states and regions in economic partnerships. That is the context in which one may truly appreciate the opportunities for co-development with ASEAN and the EU (and, in a broader sense, with the Asian and European macro-regions) that open up with Russia’s accession to the Asia-Europe Meeting.

Notes

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An earlier version of this text appeared in the special issue of the International Affairs Journal on Russia-ASEAN (Moscow, October 2010) under the title “Next Time, At ASEM! Theory and Practice of Interregional Relations: Russia, Take Note”.

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Christopher Dent, “The ASEM: Managing the New Framework of the EU’s Economic Relations with East Asia”, Pacific Affairs, vol. 70, no. 4 (Winter): 495–516; and Corrado G.M. Letta, ASEM’s Future: Asia-Europe Partnership, vol. 1 (Bologna: “Lo Scarabeo” Editrice, 2002). More on this: “Bogor Declaration 1994”, (accessed 4 June 2011). More on this: “New Transatlantic Agenda”, (accessed 4 June 2011). Davis Bobrow, “The US and ASEM: Why the Hegemon Didn’t Bark”, The Pacific Review, vol. 12, no. 1 (1999): 103–28. Julie Gilson, Asia Meets Europe: Interregionalism and the Asia-Europe Meeting (Cheltenham: Edward Elgar, 2002), pp. 1–8. Beginda Pakpahan, “Contemporary Trans-regional Cooperation between Europe and Asia in a Changing World”, Journal of Contemporary European Research, vol. 6, issue 4 (2010): 514–34. Michael Reiterer, “Asia-Europe Meeting (ASEM): Fostering the Multipolar World Order through Inter-regional cooperation”, Asia Europe Journal, no. 7 (2009): 179–96. Christopher Dent, “The Asia-Europe Meeting and Inter-regionalism: Toward a Theory of Multilateral Utility”, Asian Survey, vol. 44, no. 2 (March/April 2004): 213–36. Gilson, op. cit., p. 3. Jűrgen Rűland, “Interregionalism and the Crisis of Multilateralism: How to Keep the Asia-Europe Meeting (ASEM) Relevant”, European Foreign Affairs Review, vol. 11 (2006): 45–62. Reiterer, op. cit., p. 181. Alexei D. Voskressenski, “Introduction”, in Bolsha’ya Vostochna’ya Azi’ya: mirova’ya politika i regionalnye transformazii [Greater East Asia: world politics and regional transformations], edited by Voskressenski (Moscow: MGIMO-University), pp. 6–10. “Towards a New Asian Strategy”, (accessed 4 June 2011), p. 1. The forum convened its summits in London in 1998, Seoul in 2000, Copenhagen in 2002, Hanoi in 2004, Helsinki in 2006, Beijing in 2008, and Brussels in 2010. Sergey Trush, “Tret’ya vstrecha ASEM I Rossiya” [Third Meeting of ASEM and Russia], SSha. Kanada: Ekonomika, politika, cul’tura, no. 9 (2000): 80–81. Shada Islam, “Asia, Europe Must Not Drift Apart”, Asia Sentinel, 13 July 2010; and Corrado G.M. Letta, ASEM’s Future: Asia-Europe Partnership, vol. 1 (Bologna: “Lo Scarabeo” Editrice, 2002). Kishore Mahbubani, The New Asian Hemisphere: The irresistible shift of global power to the East (New York: Public Affairs, 2008), p. 265.

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Sergey Sevastyanov, “Regionalizm v Vostochnoy Azii I Rossiya” [Regionalism in East Asia and Russia], Mirovaya ekonomika i mezhdunarodnye otnosheniya, no. 12 (2008): 103. 20 As for 2009 EU-27 was the third top ASEAN trade partner with a share of 11.2 per cent from the total ASEAN trade, see “Top ten ASEAN trade partner countries/regions, 2009”, (accessed 25 May 2011). During 2007–09, EU-25 was a number one source of foreign direct investments to ASEAN, see “Top ten sources of foreign direct investment inflow to ASEAN”, (accessed 25 May 2011). 21 For more about Russia’s basic goals and interests in the Far East, see “Stenograficheskiy otchyot o soveshanii po sotsial’no-ekonomicheskomu razvitiyu Dal’nego Vostoka I sotrudnichestvu so stranami Aziatsko-Tikhookeanskogo regiona” [Stenographic Report on the Meeting on Socioeconomic Development of the Far East and Cooperation with Countries of the Asia-Pacific Region], 2 July 2010, (accessed 10 April 2011). 19

References Bobrow, Davis. “The US and ASEM: Why the Hegemon Didn’t Bark”. The Pacific Review, vol. 12, no. 1 (1999). Dent, Christopher. “The Asia-Europe Meeting and Inter-regionalism: Toward a Theory of Multilateral Utility”. Asian Survey, vol. 44, no. 2 (March/April 2004). Dent, Christopher. “The ASEM: Managing the New Framework of the EU’s Economic Relations with East Asia”. Pacific Affairs, vol. 70, no. 4 (Winter 1997–98). Gilson, Julie. Asia Meets Europe: Interregionalism and the Asia-Europe Meeting. Cheltenham: Edward Elgar, 2002. Islam, Shada. “Asia, Europe Must Not Drift Apart”. Asia Sentinel, 13 July 2010. Letta, Corrado G.M. ASEM’s Future: Asia-Europe Partnership, vol. 1. Bologna: “Lo Scarabeo” Editrice, 2002. Mahbubani, Kishore. The New Asian Hemisphere: The irresistible shift of global power to the East. New York: Public Affairs, 2008. Pakpahan, Beginda. “Contemporary Trans-regional Cooperation between Europe and Asia in a Changing World”. Journal of Contemporary European Research, vol. 6, issue 4 (2010). Reiterer, Michael. “Asia-Europe Meeting (ASEM): Fostering the Multipolar World Order through Inter-regional cooperation”. Asia Europe Journal, no. 7 (2009). Rűland, Jűrgen. “Interregionalism and the Crisis of Multilateralism: How to Keep the Asia-Europe Meeting (ASEM) Relevant”. European Foreign Affairs Review, vol. 11 (2006).

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Sevastyanov, Sergey. “Regionalizm v Vostochnoy Azii I Rossiya” [Regionalism in East Asia and Russia]. Mirovaya ekonomika i mezhdunarodnye otnosheniya, no. 12 (2008). “Towards a New Asian Strategy”. (accessed 4 June 2011). Trush, Sergey. “Tret’ya vstrecha ASEM I Rossiya” [Third Meeting of ASEM and Russia]. SSha. Kanada: Ekonomika, politika, cul’tura, no. 9 (2000). Voskressenski, Alexei D. “Introduction”. In “Bolsha’ya Vostochna’ya Azi’ya: mirova’ya politika i regionalnye transformazii” [Greater East Asia: world politics and regional transformations]”, edited by Voskressenski. Moscow: MGIMOUniversity, 2010.

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RUSSIA-INDIA-CHINA: ACTING IN CONCERT IN SOUTHEAST ASIA? Natalia V. Stapran

The concept of a Russia-India-China (RIC) “strategic triangle” as an arrangement that may add stability and credibility to the post-Cold War system of international relations has quite a few supporters among Russian academics. Looking at the origins of the idea, some point to the works of Vladimir Lenin. Indeed, in the early twentieth century, the founder of the Soviet Union believed that an alliance of this kind could play a crucial role in the worldwide anti-imperialist struggle.1 Yet it is only recently that the prospect of geopolitical coordination between RIC has become a subject of a lively debate. The first person to publicly discuss this option was Yevgeny Primakov.2 In December 1998 when Mr Primakov was Russia’s Prime Minister, he briefly spoke about it and basically implied that the formation of such a “triangle” might constrain U.S. hegemonic behaviour and represent a significant step towards multi-polarity in global affairs. Initially, both New Delhi and Beijing were lukewarm to the idea. How­ ever, in 1999, when the first North Atlantic Treaty Organization (NATO) bombs fell on Belgrade, India proposed beginning discussions on trilateral cooperation at both official and scholarly levels. Beijing expressed its interest too, and since 2001, analysts from the three countries have been getting together on a regular basis to discuss the problems of partnership in the RIC format. In 2003, the foreign ministers of the three countries met for 90

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the first time on the sidelines of the UN General Assembly. Two years later, they held their first meeting that was not tied to other international events. In November 2010, when they assembled in Wuhan, China, it was their tenth conference. By that time, the addition of Brazil (2008) resulted in the emergence of a separate bigger club, BRIC. In 2011, the latter had to be renamed BRICS due to South Africa’s admission. Characteristically, this has not resulted in the abandonment of the original RIC trilateral format. For a decade, RIC in its various manifestations has been a unique common platform for the countries that account for 20 per cent of total landmass, 39 per cent of the global population and a significant portion of global GDP. Being neither allies nor enemies, all three aspire for a multi-polar world order. Contrary to some assumptions, they do not take an anti-Western stance, what they are actually keen to promote is a bigger role for developing economies in international decision making. Specifically, they support the reform of international financial institutions (including the speedy shift of at least 5 per cent of the International Monetary Fund (IMF) quota share to developing countries, as well as the increase of their voting power in the World Bank by a minimum of 3 per cent).3 All three have similar views on the Doha round of trade talks and the rising protectionism in the developed world, climate change, cross-border terrorism, etc. Among the key areas of their cooperation are agriculture, disaster relief, health and medicine — and energy, of course. In economic terms, they definitely complement each other: while Russia is a major supplier of oil and gas, China and India are energy deficit countries, but both are steadily increasing production of exportable manufactured goods. These and other facts show that RIC’s chances of evolving into a meaningful combination of forces are not as bleak as some sceptics claim. Mutual interaction gives them greater leverage on international issues and additional opportunities to present their views to the multilateral institutions historically controlled by the West. Many watchers in Russia and elsewhere interpret this partnership from a neo-realist point of view, looking at it as a factor in the global balance of power, a counterweight to the United States and the West in the process of creating a multi-polar world. Others take a more rational and utilitarian approach, presenting the trilateral interaction as a means to maximize economic advantage. Without doubt, Russia, India and China have enormous aggregate potential (economic, demographic, cultural, military, etc.) to seriously influence the state of things not just in Eurasia (to which, unlike Brazil and

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South Africa, they all belong geographically) but in the whole world. History tells us that friendly relations among the members of this trio are not at all impossible. Memories of the brighter moments — for instance, in relations between Russia and China as well as Russia and India — still linger, serving as an inspiration for new types of interactions. In terms of domestic politics and prevailing ideologies, Russia, India and China may not exactly see eye to eye, but differences are not antagonistic. In all three cases top priority is given to modernization of economies, bridging the gap with the developed world and promotion of competi­ tiveness in external markets. In order to achieve these aims, all three need a peaceful, stable external environment. These are the primary reasons why the political will to develop trilateral understanding and cooperation is so clearly there. However, the national interests of each of the three countries cannot be discounted as they are too broad, too complex and too unique to ever fully coincide. One region where elements of competition for presence, resources and leverage between the countries belonging to RIC have been rather obvious is Central Asia. Another is Southeast Asia. The perception that the latter is an area of potential conflict between India and China has been evident for quite a while. It is rooted in the belief that New Delhi’s and Beijing’s traditional spheres of influence overlap in the South of Asia.4 While New Delhi tries to prevent China from pursuing its interests in the subcontinent, Beijing resents India’s attempts to strengthen its positions in Southeast Asia. During the Cold War, India’s closeness to the Soviet Union, activism in the Third World, its support of Vietnam’s move into Cambodia and opposition to China’s military action against Vietnam tended to give an impression of an enduring rivalry between India and China in Indochina. In reality, until the start of its “Look East Policy” in the 1990s (which more or less coincided with Russia’s post-Soviet retreat from the region) India was practically out of Southeast Asia, while China had been scoring economic and political points for the previous decade and before. It is clear that India, not to mention Russia, both have a long way to go in Southeast Asia to catch up with China.5 Persistent attempts of both Beijing and New Delhi to engage Myanmar have been widely seen as yet another manifestation of Sino-Indian rivalry.6 There have been strong suspicions in India that China tries to create a “String of Pearls” — a set of naval bases along the maritime route from the Straits of Malacca to the Gulf — in order to protect its imports of Middle Eastern oil. According to this school of thought, close ties with

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Myanmar are needed, above anything else, to implement such a scheme, and its implementation will lead to India’s strategic encirclement. To counter this, during the George W. Bush presidency, India joined a programme of naval cooperation with the U.S., Japan and Australia that included naval exercises in the Bay of Bengal, in the vicinity of Myanmar’s coast. Following the Global Financial Crisis and the election of Barack Obama to the White House in 2008, this initiative was put on hold; however this did not mean that the United States lost its interest in exploiting rifts and disagreements between China and India. From an American strategic perspective, such efforts at naval cooperation may be just enough to do away with RIC and with it, any role these countries may ever aspire to play jointly in Southeast Asia or elsewhere. America occasionally flirts with the idea of creating its own trilateral format with China and India, or even a U.S.–China–Pakistan “triangle”. What should one make of this? It is highly doubtful that Washington seriously intends to implement any of these initiatives. It could be argued that such alternative groupings are provocative and aimed at confusing other regional players and undermining the implementation of what is perceived as RIC’s anti-American designs. They also serve to divert public attention from fully functioning mechanisms such as the U.S. military alliances with Japan, Australia and South Korea. Obviously RIC’s joint involvement in Southeast Asian affairs does not correlate with the regional strategy of the aforementioned American allies. On the one hand Japanese analysts unite India and China as rising powers, which have recently been extending their influence into Southeast Asia, relatively reducing Japan’s role in the region.7 On the other, India together with Japan, Australia, and New Zealand are said to take steps to cooperate with ASEAN so as to ensure that the region’s future will not be dominated by Beijing.8 Meanwhile, Russia is being characterized as an important contributor to Chinese military modernization.9 The United States’ dominant position in the global economy and regional affairs wholeheartedly advocated by Japan remains a huge obstacle to the growth of RIC as a cohesive group. As major beneficiaries of U.S.style globalization, both China and India are highly interested in continuing to do business with the United States. While Russia’s economic ties with America are much weaker, developing them for the sake of more dynamic domestic growth and modernization has been an objective of all post-Soviet governments in Russia. Does it mean that genuine cooperation between Russia, India and China in Southeast Asia is unlikely? No matter how it may look right

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now, a measure of progress in this sense is a must if RIC is to evolve into something relevant and mutually useful. After all, Southeast Asia belongs to the bigger East Asian region, an engine that keeps the global economy going. If RIC participants fail to act in concert in this part of the world, it will be tantamount to lost opportunities in improving not just their regional, but also their global positions. Isn’t it time, at the very least, to put the issues of trilateral coordination/cooperation in Southeast and East Asia on the agenda of RIC meetings? Since all three countries are official dialogue partners of the Association of Southeast Asian Nations (ASEAN), and have been involved for some time in diverse and numerous interactions with ASEAN, this would appear to be a natural thing to do. It may prove worthwhile to take the next step and create “the other ASEAN+3” — that is, the ASEAN+RIC format — and make it mutually beneficial. ASEAN countries are well aware of the trust deficit and frictions between RIC member-states, and having a vital stake in regional stability, they try to manoeuvre between big powers. The Cold War era left a lasting mark on the mentality of ASEAN elites: some of them got accustomed to the American role of keeping Southeast Asia stable, others were seeking support from the Soviet Union, not to mention Chinese comrades and India’s partners in the Non-Alignment Movement (NAM). That is why today, ASEAN countries seem to be satisfied with the existing bilateral format of relations with each of the RIC countries and show no desire to launch any ASEAN+RIC mechanism. Although at present nobody seems to be thinking along these lines, the invitation to join the East Asia Summit received by Russia in 2010 may quicken the movement in this direction. Characteristically, at their tenth meeting in November 2010, the RIC foreign ministers focused on problems of Asian security. Representatives of all three countries seemed to be ready to discuss and possibly coordinate their policies on such issues as religious extremism and political separatism. Another agenda item was the place of RIC in the set of multilateral regional bodies. The issue was discussed “in the light of the joint Russian-Chinese initiative to strengthen security and cooperation in the Asia-Pacific”. This plan is “not directed against third countries”, says Russian Foreign Minister Sergey Lavrov. “It is required for stability in its regional and global dimensions. Its deepening is one of the most important guarantees that the objective process of the formation of a polycentric international order will not be artificially impeded.”10 Nevertheless, indirect criticism of

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America’s regional policy is there: closed blocs in Asia are described as “a threat to national security and a source of dividing lines, mutual distrust and suspicion”.11 Once again, one cannot help thinking about the lack of cohesion within RIC. One of its participants, India, seems more wary of alienating the U.S. than the other two, and its reluctance to support their joint initiative speaks for itself. This should not be underestimated because without a common vision, RIC countries may not achieve as much as they possibly could. Finally, what can be expected from RIC as a regional and global player in the foreseeable future? Not unlike ten years ago, today, some sceptics insist that RIC does not stand a chance. They believe that the divisions between Russia, India and China will only become stronger, due to clashes of ambitions, conflicting strategies, and intensifying rivalries at regional and global levels. The disproportionate growth of China’s economic and military might is expected to push Russia and India closer to the West, if not into “marriages of convenience” with the latter, with most unhappy consequences for the “triangle”. As for strong believers in RIC, they are not so numerous, but they can be found, especially among those who anticipate that, with time the United States may treat the rest of the world with yet more arrogance and assertiveness. In that case, the three countries may want to go as far as setting up a political and military alliance to counter the perceived American onslaught. Less dramatic forecasts present a “partnership without union” between the three countries, which will continue in the spirit of pragmatism. This will result in greater manageability and predictability of relations inside RIC itself, as well as RIC’s relations with its neighbours in East Asia and the Pacific. In the regional and global arenas, Russia, India and China will perform complicated balancing acts, trying to maintain constructive relations with each other, without putting their ties with the U.S. under excessive. Taking into account such common national priorities of the RIC participants as economic growth and social modernization, this third scenario would be most desirable for each of the three. If this really becomes the way for RIC members to move into the future, the parallel with the “ASEAN Way” — in terms of dealing with each other and the world for the sake of peaceful and successful development — will not be inappropriate. These similarities in style and objectives may also contribute to the eventual formation of a dialogue platform described above as “another ASEAN+3”.

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Notes

Lenin V.I., “Better Fewer, But Better”, . 2 Das R.N., “Russia–China–India Trilateral: Calibrating a Fine Balance”, 15 November 2010, . 3 Manish Chand, “Russia-India-China triangle: Promise and Reality”, Russia and India Report, 30 June 2010. 4 Garver J., Protracted Contest: Sino-Indian Rivalry in the Twentieth Century (New Delhi: Oxford University Press, 2002). 5 Zhao Hong, “India and China: Rivals or Partners in Southeast Asia?”, Contemporary Southeast Asia 29, no. 1 (2007): 139. 6 Raja Mohan C., “India’s Geopolitics and Southeast Asian Security”, Southeast Asian Affairs 2008 (Singapore: Institute of Southeast Asian Studies, 2009), p. 53. 7 Tomotaka Shoji, “Pursuing a Multi-dimensional Relationship: Rising China and Japan’s Southeast Asia Policy”, in The Rise of China: Responses from Southeast Asia and Japan, edited by Jun Tsunekawa (Japan: The National Institute for Defence Studies, 2009), p. 158, . 8 Carolina G. Hernandez, “The Rise of China: Responses from Southeast Asia and Japan”, in The Rise of China: Responses from Southeast Asia and Japan, edited by Jun Tsunekawa (Japan: The National Institute for Defence Studies, 2009), p. 4, . 9 NIDS China Security Report (Japan: The National Institute for Defence Studies, 2011), p. 43, . 10 S. Lavrov, “65th Anniversary of the End of the World War Two: History and Contemporaneity”, Renmin Ribao, 24 September 2010. 11 Ibid. 1

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THE SOUTH CHINA SEA ISSUE: A VIEW FROM RUSSIA Evgeny Kanaev

The South China Sea issue continues to generate considerable interest within the world expert community. There is abundant evidence that it will exert an increasing influence on the evolving geopolitical order in Southeast Asia. Attempts to mitigate the conflict potential of the multilateral territorial dispute in the South China Sea area have been quite numerous, varying in purpose, scale and character. The assessments of their results range from deeply pessimistic to cautiously optimistic, with some of the criticism generated, as it seems, by over-expectations. Under these circumstances, a re-evaluation of the efforts to solve the dispute and the results they are producing becomes a timely exercise. So far, Moscow has not been known to display a keen interest in this issue. However, to pursue an effective policy in East Asia, it has to develop a more nuanced approach towards one of the region’s key problems. This paper offers a review of the recent trends and factors, both domestic and international which increase the importance of the South China Sea issue in the eyes of key East Asian players — the U.S., China and the Association of Southeast Asian nations (ASEAN). The course and nature of efforts aimed at lessening the conflict potential of the issue are analysed, with the emphasis on the themes which might be explored in order to strengthen the cooperative vector in relations between the parties involved. A brief outline of Russia’s policy options towards the issue is given in the final passages.

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The SOUTH CHINA SEA AS A PRIORITY OF EAST ASIAN POWERS After the Declaration on the Conduct of Parties in the South China Sea (DOC) was signed in 2002, the situation in the area seemed to stabilize. However, later, new, thorny problems emerged. China and some claimants among the ASEAN countries reverted to more uncompromising positions simultaneously advancing their military capabilities, which hindered the observance of the DOC provisions.1 Later on, the issue came to the forefront of East Asian politics at the Hanoi session of the ASEAN Regional Forum (July 2010). Speaking there, the US Secretary of State, Hillary Clinton, stressed Washington’s interest in maintaining freedom of navigation through the waters of the South China Sea and readiness to play a more substantial role in the area.2 It provoked a fresh outbreak of tension between China and the U.S., with both parties strengthening their military presence in the South China Sea and reiterating their “indisputable rights” and “strategic interests” in the area. These are the signs that the core of the issue is shifting from sovereignty over the islands to the geopolitical rivalry between the U.S. and China. The key dividing lines and points of contradiction are presented below: Military Activities in Foreign Exclusive Economic Zones: The incident with the American surveillance ship The Impeccable in March 2009 raised a sensitive problem of whether U.S. military activities in the South China Sea would be tolerated by China. Washington is determined to keep an unrestricted access to this maritime area for the sake of maintaining East Asian security. China, however, tends to see this activity as violating its sovereignty. This position is not ungrounded. Suffice it to say that the opposite scenario (namely, a Chinese military vessel appearing in the vicinity of the U.S. coast) would have been something totally unacceptable by American standards. One should not forget that America continues to present its nonproliferation thrust and war on terrorism as manifestations of its global responsibility.3 In this context disagreements between the U.S. and China over what can be accepted or at least tolerated in foreign Exclusive Economic Zones (EEZs), including the South China Sea, are bound to increase. Additional evidence that this scenario may materialize is provided by the escalation of maritime disputes between the U.S. and its allies and China in 2010. Having failed to receive Beijing’s support in blaming North Korea for attacking the South Korean ship Cheonan, Washington conducted joint

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naval and air exercises not only with its Northeast Asian allies, but also with Vietnam aimed at, among other things, irritating China. The same is true with regard to Hillary Clinton’s statement that the Japan-U.S. bilateral security treaty is applicable to the Senkaku Islands.4 If these disputes intensify, China-U.S. contradictions over “the limits of the permissible” in EEZ will become much sharper than they currently are. Although China tends to avoid actions or statements which may be interpreted as provocative, two points seem noteworthy. The first is a growing lack of correspondence between the considerable success which Beijing has achieved in modernizing naval and air power and the apparent vulnerability in protecting its oil imports via the Malacca Straits. Second, since 2008 China’s maritime strategic thinking has been attaching profound importance to “military operations other than war”, which can be interpreted as a more assertive naval posture.5 American “national interests” and Chinese “core interests” in the South China Sea: Current trends in U.S. policy towards China suggest that American “national interest” in maintaining freedom of navigation through the South China Sea is linked to expectations that Beijing will be more of a “responsible shareholder” under Washington’s leadership. This argument is supported by a point in Mrs Clinton’s speech at the ASEAN Regional Forum (ARF) Summit in Hanoi that the interests of “the broader international community” are at stake.6 Beijing, however, sees its international responsibility in a different light. As follows from Yang Jiechi’s speech delivered at the 2010 Munich Security Conference, China’s contribution to preserving global stability stems primarily from its ability to tackle domestic issues.7 Needless to say, this “inward-oriented” position attaches supreme importance to national sovereignty. As for China’s statement that the South China Sea is part of its “core interests”,8 it hardly conveys any new message. In fact, Beijing has reiterated its position which was formulated in 1992, when the Law of Territorial Sea and the Contiguous Zone was adopted. Consequently, the argument that China has turned to a more hardline stance seems hardly convincing. The reasons behind the U.S. raising the South China Sea issue at the ARF session deserve special attention. It can be argued that the ARF, embracing many participants, could have served as a favourable platform for Washington to cope with two important tasks. One of them was to make Beijing play a “lose-lose” game. In case China made a compromise it would demonstrate its readiness to accept the American primacy in shaping maritime order in

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Asia-Pacific. The other parties would see it in the context of the Cheonan accident and the announced joint naval manoeuveres of the U.S. and South Korea. In case China objected it would show the ARF participants (first of all, the ASEAN states) that its “win-win” policy in Southeast Asia had little to do with the reality. The other task was to make it clear that the U.S. continues and will remain to be the only indispensable power in countering Beijing’s “insidious plans” in maritime East Asia. In the foreseeable future the set of problems related to the South China Sea will probably acquire greater importance for East Asian powers. Let’s take a closer look at their motives. United States : Given the recently declared shift of focus in the U.S.’ Asia policy from the Middle East and South Asia to East Asia and within the latter — from Northeast Asia to Southeast Asia, Washington’s motivation to increase its influence upon the overall situation in the South China Sea can be expected to receive a strong impetus.9 First, the Obama administration will have to provide continuity between the current and the earlier announced Asia-Pacific policy statements, namely, “being back” and “strengthening American leadership”. 10 Against the background of China’s growing economic and military might, it is important to correct the impression that the U.S. is losing influence upon Southeast Asia or even “conceding” it to China.11 As far as America’s Northeast Asian allies are concerned, after the escalation of maritime disputes with China they are expecting strong U.S. guarantees that maritime stability in East Asia will be preserved. Second, maintaining freedom of navigation has recently been raised to a higher level in Washington’s strategic thinking, as highlighted in a set of documents including “Naval Operation Concept 2010”, “National Security Strategy 2010” and “Quadrennial Defence Review Report 2010”.12 Exerting influence on the situation in the South China Sea, which links the Pacific Ocean with the Indian Ocean, as well as Northeast Asia with Southeast Asia, is part of this strategy. Last but not least, Washington will have to allay the fears of American corporations that drill for oil and gas in the South China Sea. There have been precedents, still fresh in the memories of energy business elites, when the plans to explore the resources in some parts of the South China Sea had to be abandoned due to the disputed status of these areas. There are also serious frictions between China and leading multinational oil companies over the already operational projects in the disputed area.13 In periods of overall instability such apprehensions can only re-emerge.

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China: Successful economic development and military modernization is accompanied in China by growing self-confidence and nationalistic sentiments. The 18th National Congress of the Communist Party of China, which is to take place in 2012, is likely to place nationalism high on the agenda of the country’s leadership. That same year will mark the 20th anniversary of the Law on the Territorial Sea and the Contiguous Zone of the People’s Republic of China and the 10th anniversary of the Declaration on the Conduct of Parties in the South China Sea, which will further motivate Beijing to strengthen this direction of its foreign policy. The current upward trends in relations between China and Taiwan under the administration of Ma Ying-jeou may solidify Beijing’s determination to pursue the policy of recovering “the lost territories”. Against this backdrop, the idea to draw up the Code on the Conduct of Parties in the South China Sea instead of the 2002 Declaration seems hardly realistic. ASEAN: The increasing interest in the South China Sea issue will be directly related to the establishment of an ASEAN Community. New efforts will be required to translate the DOC provisions into reality given that up to now the results are hardly impressive. In fact, since the first meeting of ChinaASEAN Joint Working Group on the Declaration on the Conduct of Parties in the South China Sea in 2005, its participants have been reiterating their commitment to safeguarding peace and stability in the area rather than trying to make a breakthrough on the issue.14 The growing need to develop a more unified position on the issue adds more complexity to the problem. In May 2009 Malaysia and Vietnam made joint submissions to the United Nations concerning the extension of their continental shelves beyond 200 nautical miles into the South China Sea. This can be interpreted as a step towards closer coordination of the ASEAN states positions vis-à-vis “outside” powers. However, Vietnam has repeatedly been trying to place the dispute over the Paracel islands outside the framework of its bilateral relations with China, insisting on emphasizing their disputed status in the future Code on the Conduct of Parties in the South China Sea.15 These developments should be seen in the context of ASEAN’s intentions to enhance its potential in dealing with challenges to Southeast Asian security, which was emphasized during the 18th ASEAN Summit.16 Quite probably, the South China Sea issue will influence ASEAN’s policy within the East Asia Summit framework. If tensions between China and the U.S. grow, this will almost certainly reduce the effectiveness of the Summit, and ASEAN’s reputation as its coordinator will suffer.

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Last but not least, dealing with the South China Sea issue as a potential challenge to global security within the Southeast Asian territorial domain will reflect ASEAN’s real ability to cope with a new ambitious task of raising its global profile, which was set during the last ASEAN Summit.17 Apart from geopolitics, other reasons for the growing importance of the South China Sea may be mentioned. First and foremost, this area will inevitably be rising to prominence in the economic priorities of East Asian countries. Reliable data suggests that by 2020 the share of the Southeast Asian states’ dependency on imported oil will reach 50 per cent, while the demand for oil in China is expected to be three times as much as its production.18 These factors will stimulate interest in exploring the energy resources of the South China Sea. Its biological resources will be more important too. According to the Food and Agriculture Organisation (FAO) of the United Nations (UN) estimates, Asia is expected to face serious challenges in terms of food security, with an additional 49 million people facing the prospect of hunger by 2020.19 Apart from that, international trade through the South China Sea is likely to increase, with the cargo and ship traffic via the Malacca Straits reaching 6.4 billion tonnes and 141,000 respectively by 2020.20 Last but not least, since Southeast Asia is a region of serious seismic hazards, a much closer monitoring of the coming earthquakes and tsunamis will be required, with the need to set up seismological stations on the islands and reefs of the Spratly archipelago. In other words, there are all sorts of reasons to expect that East Asian powers will be paying even more attention than before to the set of South China Sea issues.

TRYING TO DEFUSE TENSIONS: WHAT HAS AND HAS NOT BEEN ACHIEVED A comprehensive and balanced assessment of what has been achieved in defusing tensions in the South China Sea is not an easy task. After all, multilateral controversies have been accumulating there for decades, if not centuries. The analysis that follows rests on the assumption that any results, however modest they may seem, must be considered in a positive light. The prevailing view of the DOC is that by signing it ASEAN “conceded” to China the initiative in defining the parameters of how the issue should have been resolved. However, the legal framework of the dispute settlement, outlined in the DOC, is not to blame. First of all, any kind of multilateral negotiations over the South China Sea issue would have been fraught with serious inherent limitations. The

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negotiating parties simply lacked practical experience and — more broadly — strategic culture of such talks. In fact, it was difficult to expect than any problems related to international security could be effectively resolved. Second, although ASEAN remained a key element in many regional dialogue platforms, it could not moderate contradictions even between its own member states. Having no practical experience in dealing with the issues of sovereignty, both between its members and with outside powers, ASEAN had to cope with a practically insurmountable task. Third, the U.S. as the “benign hegemon” of Southeast Asia was not too interested in solving the issue of sovereignty. Washington was (and remains) basically concerned with the freedom of navigation via the South China Sea. As long as Beijing did not threaten the sea lines of communication (SLOCs), Washington did not care much about the other aspects of the problem. Apart from anything else, the DOC was the logical outcome of two parallel processes developed in the late 1990s to early 2000s. One was growing flexibility in China’s position on the issue, while the other may be described as the progressive ossification of ASEAN’s attitudes. Consider, for instance, the talks between China and ASEAN against the background of those between the ASEAN states themselves. The gist of the situation was China’s readiness to consider different options for the presumable code of conduct of parties in the South China Sea while the ASEAN states, namely, Malaysia, Vietnam and the Philippines, were stuck in a stalemate as they tried to draw up the “ASEAN version” of the code. That is why Malaysia pushed forward the proposal to adopt, as an interim measure, the Declaration instead of the code. 21 Under these circumstances, it seems right to assess the very fact that the DOC was signed as a serious achievement. After all, it represents the agreed upon and internationally recognized legal framework for resolving conflicting claims in the South China Sea. Another type of effort to reduce tensions over the issue is functional cooperation. Its key feature is to put aside the issue of sovereignty and concentrate on “win-win” projects which include mainly joint exploration of resources and fighting piracy in the Malacca Straits. The idea of jointly exploring the resources of the disputed areas has been repeatedly proposed by both China and the ASEAN states. Theoretically, this vector could have been regarded as mutually advantageous to the parties involved. In reality, however, the results lagged far behind the expectations for a number of reasons. To begin with, these proposals turned out to be mutually competitive. China interpreted the appeal of ASEAN’s participants expressed during the Workshops on Managing Potential Conflicts in the South China Sea to

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establish a cooperative regime, as running counter to the earlier and somewhat similar proposals by Deng Xiaoping and Li Peng. The issue of sovereignty turned out to be a major stumbling block. In fact, any kind of cooperative regime raises a number of sensitive questions. As regards the exploitation of resources, it has to be clear under what conditions the parties are to share them. For instance, if China considers the South China Sea as its “internal waters” it logically sees any kind of joint economic activity in the area as exploiting Chinese resources on Chinese territory. The attempts to jointly patrol the sea lanes of the South China Sea are another typical example, with their effectiveness being hampered by poor coordination resulting from the “sovereignty factor”.22 Of course, the role of external players has been and remains very sensitive. Theoretically, the establishment of truly cooperative regimes presupposes the participation of as many outside powers as possible. In reality, however, the best results in cooperation have up to now been achieved under the schemes which include only the parties directly involved in the dispute. That is how complicated the issue is. Therefore, even the best intentions concerning cooperation in spheres that look mutually beneficial are doomed to be of limited effectiveness and fraught with setbacks. A distinctive feature of the South China Sea issue has been an over­ abundance of expert recommendations aimed at developing novel approaches to its various aspects. But so many experts, even renowned at both national and international level, are politically committed to the positions of their countries. Hardly any expert has been able to overcome the “curse of sovereignty”, which puts the utility of these recommendations under serious question. Consequently, none of the submitted proposals have evoked serious interest in the official circles of the countries that drafted and signed the DOC. Does it mean that the results of all these efforts have been totally disappointing and the real achievements are zero? I would argue that these achievements, although not too impressive, are still there. First, there is the internationally recognized legal framework for handling the overall issue — that is, the Declaration on the Conduct of Parties in the South China Sea. Moreover, in the near future the formalized mechanisms for cooperation, outlined in the Declaration, are expected to be further strengthened given the symbolism of its coming ten-year anniversary. Second, cooperation at the bilateral level is slowly but steadily developing. Though still limited in scope and nature, these steps lead to greater policy coordination between the claimant states. In that context, the use of force may become a less likely option — at least, in theory.

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Third, what may be needed to fulfill the potential of multilateral cooperative regimes is just more time. To sum it up, further progress is unlikely to be rapid and impressive, but it may still be achieved. If so, there is some reason for cautious optimism.

RUSSIA’S POLICY OPTIONS Can Moscow remain indifferent to the set of problems related to the South China Sea? Apparently, it cannot. For instance, Russia and Vietnam jointly develop oil reserves in the area of the South China Sea. More than that, Russia’s relations with such claimants as China and the ASEAN members are on the rise. A confrontation may be harmful not just to the parties immediately involved and affected, but also to Russia, and right at the time when its regional positions are improving. With this in mind, what kind of policy should Moscow follow? It seems that Russia’s most effective option must be twofold. First, it should dissociate itself from any developments that can provoke tensions, including all kinds of interferences in the dispute with demonstrably positive intentions. Second, Russia should do its best to increase the overall cooperative potential of the region and to contribute to the search for its new security architecture. At this point it needs to be stressed that Russia’s potential contribution in mitigating tensions over the South China Sea issue should not be underestimated. This argument can be substantiated by the following examples. Energy: In the not too distant future, Russia’s role in ensuring East Asian energy security will be sufficiently bigger, especially if the pipeline from Eastern Siberia to the Pacific Ocean becomes operational in 2012, as was recently stated, in other words, two years ahead of the schedule.23 Along this line, two additional factors are noteworthy. First, systematic outbreaks of instability in Arab countries lead to uncertainty concerning energy supplies from Middle East to East Asian oil-dependent economies. Second, the development of the nuclear energy sector in the region as an alternative to oil and gas will presumably slow down after the Fukushima accident. This combination of factors will stimulate the interest of the region as a whole in Russia’s energy supplies. If Russia responds, the contradictions related to oil and gas reserves of the South China Sea are likely to become less sharp.

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Sea lanes of communication: Currently, Russia is making efforts aimed at developing the Northern Sea Route, which is presented as a strategic priority in “The Foundations of the Russian Federation’s State Policy in the Arctic until 2020 and beyond.”24 Although many problems still remain and their solutions are sure to be difficult and time-consuming, these efforts may eventually make the cargo traffic via the South China Sea, and particularly, the overloaded Straits of Malacca, somewhat less intense. Natural disasters prevention: Russia and the ASEAN states have real possibilities to cooperate in forecasting and responding to natural disasters, as outlined in the key documents adopted at the top levels.25 In the “postFukushima” period the demand for this kind cooperation has grown immensely. Along with these factors, there are sound reasons for arguing that Russia’s participation in the East Asia Summit will produce a stabilizing effect on the overall strategic situation in the area given Moscow’s global status. To be sure, some uneasy questions may pop up too. For instance, how do Russian transfers of arms to several countries involved in the dispute fit this scenario? In fact, these transfers do not undermine it. The argument that Russian arms may be used as “bargaining chips” in negotiations between the claimants to the disputed archipelagoes is hardly plausible. In the regional situation as we know it today the possibility of armed clashes over the islands is quite low. While nothing like a genuine solution to the South China Sea issue is in sight, keeping these contradictions within peacefully manageable bounds looks like the extent of what can be done. Whatever Russia may do to help achieve this will be surely welcome.

CONCLUSIONS Based on what was said above, one may conclude that the global component of the South China Sea issue is likely to grow in importance. This turn of events will be secured by the U.S. and China whose stakes in this maritime area are rising. From its own perspective, ASEAN is also adding emphasis to the global dimension of the problem. The complexity of the issue as we know it today is too high to expect a resolution in the observable future. Besides, some of the parties, no matter what they say, are not really interested in bringing the South China Sea dispute to an end.

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As for Russia, its contribution to mitigating tensions in and around the South China Sea may eventually not be so small if Moscow follows a policy aimed at keeping these tensions in their present, non-explosive state. At least, the resources and opportunities that are needed to pursue such a policy are basically there and hopefully will increase.

Notes

Feria M., “South China Sea Flashpoint”, Philippine Daily Inquirer, 19 April 2008 . 2 Hillary Rodham Clinton, Secretary of State, “Remarks at Press Availability”, National Convention Center, Hanoi, 23 July 2010 . 3 See, for instance, “World at Risk: The Report of the Commission on the Prevention of WMD Proliferation and Terrorism”, New York, Toronto, 2008 . 4 “Clinton Tells Maehara Senkakus Subject To Bilateral Security Treaty”, Nikkei, 24 September 2010 . 5 “China’s National Defense in 2008”, Information Office of the State Council of the People’s Republic of China, Beijing, January 2009 ; “China’s National Defense in 2010”, Information Office of the State Council, The People’s Republic of China, Beijing, March 2011 . 6 Hillary Rodham Clinton, Secretary of State, “Remarks at Press Availability”, National Convention Center, Hanoi, 23 July 2010 . 7 “A Changing China in a Changing World”, Address by H.E. Yang Jiechi, Minister of Foreign Affairs of the People’s Republic of China, at the Munich Security Conference, Munich, 5 February 2010 . 8 See Wong E., “Chinese Military Seeks to Extend Its Naval Power”, New York Times, 23 April 2010 . 9 Campbell C., “U.S. Engagement in Southeast Asia”, Center for Strategic and International Studies, Washington, 31 May 2011 . 10 Current priorities in U.S. Asia-Pacific policy are amply revealed at: “Clinton’s Speech on U.S. Agenda in Asia-Pacific Region”, U.S. Department of State, 1

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28 October 2010 . Among the American political and expert community, these apprehensions are remarkably widespread. See, for instance, Brown P.J., “U.S. Ponders China’s Southeast Asian Rise”, Asia Times Online, 10 March 2010 . “Naval Operations Concept 2010”, Washington, 2010 ; “National Security Strategy”, Washington, 2010 ; “Quadrennial Defense Review Report”, Washington, 2010 . For a recent example, see “BP Prefers to Manage Chinese Pressure over South China Sea in Commercial Channels”, The Telegraph, 4 February 2011 . See, for instance, “China, ASEAN Agree to Follow S China Sea Declaration”, 24 December 2010 . For recent examples, see Ghosh N., “Viet Nam: Paracel Incident Poses Test for ASEAN”, Straits Times, 8 October 2010 . “ASEAN Community in a Global Community of Nations”, Chair’s Statement of the 18th ASEAN Summit Jakarta, 7–8 May 2011 . “ASEAN Leaders’ Joint Statement on the ASEAN Community in a Global Community of Nations”, 8 May 2011 . Figure 2.1.10, “Oil Demand and Net Oil Import Dependency by Subregion (2005, 2015, and 2030)”. “2.1. Energy Demand and Supply Outlook” ; “NDRC: Oil Demand in China to Triple over Its Output in 2020”, 24 September 2009 . “Asia Pacific Food Situation Update”, October 2010 . Bateman S., Ho J., and Chan J., “Good Order at Sea in Southeast Asia”, RSIS Policy Paper, Singapore, 2009, p. 12 . See Song Yann-huei, “The Overall Situation in the South China Sea in the New Millennium: Before and After the September 11 Terrorist Attacks”,

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Ocean Development and International Law 34, nos. 3–4 (2003): 229–77, 245, 247. For more details, see Huang V., “Building Maritime Security in Southeast Asia: Outsiders Not Welcome?”, Naval War College Review 61, no. 1 (2008): 87–105. “Kudryashov: VSTO-2 May Launch in December 2012”, Oil and Gas Eurasia, 22 March 2011 . “The Foundations of the Russian Federation’s State Policy in the Arctic until 2020 and beyond”, 18 September 2008 . IV. “Functional Cooperation”, Comprehensive Programme of Action to Promote Cooperation between the Association of Southeast Asian Nations and the Russian Federation 2005-2015 ; “Socio-Cultural Cooperation”, Joint Statement of the Second ASEAN-Russian Federation Summit, Ha Noi, 30 October 2010 .

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SOUTHEAST ASIA AND RUSSIA: FORGING A NEW REGIONAL ARCHITECTURE1 Pushpa Thambipillai

ABSTRACT Global political changes and regional geopolitical accommodations have had a profound impact on Southeast Asia-Russia relations. The various states of Southeast Asia have had different experiences in their relationship with Russia, especially under the Soviet Union; there was an “unwritten” separation of Southeast Asia into those states that had close ties and those that did not, irrespective of diplomatic status. Political ideology and the expected level of beneficial outcomes were the causal reasons — accounting positively or negatively towards the shared perception of both regions. With the disintegration of the Soviet Union and the renewed interest of Southeast Asian states towards a reconstituted Russian federation, both parties were ready to explore mutual ties. Thus the stage was set, not only for increased bilateral relations, but also for the collective relationship between the Association of Southeast Asian Nations (ASEAN) and Russia. While not yet as active and integrated as ASEAN’s relations with the other Dialogue Partners, the ASEAN-Russia links are gradually gaining momentum as indicated by increased political, economic and social interactions. 110

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THE PAST ON THE PRESENT — INFLUENCES ON SOUTHEAST ASIA AND RUSSIA The long absence of any form of significant relationship between most of the states of Southeast Asia and Russia was the result of mutually prevalent factors of geography, ignorance, suspicion and the general lack of leaders’ incentives to forge closer ties. The past, perhaps as far back as the beginnings of the western colonial period in Southeast Asia in the sixteenth century, has not registered significant encounters with Russia. Fast forward to the period as represented by the twentieth century as characterized by the Russian Revolution and the rising Soviet Union in a Cold War entanglement — that only added to the drift between the two geographical areas, except for those in Southeast Asia, who were inspired by the ideals of Marxism. Thus a few of the states looked to the Soviet Union as a political model and thus support, while other non communist states exercised partiality from a potentially “dangerous” power that might subvert the entrenched local political systems. Geography was both a factor in limiting contacts as well as a major deterrent in forging links. The states of Southeast Asia lay in the furthest corner of the Asian continent that had made air and sea linkages burdensome, especially since Czarist Russia had not competed with the other European powers in carving up lands along the sea routes, thus remaining a European power bordering the Baltic and Caspian seas. As it extended eastwards towards the Pacific coast it occupied vast tracts of land in Central and Pacific Asia. This continued during its Soviet era, as its expansion extended to ties with more states that shared its ideology and political strategies. Simultaneously, its ideological and political confrontations with other Western states during the Cold War era isolated the majority of Southeast Asians. The newly independent states were also faced with domestic insurgencies that were extolling communist ideas. However, due to its distance, direct Russian influences on those groups, especially in insular Southeast Asia were limited, while China, a much closer geographical and cultural ally had direct contact with those ideologically inclined towards fighting for a socialist system within their states. But that did not render the Soviet Union in any better perspective from the local leaders who often portrayed the Soviet Union negatively. The geographical factor also contributed to mutual suspicion and ignorance. While most in Southeast Asia were oriented towards the western allies and viewed the Soviet Union from a tainted perspective as coloured by the East-West Cold War divide, the Soviets also viewed the former as

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political allies of the West and thus to be cast with suspicion, including in the early stages of ASEAN’s existence. Distance also did not help in the socio-cultural understanding of the two distinct regions. Because of political divide, the information and interpersonal contacts were gravely missing on both sides. Unlike greater understanding and exposure to the West or to China (as a result of ethnic familiarity), the knowledge on the politics, culture and language created a huge gap as any form of contact was dismissed as politically not permitted. Thus, the majority of peoples in both regions were not exposed to the language, arts and literature of Russia for example, in the same way they had been exposed to the other European or Asian cultures. As emphasized earlier, only those politically inclined were in the forefront of establishing close ties that promoted other educational and socio-cultural links as well. Russian leaders have often emphasized the fact that two thirds of its land territory lie in the Asian continent and that it has a long border on the Pacific coast that brings it into close proximity with states in Asia, especially China, Japan, and Korea. However, from the Southeast Asian perspective, Russia was perceived as being synonymous with Moscow, 7,000 kilometres away, and not its Asian lands, nor in its very Europeanized Far East territories. Even with the end of the Cold War and the dissolution of the Soviet Union, links did not immediately expand. It has taken about two decades to discover the potential of an active political, economic and socio-cultural relationship despite the fact that almost all of the Southeast Asian states had begun establishing diplomatic ties since the 1950s to the 1970s. For the most part, the Southeast Asian perspective views the new Russia as still western-oriented even though post-Soviet leaders have begun to acknowledge their Asia Pacific interests in tandem with the shift in economic weight to the Pacific, away from the Atlantic. Since the 1990s, the journey towards Southeast Asia has been, nevertheless, slow as Russia was focused on establishing its political and economic priorities in a disintegrated domestic environment. Its foreign policy emphasis had to be directed on the more crucial needs, and thus the attention continued towards European and American strategies. Russia maintained relations with important states on its eastern border like China and long time ally India and smaller states like Vietnam, while adjusting to sustainable relations with its “near abroad” allies in central Asia. Under those trying times, it is understandable why some parts of the world, like Southeast Asia or the collective ASEAN, were not in its immediate radar. Once its foreign policy became more assertive and confident as a result of domestic readjustments, especially under President

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Putin, did Russia adopt a more keen interest in bilateral and multilateral relations with Southeast Asia as part of its growing multilateral strategies in the Asia-Pacific region.

STRENGTHENING THE FOUNDATIONS The foundations of bilateral relations enlighten the current status of Southeast Asia-Russia relations. Each of the Southeast Asian states had established diplomatic relations with Russia at various periods after they emerged as independent units. The ties reflected their national interest and how they viewed the Soviet Union. Thailand, the only non-colonized state, had experienced a much longer contact with Russia, beginning with Russian naval visits in 1863 that led to later cultural and educational contacts between the peoples, including royal personalities, culminating in King Chulalongkorn’s visit in 1897; it subsequently led to the setting up of diplomatic relations. The first Consulate General was opened in Bangkok in 1898. By 1917 it had been upgraded to a Mission. Twentieth-century diplomatic relations between Thailand and the Soviet Union were established in March 1941, but being interrupted by the Second World War, agreements were signed in 1947 for the exchange of diplomatic missions. For the next thirty years or so the bilateral political relations were influenced by the Cold War period and Thailand’s alignment with SEATO and the Vietnam War. The relationship continued on a low scale, sustained mainly by commercial interests. For the rest of the newly independent Southeast Asian states, their diplomatic links were established during the height of the Cold War and thus were either strengthened or curtailed in their activities according to their alignments. Trade, especially in commodities, was a motivating factor while political relations remained cool as a result of ideological differences. The first few to become independent states after the Second World War were the Philippines, Burma, and Indonesia in the late 1940s and Vietnam (North and South), Cambodia and Laos after the Geneva peace conference of 1954, Malaya in 1957 and Singapore in 1965. In the early years of statehood, the Soviet leadership paid little interest to specific Southeast Asian states except where there had already been contacts with other socialist parties, as in Indonesia (state to state relations had been established in 1950) and with Vietnam (even prior to official ties in 1950). The Democratic Republic of Vietnam was perhaps the most important link especially after 1955 when the Soviet Union set up a diplomatic mission in Hanoi. One of the reasons for its increased interest in Vietnam was its political

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rivalry with the Peoples’ Republic of China that had acted independently, away from the international socialist movement. As global competition intensified under the various Big Powers, so did the spillover that affected the states in Southeast Asia into either being aligned with or away from the Soviet Union.2 As the new states, driven by interest in non-alignment, saw the political and economic benefits of relations with the Soviet Union they established diplomatic ties (despite having reservations about the ideological differences and potential military threat). The improving regional relations within insular Southeast Asia also instilled the political confidence to seek potential relationships, as was the case of Malaysia (1967) and Singapore (1968); it also reflected their respective leaders’ desire to indicate an independent path away from the other Big Powers like the United States (though in fact they remained close to the West). The Philippines which had been closely aligned with the U.S. and had been encouraged by the U.S.-China rapprochements in 1972, was also keen to open its links to both China (which it did in 1975) and with the Soviet Union with which it established relations in 1976.3 ASEAN had by then become a sustainable regional grouping of the five member states. However, the geopolitical changes in Indochina in 1975 were met with apprehension from other regional states that feared communist expansionism. There was a regress to Cold War anxieties when Soviet support was perceived to be supporting Vietnam’s motives in neighbouring states. The decade 1979–89 was a “black” period in relations between the Soviet Union and most of Southeast Asia’s ASEAN states. Both the Soviet Union and its ally Vietnam had invaded and occupied “client” states, Afghanistan and Cambodia, on account that they had been invited specifically by local leaders. Especially for the ASEAN states, the Cambodian (or Kampuchean) issue had become a major preoccupation of their collective foreign policy as they took on an active role to get international attention on the prolonged political stalemate. They succeeded in involving the United Nations, especially the P5, in seeking a settlement and the eventual withdrawal of Vietnamese troops. Perhaps it is the decade that political observers in ASEAN would rather reassess as they now look at Vietnam, Laos and Cambodia as full ASEAN members and Russia as a key bilateral and regional partner. The dark period also had some intermittent promising streaks. One of the influencing factors in the mutual adjustment in Southeast Asia-Russia relations was the appointment of President Gorbachev as the new leader in 1985 and his expressed interests in the Asia-Pacific region. Among his foreign policy speeches, one of the more eagerly received was the 1986 speech in

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Vladivostok on the “Peace and Security for the Asia Pacific Ocean Region”.4 This was followed with his visits to China and Japan while Foreign Minister Shevardnadze’s visit to Southeast Asia also promoted the “new thinking” from Moscow in an attempt to change the negative perceptions about the Soviet Union as an expanding military power with ideological and military networks as attested by the use of naval facilities in Vietnam.5 The gradual decline in the perceived threat (not particularly served by recurring Russian espionage scandals within Southeast Asia) led to a measured acceptance of Russia as a potential partner for Southeast Asian states, irrespective of its ideological representations.

ENGAGING WITH ASEAN While Gorbachev facilitated an encouraging atmosphere, Russia’s changing relations with Southeast Asia coincided with a number of global events: the democracy movements in Eastern Europe that began in Poland and East Germany that ultimately spread to other states; the internal struggles within the Soviet Union itself that Gorbachev attempted to contain; the realization of the futility of invading Afghanistan and the loss of its young men there, the folly of supporting its eastern ally Vietnam in its occupation of Cambodia, the engagement of the P5 in ASEAN’s attempt to involve them in a political solution for Cambodia that brought Russia diplomatically closer with the Southeast Asian states, and finally its own demise and the emergence of the new Russia.6 Having thus showed its interest in the diplomatic process for peace in the region, Russia was accorded continued bilateral diplomatic recognition when it ended its Soviet era in December 1991. All the Southeast Asian states had by then had diplomatic ties with the ex-Soviet Union, the last being Brunei that had only initialed its bilateral agreement in September 1991.7 Recognizing its potential as a power in the Asia-Pacific region, Russia was invited to the first security related forum sponsored by ASEAN — the ASEAN Regional Forum in July 1994. ASEAN leaders had been considering a probable forum to discuss security issues in a more “open” manner (although in earlier years ASEAN did not want its image to be tarnished as a security related organization). Since the mid-1970s, ASEAN has established special relations with developed countries under a scheme called Dialogue Partners.8 Thus at the first security forum, the existing Dialogue Partners plus other major players in the region — India, China and Russia — were invited to the inaugural meeting.9 For Russia, it signalled the beginning of warmer ties not only with the individual states of Southeast Asia beyond its limited allies

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but also with the ASEAN grouping that past leaders had perceived negatively. Besides, there were improving political relations all around: Russia-China, China-Vietnam and Vietnam-ASEAN. ASEAN’s “rapprochement” with Vietnam and the latter’s application and eventual membership of ASEAN in July 1995 may be seen as an added pathway to the mutual interest between ASEAN and Russia.10 Russia was accepted as a full Dialogue Partner (DP) in July 1996. Through the DP system, the Russian Foreign Minister has attended the annual Post Ministerial Conference (PMC) since 1996, referred to as PMC+1. It has also led to the establishment of a number of structures and processes in addition to Summits and Foreign Ministers’ Meetings.11 Although the range of Russian interactions is not as high as ASEAN’s other DP, its relevance is viewed as essential for diplomatic and political-security relations of the larger region.12 The Russian Foreign Minister meets all the other ten ASEAN foreign ministers while their senior officials also have regular contacts on strengthening mutual issues. It also enables the Russian FM to interact with the other foreign ministers representing their respective countries at the PMC and thus be exposed to a wider circle of friendly states. That involvement perhaps introduced Russia into a new relationship of multilateralism in Asia as expounded by ASEAN and its international friends. It also introduced multicultural political behaviour which until then had not been widely introduced to Russia except through its limited bilateral relations with some of the Southeast Asian partners.13 Russia has also been exposed to the concept of the ASEAN Way, an all en­ compassing process of dialogue, consultation, consensus and non-interference in the domestic affairs of member states. The issue of non-interference had become a cardinal philosophy and practice in ASEAN with its introduction in 1976 under the Treaty of Amity and Cooperation (TAC). Since then, all subsequent members and close allies have acceded to the Treaty, as it had been applicable not only to members but to others in Southeast Asia and partners beyond.14 Russia acceded to the TAC in November 2004 affirming its relations with the regional grouping. The expanding ties are indicated by the two summits that have been held between ASEAN and Russia, once each as represented by Presidents Putin and Medvedev.15 ASEAN’s new Charter (effective January 2009) instituted the system of ambassadors to the regional organization at its secretariat in Jakarta. Russia has accredited its Ambassador to Indonesia as the representative to ASEAN. Undoubtedly, the Southeast Asia-Russia relationship varies in its strengths among the various ASEAN member states. At the regional level, the two parties have begun to extend their cooperation in various economic,

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political and security sectors (in addition to participation in the ASEAN Regional Forum and the ASEAN Defence Ministers Meeting), for instance, in cooperation in countering terrorism and transnational crime.16 Past relationships have not provided adequate interactions for promoting trans­ parency and cooperation in military related areas. As the relationship matures, opportunities may arise, for example, for friendly port visits from Russia’s Asia Pacific Fleet to Southeast Asia. Various tiers of linkages seem to be underway. The upcoming Southeast Asian Russian relationship through the East Asia Summit (EAS) that has already included leaders of ASEAN, ASEAN Plus Three (China, Japan and South Korea), India, Australia and New Zealand is another indication of the expanding ties; the latter part of 2011 saw Russia’s inclusion together with the United States into the EAS. The EAS may represent the nucleus of an impending East Asian Community and another opportunity for Russian multilateralism — a political parallel to the APEC (Asia Pacific Economic) forum that Russia joined in November 1998 and which is propelling Russia to develop its Far East while increasing its interactions with Pacific Asia. Its Pacific coast has often been neglected at the expense of Moscow’s dominant interest. The APEC chairmanship in 2012 will perhaps strengthen the role of Russia’s Pacific region with the Southeast Asian states and ASEAN.

ECONOMIC POTENTIAL Economic ties between ASEAN and Russia vary from one Southeast Asian country to another, partly influenced by historical links and partly determined by the composition of the trade and services in demand. Southeast AsiaRussia trade in commodities and services is low when compared to that of other developed partners. Investments are also small but show a marked increase between 1996 and 2010. However, the economic relations cannot be considered in isolation by concentrating only on commodity trade and investment.17 A broader analysis would cover such indicators as logistics and air/sea connectivity, tourist flows, educational services, energy cooperation in oil and gas exploration and production, the transfer of nuclear technology for civilian purposes and more importantly the arms market where Russia has the superior advantage in being the major supplier for some of the Southeast Asian states. Again, the nature and value of the arms imports varies, from the purchase of small arms to the purchase of MIG and SU fighter aircrafts.18 In addition to formal transactions there have also been media reports of an illegal arms trade by certain Russian merchants to and through certain Southeast Asian states; government agencies in the region fear that the arms

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may be acquired by terrorists and other anti-government groups operating in Southeast Asia. While Vietnam has continued to be a close economic partner, in recent years Singapore has emerged as a potential economic base for Russian ventures into the region in trade, banking, shipping and other services. According to reports, the 2009 trade between Russia and ASEAN was US$6 billion while the Russian-China trade was US$178 billion, clearly indicating the disparity in the partners’ links to the region.19 According to ASEAN trade with its partners, Russia only accounted for 0.6 per cent in 2008 (or US$9.6 billion), an increase, nevertheless from a mere 0.3 per cent in 2007.20 ASEAN data also indicates that as far as Net Investment Inflow is concerned, from 2007–09, Russia accounted for 0.2 per cent while in comparison the United States accounted for 10.1 per cent and China accounted for 3.2 per cent. Russia is making slow improvements into the regional economic networks, and with improving public and private sector linkages, there are opportunities for an upwardly moving economic statistics. The economic trend will also be influenced by Russia’s global involvement resulting from WTO membership and active participation in other multilateral organizations like APEC, BRICS and G20. At present, its trade and investment levels with ASEAN resemble that of another Dialogue Partner, New Zealand, a micro-state when viewed against Russia’s vast land population size. Russia’s potential in the arms trade and in other essential technology based services would however, retain its importance as a strong economic partner.

RUSSIA AND REGIONAL DYNAMICS Although a large part of the Russian Federation lies in Asia, Russia has traditionally considered itself a European state as the larger part of its economy and population occur west of the Urals. Nonetheless it should be pointed out that it has been historically populated by large numbers of Asiatic peoples. It has had strong influences of Asian religions, namely Buddhism and Islam, (in addition Orthodox Christianity and Judaism) and is now flanked in its south by large populations of Turkic and Islamic faiths. Southeast Asia is also home to peoples with similar Asiatic and religious backgrounds. Russia can take advantage of the vast opportunities beyond its nearest Eastern neighbours — China, Korea and Japan, especially in trade and energy related interactions. Thus the potential in various sectors of cooperation with Southeast Asia and ASEAN is only now appearing to be emerging.21 Russia cannot but respond to changes in the Asia-Pacific environment. In addition to APEC, it has shown keenness in the Shanghai Cooperation

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Organisation and the Asian Cooperation Dialogue, ASEM, BRICS and G20 that brings it into contact with more Asian states.22 Changing U.S. strategies towards a more active role in the Asia Pacific plus an emerging China that is seen as “flexing its muscles” in both the hard and soft power arenas may influence Russia to reassess its role and interest in engaging more deeply with ASEAN and member states. On the positive side, Russia does not have any bilateral territorial issues; besides it has appeared neutral on the issue of rival claimants to the Spratly Islands in the South China Sea. As all interested parties, it will be concerned about the free passage of international waterways, and the security from maritime piracy. Another advantage is that presently Russia is not perceived as an imminent security threat or as an emerging power player in the Southeast Asian region, and this may be to its advantage provided the friendly opportunities are explored and systematically pursued. Learning from the other major powers, Russia may need to improve its political and cultural relationship and invest in more “soft power” and pay greater attention to people-to-people relationship so that it creates the viable status as one of the “big boys” in the region. Russia has yet to explore the potential of institutions similar to the Goethe Institute, the British Council or the newly established Confucius Center if it wishes to be part of the long term regional architecture. As emphasized throughout this paper, bilateral Russian contacts vary amongst different Southeast Asian states. For most of them, Russian history is a “blur” as it is not widely covered in school curriculum; the great literary works have been almost neglected except for a few elite scholars who read the translated versions. Thus language itself has been a major obstacle, as in most of the states, it is not taught extensively.23 Experts on Russia also constitute a minority, while presumably the same applies to Southeast Asian experts in Russia. Thus both sides need more investment in their relationship if they are serious about beneficial outcomes. The newly established ASEAN Center in Moscow (in June 2010) can be a lead agency in undertaking greater understanding and communication. Wary of Big Power rivalry in the past, ASEAN now promotes relation­ ships that are mutually beneficial in development issues, trade enhancement and mutual cooperation in environment, energy and food security. Russia as a leader in technology has a vast area to explore with its ASEAN partners. Thus both parties need to exploit the potential that can contribute to wider understanding and the realization of common goals beyond erratic reminders of each other’s potentials only and if scholarly or official meetings take place.

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CONCLUSION ASEAN and Russia are in the midst of the 15th year of the establishment of formal links. The observance may be the right occasion to review the progress of the relationship and to charter further plans. The membership of Russia in the East Asia Summit will also be another means to enhance the potential relationship between Russia and the Southeast Asian community. As past suspicions and ignorance dissipate, the prospects for sustaining viable ties appear encouraging and thus need to be vigorously pursued. Similar to Gorbachev’s 1986 address, a current Russian policy towards the Asia Pacific region, especially towards Southeast Asia and ASEAN would create an opportune environment for promoting relations. In that direction, President Medvedev has given his insights in a major foreign policy speech in July 2010. That together with the Russian leader’s participation at the second ASEAN-Russia Summit in Hanoi should provide adequate indication of Russia’s interests that should now be reciprocated with action from the Southeast Asian states, ASEAN and Russia itself.

Notes

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Parts of this paper were originally presented at the AAS/ICAS Conference, Hawaii, 31 March–2 April 2011. The writer would like to thank fellow panel members and members of the audience for valuable input. Not only did the Cold War split the Third World countries into being identified with the Western (Capitalist) states or with the Socialist states, but also within the later into pro soviet or pro China; for example President Sukarno, after his initial ties with the Soviet Union, moved closer towards China in the mid-1950s. For studies on the earlier period of Soviet relations with Southeast Asia, see Bilveer Singh, Soviet Relations with ASEAN, 1967–88 (Singapore: Singapore University Press, 1989); K.S. Nathan, Détente and Soviet Policy in Southeast Asia (Kuala Lumpur: Gateway Publishing House, 1984); Leszek Buszynski, Soviet Foreign Policy and Southeast Asia (London & Sydney: Croom Helm, 1986); Donald S. Zagoria, Soviet Policy in East Asia (New Haven: Yale University Press, 1982). For more recent studies see, Gennady Chufrin and Mark Hong, eds., Russia-ASEAN Relations. New Directions (Singapore: Institute of Southeast Asian Studies, 2007). For an insight into Russian policy see, Robert Legvold, ed., Russian Foreign Policy in the 21st Century and the Shadow of the Past (New York: Columbia University Press, 2007); Gilbert Rozman, Kazuhiko Togo, and Joseph P. Ferguson, Russian Strategic Thought Towards Asia (New York: Palgrave MacMillan, 2006). The three cases cited here, representing non-communist Southeast Asia, are interesting in that they had already established some form of contact with the Soviet government, mainly through trade; the Russian trade missions were

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permitted to set up offices, for example in Singapore and Malaysia in the mid1960s. The Philippines, on the other hand, explored “friendship” relations with the visit of Mrs Imelda Marcos to Moscow in 1972 which later led to the official visit by President Marcos. 4 Speech by Mikhail Gorbachev in Vladivostok, July 28, 1986, (Moscow: Novosti Press Agency Publishing House, 1986). 5 In June 1978, Vietnam became a full member of the Council for Mutual Economic Assistance (CMEA). Later that year the Soviet Union and Vietnam signed a 25-year Treaty of Friendship and Cooperation. That also granted military access to Vietnam’s air and sea ports, leading to military deployments at Cam Ranh Bay, a useful deep water port. For further details, see Ramesh Thakur and Carlyle A. Thayer, Soviet Relations with India and Vietnam 1945– 1992 (Delhi: Oxford University Press, 1993), p. 61. The use of the port was reportedly rent-free. The Soviet Union withdrew from the port in 2002 at the end of its lease. 6 The Soviet Union was one of the eighteen states that participated in the Paris Peace Agreement on Cambodia signed in October 1991 (just as the Soviet Union itself was undergoing domestic turmoil). The initial conference had first met in July 1989 but it ended in a stalemate. The final peace treaty, endorsed by the UN Security Council and the General Assembly, installed an interim UN administration in Cambodia supported by peacekeepers. It paved the way for general elections and the handover of the administration to a new government in 1993. 7 Brunei Darussalam had regained its sovereignty in January 1984, after almost 100 years of being a British protectorate. Although Brunei Darussalam had established diplomatic relations with dozens of countries after its independence, they did not include any communist states. The first two diplomatic agreements were with China and the Soviet Union in 1991. It is the newest venue for Russia’s diplomatic mission, having opened its embassy only in mid-2010; Brunei Darussalam had set up a mission in Moscow decade earlier, more in keeping with ASEAN’s dialogue relations with Russia. 8 In 1994 the Dialogue Partners were: Australia, Canada, European Union, Japan, New Zealand, South Korea and the United States. In the following two years, India, China and Russia became full Dialogue Partners. 9 Laos, Vietnam and Papua New Guinea, all of whom had established strong ties with ASEAN, one of which was through accession to ASEAN’s Treaty of Amity and Cooperation, were also invited to the ARF. 10 Laos and Myanmar joined ASEAN in 1997 and Cambodia in 1999. 11 The structures include the ASEAN-Russia Joint Cooperation Committee, the ASEAN-Russia Joint Planning and Management Committee and the ASEAN Committee in Moscow. 12 Each of the ten AEAN members coordinates relations on the Dialogue Partners for a three-year period. For the current phase, 2009–12, the coordinating country

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is Myanmar. The immediate past coordinator was the Philippines, 2006–09. See for details on the coordination. For instance, the Russian ministers or senior officials had to be acculturated into the lighter side of ASEAN diplomacy after their official business was concluded. It appeared to be a learning process that the Russians, used to their Europe oriented ways, had to quickly adapt to. Except for Papua New Guinea, ASEAN’s other partners had not acceded to the Treaty till the turn of the Millennium. President Putin met the ASEAN leaders at the Summit in Kuala Lumpur in 2005, while President Medvedev met them in Hanoi in 2010. Russian representatives participate in the ARF Working Groups. Another avenue for contact is the Council for Security Cooperation in the Asia Pacific (CSCAP) which consists of senior government officials and academics working together — under what is termed as Track Two. A newer avenue for ministerial contact has been the ASEAN Defence Ministers Meeting (ADMM) Plus. An important avenue for formal contact is through the ASEAN-Russia Business Council. However, each member state, with the support of various public and private sector institutions, has established various commercial linkages. According to SIPRI Yearbook 2009, Armaments, Disarmament and International Security (London: Oxford University Press, 2009), Russia reportedly exported arms worth about US$7.400 billion, second only to U.S. ($12.793 billion) from a global export market worth US$51.053 billion. See Appendix 7B, ‘The Financial Value of Arms Trade”, p. 335. See the AFP source in (accessed 26 March 2011). See ASEAN Community in Figures (2009), Table 15, “ASEAN Trade with Selected Partner Countries, ranked according to the 2008 shares (in percent)”, p. 15. The ASEAN share was 25.0 per cent in 2007, and 26.8 per cent in 2008. In comparison, China’s was 11.6 per cent (2007), 11.8 per cent (2008). Source: . The various proposals for cooperation between ASEAN and Russia were encompassed in the “Comprehensive program of action to promote cooperation between the Association of Southeast Asian Nations and the Russian Federation 2005–15”. See for further details. Russia was admitted to the World Trade Organization at the end of 2011. It has also expressed interest in the Asian Development Bank. Understandably, there are more graduates from Russian institutions in Vietnam, Laos and Cambodia. However, in recent years there have been more students from Thailand and Myanmar seeking Russian education and training in the arts or in technology fields. Malaysia is another case in point. In the past decade, with improving bilateral relations with Russia, and with an increased demand for higher education, Malaysia’s Ministry of Education had recognized special Russian medical universities and thus sponsored students for their training there.

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Soon other private students keen on a medical degree have also gone to Russia, in the process acquiring a working knowledge of the language. The Russian Centre for International Scientific and Cultural Cooperation, RCSC, at the Russian Embassy in Kuala Lumpur, promotes the cultural and educational links between the two countries and sponsors language classes as well as music and film festivals to promote Russia. On an average about thirty Malaysian students join Russian medical institutions each year. See for more details on the diplomatic, economic and cultural activities of the embassy in Malaysia.

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RUSSIA-ASEAN RELATIONS: AN INDIAN PERSPECTIVE Vijay Sakhuja

The twenty-first-century economic order is driven by globalization, which has had a profound impact on every country of the world, be it landlocked, coastal or adjoining the polar regions, resulting in greater access to global markets. Most countries are experiencing high growth rates largely driven by the burgeoning global trade and are highly dependent on the free flow of resources and goods to sustain their economy. In this globalization-led international order, the Asia-Pacific region has emerged as the most dynamic part of the world in economic and strategic terms. Both regional and extra regional powers are important stakeholders in global order, and their economic prosperity and security is intertwined with the regional economic and security environment. These stakeholders are constantly engaged in formulating policies and developing strategies for greater engagement which manifests in the form of Free Trade Agreements (FTAs) to enhance trade and interdependence. In fact, economic diplomacy has emerged as an important tool for these states to harness the benefits of the current trends in globalization and keep their economies vibrant and competitive. Consequently, there is greater emphasis on trade and investments in the region. At the strategic level, the Asia-Pacific region is under transformation. During the Cold War, geopolitical concerns and global rivalry between the U.S. and USSR had shaped the security dynamics in Asia. In the post-Cold War period, Asia is no longer divided along geopolitical and ideological lines, 124

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except in Korea. In fact there are more players in the region which would like to dominate the regional affairs. The Association of Southeast Asian Nations (ASEAN), China, India, Japan, Australia, the Republic of Korea, United States and Russia are at the forefront. In the evolving Asian balance of power, no country is willing to play second fiddle. In the above context, Russia and ASEAN are important players in the evolving geopolitical and geostrategic developments in the Asia-Pacific region. This paper attempts to explore areas of cooperation between Russia and ASEAN countries. It begins by arguing that Russia is an Asia-Pacific power and an important player in the strategic and political dynamics of the region through its engagements in a host of Asia-Pacific related multi­ lateral institutions and organizations. The paper then showcases the regional nuclear developments and argues that Russia could consider acceding to the Southeast Asian Nuclear Weapon Free Zone (SEANWFZ). Finally the paper identifies areas such as energy cooperation and humanitarian assistance and disaster relief (HADR) particularly during earthquakes, tsunamis and nuclear accidents, where the two can cooperate.

RUSSIA: AN ASIA-PACIFIC POWER There is a tendency to regard Russia as a Eurasian power focused on the Euro-Atlantic region, or from a polar i.e. Arctic perspective given that the Arctic waters give it access to the warmer waters but not as an Asia-Pacific power. In fact the constants of geography dictate that Russia is also an AsiaPacific power by virtue of its Far East that opens into the Pacific region. In the Pacific Ocean, it lays claims to the Kurile Islands which are disputed by Japan, it overlooks the Bering Strait that is the gateway to Arctic waters, that are fast becoming navigable, and the Siberian and Far Eastern regions that are rich in energy and mineral resources and can meet the energy needs of the Asian countries. Russia has emerged as a partner and a stakeholder in several Asia-Pacific regional groupings such as the Asia-Pacific Economic Council (APEC) (it will host the APEC summit in Vladivostok in 2012), ASEAN Regional Forum (ARF), the East Asia Summit (EAS), and the ASEAN Defence Ministers’ Meeting Plus, a dialogue forum inaugurated in Hanoi in 2010. At the sub-regional level, it has institutionalized the Shanghai Cooperation Organization (SCO) comprising China, Russia, Uzbekistan, Kazakhstan, Kyrgyzstan, and Tajikistan, which aims to promote security and economic cooperation.

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Russia has supported debate and discussion on Asia-Pacific regional issues and its initiatives to address the challenges facing the region have been welcomed. Speaking at the 2011 Shangri-La Dialogue, hosted by Singapore, which is a forum for the defence ministers and senior military officials from across the Asia-Pacific region to debate and discuss the regional security environment, the Malaysian Prime Minister Najib Razak in his opening address stated that “I say to our friends from U.S., China, Russia, India and beyond: We in ASEAN share your values and your aspirations, and we urge you to work with us.” 1 Both Russia and ASEAN members are maritime states, and their eco­ nomic vitality is dependent on relatively long and vulnerable sea lines of communication (SLOCs). The Asia-Pacific region’s SLOCs therefore have strategic significance for both sides, from trade and security perspectives. Coastal and offshore resources provide a principal means of livelihood for Russia and ASEAN countries. Thus security is intertwined with maritime affairs. Interestingly, maritime security has found a prominent place in the political, economic and security discourse in the Asia-Pacific region and is discussed during Track I and Track II discussions, both at bilateral and multilateral levels. At another level, the Russian navy operates out of the port of Vladivostok.

NUCLEAR DIMENSION OF ASIA-PACIFIC SECURITY The overall nuclear weapons outlook in the Asia-Pacific region is somewhat worrisome, with several states possessing significant nuclear weapons capabilities and their delivery systems. China acquired nuclear capability from the generous Soviet assistance and today possesses a variety of intercontinental, cruise and ballistic missiles with multiple independently targetable re-entry vehicle (MIRV) capability. The Chinese DF-31 and DF-41 Intercontinental Ballistic Missiles (ICBM) can hit targets as far as mainland U.S., Russia, South Asia and Southeast Asia. The North Korean inventory of missiles includes 800 road-mobile missiles (600 of these missiles are Scud variants), and about 200 Nodong missiles capable of delivering a variety of payloads including nuclear, chemical and biological. Given their ranges, these missiles can strike Japan, Russia and South Korea. Perhaps what merits attention is that some Asian navies have developed second-strike capability built around the sea-based nuclear deterrent. The Chinese new generation ballistic missile submarines (SSBNs) such as the Type 094 Jin class SSBN, fitted with 12 × JL-2 ballistic missile (8,000 kilometre

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range) with MIRV capability of smaller yields, is a well acknowledged threat. China is also developing ballistic missile capability to attack moving targets at sea. A U.S. Congressional Research Service Report titled China Naval Modernisation: Implications for U.S. Navy Capabilities — Background and Issues for Congress has noted that China is fast developing anti-ship ballistic missiles (ASBMs), with manoeuvrable re-entry vehicles (MaRVs), capable of hitting moving ships at sea including aircraft carriers.2 The report further observes that: China is developing an ASBM based on a variant of the CSS-5 MRBM (medium-range ballistic missile) as a part of its anti-access strategy. The missile has a range in excess of 1,500km, is armed with a manoeuvrable warhead, and when incorporated into a sophisticated command and control system, is intended to provide the PLA the capability to attack ships at sea, including aircraft carriers in the western Pacific Ocean.

The ASEAN states seek strict adherence to the Southeast Asia Nuclear Weapon Free Zone (SEANWFZ), a treaty which is a significant initiative for strengthening security and stability in Southeast Asia. It is also an effort by the Southeast Asian nations to uphold global efforts at nuclear disarmament. It is useful to point out that the United States, Russia, United Kingdom, and France have all objected to the inclusion of continental shelves and exclusive economic zones (EEZ) in the SEANWFZ treaty on the grounds that it imposed significant restrictions on the operational deployment of their navies. These concerns were notable, keeping in mind that the seabased deterrent pivoting on nuclear submarines is the potent segment of the strategic triad, including those of China and India.

RUSSIAN MILITARY INDUSTRIAL COMPLEX AND ASEAN COUNTRIES In the past, Russia has been a major supplier of military hardware to Indonesia and Vietnam. It has supplied a variety of equipment such as tanks, armoured personnel carriers (APCs), military combat vehicles, missiles, fighter aircraft, helicopters, submarines, ships and naval systems and has contributed to their modernization. Under a contract signed in 2003, Indonesia purchased a pair each of Su 27 SK and Su 30 MK2 for US$192 million. In December 2006, under a loan agreement, Russia has agreed to supply Indonesia additional Su 30

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SK fighter jets and this US$300 million deal includes purchases of three each Su-27 SKM and Su-30MK2. Overall, the Indonesian plans envisage purchases of up to one squadron of Su 30s (16 aircraft) to replace its aging fleet of fighters. The Russian military equipment is also significant from the perspective that Russia has emerged as the trustworthy supplier of military equipment. In this context, Indonesian President Yudhoyono has observed that: We want to diversify the sources of our equipment. Russia is offering us a generous package, and Russia also does not attach any conditions whatsoever. Russia is all business and does not attach any political conditions and that is the way we like it, and that is why we took up the offer.

The Indonesian Defence Minister Juwono Sudarsono was even more forthright and stated: Requirements for purchasing arms from Western countries are compli­ cated, with pre-conditions attached such as human rights, accountability, not to mention licensing…. In our past experience with Britain, we were not allowed to use Scorpion tanks in Aceh, even though we were facing armed separatists.3

Vietnam is a traditional ally of Russia. During the Cold War, the Soviets had a naval base at Cam Ranh Bay that served as a forward base for the Soviet Pacific Fleet. Vietnam has a history of operating Soviet/Russian aircraft. Significantly, the bulk of the aircraft inventory of the Vietnam People’s Air Force is of Soviet/Russian origin, and thus Vietnam has expertise in operating modern Russian aircraft like the Su27/Su30. Keeping in mind the Vietnamese expertise, it continues to be an important customer for Russian-origin military hardware. In December 2009, during his visit to Moscow, the Vietnamese Prime Minister Nguyen Tan Dung signed a US$2 billion agreement for the purchase of six Kilo Class submarines and twelve SU-30MKK fighter jets.4 Malaysia too has acquired Russian fighter jets such as the MiG-29 interceptors and Su-30 multi-role fighters. Significantly, Dato Seri Dr Ahmad Zahid Hamidi, the Minister of Defence of Malaysia, has noted that “We are also satisfied with the transfer of technology as far as the offset program is concerned. At the same time, we are very satisfied with the performance of the Su-30MKM, and have no problems with maintenance and logistics support.”5 Malaysia is also planning to purchase fifty MS-21

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next-generation narrow body jetliners at a cost of US$3 billion. The delivery for these will begin in 2016.

ENERGY SECURITY Russia is endowed with huge reserves of oil and gas. According to BP statistical data, Russia leads the world with 44.38 trillion cubic metres (tcm) of proved natural gas reserves, which corresponds to a quarter of world reserves and 74.2 billion barrels (bbl) of oil.6 But these are located in remote areas in the West Arctic and Far East regions, that are characterized by severe climatic conditions and exploitation operations are difficult. The bulk of the oil and gas reserves in the West Arctic are offshore in the Barents and Kara Seas that stretch over nearly 2 million square kilometres and could contain as much as 50–60 billion tonnes of oil equivalents. In the Far East and Eastern Siberia, the oil and gas reserves are estimated to be located over 1.5 million square kilometres, excluding Sakhalin and its shelf. Although some of the ASEAN countries such as Vietnam, Malaysia, Myanmar and Indonesia are gas-rich, the region as a whole is dependent on other sources for oil, which accounts for nearly 40 to 60 per cent of the region’s energy mix. Till 2004, Indonesia was a member of the Organ­ ization of the Petroleum Exporting Countries (OPEC) and a net exporter of oil, which has since turned into a net oil importer; due to the growing demand for energy given that it is the fourth-largest country by population and its growing economy.7 There are fears that Malaysia and Vietnam may experience energy shortages similar to Indonesia. This has prompted Singapore to diversify its gas dependence from Indonesia and Malaysia to other sources, by building an LNG terminal. In essence, the region as a whole is experiencing high economic growth, and this will result in an increase in oil consumption resulting in dependency on oil from other sources such as the Arctic. Russia has also been in dialogue with some ASEAN countries on the sale of nuclear reactors for peaceful nuclear energy generation. According to Alexander Ivanov, Russian Ambassador to Indonesia: We signed a deal with Vietnam to build a [nuclear power plant], and last year we made a presentation on nuclear power in Indonesia to the energy [and mineral resources] minister. But we think it’s up to the Indonesian government to [decide on] building the atomic power plant…8

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ARCTIC ROUTES The Northern Sea Route (NSR) is a transport corridor in the Arctic Ocean and offers the shortest path in the Northern Hemisphere for shipping goods between Europe and Asia through the Bering Strait into the Pacific Ocean. This route has become navigable only for a short period. According to estimates, the NSR will witness 5–6 million tonnes of cargo movement towards the eastern direction and 2–3 million tonnes to the West.9 In January 2011, a Russian shipping company Sovcomflot had received fifteen requests for icebreaker assistance in the Arctic for 2011, as compared to four in 2010. It is estimated that in 2011, the total volume of cargo to be shipped through the NSR can be expected to be at least 1.15 million tonnes, including 150,000 tonnes of oil for China, 400,000 tonnes of gas condensate and 600,000 tonnes of iron are likely to be shipped along this route.10 It is estimated that the cargo transported through the NSR has the potential to increase nearly ten times by 2020. In terms of distance, the NSR offers shipping companies considerable advantage. For instance, the distance between Yokohama (Japan) to Rotterdam (Netherlands) is 5,618 miles when compared to the 11,209 miles passage through the Malacca Straits via Suez Canal or 11,250 miles through the Panama Canal.11 The route through the NSR results in saving approximately 10–15 days of passage time.12 Commenting on the 2010 MV Nordic Barents voyage from Kirkenes port in Norway to China, the CEO of the shipping company noted that “The whole trip went very well. There were no big delays and it was a lot cheaper. Just compared to going via the Cape of Good Hope, the savings for fuel alone was around $550,000…” 13 In the Far East, Russia has announced its intention to develop the port of Petropavlovsk at Kamchatka as an eastern hub for the NSR.14 The Northeastern Shipping Company with a fleet of eight vessels totalling 100,000 metric tonnes deadweight tonnage (dwt) will develop the port so that it will become a major international port.

COUNTER-TERRORISM In 2010, Russia and ASEAN signed an agreement to jointly work on com­ bating terrorism. Russia has noted that “terrorism was not only a domestic issue, but an international problem and had become a threat to Russia”.15 ASEAN has also signed a Memorandum of Understanding (MOU) with the Shanghai Cooperation Organisation (SCO). These initiatives are significant and provide the basis for exchange of information to counter terrorism. At

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another level, there is a need to link up regional initiatives with other regions. For instance, counter-terrorism initiatives in SCO and ARF can complement each other, and this will result in greater sharing of information on the activities of terror networks in Asia-Pacific and Central Asia.

PROLIFERATION OF WEAPONS OF MASS DESTRUCTION (WMDs) The imperative to combat the spread of WMDs and related technologies is yet another vital issue of cooperation for Russia and ASEAN. The transfer of WMD and their delivery systems by sea is attractive due to ease of concealment, containerization and shipments onboard the Flags of Convenience (FoC) vessels. Further, the emergence of the new actors, both state and non-state in the global proliferation network has undermined inter­ national efforts at containing proliferation of weapons of mass destruction. North Korea’s clandestine trade in WMDs with Pakistan, Iran, and Syria has been the singular proliferation dynamic that has resulted in the rapid missile and nuclear proliferation of the three countries. Russia and ASEAN states can work together to counter proliferation networks and also to intercept vessels engaged in transportation of WMDs.

HUMANITARIAN ASSISTANCE AND DISASTER RELIEF (HADR) Several scientific studies and computer generated modelling results have concluded that the phenomena of global warming and the associated climate change has resulted in an increase in the frequency and intensity of cyclones. In that context, militaries are now training to respond to a variety of climate induced disasters. The navies in particular have been in the forefront and have begun to reshape their roles and missions to respond to the need for humanitarian and disaster relief operations. They are exploring and conceptualizing maritime cooperation to respond to such contingencies as the new template of multinational maritime operations in the humanitarian spectrum. Russia has supported cooperation on issues like disaster relief within the framework of the ARF. Russia has also acquired the Mistral class amphibious ship which can be fruitfully deployed along with Southeast Asian naval vessels to respond to disasters arising from cyclones and typhoons. This vessel can be rushed to transport food, water, and medical supplies to areas that were inaccessible and in desperate need for assistance and even evacuation.

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CONCLUsionS Finally, Russia and ASEAN relations are likely to witness a higher trajectory in the political and economic arenas. The increased interaction between the two partners is indicative of the fact that Russia and ASEAN are on the path of becoming significant partners in the future. The two sides can be expected to enhance their relationship built around several issues such as HADR, counter-terrorism, anti-piracy and counter-proliferation. However, the prospects of such partnership would be highly dependent on the kind of strategy Russia follows with regards to military sales to some of the ASEAN counties which may result in a regional arms race. This could be the harbinger of instability within ASEAN.

Notes

Oksana Antonenko, “Russia emerges as a big player in Asia-Pacific”, Moscow Times, 10 June 2011. 2 Ronald O’Rourke, “China Naval Modernisation: Implications for U.S. Navy Capabilities — Background and Issues for Congress”, Congressional Research Service Report, 23 December 2009. 3 “Indonesia Signs $1B+ Defence Credit Agreement With Russia”, (accessed 7 June 2011). 4 “Vietnam Aims to Counter China with Sub Deal: Analysts”, Bangkok Post, 17 December 2009. 5 Vladimir Karnozov, “Malaysian interest in Russian products”, (accessed 20 June 2011). 6 “Russia Regional Report”, January 2011, (accessed 7 June 2011). 7 Hanan Nugroho, “ASEAN energy cooperation: Facts and challenges”, Jakarta Post, 19 May 2011. 8 Zamzam Aden, “Russia offers RI help on nuclear power”, Jakarta Post, 9 February 2011. 9 “Ports Situated at the Northern Sea Route Require Property and Land Taxes Decrease”, (accessed 25 July 2010). 10 “Northern Sea Route Shipping to Multiply Fivefold in 2010”, Barents Observer, 11 February 2011. 11 Scott Borgerson, “Sea Change: The Transformation of the Arctic”, The Atlantic, November 2008, p. 89, (accessed 25 July 2010). 1

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Jessica Bachman, “More Russian tankers to ply Arctic route despite cost”, Reuters [Africa], 20 April 2011. 13 “Arctic shipping routes unlikely to be Suez of the north”, (accessed 7 July 2011). 14 “Russians Plan Arctic Hub”, Breakbulk Online, 10 December 2010. 15 Zamzam Aden, “Russia offers RI help on nuclear power”, Jakarta Post, 9 February 2011. 12

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Section III Bilateral Relations

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WHAT SINGAPORE MAY OFFER TO RUSSIA? The Present State and the Prospects of Relations Mark Hong

WHAT ROLES CAN SINGAPORE PLAY FOR RUSSIA? One key role is Singapore’s good governance policies, which The Economist magazine’s “Special report: The future of the state”1 in its 17 March 2011 issue explained: Singapore’s competitive advantage has been good, cheap government. It has worked hard to keep its bureaucracy small; even education consumes only 3.3 per cent of GDP. But the real savings come from keeping down social transfers and especially from not indulging the middle class. Minister Mentor Lee Kuan Yew thinks that the west’s mistake has been to set up “all you can eat welfare states” — because everything at the buffet is free, it is consumed voraciously.

The following points sum up the lessons from Singapore, according to The Economist 2 article: • Singapore is important to any study of governance now, in Asia and the West, partly because it does some things very well — such as in education — and because there is an emerging theory about a superior Asian model of government, which is simplified in four parts; • First, Singapore is good at governmence; it provides better schools, hospitals and safer streets with a government that consumes only 19 per cent of GDP (even though this figure does not include the CPF 137

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social security fund or the holdings of the two sovereign wealth funds). About 70,000 officials from 170 countries have learnt about Singapore’s approach to public administration. For more details of the Singapore Civil Service, please read the UNDP-MFA-CSC book, Virtuous Cycles: The Singapore Public Service and National Development, by Dr N.C. Saxena, launched on 24 March 2011.3 • Second, the secret of its success lies in an Asian mixture of authoritarian values and state-directed capitalism — largely a myth. Asian values are less important to Singapore’s success than a competent civil service and a competitive, small state. Singapore argues that it has found a good balance between accountability and efficiency; it is able to take a very long view on policies because there is stability in achieving power through regular elections, unlike the U.S. administrations which have to think of the next election very soon. One distinctive feature of Singapore is the high quality of its civil service, key features of which include: talent spotting and grooming through numerous scholarships; high pay; human resource development; meritocracy flows all the way through the system. • Thirdly, China is trying to copy Singapore — true; China sends streams of leaders — such as the expected next leader Xi Jinping, and thousands of officials — to learn from Singapore. The core of Singapore’s success — its ability to attract foreign MNCs — owes far more to laissez faire than to industrial policies. Singapore adopts an “open door” policy and also by building a business-friendly ecosystem of excellent infrastructure; a well-educated and highly skilled workforce; open trade; the rule of law; and low taxes. Singapore’s approach is to provide the people with assets that allow them to look after themselves, such as education and the CPF system; people are expected to look after their parents and pay for government services, such as co-payments for healthcare. • Fourthly, China’s government is more efficient than the West — mostly untrue. The place that should be learning most from Singapore is the West: remember this advice comes from the magazine that was critical of Singapore in the 1970s and 1980s! It stated that for all the talk about Asian values, Singapore is pretty much western. Its model combines elements of Victorian self-reliance and American management theory. Singapore could also benefit by relaxing its grip without sacrificing efficiency and gain entrepreneurial vim.

SINGAPORE’S STANDING IN SOUTHEAST ASIA The March 2011 Economist Intelligence Unit Survey4 ranked the ASEAN countries as follows, with Singapore ranked highly (see Table 1):

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60

71

74

82

100

140

163

Indonesia

Malaysia

Philippines

Singapore

Cambodia

Vietnam

Myanmar

1.77

2.94

4.87

5.89

6.12

6.19

6.53

6.55

Overall score

0.00

0.00

6.08

4.33

8.33

6.50

6.92

7.83

Electoral process/ pluralism

Source: Economist Intelligence Unit, March 2011

57

Thailand

Rank*

1.79

4.29

6.07

7.50

5.00

6.79

7.50

6.07

Functioning of government

0.56

3.33

2.78

2.78

5.00

5.56

5.56

5.56

Political participation

Table 1 ASEAN Rankings

5.63

5.63

5.00

7.50

3.13

6.25

5.63

6.25

Political culture

0.88

1.47

4.41

7.35

9.12

5.88

7.06

7.06

Civil liberties

Authoritarian

Authoritarian

Hybrid regime

Hybrid regime

Flawed democracy

Flawed democracy

Flawed democracy

Flawed democracy

Regime type

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THE RECENT GENERAL ELECTION IN SINGAPORE Singapore’s 16th Parliamentary General Election was held on 7 May 2011. The General Election (GE) was described as a “watershed election” for various reasons by various parties. First, the elections had the highest proportion of contested seats since independence, with 82 of 87 seats contested. Second, the final results saw a 6.46 per cent swing against the PAP from the 2006 elections to 60.14 per cent, its lowest since independence. The PAP was returned to power with 81 seats out of a total of 87 seats in Parliament. Third, while the PAP met most expectations to sweep into power and claim over two-thirds of parliamentary seats, winning 81 out of 87 seats, it lost the Aljunied Group Representation Constituency (GRC) to the Worker’s Party, the first time a GRC was won by an opposition party. Fourth, the Workers’ Party ended up with six seats in Parliament, the best opposition parliamentary result since independence. The strong results of the Workers’ Party led to speculation that there may eventually emerge a two-party political system in future elections. What is important to note about the 2011 GE was the strong swing towards the opposition, which put up better and more credible candidates, as well as the demonstration of a vibrant democracy functioning in Singapore. With the appointment of three Non-Constituency Members of Parlia­ ment (MPs) appointed from the opposition, there are now nine opposition MPs in Parliament, the best representation of the opposition to date. Another notable feature was the loss of fear of voters to vote for the opposition, which they did in order to send strong messages of their discontent over rising inflation, too many foreigners working in Singapore, the perceived lack of empathy with voters from the government, and other issues. With more opposition voices in Parliament, it is expected that there will be more vigorous debates in Parliament. After the GE, the government lost ten experienced ministers either via resignations or retirement or electoral defeats, and yet the stock market did not collapse nor did foreign investors withdraw from Singapore. This was a testament to the strength of the Singapore system and to the confidence in the PAP government. But noticeably, the PAP ministers showed themselves more responsive to the views and sentiments of the voters. It announced the setting up of a committee to review the sensitive issue of the high ministerial salaries, an issue which featured in the GE. The next key election was the presidential election in August 2011, which was contested by four candidates, and which resulted in a very narrow victory of Dr Tony Tan, a former Deputy Prime Minister and leading member of the ruling Establishment. The lesson

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to be drawn from the May 2011 GE in Singapore is that even in a one-party dominant and well-governed state like Singapore, after a long period of peace, prosperity and stability, the political contract with new and young voters has to be re-negotiated anew.

WHY SINGAPORE BELIEVES IN DEMOCRACY There are several good reasons why Singapore believes in democracy, which has been a feature of Singapore politics, despite the apparent “one-party system” operating in Singapore over many years, due to the strong domination of the ruling PAP. The reasons are as follows. Firstly, we appreciate its checks against tyranny and abuse of power and its promotion of the equality of all citizens. Secondly, we value the power and effectiveness of the democraticfree market system, which combines the effective and vigorous dynamics of proven economic and political systems that strengthens the synergies between both systems, and liberates the creativity and innovation, enthusiasm and freedom, drive and entrepreneurship of citizens. Thirdly, we believe democracy is essentially about freedom of choice: to choose your own system and government; we respect the right of all countries and peoples to make their own political and systemic choices and that they should not be criticized or pressured. Singapore thus does not export its systems nor invite others to follow or adopt its systems. But if foreigners do enquire, we share with them such observations, like the ones below.

MINISTER MENTOR LEE KUAN YEW’S SIX PRINCIPLES OF GOOD GOVERNANCE Based on his thirty years of being the leader and Prime Minister of Singapore, Minister Mentor (MM) Lee outlined his “Six Principles of Good Governance”. They are: 1. Send clear signals; this applies to policies, programmes and planning; 2. Set consistent policies; this is especially important to foreign investors, who because of the long time-frame needed for huge investments, want assur­ ance that rules and regulations do not change arbitrarily or frequently; 3. Maintain a clean government; fight corruption vigorously, as it can destroy countries, societies, economies, governments, families and individuals; the top leaders must demonstrate personal examples of extreme integrity; 4. Win respect, not popularity; as MM Lee has consistently stated, the business of government is to lead, and must implement tough but

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necessary policies, such as tax increases, when the situation calls for it, but the leaders should explain and communicate to the people the reasons, the necessity etc.; 5. Spread benefits to the people: this means that leaders and Governments win power through elections, not for personal or familial enrichment, but to bring progress, prosperity, peace and justice for all the peoples, and not just for privileged cliques; and 6. Strive to succeed: this message is very relevant because having achieved development; many people become complacent and take it easy; thus this point about continuous striving, generation after generation must be driven home, especially to the many Singaporeans who argue that we should now relax and just enjoy life. It is important to note that the systems which a country chooses from its start in life as an independent and sovereign country have tremendous impact and influence on its future development as an economy, polity and society. For instance, the USSR and countries of Eastern Europe, due to the Russian Revolution and the effects of WW2, embraced Soviet Communism for some seventy years, and after 1991, they had to reverse course. In the process, their peoples underwent a lot of misery and suffering. Singapore, luckily for its people, consciously chose the best combination of democracy and the free market, and thus enjoyed decades of growth, peace and prosperity, since independence in 1965, and did not have to undergo the miseries of systemic reversals. This point shows the importance of the path-dependent theory.5

FINANCIAL CENTRE ROLE Another key role that Singapore can play for Russia is to act as a centre for raising capital. Asia is now the centre of global growth and it is natural for Russia to get involved in Asia, especially in the field of finance. Asia needs several business hubs, some of which will be national business hubs, with very important intermediary roles. Others will be international business hubs, including those within large countries, such as Mumbai, Shanghai and Beijing. There are also those which are neutral and independent, like Singapore. They complement each other. Business financing is not a zero-sum game and this has been very much a question of the water level rising across the board; business hubs, both national and independent neutral hubs, like Singapore, complementing each other. That has been the story of the past ten years. There is a particular need to find, on a more efficient basis, sources of finance for companies from Russia. For instance, for Indian companies,

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Singapore has always been a very convenient location to raise funds, whether it is bond, equity, private equity or to do syndicate deals. Many Indian and Chinese companies are already familiar with the pool of investors in Singapore. This financing role is a very useful role, which Singapore can play, particularly for the raising of long-term finance. This is not about short-term, “hot” money. There is also a need for depth of capital markets. It helps to have an offshore market like Singapore that is not a nameplate jurisdiction, not a matter of tax convenience, but because it is a centre for gathering of multinational skills and investors. That is Singapore’s comparative advantage.

CONCLUSIONS When I served in Moscow for over six years, from 1995 to 2002, many Russians asked me: what could a huge country with such rich natural resources, and a superpower like Russia, learn from a tiny city state like Singapore, which could not be even located on a map? My answer was: Well, the laws of gravity operate in Russia as in Singapore; the Singaporeans are not floating off the ground! In other words, study the Singapore experience, abstract the general principles, borrow what Russia needs, adapt it to Russia’s specific situation and implement effectively. This was exactly how Singapore itself progressed: by being humble and willing to learn best practices from all around the world. This was exactly how our world-famous Changi Airport was built; before its construction, Singapore sent teams to all the best airports around the world; studied and adopted their best features; brought back to Singapore, incorporated and adapted to Changi’s specific needs, and proceeded. Now, other countries come to study and emulate Changi Airport, rated one of the world’s best airports. But Changi is still keen on improving itself, as it progresses to plan a new Terminal Four. In effect, Singapore has become a “one-stop supermarket of best practices”, and many sensible countries visit to learn, enquire and discuss with Singapore. But we do not push, promote nor proselytize our systems and ideas, we are actually quite busy, doing our own thing and trying to become even better.

THIRD ROLE: HOW SINGAPORE CAN SERVE AS A BRIDGE FOR RUSSIA, INDIA AND CHINA What role can Singapore meaningfully play in the growing trilateral economic activity between Russia, China and India? The answer lies in the

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growing needs and opportunities in these three large economies, respective comparative advantages, and Singapore’s economic connectivity and global positioning. For example, Russia’s need for the financing and development of infrastructure presents opportunities for collaboration between China, India and Singapore — in terms of capabilities and access to capital markets. In the context of Information Technology (IT), the collaborative flow could be very synergistic — with Indian, Russian and Chinese IT expertise combining with Singaporean market knowledge. In the context of the energy sector, Russian, Indian and Chinese energy companies involved in energy trading could find Singapore an ideal location to conduct LNG trading and to transport LNG shipments to global markets. These are but some examples of the scope for quadrilateral, beneficial partnerships.

ECONOMIC RELATIONS: BILATERAL TRADE Trade between Singapore and Russia reached close to SGD$4 billion in 2009, a moderate 5.3 per cent increase from the previous year’s of 101.9 per cent. Russia was ranked as Singapore’s 30th largest trading partner in 2008 with the balance of trade in Russia’s favour. Singapore’s trade with Russia is summarized in Table 2. Imports from Russia increased from SGD$3.2 billion in 2008 to SGD$3.5 billion in 2009. The key imports included petroleum products, crude petroleum and aluminium making up 94 per cent of the total imports in 2009. The top 10 imports were (see Table 3):

Table 2 Singapore’s Trade with Russia

Trade (SGD ‘000) Imports Exports Total Trade Trade Trend (%) Imports Exports Total Trade

2007

2008

2009

1,124,244 754,874 1,879,118

3,161,020 632,840 3,793,860

3,479,435 516,421 3,995,856

– – –

181.2% –16.2% 101.9%

10.1% –18.4% 5.3%

Source: IE Singapore

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Table 3 Singapore Imports from Russia (in S$ thousands)

1 2 3 4 5 6 7 8 9 10

Product

2007

2008

2009

Petroleum Products Refined Petroleum Crude Aluminium Nickel Steel Flat-Rolled Product Unclad Copper Civil Engineering Equipment Parts Steel Bar Shape etc. Zinc Synthetic Rubber & Waste

793,605 131,115 18,307 39,400 8,137 39,632 5,588 246 32,126 4,979

2,661,879 206,976 167,052 570 11,347 36,714 4,777 3,101 1,874 10,791

2,670,136 458,480 139,057 115,392 24,889 12,650 7,784 5,194 4,103 3,990

Source: IE Singapore

Exports into Russia decreased from SGD$633 million in 2008 to SGD$516 million in 2009. The top export items are musical instruments and parts, measuring instruments and telecommunications equipment — telecommunications equipment exports, which were the top export items in the previous two years, declined by more than 49 per cent in 2009. The top ten exports in 2009 were (see Table 4): Table 4 Singapore Exports to Russia (in S$ thousands)

1 2 3 4 5 6 7 8 9 10

Product

2007

2008

2009

Musical Instruments and Parts Measuring Instruments Telecommunications Equipment Electronic Valves Civil Engineering Equipment Parts Pumps for Liquids Petroleum Products Refined Parts for Office & Dp Machines Household Goods Apparel Articles of Textile

29 3,739 236,004 25,922 112,342 37,581 31,835 39,630 1,163 12,306

1,235 6,361 82,900 25,941 34,308 39,508 40,024 27,520 33,889 10,726

89,219 46,728 41,947 38,776 34,701 33,937 28,151 25,245 22,129 12,074

Source: IE Singapore

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KEY POINTS From the above data, it can be seen that there is much scope for expanding trade and investment relations between both countries, as well as in tourism. Two key steps can be taken: negotiating a bilateral Free Trade Agreement (FTA) and an Open Skies Agreement. On its part, Singapore has already negotiated eighteen FTAs with various countries, and has benefited from these FTAs by increasing trade and investments. The continued slow progress of the Doha Round is one argument for negotiating bilateral FTAs between willing partners. The Ukraine and Singapore are negotiating a bilateral FTA: why not Russia? Another way of examining Russia-Singapore bilateral relations is to compare this with Singapore’s bilateral economic relations with India and with China. In these two sets of bilateral economic relations, we can note the vitality and depth of relations which are missing from that with Russia. In this context, we should note that Singapore is helping Russia to set up two Special Economic Zones in Russia. For some years now, China and India are the rising economic giants within Asia and key locomotives of the global economy. Today, China and India constitute one-third of the world’s population, and contribute nearly 8 per cent of the global gross domestic product. With the genesis of India’s “Look East” policy in 1991, economic relations between India and ASEAN across trade, investment, tourism and technology have grown consistently. Likewise, China’s “Look South” policy and its expanding industries have created a surge in demand for raw materials, fuels, intermediate products, and final goods and services from ASEAN countries, including Singapore. Does Russia have a “Look Southeast Policy” towards ASEAN?

THE COMPETITIVE ADVANTAGES OF DOING BUSINESS IN SINGAPORE Take the examples of India and Chinese companies, which have discovered the benefits and profits from doing business with, and in Singapore. Singapore-India relations have now reached a new and higher level since the two countries signed the Comprehensive Economic Cooperation Agreement in 2005, and when India and ASEAN signed the Free Trade Agreement in Goods in 2008. Today, Singapore is India’s largest trading partner among ASEAN countries and also the largest ASEAN investor in India. In 2010, Singapore’s total trade with India stood at SGD$30.7 billion, a 42 per cent increase from 2009.

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Singapore and China also share a special economic relationship, with Singapore as one of China’s key economic partners in ASEAN. The political goodwill and cultural ties between Singapore and China have helped to strengthen their economic partnership. Singapore was also the first country that China signed an FTA with in Asia in 2008. Bilateral trade between the two countries is robust, rising by 25.9 per cent from 2009 to 2010, to reach SGD$95.3 billion. Today, there are 3,000 Chinese firms and more than 4,000 Indian firms operating in Singapore. (Note: there are lessons for Russian companies in this data.) It is an acknowledgement of Singapore’s role as an excellent platform to forge business alliances and enter new markets. Many companies have chosen Singapore as their regional headquarters. Establishing their bases in Singapore has enabled these companies to take full advantage of the burgeoning intra-Asia trade, particularly between South Asia and Northeast Asia. Russian firms hopefully might be inspired by these examples to capitalize on Singapore’s strengths and seize the growing opportunities. Singapore’s familiarity with the cultures and business practices of India and China also puts it in good stead to facilitate interactions and investments between the three countries. Russian companies can tap on Singapore’s Indian and Chinese networks to enter either market, as well as ASEAN markets. On another front, due to their familiarity with the ChinaSingapore Suzhou Industrial Park, going back approximately seventeen years, many Chinese companies have expressed interest to establish their businesses at the Singapore-developed International Tech Park in Bangalore. One practical step is for the Chambers of Commerce of Russia, India and China to work with the Singapore Chambers of Commerce and Industry. For instance, the Singapore Indian Chamber of Commerce and Industry (SICCI) was the first trade association in Singapore to appoint a representative in New Delhi to facilitate and assist Singapore-based companies interested in doing business in India. Furthermore, SICCI and the Singapore Chinese Chamber of Commerce & Industry (SCCCI) are making efforts to invite Indian companies to invest in China and vice-versa. The SICCI has signed a Memorandum of Understanding (MOU) with the Enterprise Development Centre at SCCCI’s Shanghai Representative Office. With the MOU, Indian companies in Singapore can work with SCCCI and the EDC Shanghai Representative Office to explore business opportunities in China. Such MOUs are important steps to facilitate efforts by Indian or Russian companies to explore China using Singapore and the EDC Shanghai Representative Office as a staging post. SCCCI and the EDC Shanghai Representative have good ground knowledge and understanding of the Chinese market, and are well placed to provide the right advice

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and guidance. These are practical ways for Russian firms wishing to enter the Chinese and Indian markets by leveraging on Singapore’s connections and networks.

POSSIBLE SINGAPORE-RUSSIA COOPERATION Despite its small geographic size, smaller than the area of Moscow City, which is about 1,000 square kilometres, Singapore has a relatively high profile in the world, as indicated by the following:   1. Singapore has been consistently invited to attend the G20 meetings;   2. Its Finance Minister Tharman Shanmugaratnam has been appointed to chair the IMF International Financial and Monetary Committee; other Singaporeans lead Interpol and the United Nations’ Economic and Social Commission for Asia and the Pacific (ESCAP);   3. Singapore is ranked in the top levels for education excellence; economic competitiveness; anti-corruption; good governance;   4. It is the second busiest port in the world;   5. Best airport in the world;   6. Venue of First Youth Olympics in 2010;   7. Singapore overtook Malaysian GDP in size in 2010;   8. Its economy grew by 14.7 per cent in 2010;   9. Its two new integrated resorts serve as models for Taiwan; 10. The Economist magazine in March 2011 cited Singapore as a leading model for good governance for the West. Whilst Singapore’s Minister Mentor Lee Kuan Yew has visited Moscow several times, how many times have the top Russian leaders visited Singapore on a state visit? Political exchange visits are important to signal trust and good relations. For instance, in March 2011, the Ukraine President Yanukovych and his delegation visited Singapore, on the first-ever state visit by a Ukrainian President. Possible areas of bilateral cooperation include the following: since Russia is strong in Maths, Science and Technology and as Singapore is stressing these areas — as shown by its setting up of its new University of Technology and Design, its new Institute of Applied Technology — this should be a strong cooperation area. In education, where for example the National University of Singapore (NUS) has set up its University Scholars’ programme — an enrich­ ment programme for top NUS students, located in the new University Town — exchange programmes between NUS and MGIMO and Moscow State University should be fostered. NUS also has a Music Academy — its students

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go on exchange programmes with the Peabody Institute in the United States and play at Carnegie Hall in New York. As Russia has strengths and expertise in music and ballet, these are areas of interest. We could also cooperate in museums exchange programmes. Why not hold a Russian cultural festival in Singapore?

Notes

The Economist, “Special report: The future of the State”, 17 March 2011, (accessed 17 March 2011). 2 Ibid. 3 N.C. Saxena, “Virtuous Cycles: The Singapore Public Service and National Development”, United Nations Development Programme, 2011, (accessed 31 March 2011). 4 The Economist Intelligence Unit, (accessed March 2011). 5 Path dependent theory: at the point of writing, in March 2011, there is ongoing unrest and popular revolts in several Arab countries, such as Libya, Bahrain, Yemen, Syria and some other Arab states. Several questions immediately arise, such as: What are the causes of these popular revolts? Where else can they spread to? What are the likely consequences of these revolts? Are they asking for democracy or something else?   Here I wish to take note of the Path Dependent Theory, which is defined as: how the set of decisions one faces for any given circumstance is limited by the decisions one has made in the past, even though past circumstances may no longer be relevant. People are usually not aware of path dependency. This refers to the notion that often “something that seems normal or inevitable today began with a choice that made sense at a particular time in the past, but survived despite the eclipse of the justification for that choice.” Then there is the Einstellung Effect, the idea that countries often try to solve problems by using solutions that worked in the past instead of looking at each situation on its own merits. This effect is especially powerful in international affairs, where each new conflict is viewed through the prism of Vietnam, Munich or the Cold War. For instance, the USA might be affected by the Einstellung Effect in thinking about and portraying China as the New Enemy (replacing the former USSR in the Cold War). 1

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MYANMAR-RUSSIA RELATIONS IN A CHANGING WORLD: GROWING TIES BASED ON STRATEGIC PARTNERSHIP AND ECONOMIC PROSPECTS Thaung Tun

INTRODUCTION Myanmar and Russia are separated by oceans and continents. Notwithstanding the geographic distance, the two countries have developed close relations based on mutual understanding, economic opportunity and strategic considerations. From the time they established diplomatic relations on 18 February 1948, barely a month after Myanmar became independent, the two sides have nurtured their relationship. Similarity in their outlook on major regional and international issues has helped to bring them closer. On the world stage, both countries agree on the need to strengthen the central role of the United Nations and the Security Council in maintaining international peace and security and in fighting terrorism and other challenges faced by the international community. Regular consultations between the Ministries of Foreign Affairs undertaken in accordance with an agreement signed in 1999, have allowed the two sides to coordinate positions on international issues.1 150

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MYANMAR-RUSSIA RELATIONS The first high-level exchange of visits between Myanmar and Russia took place in 1955. Prime Minister U Nu visited the Soviet Union in October 1955 and Soviet leaders Nikita Khrushchev and Nikolai Bulganin returned the visit two months later. Premier Khrushchev paid another visit to Yangon in February 1960. Prior to the visit, a trade agreement was signed, leading to mutually beneficial economic cooperation. In exchange for Myanmar rice, the Soviet Union carried out a number of building projects that included the Rangoon Institute of Technology, the General Hospital in Taunggyi and the Inya Lake Hotel in Yangon. People-to-people exchanges were also promoted. This led to an exchange of delegations that ranged from music and dance troupes to sports teams. Following the collapse of the Soviet Union in 1991 however, MyanmarRussia relations were at a low ebb as the Russian Federation was obliged to focus more on managing the transition at home than on relations with distant countries. The two countries revived their relations once the situation in Russia improved. The bilateral ties gained added momentum with the landmark visit of Vice-Senior General Maung Aye, the Vice-Chairman of the State Peace and Development Council of Myanmar, to Russia in April 2006 at the invitation of the Prime Minister of the Russian Federation, Mikhail Fradkov. The visit was the first by a Myanmar leader in four decades and resulted in strengthening the bonds of friendship. During the visit, a number of bilateral cooperation agreements and a Memorandum of Understanding (MOU) between the chambers of commerce and industry of the two countries were signed. The agreements have led to closer cooperation in the field of education and the training of scientists. The Chairman of the Supreme Court of the Russian Federation, Mr Vyacheslav M. Lebedev paid a return visit the same year. The latest visit on the Myanmar side was the visit of the Speaker of the Pyithu Hluttaw, Thura U Shwe Mann to Moscow and St. Petersburg from 26 June to 1 July 2011. The visit strengthened the ties between the Russian State Duma and the new legislatures in Myanmar.

MYANMAR-RUSSIA NUCLEAR COOPERATION In recent years, growing ties between Myanmar and Russia have become manifest in the field of education and scientific training including in the field of nuclear science. The training of Myanmar specialists in nuclear science

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and technology has led to speculation in the West that Myanmar harboured ambitions to acquire nuclear technology for weapons purposes. While Myanmar and Russia had indeed been discussing cooperation in the field of nuclear science, it was mainly limited to the establishment of a small nuclear reactor in Myanmar for research purposes. In 2000 Myanmar sought the help of the Russian Government to set up a nuclear research centre and in the following year, the two governments began negotiations on establishing a 10 megawatt (MW) (thermal) light water, pool-type research reactor and an isotope laboratory. In July 2001, Myanmar and Russia initialed an agreement on cooperation in building the nuclear research centre. A nuclear energy department was set up in the Myanmar Ministry of Science and Technology to oversee the project. Talks between Myanmar and Russia resumed in 2005 and in May 2007 and the two countries signed an agreement on the construction of a nuclear research centre in central Myanmar.2 The agreement was signed by U Thaung, the Minister of Science and Technology of Myanmar and Sergey Kirienko, Head of the Russian Federal Agency for Nuclear Energy. It put in place the legal framework for cooperation between the two countries in two key areas: a) The designing, building and launching of the nuclear research centre; and b) The training of Myanmar specialists for the nuclear centre. The document also outlined steps to be taken by the two sides to implement the agreement. It requires Myanmar first to be a party to the International Atomic Energy Agency (IAEA) Additional Protocol before it signed the contract for the construction of the nuclear research centre. The agreement includes the following points:3 • The construction of a nuclear research centre with a 10 MW (thermal) pool-type nuclear reactor using light water as a coolant and moderator; • The nuclear fuel used by the reactor would have uranium enriched to less than 20 per cent; • The research centre would have a neutron activation analysis laboratory, a medical isotopes production laboratory, a silicon neutron doping facility, etc; • Russian specialists would install and launch the centre’s equipment. Russia would supply the nuclear fuel and spare parts; • Irradiated nuclear fuel would be returned to Russia; • Myanmar pledges not to use the supplied nuclear or special non-nuclear material for the production of nuclear explosive devices or any other

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military purposes; it also pledges to place these materials under the IAEA safeguards for the entire duration of their stay in Myanmar; • Myanmar pledges not to use the equipment, materials and technologies supplied from Russia in nuclear facilities not placed under the IAEA safeguards; • Russia would train 300 to 350 nuclear energy specialists for the Myanmar nuclear research centre. The initial plan was to launch the centre in five years. However, due to the prohibitive cost of the project (estimated to be around 200m to 400m Euros) and other considerations, the project has not been implemented. In this regard, the Myanmar Ministry of Foreign Affairs issued a press statement on 11 June 2010 stating that the plan to purchase a nuclear research reactor from Russia had been suspended due to inadequacy of resources and the government’s concern for the misunderstanding it could cause in the international community. The training of Myanmar specialists in Russia for science and technology has however gone on as part of the cooperation programme between Myanmar and Russia in the field of education.

GROWING COOPERATION IN THE POLITICAL, ECONOMIC AND DEFENCE FIELDS In 2010, trade between Myanmar and Russia remained modest at US$114 million, with machinery and transport equipment accounting for 80 per cent of Myanmar’s imports from Russia. On the other hand, economic relations grew considerably as several Russian enterprises signed contracts with Myanmar government enterprises in the energy, mining and industrial sectors. The relations were further enhanced when the Russian governmentowned enterprise, Tyazhpromexport, established a plant to produce cast iron in the Shan State. Russian companies have also signed production-sharing contracts with Myanmar Oil and Gas Enterprise of the Ministry of Energy to explore oil and gas reserves. Cooperation between the two sides in the field of defence has also been growing since 1995 when Myanmar procured Russian military hardware and Russia provided training for Myanmar technicians. In December 2009, it was reported that a 400 million-euro contract was signed for the delivery of Russian MiG-29 fighters for the Myanmar Air Force. Earlier, in 2001–02, as part of a bilateral agreement on military and technical cooperation, Myanmar reportedly acquired MiG-29 and Su-27 jet fighters as well as artillery systems from Russia. A large number of Myanmar technicians were also said to have been trained in Russia. At the same time a significant number of Myanmar students have been attending universities

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and technological institutes in Russia in the past decade. At present around 1,500 Myanmar students are reported to be in eleven institutions in Russia. About 500 students with doctoral and post-graduate degrees have already returned home.

CONCLUSION Over the course of human history, dominant powers have employed global strategic positioning to broaden their scope of influence and enhance prospects for sustained economic development. The Romans used this strategy to ensure access to natural resources and control strategic sea lanes in the Mediterranean and spread their influence throughout their empire. In the modern era, the United States and the Soviet Union have done likewise. They used it to their advantage throughout the Cold War. While the U.S. developed military and economic alliances with countries located at key strategic points on the globe to achieve its political and economic objectives, the Soviet Union likewise forged strong ties with countries such as Cuba, Syria, North Korea and Vietnam to garner support for its cause. Under the circumstances it is not unnatural for Russia to seek closer ties of friendship and cooperation with countries in Asia, particularly with countries like Myanmar, which are strategically located. Myanmar occupies the landmass between China and India — two of the fastest growing economies in the world. Its large coastline overlooks the Bay of Bengal and its waters are adjacent to one of the world’s busiest sea lanes and the Straits of Malacca, the shortest sea route between the Persian Gulf and China. Currently, more than 80 per cent of China’s oil imports pass through the Malacca Straits — a point of special interest for big powers. Also, it is only through Myanmar that China can have access to the Indian Ocean. Moreover, with the megaprojects for construction of deep-sea ports in Kyaukphyu and Dawei in Myanmar becoming closer to reality, South Asia and Southeast Asia will be connected like never before. In addition, the strategic location of Myanmar will loom large as China and Myanmar have begun construction on the oil and gas pipeline project as well as the rail link that will connect Kyaukphyu, on the west coast of Myanmar to Kunming in Yunnan. Myanmar’s location between China and India has drawn Moscow’s attention to the strategic importance of Myanmar in the region. Seen from this perspective, observers believe that it is in Russia’s strategic interest to enhance ties with Myanmar. Moscow may also be seeking to expand its presence in Southeast Asia to counter Chinese activities in the region as well as to monitor the “rivalry” between China and India in Myanmar and the region.

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Observers see in Russia a counterbalance to the growing Chinese presence in Southeast Asia. Myanmar for its part sees Russia as a dependable friend and looks to it as an alternate source of modern weapons and information technology, especially in the light of embargoes and sanctions imposed on it by Western countries. Myanmar thus welcomes Russian investment in agriculture and energy, and encourages private sector cooperation between the two countries. Today Russian business enterprises are showing increasing interest in such areas as power-generation, telecommunication, transportation, agricultural machinery, pharmaceutical production and tourism. Russia’s importance for Myanmar was amply borne out in 2007, when Russia together with China, vetoed the U.S.-sponsored resolution on Myanmar in the UN Security Council. The Russian action is a reflection of the strong ties that exist between Myanmar and Russia. Notwithstanding the geographic distance, the relations between the two countries have always been cordial. They are likely to become even stronger in the years ahead as Myanmar needs to expand its circle of friends to overcome the sanctions imposed by the West, and Russia, as a Eurasian power, needs to have influence in Asia and the Pacific, the fastest growing region in the world.

Notes

1



2



3

The latest round of consultations to enhance bilateral cooperation was held in Nay Pyi Taw on 23 June 2011. According to a 15 May 2007 Russian Atomic Energy Agency (Rosatom) press release, the two governments signed an intergovernmental cooperation agreement in Moscow to establish a nuclear studies centre in Myanmar, which would include a 10-megawatt, light water-moderated nuclear reactor. The fuel for the reactor would contain uranium comprised of 20 per cent uranium-235. Rosatom Press Secretary Sergey Novikov said on 15 May 2007 that Russia was planning initially to supply 10 metric tonnes of fuel for the reactor. Nuclear weapons use uranium containing more than 90 per cent uranium-235. The centre also would include a medical isotope production laboratory and nuclear waste treatment and storage facilities. In addition, Russian universities were tasked with training 300–350 specialists for the centre, according to Rosatom. Anton Khlopkov and Dimitry Konuhhov, “Russia-Myanmar and Nuclear Technologies”, Centre for Energy and Security Studies, Moscow, updated 29 June 2011.

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RUSSIAN-MYANMAR RELATIONS Gleb A. Ivashentsov

INTRODUCTION Bilateral relations between Russia and Myanmar have more than sixty years of history. These have been positive relations. Russians never came to Myanmar as conquerors and never had any conflicts or controversies with Myanmar. For the last twenty years, Russia, along with the Association of Southeast Asian Nations (ASEAN) and China, has been among the leading foreign partners of Myanmar. For all that period Russia — be it in the United Nations or other international forums has continuously and from the positions of principle opposed internationalization and unfounded politicization of the so-called “Myanmar issue”. For us in Russia, Myanmar is an important present and perspective partner. Such an approach is determined by her line in the international affairs and her ASEAN membership, as well as by her geographic location, size, natural riches and economic potential. The Russian-Myanmar interaction in the international arena is distinguished by common or very close approaches to all topical issues of the global agenda. Myanmar efficiently performs as the Russian-ASEAN dialogue partnership coordinator.

GENERAL ELECTIONS IN 2010 The general multiparty parliament election took place in Myanmar on 7 November 2010. It was convincingly won by the pro-government party of Union Solidarity and Development, which won 77 electoral seats all over the country. The election campaign of 2010 and the formation of the 156

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constitutional organs of state power brought new dynamics to Myanmar’s political life. Thirty-seven parties took part in the election. Twenty-two parties, including the opposition parties, succeeded in gaining seats in parliaments at different levels. In November 2010, Aung San Suu Kyi was released after many years of home arrest.

A GENERATIONAL CHANGE The political processes started in Myanmar seem to be radically changing the former system. The people of a new generation are coming to power. It is not significant whether they are military or civilians. The significance lies with the fact that their vision of the path of Myanmar’s future is different from what we saw before. The new Chief Commander of the Armed Forces, the Minister of Defence and other military leaders have become subordinate to the present civilian state and government leaders and should not by any means position the new power structures under themselves. That seems to be the main principle to determine future developments.

ECONOMIC DEVELOPMENTS Along with the change to civilian rule, the open market economy is striking roots. The Myanmar Government is resolutely following the line towards privatization of public enterprises. About 600 of them were privatized in 2010–11, including 250 petrol stations all over the country. Steps were taken to create a more favourable investment climate. In January 2011, the Act on Special Economic Zones was approved which provided quite a number of tax exemptions to attract foreign capital to invest in such big scale projects as the Yangon and Tavoy port zones, as well as construction of deep-sea ports in Sittwe and Chaukpyu, in trans-regional transport infrastructure, automobile-assembly plants and large mining and other industrial enterprises. Foreign investments to Myanmar in 2010 equalled those from 1988 to 2009 period in totality.

RICH RESOURCES Myanmar has a tremendous development potential which could make it one of the most prosperous states in Southeast Asia. It is rich in metal ores, including uranium, oil and natural gas, precious stones along with diamonds, timber and many other natural resources. Myanmar can become the rice bowl

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of the world, and the Andaman Sea must be the only sea in Asia where fish die of old age. It is the natural transit corridor from China to the Indian Ocean and the bridge between South and Southeast Asia. It has hardworking people with a more than 90 per cent literacy rate and a comparatively good knowledge of English, at least in the urban areas.

WESTERN SANCTIONS Myanmar’s economic breakthrough is impeded today not only by the heritage of many years of internal, mainly ethnic, strife, and economic mismanage­ ment of the former regimes. The economic sanctions applied by the West have also contributed to the problems of Myanmar. Surely one could not have expected Myanmar’s adversaries in the West all of a sudden to become its sympathizers after the election, but at least some light at the end of the tunnel of sanctions should appear. All friends of Myanmar should make all efforts to achieve this in all international forums.

RUSSIA-MYANMAR TRADE As for bilateral Russian-Myanmar trade, it is relatively small as it did not exceed US$110 million in 2010. Both sides should know each other’s capabilities better in order to expand trade. At the same time, cooperation is steadily growing in oil and gas exploration, construction, telecommunications and defence technologies. The lack of any Myanmar debt to Russia is a positive factor in the growth of such cooperation. Myanmar imports Russian planes and helicopters. A cast iron plant with a 200,000 ton capacity is under construction in the Shan State, and it will start operations by the end of 2011. More than 3,000 Myanmar youths have received higher technological education in Russia within the last decade. In December 2010, the framework agreements on construction by Moscow Metro Construction Authority of the first metro line in Naypyidaw and a contract on technical assistance in geological survey were signed. This will mark the launching of an unparalleled project in Russian-Myanmar business cooperation.

VARIOUS AGREEMENTS The legal basis of Russian-Myanmar relations has been constantly widened. A number of important inter-government documents have been signed within the last few years. They include the Agreement on Cultural Cooperation,

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Declaration on Principles of Friendly Relations, Agreement on Visa-Free Travel for Diplomatic and Service Passports Holders, Agreement on Defence Technological Cooperation and Agreement on Cooperation in Construction of a Nuclear Research Centre in Myanmar, as well as the agreement between relevant Russian and Myanmar agencies on Cooperation in Prevention of Illegal Drug Trafficking.

CONCLUSION The present positive political changes taking place in Myanmar will surely widen the prospects of Russian-Myanmar cooperation, which is mutually beneficial and serves the interests of peace and progress in Southeast Asia.

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RUSSIA-THAILAND RELATIONS: HISTORICAL BACKGROUND AND CONTEMPORARY DEVELOPMENTS Ekaterina Koldunova and Paradorn Rangsimaporn

One can generally say that Russia and Thailand have friendly relations based on mutual respect. Despite the geographical remoteness, both states have a long tradition of interaction. It is a well known fact that amicable relations between Emperor Nicholas II and King Chulalongkorn (Rama V) helped Siam to avoid colonial dependence and maintain a balance between the great powers of that time.1 The current development of bilateral relations is marked by positive dynamics in the political sphere, especially from the year 2000 when mutual political contacts were intensified. In the year 2003, President Vladimir Putin became the first Russian leader to visit Thailand for more than a hundred years. In July 2007, Her Majesty Queen Sirikit paid a visit to Russia to commemorate the 110th anniversary of Russia-Thailand relations. However, the relationship is not without challenges. Economic ties have not yet reached their highest possible level and political ties have been, to a certain extent, affected by the several changes in government in Thailand in recent years. Factors that would enhance the relationship include the creation of better conditions and mechanisms for greater understanding and knowledge of each other. Human resources development in this respect is a key issue.

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A HISTORICAL OVERVIEW The temperature of relations between Russia and Thailand throughout its history has alternated between hot, cold, and lukewarm. From the warm and close relations between the two monarchies during the late nineteenth century to the icy breeze of ideological antagonism during the Cold War, Russia-Thailand relations in the post-Cold War world have markedly improved, with warmth and friendship gradually returning. A Royal Friendship: The first direct contact between Russia and Siam (as Thailand was known then) took place in 1863 when two Russian warships entered the Chao Phraya River and a friendly reception was accorded by the Siamese. Compared to other Western powers which arrived in Siam much earlier, Russia’s first encounter with Siam was during the modernization drives undertaken by King Rama IV and King Rama V. This left a favourable impression of Siam on the Russians and helped to shape the friendly relations between the two royal families later on.2 This close relationship came at an opportune moment for Siam as it was faced with the threat of colonization from both West (Great Britain) and East (France). Russia’s close ties with France and its rivalry with Great Britain was seen by the Siamese elite as a potential countervailing force to the colonial ambitions of those powers. However, early attempts to enlist the aid of Russia during the reign of Tsar Alexander III failed to achieve significant results as Russia then preferred not to complicate its close relations with France. Thus, Russia stayed neutral during the Paknam crisis of 1893 when French gunboats threatened Bangkok, and France demanded territory east of the Mekong River from Siam.3 It was only when Tsar Nicholas II came to the throne in 1894 that his personal ties with King Chulalongkorn ensured Russia’s more sympathetic attitude towards the Siamese plight. The seeds of this personal friendship were sown at the time of the future Tsar’s earlier visit to Siam in March 1891. During his tour of the Far East he was accorded a grand reception by the Siamese monarchy and was duly impressed by the hospitality. Relations between the two monarchs became closer still, when King Chulalongkorn visited Russia in July 1897 during his first tour of Europe and prior to visiting France upon the Tsar’s advice.4 The grand reception accorded by the Tsar to the King was widely publicized and played a part in easing Franco-Siamese tensions: indeed, the Siamese King was portrayed as an equal to a European monarch. Other European powers, notably France and Great Britain, could not help but accord equally warm and regal receptions to the Siamese King during his visits there.5 The Russian Tsar had also promised to the Siamese

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King that Russia would do its best to improve the situation between France and Siam. The Tsar stressed that “the independence of Siam will never be lost, nor it will be disturbed”.6 He also offered to establish formal diplomatic relations and to appoint an envoy to the Kingdom, as well as proposed that the King send one of his sons to study in Russia under his personal guardianship. The King chose Prince Chakrabongse, one of his favourite sons, who later became a colonel of the Hussars of the Imperial Guard and married a Russian lady. Indeed, the Prince’s Russian experience epitomized the strong friendship and ties between the two royal families.7 Russia’s official policy towards Siam thus became quite supportive. However, it also became clearer (especially after Russia’s defeat by Japan in 1905) that Russia’s influence in the Far East, especially in Southeast Asia, was limited. It neither had the resources nor the interests to become actively involved in the imperial rivalry between Great Britain and France in the region. Ultimately, Siam remained independent primarily due to the diplomatic skills of King Chulalongkorn, who adroitly balanced the influence of the European powers and tactfully ceded some territories to preserve the bulk of Siam’s lands. While Russia did play a part in preserving Siam’s independence, it was not a decisive one. The rise of Germany in Europe forced both Great Britain and France to put aside their differences, curtail their colonial ambitions elsewhere, and refocus on managing affairs on their own continent. Thus, Siam became a buffer state between the two powers “as the era of colonial land-grabbing came to an end”.8 Ideological Split: The Bolshevik Revolution and the subsequent murder of the Tsar and his family came as a great shock to Siam’s ruling elite. After the severance of diplomatic relations in 1917, there were practically no contacts between the two states and peoples for a quarter of a century. When in 1941 there was an attempt to restore relations, the process was interrupted by the Second World War.9 In its early years the Soviet Union had little interest in Southeast Asia let alone Siam. Stalin was more concerned with the rising threats from Nazi Germany and Imperial Japan and later, with the consolidation of the post-Second World War gains in Europe and the burgeoning Cold War with the Western world. In Siam (which did not move from an absolute to constitutional monarchy until 1932), communist ideology and its antagonism towards class divisions and royalty was largely unacceptable. However, in return for the Soviet Union’s support of Thailand’s United Nations’ (UN) membership in 1946, formal diplomatic ties were established and diplomatic missions were subsequently exchanged.10 Thus, Thailand became the first non-

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communist Southeast Asian country to establish diplomatic relations with the USSR.11 Under Nikita Khrushchev, the Soviet Union assigned greater importance to the Third World and its emerging nations, though Southeast Asia remained relatively low on the list of priorities. By the late 1970s with the “communisation” of Indochina and through Moscow’s special relationship with Hanoi, the Soviet influence in the region was enhanced.12 However, relations with the non-communist Southeast Asian countries, including Thailand, remained consistently low and its views of these countries very critical. Thailand was often singled out for Soviet criticism because of its military support to the U.S. war effort in Vietnam, including the stationing of the U.S. troops in the country. Moreover, following the 1978 Vietnamese invasion of Cambodia, when Thailand provided sanctuary for refugees as well as resistance fighters, including elements of the Khmer Rouge, the Soviet stance against Thailand hardened.13 On Thailand’s part, throughout much of the Cold War Thailand per­ ceived the Soviet Union as a real, yet indirect threat to its national security primarily due to their differences in values. All Thais were brought up to hold upmost respect and reverence towards the monarchy and Buddhism — the state religion — which went against communist ideals. The Thai elite and policy-makers were also traditionally anti-communist. Perceptions of the Soviet Union by Thai policy-makers as a source of threat grew stronger after Moscow supported Vietnam’s invasion of Cambodia in 1978. Since Thailand was a key American ally in the Far East, Soviet intelligence activities in Bangkok (described by some pundits as the hub of great powers’ regional espionage) were a major headache.14 Despite Thailand’s anathema towards communism, the Soviet Union was not initially seen as the number one threat. The perceived real threat then was the People’s Republic of China (PRC) due to its support for the militant Communist Party of Thailand. With the fall of South Vietnam in 1975 to communist forces and the Vietnamese invasion of Cambodia in 1978, however, Vietnam replaced China as Thailand’s chief adversary and Moscow’s support for Hanoi served to raise the Soviet Union’s threat profile. At about the same time, the widening Sino-Soviet rift, the end of the Cultural Revolution in the PRC with the advent of a more pragmatic leadership, and the normalization of U.S.-PRC relations, prompted Thai policy-makers to engage the PRC as a strategic partner. With Vietnam’s invasion of Cambodia and the fall of the pro-Beijing Khmer Rouge, both the Thai and Chinese governments came to share an interest in countering the Vietnamese and Soviet influence in the region.15 Although in 1979, during Prime Minister Kriangsak Chamanan’s visit to the Soviet Union, no other

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than Leonid Brezhnev assured him that Vietnam would not invade Thailand, Bangkok remained wary of Moscow’s and Hanoi’s intentions, believing they held expansionist designs to counterbalance the U.S. in the region.16 Thus, Thailand’s growing hostility towards the USSR in the 1970s and early 1980s was inspired by the latter’s position in the regional balance of power. Only with Mikhail Gorbachev’s rise to power and his famous Vladivostok speech in 1986 when he indicated readiness to mend relations with China and the Association of Southeast Asian Nations (ASEAN) did relations with Thailand start to improve. Soviet Foreign Minister Eduard Shevardnadze visited Thailand in 1987 as part of a Southeast Asian goodwill tour and Thai Foreign Minister Siddhi Savetsila returned the visit later that year. While there, he made it clear that Thailand saw the Soviet Union as a vital factor in the resolution of the Cambodian problem.17 Hanoi, under some pressure from Moscow but mainly due to internal economic reasons as well as the desire to improve relations with Beijing, eventually agreed to withdraw its troops and did so in 1990.18 A major obstacle to Thai-Soviet relations was thus removed. By then, however, Gorbachev’s political and economic initiatives had made the Soviet Union untenable and led it towards collapse in 1991. With the birth of the Russian Federation a new chapter in Thai-Russian relations had begun. A New Beginning: After the dissolution of the Soviet Union, Thailand quickly recognized the new Russian Federation on 28 December 1991. Historical memories helped in cementing bilateral ties: Princess Maha Chakri Sirindhorn visited Russia in March 1993 and celebrations were held in 1997 to mark the 100th anniversary of relations. That year, in July, Thai Privy Councillor and former Prime Minister Prem Tinsulanonda headed a large delegation of government and private sector representatives to Russia, and Russian Foreign Minister Yevgeny Primakov visited Thailand the following month.19 Despite high-level political ties growing closer, for much of the 1990s, trade was insubstantial with Thailand experiencing a trade deficit. Russian exports were mainly primary products like iron, steel, fertilizers and some chemicals while Thai exports were generally low value added products such as clothing, plastic products, cane sugar, and agricultural products. Tourism, however, was and remains a growth industry with around 100,000 Russians visiting Thailand in 1997.20 For Russia, the 1990s was a decade of high internal turbulence and rapidly changing foreign policy priorities. During the early 1990s Russia’s foreign policy-making was dominated by the so-called “integrationists” or

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“Atlantists” who stressed the necessity to develop closer ties with the West and, ideally, join it. The Asian direction was simply not assigned as much importance as the western one. Not reciprocated by the U.S. and Europe, this drift towards the West was eventually replaced by the “balancing” approach of Yevgeny Primakov.21 It is during his time as Foreign Minister (1996–98) and Prime Minister (1998–99) that a more pragmatic line prevailed. Particularly, relations with Asian states as well as contacts with Asia-Pacific multilateral organizations became a full-fledged direction in Russian foreign policy. In 1996, Russia became an official dialogue partner of ASEAN, and in 1998 it joined the Asia-Pacific Economic Cooperation (APEC) organization — both organizations in which Thailand plays an active role. These events established a good basis for the strengthening of the Russia-Thailand relationship in the next decade.

CONTEMPORARY DEVELOPMENTS IN BILATERAL RELATIONS The Rise of Strong Leaders: Early in the new millennium interactions between Russia and Thailand intensified for a number of reasons. Having overcome the crises of 1997–98, both Russia and Thailand returned to stability and economic growth. The period when the world, according to Thomas Graham, had a sense of doing “without Russia”, was all but over.22 The country was now regarded by some as an “emerging market”, by others — as an “aspiring great power”.23 During Vladimir Putin’s presidency Russia’s efforts in the international arena were aimed both at re-establishing ties with traditional partners like China or Vietnam and securing new beneficial connections, bilateral and multilateral. Russia’s integration into the thriving Asia-Pacific region through its Far Eastern areas became a popular idea with some practical implications. Meanwhile, a new kind of leader emerged in Thailand. Within a short period of time, Prime Minister Thaksin Shinawatra transformed the country’s foreign policy by making it more activist and projecting Thailand as a regional player with global outlook and far reaching economic goals.24 During his years in power, Thailand initiated the Asia Cooperation Dialogue (ACD), nominated candidates to the positions of the World Trade Organization (the WTO) Director-General and the UN Secretary General, and started to look for new markets beyond the Asian region. In October 2002, Prime Minister Shinawatra visited Moscow and met President Putin and Prime Minister Mikhail Kasyanov. As a result of this visit, Thailand and Russia agreed on a number of documents aimed at the

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encouragement and mutual protection of investments, cooperation in the sphere of tourism and in space technologies. Both parties agreed to settle the issue of Russia’s debt on credits for purchases of rice and mutually dispensed with visa requirements for diplomats. Later on, holders of normal Thai and Russian passports were allowed to stay in Russia or Thailand correspondingly without visas for a thirty-day period. President Putin’s state visit to Thailand in 2003 marked a new stage in bilateral relations. For the first time in the history of modern Russia its head of state visited Thailand and was honoured by an audience with His Majesty King Bhumibol Adulyadej and Her Majesty Queen Sirikit. As Alexander Losyukov, then Russian deputy foreign minister noted, “President Putin’s visit revived the foundations of special bilateral relations laid one hundred years ago and defined the long-term priorities for interaction of Russia and Thailand.”25 Thus, Russia-Thailand interaction in the 2000s was positively invigorated. Both states established a mechanism of regular meetings at a high level. With Russia’s admission to APEC, the two countries’ leaders got the additional opportunity to exchange opinions on the sidelines of this forum. Moreover, Russia and Thailand had significantly expanded cultural and educational exchanges through, for instance, the establishment of national days of culture hosted in turn by Moscow and Bangkok. Some new themes in bilateral ties could be attributed to Thaksin Shinawatra’s personal style. Wishing to demonstrate Thailand’s greater independence on the international arena he started talking to Russia about military-technical cooperation — specifically, about buying Su-30 MK fighter planes. Since Russia wanted to expand its arms sales in Southeast Asia, its reaction was positive. A break into the Thai market would be particularly significant given Thailand’s traditional status as a close ally of the U.S. and a buyer of its weapons. In 2005, the Royal Thai Air Force started its modernization programme. This included the substitution of old F-5 fighters with newer models. The Thaksin government was choosing between the Swedish JAS-39 Gripen, the Russian Su-30 MK and an upgrade of the American F-16 A/B to the C/D model. While the Prime Minister himself was inclined to buy the Russian jets, the Thai Air Forces Commander in Chief supported the deal with the U.S.26 There are reasons to believe that Thailand’s expression of interest in military-technical cooperation with Russia was a way of prompting the U.S. to propose better contract terms to Thailand. However, the final decision made in favour of neither American nor Russian fighters but Swedish ones, was, in a sense, an indirect sign that Russian-Thai cooperation in this field

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might have been possible in case of a competitive proposal. This conclusion is supported by a later Thai-Russian deal on Mi-17 helicopters in 2008.27 Enhancing Economic Ties: Better political relations in the 2000s provided a good background for improving economic ties. To invigorate business contacts, Russia and Thailand launched bilateral business forums. The opening of Thailand’s Export-Import Bank division in Russia became a positive example of cooperation in the banking sector. Joint projects in the light industry also have good prospects. The most recent example is Thailand’s CP Group activities in Russia. The CP Group is a large-scale corporation working in the sphere of agribusiness and food. It is also one of the oldest Thai industrial enterprises with its history going back to the year 1921. In the 1960s the CP Group significantly expanded by forming the full production chain in the field of agriculture. In the late 2000s the CP Group decided to start its operations in Russia and invest in its stock-raising market. Presently Russia is regarded by the company as one of its most promising markets.28 Tourism remains another sphere of mutual interest. Estimates show that Russian tourist inflow is constantly increasing, ranking third only after China and Japan in 2010.29 Russia is also seen as a potential source of foreign investments to Thailand, especially taking into account its post-crisis energyfuelled growth. Challenges: While the Western countries disapproved of the September 2006 military coup that overthrew the Thaksin constitutional government, Thai-Russian relations remained mostly on track. In 2007 they culminated in the visit to Russia by Her Majesty Queen Sirikit to commemorate the 110th anniversary of bilateral ties. Nonetheless, relations have not always proceeded smoothly. Talks between Russia and Myanmar on nuclear energy cooperation reportedly caused some concerns among Thai military leaders. Characteristically, the aforementioned deal to buy Russian Su-30 MK fighters finally fell through in 2007.30 But the most challenging issue in recent years has been the case of Victor Bout, the alleged international arms dealer, who was arrested in Thailand in March 2008 in a joint U.S.-Thai operation. Bout remained in Thai custody until November 2010 when the Thai Cabinet, under Prime Minister Abhisit Vejjajiva approved his extradition to the U.S. (after the appeal court had overturned the criminal court’s previous ruling dismissing the U.S.’ request for extradition). Bout’s extradition caused a strong reaction in Russia: Foreign Minister Sergei Lavrov declared that the Thai decision was a result

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of “unprecedented political pressure” from Washington on Bangkok.31 The Vejjajiva government, however, denied this and insisted on its own respect for the judiciary’s independence.32 Indeed, Bout’s case illustrates how difficult it is to keep the delicate balance in relations with two great powers when they are imposing conflicting demands on Thailand.

FOREIGN POLICY CONCEPTS AND DECISION-MAKING STRUCTURES Thai-Russian post-Cold War relations have been generally marked by stability and improvement. To understand this continuity and change in the relationship, one may want to take into account the conceptual approaches of the partners to each other and the structure of their foreign policy institutions. Relations with Thailand do not represent a separate direction in Russia’s official foreign policy concept. These relations are viewed in the broader context of Russia’s Asia-Pacific regional priorities and modernization plans, with particular attention to such multilateral entities as ASEAN, ASEAN Regional Forum (ARF) and APEC.33 Thailand’s attitude to Russia is somewhat similar. In documents outlin­ ing Thailand’s foreign policy (for instance, in the Policy Statement of the Council of Ministers made by Abhisit Vejjajiva when his government was just formed) cooperation and partnership with the main world actors in the spheres of politics, economy, trade, finance, and new technologies is a familiar priority, and that is where relations with Russia belong. In these relationships Thailand emphasizes economic interaction (especially in the agricultural and investment spheres), ensuring economic advantages for Thailand and maintaining the Kingdom’s favourable image abroad.34 In the Russian Foreign Ministry, Thailand is in the sphere of competence of the Third Asian Department that deals with East Asia, Australia and Oceania. In the Ministry of Foreign Affairs of Thailand, the Department of European Affairs and within it — its Third Division is responsible for Thailand’s relations with Russia. The Division is dealing with all aspects of bilateral relations including political, economic, and sociocultural ties. The Royal Thai Embassy in the Russian Federation and the Russian Embassy in Thailand work directly with the Foreign Ministries of the two countries and other governmental bodies. Both the Department of European Affairs and the Royal Thai Embassy have some Russian-speaking specialists who were educated either in Russian universities (including the Moscow State Institute of International Relations,

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or MGIMO-University 35) or in other foreign or domestic universities specializing in Russian studies and international relations as a whole, including Chulalongkorn and Thammasat Universities.36 Some of them studied in Russia as beneficiaries of the special scholarships from the Ministry of Foreign Affairs (MFA) of Thailand. The number of such diplomats is not too high. Besides, due to the rotation practice adopted in the Ministry at the initial stage of a diplomat’s career, each young diplomat is assigned to work at various departments not necessarily in accordance with his or her specialization. The same is true for career diplomats in the MFA of Russia. Normally in the Ministry and Russian Embassy there would be professionals who specialize in Thai studies. Thai language is taught in four universities in Russia (MGIMO-University, Institute of Asian and African Studies of Moscow State University, Saint-Petersburg State University, Far Eastern Federal University), but in practice only graduates from MGIMO-University and Institute of Asian and African studies apply for the positions in the Ministry, and they are not numerous. In both Russia and Thailand, there are very few, if any experts on Thailand and Russia respectively in other government agencies apart from the Foreign Ministries. This is particularly true of Thailand where it is difficult to find an official familiar with Russian issues in such relevant ministries as those of Defence and Commerce. This lack of human resources reflects the broader problem in Thai-Russian relations: mutual interest, knowledge, and understanding of each other is still lacking. Compared to the interest of Thais in other great powers like the U.S. and China, Russia is not given much attention. Although the rise in people-to-people contacts through tourism and cultural events, the establishment of Russian programmes and courses in Thai universities and the opening of the ASEAN Centre in MGIMO are steps in the right direction, much remains to be done to bring understanding between the two countries to a meaningful level.

CONCLUSION Having experienced ups and downs in its relations, Russia and Thailand are now involved in a constructive and multidimensional dialogue that covers political, economic and sociocultural issues. However, to move relations to qualitatively new stages both parties need to create such conditions and mechanisms which will better inform political decision-making on all aspects of relations and promote better knowledge of each other. Only if this is achieved would Russia cease to be seen by Thailand as a mere element of the balance-of-power construction in the Asia Pacific, and Thailand would cease

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to be regarded by Russians as another exotic tourist destination. Hopefully, expanded people-to-people, educational, cultural, business and research contacts will lay the ground for this kind of change.

Notes

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Isorn Pocmontri, ed., From your Friend: Centenary of Thai-Russian Relations (Moscow: Royal Thai Embassy, 2007); Paradorn Rangsimaporn, “Russia’s Search for Influence in Southeast Asia”, Asian Survey, vol. XLIX, no. 5 (September/ October 2009): 804. Ekaterina Pugacheva, The Significance of Personal Contacts between the Russian Imperial Family and the Royal Court of Siam in the Late 19th-Early 20th Centuries, MA thesis (Bangkok: Chulalongkorn University, 2009), pp. 20–23. Modernizing reforms included the abolition of slavery; judicial reform; creation of a salaried bureaucracy, army and police; and the development of agriculture and education. See Chris Baker and Pasuk Phongpaichit, A History of Thailand (Cambridge: Cambridge University Press, 2007), pp. 47–80. See Patrick Tuck, The French Wolf and the Siamese Lamb: The French Threat to Siamese Independence 1858–1907 (Bangkok: White Lotus, 1995). For more on this, see Boris Melnichenko and Anastasiya Pyleva, Rossiya-Tailand: istoriya vzaimootnosheniy (XIX-nachalo XXI veka) [Russia-Thailand: History of relationship (XIX — the beginning of XXI century)] (Saint-Petersburg: SaintPetersburg State University, 2011), pp. 19–131. H.S.H. Prince Subhadradis Diskul, “The Significance of King Chulalongkorn’s Visit to Europe” and Didier Rolin Jacquemyns, “European Perceptions of King Chulalongkorn’s Visit to Europe”, both in Charit Tingsabadh, ed., King Chulalongkorn’s Visit to Europe: Reflections on Significance and Impacts (Bangkok: Chulalongkorn University, 2000), pp. 1 and 6–7. Pocmontri, ed., op. cit., p. 35. See Eileen Hunter and Narisa Chakrabongse, Katya and the Prince of Siam (Bangkok: River Books, 1994). Baker and Phongpaichit, op. cit., p. 78. A part of the Anglo-French agreements of 8 April 1904 (the so-called “Entente Cordiale”) related to Siam and confirmed the 1896 Anglo-French agreement, recognizing British and French spheres of influence in Siam. The Malay Peninsula was recognized by France as being within the sphere of British influence while the Mekong valley was recognized by Britain as belonging to the French sphere. The agreements considerably reduced international tensions on Siamese territory and both powers disclaimed all idea of annexing Siamese territory. Ian Nish, “The Policies of the European Powers in Southeast Asia, 1893–1910”, in Tingsabadh, ed., op. cit., pp. 16–17. Statement by H.E. Yevgeny V. Afanasiev, Ambassador of the Russian Federation to the Kingdom of Thailand, “Russian-Thai Relations: History and Modern Times”,

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11 12

15 13 14



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October 2005, (accessed April 2010). Chantima Ongsuragz, “Thai Perceptions of the Soviet Union and Its Implications for Thai-Soviet Relations”, in Pushpa Thambipillai and Daniel C. Matuszewski, eds., The Soviet Union and the Asia-Pacific Region: Views from the Region (London and New York: Praeger Westport, 1989), p. 129. Statement by Afanasiev, op. cit. Bilveer Singh, Soviet Relations with ASEAN: 1967–88 (Singapore: Singapore University Press, 1989), pp. 2–7. Ibid., pp. 24–38 and 96. Ongsuragz, op. cit., pp. 122–29. Ibid., p. 125. On Thai-PRC relations see Chulacheeb Chinwanno, “Thai-Chinese Relations: Security and Strategic Partnership”, RSIS Working Paper No. 155, 24 March 2008, (accessed May 2010), pp. 1–17. Leszek Buszynski, Soviet Foreign Policy and Southeast Asia (London and Sydney: Croom Helm, 1986), pp. 229–35. R.A. Longmire, Soviet Relations with South East Asia (London and New York: Kegan Paul International, 1989), pp. 137–40. Leszek Buszynski, Gorbachev and Southeast Asia (London and New York: Routledge, 1992), pp. 132–46. Thailand-Russia Centennial Relations (Bangkok: Ministry of Foreign Affairs and the Statesman Foundation, 1997), pp. 11 and 15. Ibid., pp. 30–31. Andrei Tsygankov, “New Challenges for Putin’s Foreign Policy”, Orbis (Winter 2006): 154. Thomas Graham Jr., “World without Russia?”, Carnegie Endowment for International Peace, 9 June 1999, (accessed 19 June 2011). Paradorn Rangsimaporn, Russia as an Aspiring Great Power in East Asia: Perceptions and Policies from Yeltsin to Putin (Houndmills: Palgrave Macmillan, 2009). For more details on Thaksin Shinawatra’s foreign policy, see Pavin Chachavalpongpun, Reinventing Thailand: Thaksin and His Foreign Policy (Singapore: Institute of Southeast Asian Studies, 2010). Alexander Losyukov, “Rossiya-Tailand: 110 let po puti vzaimoponimaniya” [RussiaThailand: 110 years on the way of mutual understanding], Mezdunarodnaya Zhizn, no. 6 (June 2007): 113. “Why is Thaksin So Fond of Russia’s Jets?”, The Nation, 21 December 2005. “Thais Go Russian, Buy Mi-17 Helicopters”, Defense Industry Daily, 4 November 2008. “CP Group Targets Emerging Markets”, Bangkok Post, 21 November 2009.

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“Thailand-Russia Meeting on Trade and Economic Cooperation”, Bangkok, 18 April 2011, . 30 Kavi Chongkittavorn, “Regional perspective: Rejuvenating the stalled friendship with Russia”, Bangkok Post, 2 July 2007. 31 “’Zhalyashchii ukol’ i ekstraditsiia Viktora Buta”, Nezavisimaya Gazeta, 18 November 2010. 32 “Abhisit denies U.S. pressured govt in Bout extradition”, Bangkok Post, 3 December 2010. 33 “Konzepziya vneshney politiki Rossiyskoy Federazii 2008” [Russian Federation Foreign Policy Concept 2008], (accessed 19 June 2011); “Stenograficheskiy otchyot o soveshanii po sotsial’noekonomicheskomu razvitiyu Dal’nego Vostoka I sotrudnichestvu so stranami Aziatsko-Tikhookeanskogo regiona” [Stenographic Report on the Meeting on Socioeconomic Development of the Far East and Cooperation with Countries of the Asia-Pacific Region], 2 July 2010, (accessed 19 June 2011). 34 “Policy Statement of the Council of Ministers”, delivered by Prime Minister Abhisit Vejjajiva to the National Assembly, 29 December B.E. 2551 (2008), (accessed 4 June 2011) 35 Moscow State Institute of International Relations (University) works under the auspices of the MFA of Russia and represents a leading Russian higher education institution in the sphere of international relations. 36 Both universities are the oldest and most prestigious in Thailand. Historically they play a significant role in preparing personnel for government service, including the MFA. 29

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RUSSIA AND VIETNAM: BUILDING A STRATEGIC PARTNERSHIP1 Vladimir Mazyrin

INTRODUCTION The reasons behind the dramatic decline in relations between Moscow and Hanoi in the late 1980s and early 1990s are too well known to describe them here in any detail. Even before the fall of the Soviet Union, the donorrecipient relationship that existed earlier between the two socialist states was gone. The strategies of economic reforms adopted in Yeltsin’s Russia and under the Vietnam’s “Doi Moi” policy could hardly be more different. In the foreign policy realm, Russia mostly aspired for membership in the Western club. Meanwhile, its former Southeast Asian ally had no choice but to adapt to the realities of its regional neighbourhood — a traditionally strong American presence, the rise of China and the Association of Southeast Asian Nations’ (ASEANs’) claim for a bigger role. This combination of factors suggested that with time, the two countries would only be drifting away from each other. Nevertheless, by the middle of the 1990s there were signs of a somewhat restored mutual interest. If anything, political dialogue was resuming, and high-level contacts were taking place again. In 1994, Russia and Vietnam concluded a Treaty on the Foundations of Friendly Relations. In a very basic sense, they agreed that what they needed in the new geopolitical and geo-economic setting was a reconfiguration, not an abandonment of the old relationship.2 173

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This common stand was confirmed in 1998 when President Tran Duc Luong came to Moscow for the first Russia-Vietnam Summit. The intention to develop and diversify bilateral relations was the central theme of the talks. It took two more years to find a solution to a key problem inherited from the past — that of repaying Vietnam’s state debt to Russia. In terms of opening ground for a new stage in trade and economic cooperation, this was a major step forward.

REINFORCING POLITICAL AND MILITARY TIES Intensified political dialogue: Upon arrival in Hanoi in March 2001, President Vladimir Putin — the first head of the Russian state to ever visit Vietnam — received an enthusiastic welcome and, in turn, he expressed readiness to open a new chapter in the history of the relationship. The Joint Declaration on Strategic Partnership signed by the parties reflected their common preference for a mutually advantageous cooperation based on market principles, past experience and new international realities.3 This first Presidential visit and later another one, right after the AsiaPacific Economic Cooperation (APEC) Summit that was held in Hanoi in 2006, helped the countries to consolidate political understanding at the highest levels and make some headway in the economic sphere. However, nothing too impressive seemed to happen for quite a while. Pulling out of the decade-long slump proved to be more difficult than sliding into it. Perhaps, only now or, to be more precise, in the last four or five years, the accumulated improvements in Russia-Vietnam cooperation are beginning to result in something like a steady trend. The latest political landmark in that direction was President Dmitry Medvedev’s official visit to Vietnam in October 2010. The number of important bilateral documents signed on that occasion is just as telling as their spectrum. Covering the whole span of bilateral relations, these agreements show that interaction between Russia and Vietnam is becoming more mature, deep and diverse.4 On the whole, the recent history of political contacts leads to a conclusion that relations between Russia and Vietnam are now on the rise. In international affairs, these partners hold similar or very close positions on a great majority of issues — for instance, on the anti-terrorist struggle, on disarmament and nuclear non-proliferation, on the need to uphold the principles of national sovereignty and territorial integrity of the states, on the role of the United Nations in the modern world, on the resolution of regional and other conflicts by diplomatic and peaceful means. Vietnam appreciates the contribution of

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Russia to the maintenance of stability in Asia and the world, and backs up Russia’s initiatives within international bodies to which they both belong. In Russia’s view, Vietnam’s membership in ASEAN is a factor that contributes to stronger linkages between the Association and Moscow.5 Intergovernmental contacts and administrative links: The main body that deals with promotion and monitoring of bilateral activities at the level of the states is the Inter-governmental Commission on Trade, Economic, Scientific and Technical Cooperation (IGC). It holds annual sessions, as well as meetings of co-chairmen (represented on each side by the minister of industry) sometime in between. Within this framework, several working groups coordinate cooperation in the fields of energy, coal production and engineering, agriculture, banking, chemical and the pharmaceutical industry. As of today, neither party is fully happy with this system: even the commonly approved decisions of IGC are executed rather slowly. Working relations are maintained between many ministries of the two governments. These are the ministries of defence, foreign affairs, internal affairs, economic development and trade, education, public health, etc. However, not all the ministries interact on a permanent basis. Usually, they get in touch to discuss current issues that belong to their spheres of competence for example the state debt issue in the case of the ministries of finance or they send their representatives to thematic exhibitions and seminars in Vietnam or Russia. There are long-time and stable linkages between the military and police forces of the two nations. The Russians are training Vietnamese personnel. Security agencies exchange information and hold various meetings of experts, supporting each other’s efforts in confronting international terrorism and organized crime. The Vietnamese Committee on Search and Rescue and the Russian Ministry for Emergencies are in constant touch too. Foreign ministries of the two countries should be singled out for their regular and effective, day-to-day interaction. Professional diplomats on both sides are the ones who usually prepare high level meetings and summits, coordinate activities at global and regional forums, execute the exchange of data and documents concerning bilateral cooperation and its legal aspects. In 2001, Russia and Vietnam signed the protocol on inventory and measures for implementation of bilateral agreements. All the agreements signed by them in the period from 1955 up to 1991 were listed there.6 The legal basis for cooperation is consistently enlarged and improved. Since 1991, both sides have concluded more than fifty interstate agreements,

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mainly of intergovernmental and inter-ministerial character. Many of them stipulate bilateral trade and economic cooperation — protect mutual invest­ ments and provide for avoidance of double taxation, back up joint efforts in oil and gas exploration, power generation, manufacturing, banking, maritime and air transportation, fisheries, tourism, etc. Inter-parliamentary, party-to-party and region-to-region ties: Since the late 1990s, the legislative bodies of the two countries — the Federal Assembly of the Russian Federation and the National Assembly of Vietnam — have been developing a lively dialogue. There is a regular exchange of delegations, and “friendship groups” of deputies who support closer ties between Russia and Vietnam are functioning in both parliaments. The ruling Communist Party of Vietnam (CPV) and the Communist Party of the Russian Federation continue to communicate with each other. Whenever they are in Russia, the leaders of Vietnam invariably meet their local comrades to compare notes. But common ideology is no longer the basis for Moscow–Hanoi interactions. In line with its course reaffirmed at the 11th Party Congress in January 2011, the CPV establishes linkages with the dominant non-communist parties of other states. One of them is progovernmental “United Russia”.7 Just like relations between the central governments, contacts between the regional administrations of the two countries are getting stronger. Its legal framework was defined in 2000, in the intergovernmental agreement on principles of cooperation between the local authorities of Vietnam and the subjects of the Russian Federation. Vietnam is keenly interested in developing external contacts of its biggest urban centres — Hanoi, Ho Chi Minh City, Danang and Haiphong. Among the more active Russian participants in city-to-city and region-to-region partnerships are Moscow and Saint Petersburg, the Maritime and Khabarovsk Territories of the Russian Far East, plus such exporters of goods and services to Vietnam as Tatarstan, Nizhniy Novgorod, Yaroslavl and Chelyabinsk. The business communities of Hanoi and Ho Chi Minh City add more practical touches to inter-regional cooperation. Their involvement results in such projects as the creation of Vietnamese commercial and cultural centres in Moscow. But much is yet to be done here, and many opportunities are yet to be explored. Defence cooperation and trade in weapons: Although Russia’s military presence in Southeast Asia terminated in 2002 when it left the naval base in Cam Ranh Bay, it continues to assist Vietnam in improving its defence

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potential. Cooperation in this sphere goes back to the era of Indochina Wars, when Moscow supplied arms to Hanoi gratis. Later, between 1979 and 1990, Vietnam was given soft loans to be able to pay for the Soviet weapons. Different terms of payments (including credit support and partial acceptance of barter) were introduced in the mid-1990s when new contracts were signed. Since then, Russia has re-emerged as the principal supplier of modern arms to Vietnam. Unlike some other international traders, Moscow is not attaching political demands to such deals and never fails to mention that these are not targeted against any third party. To regulate bilateral activities in this field, the Intergovernmental Agree­ ment on Military and Defence Cooperation was signed in October 1998. One more related document is the framework contract on arms sales and training of Vietnamese officers in Russia.8 In 2009–10, the parties made deals worth US$5.5 billion. This is the equivalent of 6 per cent of Vietnam’s annual gross domestic product (GDP). The execution of these contracts will put Vietnam among the world’s biggest buyers of Russian arms.9 Along the way, Russia helps its partner to repair the equipment supplied years ago and transfers licenses to manufacture some weapons locally. With Vietnam’s long-term interest in all this, prospects for more supplies by Russia look good.

FORGING CULTURAL AND ECONOMIC COOPERATION Scientific and cultural activities: Civilian cooperation in science and technology has been developing in a number of areas, and some of these initiatives are quite promising. After all, more than a few Vietnamese engineers and scientists have been trained in Russia, and professional skills are supplemented on their side by the knowledge of the partner’s culture and language. The agreement on cooperation between the scientific institutes of Vietnam and Russia was signed in 1996. In the framework of IGC, there is a subcommittee on scientific and technological cooperation. It covers more than twenty priority areas of interaction and monitors know-how transfers (for example, through the opening of experimental production lines, creation of joint research units, conduct of seminars and exhibitions). Russian and Vietnamese researchers have been successful in developing microbiological substances for plants protection, new hydrocarbon-based materials and special fibres.10 Prominent among the joint projects in science is the Russian–Vietnamese Tropical Research and Technological Centre established in March 1987 in

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Hanoi. Toxicology, biotechnology, tropical medicine, ecology and stability of technical equipment in the tropics are among its major areas of expertise. The practical importance of the Centre’s achievements prompted the parties to agree to extend its operations until 2017. Revitalized bilateral relations prompted new interest among the Vietnam­ ese in the Russian language studies and culture. Such regularly organized programmes as “Days of Russian Culture in Vietnam” and “Days of Moscow in Hanoi” reciprocated on the other side by “Days of Vietnamese Culture in Russia” and “Days of Hanoi in Moscow”, help to sustain this mood, and the Russian Centre of Science and Culture in Hanoi makes its contribution too. Exchanges of university students and post-graduates are now somewhat livelier that just a few years ago,11 although still not as active as at the peak of the Soviet-era friendship. Unless some urgent measures are taken to attract more Vietnamese students to Russia, generational changes in Vietnam may result in a sad decrease of human potential most crucial for meaningful bilateral ties. The last big group of those Vietnamese who graduated from the Soviet Universities went back home in the late 1980s. On average, these people are now in their fifties. Some are still active as top civil servants and party functionaries. Others are professionals or in business. Even if one assumes that many of them still sympathize with Russia, new groups of educated individuals who will come to replace them in the next ten to twenty years will not inherit this outlook automatically. Something must be done to offer the talented young Vietnamese more scholarships in Moscow, St. Petersburg, Vladivostok and other Russian centres of higher learning. Restoring trade flows: After the post-Soviet decline that reached its nadir in 1996 (when total annual trade fell to one-tenth of what it used to be in 1988) trade statistics began to improve, but improvement was not steady and quick enough until lately. In 2005 bilateral trade turnover reached the US$1 billion mark, and in 2010 it came close to US$2 billion. Now the parties plan to raise it to US$3 billion in 2012 and to US$10 billion in 2020.12 Even if this takes place, Vietnam’s exchanges with its leading partners are already surpassing these targets by far: trade with China reached US$27.3 billion in 2010, trade with the U.S. — US$18 billion, and with Japan — US$16.7 billion.13 In 2010 the Russian Federation’s share in Vietnam’s total trade was just 1.2 per cent, and its place on the list of this country’s trading partners was only in the second dozen.14 Be it as it may, expansion of bilateral trade is still a fact. Its average annual growth of more than 30 per cent in 2007–10 is something not to

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be missed, especially against the background of the global financial crisis. Ironically, this crisis actually prompted Vietnam to seek alternative partners in trade, including Russia with its untapped potential. Both sides have been establishing joint ventures, joint-stock companies, trading houses and banks, and the share of middle and small enterprises in export-import operations has been increasing. At this point, the bulk of Russia’s exports are steel billets, fertilizers, motor vehicles and trucks, spare parts and some other equipment. The share of low added value products is too big, and that of engineering goods is too small (around 30 per cent of the total). Imports from Vietnam are mostly consumer goods such as textiles, garments and footwear, and foodstuffs (rice, sea products, instant noodles, cooking oils, etc.).15 A measure of complementarity between the two economies is obviously there: products of Russian heavy industry, from metals and chemicals to engineering goods, are well known and demanded in Vietnam, while products of tropical agriculture and light industry offered by the latter are welcomed in Russia. Further development of trade is constrained by a combination of limited financial resources of many participants and the complexities of crediting systems on both sides. High customs barriers and costs of transportations plus high prices and inadequate quality of some Russian goods, difficult certification and customs formalities are not conducive to progress either. After Russia’s accession to the World Trade Organization (WTO), it can enjoy preferential tariffs on its exports to Vietnam, and Vietnam can expect the same in Russia either. Since all these problems are not going to disappear in the near future, the two countries have to think how to neutralize their impact and continue to promote trade. Industrial projects, joint ventures and investments: Cooperation with Russia is welcomed in industries where it has solid technological potential and enjoys international recognition. In spite of growing competition with foreign companies, Russia’s positions in the energy complex of Vietnam remain strong. A joint venture by the name of VietSovPetro that drills for oil and gas on the continental shelf of Vietnam has been a symbol of what is possible when partners work together in earnest. Its ratio of income and expenditure places it among the most efficient of oil companies in the world. Being a major contributor of hard currency to local treasury, VietSovPetro is just as dear to Russia: in the past decade this enterprise had been delivering up to US$400–500 million in annual profits.16 Application of modern technologies allows VietSovPetro to increase its output steadily (with the exception of the recent crisis years). From 1986 to

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2010, total extractions reached 200 million tonnes of oil and 20 billion cubic metres of gas. Today, this enterprise pumps over 60 per cent of national oil and secures 5 per cent of total export earnings. In 2002 another RussianVietnamese joint venture, Vietgazprom started its operations. In 2007 it began to exploit a gas field near Danang.17 After the collapse of the Soviet Union and in spite of it, Russia completed construction of some major power plants in Vietnam, first and foremost of the Hoa Binh hydropower station with its 1,920 megawatt (MW) capacity. Until today, it is the biggest unit of its kind in the whole of Southeast Asia. The transmission facility through which Hoa Binh is sending energy southward is 1,414 kilometres long. It was also constructed with Russian assistance. In 2002, the Technopromexport Company finished construction of the Yali station (720 MW). The contract’s value was US$200 million.18 Using a Russian governmental loan of US$100 million, another Russian company, Silovye Mashiny worked on two more hydropower plants, Play Krong and Sesan-3.19 The same company delivered capital equipment for reconstruction of thermoelectric power station Uong Bi. In 2009, Inter RAO EES began to build two large thermal power plants, each with a 1,200 MW capacity. In the case of the funds that will be invested throughout the years into VietSovPetro, taking these into account, total Russian capital invested in Vietnam will amount to US$4 billion. That’s enough to occupy the fourteenth position on the list of nations from which foreign direct investments are coming to Vietnam.20 Aside from joint projects in oil and gas, there are now more than a hundred Russian-Vietnamese joint ventures officially registered in Vietnam with capital exceeding US$2 billion. The ones that have actually started to operate are involved in fishery and seafood processing, rubber production, transportation of cargoes by sea, etc. Most of these are small and medium enterprises.21 Vietnam, of course, is seeking more Russian investments, and Russian businessmen are responding. Lately, a whole set of projects costing from a third to half-a-billion U.S. dollars each have been launched in the telecom and real estate sectors.22 Not to be forgotten is such an undertaking of national importance as the construction of the 2,000 MW nuclear power plant, the first one in Vietnam and Southeast Asia.23 In all these cases, advanced Russian know-how is to be applied. As for the Vietnamese investments in Russia, until two or three years ago these were mostly made by permanent residents or immigrants “Vietkieu”.

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As a rule, their money went into small businesses — shops, restaurants, hotels, and so on. Only the biggest of these entrepreneurs would go into manufacturing. The best known project funded by the local Vietnamese capital has been the sauces and instant noodles factory in Serpukhov, near Moscow, operated by Rollton Ltd. In 2002 only ten Vietnamese funded projects were registered in Russia and their total capital was just US$32 million, the amount of money invested in seventeen such projects in 2009 had already reached US$1 billion. That made Russia the third most popular foreign destination for transfers of capital from Vietnam.24 It is encouraging that larger, state-run Vietnamese corporations are starting to establish joint ventures and make investments in Russia. The pioneer is PetroVietnam. It now carries out two oil and gas projects worth US$1.5 billion with Gazprom and Zarubezhneft in different regions of Russia.

CONCLUSION The recent dynamics in bilateral relations of Russia and Vietnam prompt an observation that neither the Soviet-era friendship, nor the partnership of today may be viewed as accidents of history. In fact, quite the opposite is true: these two countries need each other for a sufficient number of reasons, and as time goes, it becomes only clearer. Today, when their national economies are expanding and socioeco­ nomic modernization is a key imperative, Russia and Vietnam have a good opportunity to contribute to each other’s rise through productive cooperation. The need to secure the external environment that is conducive to national aspirations also brings them closer together. The pool of mutual cultural knowledge accumulated in the past is still a source of inspiration for the Russians and the Vietnamese who wish to build a future-oriented strategic partnership. As Russia seeks a new balance between the two directions of its global policy, Western and Eastern, and Vietnam consolidates its position in ASEAN and East Asia, they gradually become aware of similarities in their bigger strategic outlooks. This is yet another reason for a long-term revitalization of bilateral ties. But none of these opportunities should be taken for granted. As shown above, there are more than enough problems in the relationship. On both sides, it will take strong political will, clear thinking and determined action to make the Russia-Vietnam strategic partnership worthy of its name.

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Notes

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An earlier version of this text appeared in the Special Issue of the International Affairs Journal on Russia-ASEAN (Moscow, October 2010) under the title “Russia in Indochina: Back to the Future”. See “Nguyen Tat Giap. Quan he cua LB Nga voi cac nuoc Dong Nam A tu sau khi Lien Xo tan ra den nay” [Relations of the Russian Federation with Southeast Asian countries after the disintegration of the USSR and until today], Ph.D. dissertation, Ha-noi, 2000, p. 138. See Poliakov A., Klimov V., “Russia and Vietnam: from strategic interest to strategic partnership”, Far Eastern Affairs [in Russian], no. 3 (2001): 28–29. These are intergovernmental agreements on cooperation in power generation, construction of the nuclear power station in Vietnam and mutual protection of intellectual property rights on the results that are used or received in the course of bilateral military-technical cooperation. There is also a series of other agreements (namely, the agreement on cooperation between the ministries of justice of the two countries; the agreement in the field of communication, information technology and mass communications; the agreement on cooperation and mutual aid in customs affairs; the agreement in the field of safety regulation of nuclear energy used for peaceful purposes; the agreement on creation of investment fund between VTB and Bank of investments and development of Vietnam). Nguyen Tat Giap. Quan he cua LB Nga voi cac nuoc Dong Nam A, op. cit. p. 155. See Kobelev E., Voronin A., “Bright history of friendship and partnership”, Far Eastern Affairs [in Russian], no. 1 (2010): 15. Nhan dan, Hanoi, 28 October 2002. Nguyen Tat Giap. Quan he cua LB Nga voi cac nuoc Dong Nam A, op. cit. p. 156. See details, Mazyrin V., “New Trends and Current Problems in Economic Relations between Russia and Vietnam”, Far Eastern Affairs (in English), no. 4 (2010): 42–43; “Dang sau hop dong mua ban vu khi” . “Vietnam and Russia: traditional partners”, Vietnam Economic Times, Special issue, Hanoi, June 2003, p. 12. For example, the Hanoi State University exchanges students with the Moscow State University and the Far Eastern State University of Vladivostok. “10 nam quan he Viet-Nga” [Ten years of Vietnam-Russian relations], Vietnam Investment Review, August 2004, p. 75. (accessed 14 June 2011). Calculations by the author based on Statistical Yearbook of Vietnam 2009 (Hanoi, 2010), pp. 456–58, 463–65.

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The share of foodstuffs has risen to 60 per cent in recent years. The fastest growth has been registered in seafood production. It claims almost 30 per cent of the increase and illustrates the marine slant of Vietnam’s economy. See Nhieu co hoi mo rong giao thuong voi Nga, Kinh te Sai Gon online, . 16 This joint venture was established by Vietnamese state Corporation PetroVietnam and Russian state company Zarubezhneft with the investment capital of $1.5 billion. It started extracting oil in 1986. See Vietnam Investment Review, 5 January 2003. 17 “10 nam quan he Viet-Nga”, Vietnam Investment Review, August 2004, p. 55; Kobelev E., Voronin A., “Bright history of friendship and partnership”, Far Eastern Affairs, no. 1 (2010): 17. 18 “Viet-Nga: 50 nam huu nghi va hop tac” [Vietnam and Russia: 50 years of the friendship and cooperation], International Affairs Review, Special issue, Hanoi, (February 2001): 24. 19 Vietnam Investment Review, 5 January 2003. In fact, it was one of the few Russian state loans given to Vietnam during the last decade to implement an investment project. 20 Statistical Yearbook of Vietnam 2009, Hanoi, 2010, pp. 117–18. 21 See Nguyen Tat Giap. Quan he cua LB Nga voi cac nuoc Dong Nam A, op. cit., p. 152. 22 Vympelcom Company set up a Gtel Mobile joint venture with an authorized capital of around $300 million. In 2009, a mobile telephone network under the Beeline brand name was put into commercial service. In 2010 Russian company Alltech Telecom and Vietnam Post and Telecommunications (VNPT) created RusViet Telecom. This joint venture plans to construct the first in Southeast Asia and one of the first-ever LTE networks — mobile communication systems of the fourth generation (4G). The Russian partner plans to invest in this project about half a billion dollars. Meanwhile, two Russian developers (namely, Mirax and Metropol) announced that they intend to build hotels in Nha Trang and on Con Dao island at a cost of almost US$330 million. See (accessed 17 August 2009); (accessed 1 November 2010). 23 This plant’s construction will be backed by a multi-billion loan from Russia. See “Rossiya pomozhet Vyetnamu postroit’ AES” [Russia will help Vietnam to Build a Nuclear Power Plant], (accessed 16 December 2009). 24 See Ministry of Investment and Planning of the SRV, December 2002 report; Statistical Yearbook of Vietnam 2009, p. 127. Besides these few enterprises that officially belong to the Vietnamese, there were about 300 small companies established by the Vietnamese but registered as belonging to the Russian owners. 15

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MALAYSIA-RUSSIA RELATIONS: REVVING UP A DISTANT RELATIONSHIP1 Johan Saravanamuttu

INTRODUCTION The fluidity and changing character of international relations in Southeast Asia in the early 2010s is now axiomatic. American influence continues but its “hegemonic” presence is declining. This has been balanced by China’s rising role, and the presence of other Asian powers like Japan and India. What about the role of Russia today? Chances are that it will play a larger role in the near future. It is in this context that this essay examines Malaysia-Russian relations. Malaysian foreign policy over the years shifted from its pro-West stance to one that put the accent on non-alignment and an equidistant relationship with the major powers. Malaysia by the 1970s had championed the neutralization of Southeast Asia and promoted a Zone of Peace Freedom and Neutrality (ZOPFAN) for the region. These policies had sat well with Soviet, and later, with Russian postures of hedging and balancing U.S. and Chinese power in the region. In general, Malaysia’s foreign policy is also intimately tied to the Association of Southeast Asian Nations (ASEAN), which it helped to establish in 1967. It has also played the role of being a catalyst for change in Southeast Asian foreign policy as a founding member of ASEAN. Thus, Russia’s growing relationship with ASEAN also augments its relationship with Malaysia. While Malaysian-Russian ties have in the past been distant and low key, more recently they have seen considerable advancement in a 184

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broad spectrum of areas, particularly during the Mahathir era and after. These relationships have spanned educational and technical cooperation, capped by important arms deals. The essay provides an historical overview of the relationship and explores the prospects for relations in the future.

HISTORICAL OVERVIEW Malaysia’s past relations with the Soviet Union, then later, Russia, can be divided into two broad periods. During the Cold War, relations grew from non-recognition of the communist state, the Soviet Union of Socialist Republics (USSR or Soviet Union), to one in which the establishment of diplomatic relations on 3 April 1967 brought about the thawing of frosty political relations and a growing economic engagement. The relationship was not without its hiccups in the early years. In particular, the Soviet Union’s support for the Vietnamese invasion of Cambodia in 1978 and its intervention in Afghanistan in 1979 were two major points of contention between the two states. Charges of Soviet espionage in Malaysia also affected the relationship in the mid-1970s until the early 1980s. However, with the end of the Cold War, relations have rapidly warmed up. With the ascendancy of Mahathir Mohamad as the Prime Minister of Malaysia the relationship may be said to have breached new levels of engagement, particularly with the purchase of Soviet arms, which will be discussed in detail below. The relationship reached a new high when the first Malaysian astronaut was catapulted into space in a Soyuz spacecraft in 2007 during the tenure of the fourth Malaysian premier Ahmad Abdullah Badawi. The work of Nathan,2 has documented well Malaysian-Soviet relations in the early period. Augmenting Nathan’s work is that of Thambipillai3 and Bilveer Singh,4 which captured the Cold War period and also some of the developments at the end of the Cold War. I will draw on these studies and others, particularly the work of Russian specialist Leszek Buszynski5 to further illuminate the various phases of Malaysia-Russian relations. For the overall perspective of relations during and after the Cold War, I will draw on my own work on Malaysia’s foreign policy.6

FROM COLD WAR TO DÉTENTE In the first flush of its independence, from 1957 until the late 1960s, Malaysian foreign policy was starkly pro-West and anti-communist. In 1958, the Malayan7 Premier Tunku Abdul Rahman proclaimed to Parliament that “[I] consider that we would be breaking faith with the people if this

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government were to enter into any form of diplomatic relationship with the Communist countries.”8 Although China was mostly targeted as the “external enemy”, given its support of the communist insurgency in Malaya in the 1940s and 1950s, the Soviet Union by association suffered as well from the radical anti-communism of Malayan foreign policy. As the Malayan government threw its support behind the American war in Vietnam, the Soviet Union’s support for the other side could not be missed. Malaya’s signing of the Anglo Malayan Defence Agreement (AMDA) with Britain and its close association with Western powers despite demurring in joining the Southeast Asian Treaty Organization (SEATO), drew the new nation further away from the Soviet Union, which in the early years had already shown a predisposition to be friendly to Indonesia. When war broke out between Indonesia and Malaysia in the “Confrontation” years of 1963–65, relations with the Communist countries took a further dip. On the Soviet side, as one writer opines, the Communist state had placed an undue emphasis on ideology and cold-war rivalry in Southeast Asia, which weakened Soviet influence in the region. For Malaysia, it did not help that the Soviet-sponsored Communist International (Comintern) advocated an anti-religious, hence, anti-Islamic policy.9 Even by the latter half of the 1960s, economic considerations began to dominate Malaysia’s approach to national economic and political survival. Nathan writes that by 1968 the Soviet Union had become the largest importer of Malaysia’s rubber accounting for nearly 15 per cent of Malaysia’s total exports.10 With the establishment of full diplomatic relations in November 1967, there was the dispatch of a Soviet trade representative to Kuala Lumpur, and two years later, the first major Russian Trade and Industrial Exhibition was held in Kuala Lumpur. This changed the whole character of SovietMalaysian ties. No doubt détente by the end of the 1960s brought about a changed environment in Southeast Asia and to Malaysia. The warming of relations between the U.S. and the Soviet Union meant that Western-aligned states also had to readjust their foreign policy. In Malaysia’s case, the British announcement of its “East of Suez” policy in 1967 had a major impact on its overall foreign policy orientation. I have written that, among other things, it impelled a posture of non-alignment and was the catalyst for Malaysia’s proposal for the neutralization of Southeast Asia. It no doubt also led to a warming up of relations with Eastern European states. After the Soviet normalization, diplomatic ties were established with Yugloslavia and Bulgaria in 1969 and with other Eastern bloc countries in rapid time (Saravanamuttu 2010, p. 99).11 Malaysia also underwent its own internal transition. A major leadership change occurred after the May 13 incident in 1969, which clearly had an

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important impact on foreign policy, and by the same token, relations with the Soviet Union. The new Premier Tun Abdul Razak made an historical visit to the Soviet Union in 1972, the first by a Malaysian prime minister. This visit came two years before Tun Razak’s historic trip to the People’s Republic of China, which set the stage for Malaysia’s establishment of diplomatic relations with Beijing. The Soviet visit resulted in two bilateral agreements on economic and technical cooperation and on cultural and scientific cooperation.12 Overall, the 1970s no doubt saw a rising level of economic and even political engagement between the two countries. This dovetailed with the growing presence and influence of the Soviet Union in Southeast Asia. All this led to the first official visit to the USSR of a Malaysian delegation and a return visit of Soviet delegates in 1979. This tempo of relations was continued when Malaysian Prime Minister Hussein Onn made his official visit to USSR in 1979. He stressed Malaysia’s non-aligned stance in foreign policy and expressed the hope for peaceful solutions to the Cambodian and Afghanistan conflicts, assuring the Soviet Union that ASEAN would not become a military bloc.13 Buszynski points out that the Soviet proposal for an “Asian Collective Security System” came at the time when Malaysia was also proposing the neutralization of Southeast Asia. The Soviets attempted to interpret the Malaysian proposal from the perspective of their own initiative and indicated a willingness to be a guarantor of Southeast Asian neutrality. In his visit to Leningrad in October 1972, the Malaysian Premier Tun Razak went so far as to say that its military ties with the Commonwealth in the Five Power Defence Arrangements (FPDA) could be sacrificed to ensure fruition of the neutralization scheme.14 However, the growing ties between the countries were marred in 1976 by an alleged Soviet spy caper in which prominent Malay personalities were implicated. The managing editor of the New Straits Times, Abdul Samad Ismail, and his alleged “accomplice” from another Malaysian daily, were arrested on charges of the purported promotion of communism through the media. Compounding this, two cabinet Ministers, Deputy Minister for Labour and Manpower, Abdullah Majid, and Deputy Minister for Science, Technology and Environment Abdullah Ahmad were also detained for several months and released after they confessed to their Soviet connections. Thambipillai15 contends that the arrests could be viewed as high-level vendetta against the “Razak boys”, that is, the circle of left-leaning policy-makers who were close to the second premier Tun Abdul Razak. This corroborates my own assessment that arrests were part of a political move by the ruling party’s old guard against this group and at the same time to assuage old guard criticism

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of the government under a new prime minster.16 Dr Mahathir Mohamad, who became Prime Minister soon after these events, also confirms this view of the arrests as indicated further below. The event, however, did not affect Malaysia-Soviet relations in any material way.

THE MAHATHIR YEARS Malaysia-Soviet relations continued to grow significantly in the 1980s and the 1990s, during the tenure of the third Malaysian Prime Minister Dr Mahathir Mohamad. Both countries made initiatives to expand economic and other relations and it was during this period that important arms deals were negotiated and brought to fruition. It was therefore ironic that at the start of the Mahathir era, in July1981, an episode shrouded in mystery saw the arrest and detention of an alleged Soviet spy. Worse, the alleged Soviet agent turned out to be none other than Siddiq Mohamad Ghouse, the long-time political secretary of the then Deputy Prime Minister Mahathir.17 Ghouse was arrested only days before Mahathir was to take up the reins as Prime Minister. He was accused of being under the employ of the Soviet Embassy in Kuala Lumpur. As a consequence of the event, rightly or wrongly, three Soviet embassy personnel were expelled by the Malaysian government. More was to come a few months later, in October 1981, when Abdul Halim Mahmud, a journalist with Malay weekly, Watan, was detained on the allegation of furthering communist ideas through his writings. Halim was later released that year at about the same time as Samad Ismail, who by now had confessed to his “communist activities”.18 Mahathir has alluded to these events in his memoirs.19 According to the former premier, the powerful Home Minister Ghazali Shafie was out to eliminate the leftists who were in the Tun Razak cabinet and his associates suffered the collateral damage. Unconfirmed reports suggest that Ghazali may have been targeting Mahathir too. Mahathir himself denies he had any communist linkages or influences. Among the Razak cabinet ministers who were detained by Ghazali Shafie were the two “dollahs”, mentioned earlier, and when the net was cast wider, the Home Minister’s reach extended to journalists like Samad Ismail and Mahathir’s political secretary Ghouse. A major change in the USSR occurred with the ascendancy of Mikhail Gorbachev as General Secretary of the Communist Party and later as President of the Soviet Union. In his seminal Vladivostok speech of 23 July 1986, Gorbachev made his famous perestroika overtures to the ASEAN countries. Political analysts have opined that these overtures were largely directed to Malaysia and Indonesia. Bilveer Singh contends that the reason for this was

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because the Straits of Malacca straddled by both countries’ territorial waters was a crucially important waterway and both countries were major producers of rubber, palm oil and tin, thus spurring the Soviets under Gorbachev to launch a flurry of activities to notch up relations.20 Mahathir responded with his first official visit to the Soviet Union in August 1987 and the Soviet deputy foreign minister returned the favour in April 1988. Other diplomats followed suit on both sides, with Foreign Minister Alexander Bessmertnykh going to Kuala Lumpur in July 1991. Mahathir’s post-Vladivostock visit to Moscow alluded to the notion that the USSR was an “Asia Pacific” power, had interests in the region, and the world as a whole: The Malaysian government believes that in showing attention to the Asia-Pacific region, the Soviet Union is guided not by a desire for rivalry, but by the interests of enhancing stability in the region, which is in need of it. The Soviet initiatives do not cause concern in Malaysia. As an independent country, Malaysia has its own point of view and intends to defend it firmly.21

Buszynski22 suggests that Mahathir’s vocal support for the Soviet Union’s initiatives in the Asia Pacific was further boosted by the Soviet withdrawal from Afghanistan in 1989 but it was also impelled by the premier’s own desire to propel Malaysia’s own regional role. In particular, the Gorbachev initiatives allowed Malaysia to promote its own ideas such as the Southeast Asian Nuclear-Weapon-Free Zone Treaty (SEANWFZ). On the economic front, trade between the two countries began to pick up considerably in the 1980s. By 1988, the USSR imported 37 per cent of Malaysia’s palm oil, 51 per cent of Malaysia’s rubber and latex, and 11.5 per cent of tin, becoming one of the major importers of Malaysia’s raw materials. The balance of trade was clearly in Malaysia’s favour as indicated by the Soviet trade deficit of US$146 million in 1987.23 Perhaps with such an economic backdrop, that the Mahathir government began to initiate a number of new policies, actions, and programmes which included two highly significant arms deals with the Soviet and post-Soviet state, which will be discussed below. On the Russian side of the equation, a major shift in foreign policy towards Southeast Asia no doubt occurred during the Vladimir Putin tenure.24 This evidently sparked a significantly revved up relationship with Malaysia, helmed by the iconoclastic Mahathir.25 The two countries saw a convergence of interests on a broad range of political-economic issues, including East Asian regionalism. Malaysia, in December 2005, convened the ASEAN-Russian

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Summit in Kuala Lumpur paving the way for Russia’s admission into the East Asian Summit (EAS). Interestingly, Mahathir went as far as to practically support Russia’s observer status (on the basis of Russia’s 20-per-cent Muslim population) at the summit of the Organization of the Islamic Conference (OIC) held at Putrajaya in 2005, where Putin was invited as a guest.26

IMPROVING RELATIONSHIPS THROUGH ARMS SALES As early as 1984, Malaysia had been mulling the purchase of two heavy-lift helicopters in order to offset its positive trade balance with the Soviet Union. A Malaysian air force group visited the USSR to inspect the MI-8, MI-16 and the MI-26 models and negotiations continued over 1985–86 but eventually the purchase was scuttled over maintenance and servicing issues.27 As relations improved, Mahathir’s initiative of holding the biennial Langkawi International Maritime and Aerospace Exhibition (LIMA) was clearly a further boost to Malaysian-Russian relations. He writes in his memoirs that at the inaugural LIMA in 1991, the Russian contingent was probably the largest and it came with an impressive display of Sukhoi and MiG fighter jets, making their debut in Malaysia: The Russians themselves had never been to a place like Langkawi and they were very excited. Malaysia eventually bought their MiGs, which was the first sale of Russian aircraft in Southeast Asia. The Russians went from being a secretive country to one that was keen to sell their aircraft and technology. Their participation was a special draw for LIMA.28

The Mahathir government concluded the deal to purchase a squadron of eighteen MiGs-29N fighters which were delivered to Malaysia in 1995. The Russian sale was a counter-trade deal involving Malaysian palm oil. Several other deals followed such as the purchase of MI-17-1B helicopters in 1999, a US$30 million sale of Metis-2 anti-tank portable missile systems in 2001 and a US$48 million “Needle” anti-aircraft portable missile system in 2002.29 In August 2003, Russian President Vladimir Putin made an official visit to Malaysia and struck US$900 million deal with the country for the purchase of the Russian state-of-the-art Sukhoi-30 combat aircraft. This was to be partially paid in counter-trade palm oil as before. The squadron of eighteen jets were renamed SU-30MKM, the second M standing for “Malaysia”.30 But the deal took a long time from negotiations to delivery, with the first two planes finding their way to Malaysia only in May 2007.

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Clearly, the Russian arms deals have not been without problems, and in recent years Malaysia was seriously considering mothballing the eighteen MiGs, which have maintenance and servicing issues. In October 2009, the Defence Minister Zahid Hamidi had alluded to such a plan because of the high costs of maintenance: “[T]he Government would save Malaysian Ringgit (RM) 260 mil (about US$76.1 million) a year in maintenance costs and the sum could be used to maintain other aircraft in the Royal Malaysian Air Force (RMAF) inventory.” Zahid said that Malaysia bought the MiG29Ns at a relatively low price but later, the RMAF had to contend with higher expenses in spare parts replacement and maintenance work. Each MiG also needed to undergo preventive and restoration work which cost RM$10 million and RM$7 million for engine overhaul every year after it completed a flight time of between 1,000 hours and 4,000 hours, he said.31 However, owing to financial constraints, it was reported that Malaysia will continue to operate at least 10 MiGs till 2015.32 With respect to the Sukhoi jets, Jane’s Defence Weekly reported that Malaysia would not take delivery of its final six Su-30MKM aircraft until Sukhoi fixed problems in the avionics of the twelve jets that had been delivered earlier.33

EDUCATIONAL, SPACE AND OTHER COLLABORATIONS By the early 2000s, there were clearly important new developments in Malaysia-Russian relations spanning a broad spectrum of collaborations. By this time, some hundreds of students were studying on a regular basis in Russian tertiary institutions, particularly after medical degrees had been recognized by Malaysia. On 29 September 2010, Youth and Sports Minister Ahmad Shabery Cheek, accompanied by Deputy Minister for Foreign Affairs, Richard Riot Jaem, was in Moscow for a working visit and to meet Malaysian students. The minister met the students at Moscow Aviation Institute (MAI) and Russian State Medical University (RSMU) before hosting a Hari Raya dinner at the Malaysian Embassy attended by 600 Malaysian students from three universities in Moscow, including thirty-eight students from the Nizhny Novgorod State Medical University.34 The Russian State Medical University (RSMU) in Moscow is especially popular with Malaysians, with some 100 students enrolling every year.35 With the formation of a Russia-Malaysia Business Council in 2003, there has been a level of investment flows which are not entirely insignificant. Russian foreign direct investment (FDI) to Malaysia remains low with RM$21.5 million invested from 2002–06.36 On the part of Malaysia, Malaysia’s oil corporation Petronas made a major move when it bought US$1.1 billion

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worth of stock of Russia’s OAO Rosneft to expand international operations as domestic production stagnates. This was more than BP’s stake of US$1 billion and China’s China National Petroleum Corporation’s (CNPC’s) US$500 milion stake. Russia has the biggest gas reserves in the world, and is the second largest exporter of oil, so Petronas’ stake in Rosneft should open doors for the national oil corporation to participate widely in oil and gas ventures undertaken by the Russian firm.37 One of the celebrated collaborations between the two countries came by way of the training of Malaysia’s first astronaut, the thirty-five-year-old doctor, Sheikh Muszaphar Shukor, selected after an intensive competition among a host of candidates. On 11 October 2007, Dr Muszaphar was blasted towards the International Space Station together with a Russian cosmonaut and an American scientist in a Soyuz rocket. Sheikh Muszaphar Shukor had earlier edged out fellow candidate Faiz Khaleed, 27, and the two men were given training in Russia after being shortlisted from thousands of hopefuls in a nationwide contest. The Malaysian astronaut programme was a financial offset agreement with Russia after the Sukhoi arms deal. Dr Muszaphar returned to earth with great fanfare and was hailed as the first Muslim to be sent into space, what’s more during the holy month of Ramadan.38

CONCLUsionS Evidently, from the foregoing account, Malaysia’s contemporary relations with Russia could well be appreciated on different planes. First, with regard to overall foreign policy, relations have warmed up considerably since the Cold War with multiple levels of relationships in which the two states’ policy postures and preferences have meshed rather well. Malaysia’s well-established stances of non-alignment, balancing and hedging of Western influence globally, in the Asia Pacific and in Southeast Asia has dovetailed with contemporary Russian foreign policy, which also seeks to balance Western influence and power. For the Russian Federation, it stands to benefit considerably in influence and reputation in having good relations with a moderate Muslimmajority state like Malaysia, given its current troubles in Muslim regions in the Northern Caucasus and the earlier faus pax in Afghanistan. On its part, Malaysia is appreciative of strong Russian stances against Israeli policies and actions in the Middle East, Russian support for the Palestinian cause and its criticism of the U.S.-led war in Iraq. Moreover, as noted by a Malaysian analyst, Russia sees Malaysia as its strategic partner within ASEAN, while Malaysia sees Russia as a gateway to the Commonwealth of Independent States (CIS) countries.39

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Associating with Russia, in its new-found status as a so-called “BRIC” (Brazil, Russia, India, and China) country40 also provides Malaysia with a convenient counterbalancing posture vis-à-vis U.S. economic dominance. Alternatively, it could be seen as an important association with the rising primacy of new economic powers. It is therefore not surprising that in recent years, Malaysia has shown increasing interest in actively seeking Russian collaboration in science and technology with an eye towards improving its own human capital, skills and knowledge industries.

Notes

1



2



3



4



5



6

9 7 8

12 13 14 15 16 17 10 11

I am indebted to the editors for their highly useful comments on an earlier draft of the paper. K.S. Nathan, “Malaysia and the Soviet Union: A Relationship with a Distance”, Asian Survey, vol. 2, no. 10 (October 1987): 1059–73. Pushpa Thambipillai, “Malaysian-Soviet Relations: Changing Perceptions?”, in The Soviet Union and the Asia-Pacific Region: Views from the Region, edited by Pushpa Thambipillai and Daniel C. Matuszewski (New York, Wesport, London: Praeger, 1989). Bilveer Singh, Moscow and Southeast Asia since 1985: From USSR to the CIS (Singapore: Singapore Institute of International Affairs, 1992). Leszek Buszynski, Gorbachev and Southeast Asia (London and New York, Routledge, 1992); Leszek Buszynski, Soviet Foreign Policy and Southeast Asia (London & Sydney: Croom Helm, 1986); Leszek Buszynski, “Russia and Southeast Asia: A New Relationship”, Contemporary Southeast Asia, vol. 28, no. 2 (2006): 276–96. Johan Saravanamuttu, Malaysia’s Foreign Policy, the First Fifty Years: Alignment, Neutralism, Islamism (Singapore: Institute of Southeast Asian Studies, 2010). “Malayan” is used for the period before Malaya became Malaysia in 1963. Saravanamuttu, 2010, op. cit., p. 52. Susanne Birgerson, “The Evolution of Soviet Foreign Policy in Southeast Asia: Implications for Russian Foreign Policy Asian Affairs”, Asian Affairs, vol. 23, no. 4 (Winter 1997): 215. K.S. Nathan, 1987, op. cit., p. 1063. Johan Saravanamuttu, 2010, op. cit., p. 99. Pushpa Thambipillai, 1989, op. cit., p. 87. Bilveer Singh, 1992, op. cit., p. 94. Leszek Buszynski, 1986, pp. 76–77. Pushpa Thambipillai, 1989, op. cit., p. 88. Johan Saravanamuttu, 2010, op. cit., p. 172. Ghouse was alleged to have been a KGB mole, according to the Home Ministry, headed by Ghazali Shafie, noted for his strident anti-Communist views. In

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18 19

22 23 24 25 26 27 28 29 20 21



30



31 32



33



34



35



36 37



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Mahathir’s memoirs (2011), the former premier alludes to the “powerful” home minister who was out on some sort of witch hunt for leftists within the ruling Malay party. Pushpa Thambipillai, 1989, op. cit., p. 89. Mahathir Mohamad, A Doctor in the House: The Memoirs of Tun Dr Mahathir Mohamad (Petaling Jaya: MPH Group Publishing Sdn. Bhd., 2011), pp. 323–24. Bilveer Singh, 1992, op. cit., p. 96. Pushpa Thambipillai, 1989, op. cit., p. 95. Leszek Buszynski, 1992, op. cit., p. 208. Bilveer Singh, 1992, op. cit., pp. 101–2. Leszek Buszynski, 2006, op. cit. See Saravanamuttu, 2010, pp. 184–86 for a depiction of Mahathir’s iconoclasm. Leszek Buszynski, 2006, op. cit., p. 287. Leszek Buszynski, 1992, op. cit., p. 112, Mahathir Mohamad, 2011, op. cit., p. 524. See Asia Times article by Sergei Blagov, (accessed 13 July 2011). According to technical reports, the SU-30MKM (Modernizirovannyi Kommercheskiy Malaysia — Modernised Export Malaysia) is similar to India’s SU-30MKI. Like its Indian counterpart, the SU-30MKM is a substantial advance upon the original SU-30K export version, maintaining much of basic airframe but incorporating a number of advances from the SU-35/SU-37 project. See (accessed 13 July 2011). See ibid. See (accessed 8 August 2011). See (accessed 13 July 2011). (accessed 13 July 2011). Jackson Chung, “From Russia with Love”, The Star, 9 November 2008, (accessed 16 August 2011). Johan Saravanamuttu, 2010, op. cit., p. 306. (accessed 8 August 2011). See also Amirov, 2007, p. 26. Various media reports. See, for example, (accessed 8 August 2011).

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Attributed to K.S. Nathan by Hong, 2006, p. 6. The CIS, the Commonwealth of Independent States, was a loose confederation formed after the break-up of the Soviet Union. 40 The acronym BRIC refers to Brazil, Russia, India, and China — countries on the outside circle of the G7. 39

References Amirov, Vyacheslav. “Current State of Russian-ASEAN Trade and Economic Relations”. In Russian-ASEAN Relations: New Directions, edited by Gennady Chufrin and Mark Hong. Singapore: Institute of Southeast Asian Studies and Institute of World Economy & International Relations of the Russian Federation, 2006. Bilveer Singh. Moscow and Southeast Asia since 1985: From USSR to the CIS. Singapore: Singapore Institute of International Affairs, 1992. Birgerson, Susanne. “The Evolution of Soviet Foreign Policy in Southeast Asia: Implications for Russian Foreign Policy Asian Affairs”. Asian Affairs, vol. 23, no. 4 (Winter 1997): 212–34. Buszynski, Leszek. Gorbachev and Southeast Asia. London and New York: Routledge, 1992. ———. “Russia and Southeast Asia: A New Relationship”. Contemporary Southeast Asia, vol. 28, no. 2 (2006): 276–96. ———. Soviet Foreign Policy ad Southeast Asia. London and Sydney: Croom Helm, 1986. Chung, Jackson. “From Russia with Love”. The Star, 9 November 2008. (accessed 16 August 2011). Hong, Mark. “ASEAN-Russian Relations: A Summary Report”. Singapore: Institute of Southeast Asian Studies, 2006. Mahathir Mohamad. A Doctor in the House: The Memoirs of Tun Dr Mahathir Mohamad. Petaling Jaya: MPH Group Publishing Sdn. Bhd., 2011. Nathan, K.S. “Malaysia and the Soviet Union: A Relationship with a Distance”. Asian Survey, vol. 2, no. 10 (October 1987): 1059–73. Saravanamuttu, Johan. Malaysia’s Foreign Policy, the First Fifty Years: Alignment, Neutralism, Islamism. Singapore: Institute of Southeast Asian Studies, 2010. Thambipillai, Pushpa. “Malaysian-Soviet Relations: Changing Perceptions?”. In The Soviet Union and the Asia-Pacific Region: Views from the Region, edited by Pushpa Thambipillai and Daniel C. Matuszewski. New York, Wesport, London: Praeger, 1989.

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Cambodia and the USSR/Russia: Fifty-Five years of Relations Sok Touch

INTRODUCTION Like so many other countries in Asia, Africa and Latin America, Cambodia used to be a colony of a West European power, namely France. After gaining independence, all these new nations would seek wide recognition and support for their sovereignty. Since the colonizers such as Spain, Portugal, Great Britain and France, were allied to the U.S., the latter was seen as unhelpful at least by some former colonies. During the Cold War, they tried to build up closer relations with America’s rivals. For instance, Cambodia did not seek support from the U.S. as France took sides with the U.S. Thus, Cambodia at that time built up relations with the Soviet Union. The year 2011 has a special significance for Cambodia and Russia. Fifty-five years ago, on 13 May 1956, Phnom Penh and Moscow established diplomatic relations. Over the years, despite geographical separation, the peoples of the two countries have lived in amity with each other as partners in cooperation, mutually respectful and supportive.

UNDER THE LEADERSHIP OF PRINCE SIHANOUK Substantial contributions towards the development of relations with the USSR were made by His Majesty Norodom Sihanouk. He visited the 196

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Soviet Union twice, in 1956 and 1970. During the early years of relations, the Soviet leaders highly commended the diligent efforts of the Prince in transforming Cambodia into a resilient and independent state, where people could live in peace and prosperity. At that time Moscow backed the initiatives of His Majesty, who was one of the founding fathers of the Non-Aligned Movement. In 1957, Cambodia and the Soviet Union signed agreements on trade and cultural and scientific cooperation. The Soviet Union also supported the membership of Cambodia of the United Nations (UN). For a former colony to be a member of the UN was crucial for gaining international recognition of its independence and sovereignty from other nations, and increasing national prestige. Much as Prince Sihanouk struggled to remain neutral in the Cold War, this was not acceptable to the United States. Enraged by the fact that the famous Ho Chi Minh trail was passing through Cambodia, Washington had taken steps that eventually played into the hands of the Khmer Rouge. In March 1969, U.S. President Richard Nixon authorized massive bombings of Cambodia. More than 500,000 tonnes of bombs were dropped in the four years of the U.S. air raids, killing up to 150,000 people, most of them civilians. Just as the recent bombings of Iraq radicalized and increased the number of insurgents there, the U.S. bombings in Cambodia had unleashed a huge flow of refugees into the cities, radicalized the youth in the rural areas, and drove many into the ranks of the Khmer Rouge. In March 1970, Prince Sihanouk was overthrown by Lon Nol, a right wing pro-American General. In return, the Prince accused the United States of orchestrating the coup, formed a government in exile in Beijing and embraced the Khmer Rouge. With the moral credibility thus given to them, they soon became the dominant force organized by the Prince. Thousands of young men and women joined the Khmer Rouge. It was a turning point in Cambodian history, with subsequent events culminating in the tragedy of 1975–78. Retribution came on 7 January 1979, when the forces of the United Front for National Salvation of Kampuchea led by Heng Samrin, Hun Sen and Chea Sim, together with the Vietnamese army, ousted the Khmer Rouge. But then the battle shifted to the corridors of the UN in New York. To punish Hanoi for its intervention, the United States, Association of Southeast Asian Nations (ASEAN) and China continued to recognize the murderous regime, now entrenched in the jungles on the border with Thailand, as the legitimate government of Cambodia, and spearheaded the vote to that effect in the UN throughout the 1980s. To legitimize the Khmer Rouge, the latter

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were persuaded to unite with two non-communist factions, the Royalist FUNCINPEC and the Khmer People’s Liberation Front (KPNLF) in what was called the Coalition Government of Democratic Kampuchea (CGDK). No one asked the Cambodian people whether they liked this strange alliance. As a consequence of these decisions and moves (plus the military support to the CDGK forces, coming primarily from the U.S. and China), the People’s Republic of Kampuchea was isolated politically and economically. In this way the sufferings of its people were prolonged by another eleven years.

BROTHERLY HELP Between 1973 and 1978, diplomatic relations between the Soviet Union and Cambodia were broken. Essentially, the Soviet Union reaffirmed its loyalty to the people of Cambodia by condemning the regime of General Lon Nol and refraining from contact with the Democratic Kampuchea. Relations were re-established in the early 1979. The Soviet Union gave its brotherly help to the people of Cambodia when it was needed most, and the nation was struggling hard to reconstruct itself. Taking a proactive stand, Moscow offered substantial economic and military aid as well as technical assistance. What it provided was crucially important for restoring and building Cambodia’s socio-economic foundations in the areas of energy, transport, communications, agriculture, residential housing, health care, civil service and military training, equipment and machinery. By February 1980, the economic relations of the Soviet Union with Cambodia were regularized via intergovernmental agreements on trade and economic and technical cooperation. With the participation of Russian experts, Cambodia was able to rehabilitate and construct a number of key institutions and installations throughout the country, including the Cambodia-Soviet Hospital and the Cambodian Institute of Technology in Phnom Penh, the Military Hospital in Battambang, the Ream Navy Base, the Pochentong Air Force Base, the Military Academy, the River Military Base in Phnom Penh, etc. Until today, the results of these efforts are helping Cambodian people in their pursuit of development and national interests.

BILATERAL TRADE An important trade agreement between Cambodia and the Soviet Union that was signed in February 1983 covered a period of three years, from 1983 up to and including 1985. According to a Soviet source, Moscow’s

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trade turnover with Cambodia during this period increased from 71.8 to 100.3 million roubles. Cambodian exports were mainly rubber, while imports from the Soviet Union consisted of refined petroleum products, textiles, and chemical fertilizers. In July 1984, Cambodia — following the examples of Vietnam, Laos, and the East European countries — set up an Intergovernmental Commission for Trade, Economic, Scientific, and Technical Cooperation to manage its bilateral interaction with the Soviet Union. The first session of the commission was held in January 1985. At its fourth meeting in December 1987, various protocols were signed regarding the restoration of Cambodian rubber plantations and the development of some joint state enterprises. As Cambodia’s main trading partner, the Soviet Union accounted for 80 per cent of Cambodian foreign trade in the 1980s, supplying 100 per cent of Cambodia’s imported petroleum products, rolled iron and steel, nitrate and phosphate fertilizers, and 80–90 per cent of its imported trucks, medicine, and fabrics. Principal Cambodian exports to the Soviet Union were natural rubber (around 12 per cent of total Soviet imports of natural rubber in 1990), timber, soybeans and peanuts. Through the 1980s, Soviet economic cooperation with Cambodia was largely aimed at rebuilding and developing the energy sector, transport and communications, agriculture, natural rubber production, construction, utilities, and health services, and at training skilled workers and professionals. These efforts were financed by Soviet loans and grants.

PROJECT AND MILITARY ASSISTANCE Soviet economic assistance helped Cambodia with the implementation of forty projects. Power-generating facilities were built, 33 kilometres of power transmission lines installed, natural rubber factories with a combined capacity of 35,000 metric tonnes per year were constructed, 30,000 hectares of rubber plants put into production, facilities set up to train 2,330 students and 580 skilled workers per year, hospitals and polyclinics rebuilt and reequipped, and water purification and supply systems rebuilt in Phnom Penh and Kompong Som. Airplanes and helicopters were supplied to establish air services to principal Cambodian cities. Around 4,000 Cambodian professionals were trained in Soviet colleges and universities. The Soviet Union also provided military aid to Cambodia. The Cambodian Armed Forces received tanks, artillery, fighter jets, patrol ships, and other military hardware. Thanks to the Soviet multiple rocket launchers BM-21, Cambodia has been able to protect its sovereignty and territorial

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integrity around the Preah Vihear Temple. Many years have passed since these shipments were made, but the Russian-made weaponry and mechanical equipment retains its might and sophistication. Along the roads in Phnom Penh and throughout Cambodia, one can still see such Russian-made trucks such as KAMAZ and ZIL.

SOVIET CONTRIBUTIONS TO PEACE IN CAMBODIA Soon after President Mikhail Gorbachev came to power, the cumulative effect of his policies was manifest in decreasing levels of confrontation between the superpowers, progress in normalization of Soviet-Chinese relations and attempts to resolve a number of painful regional conflicts. All this radically altered the global political climate and created preconditions for a peaceful solution to the problem of Cambodia. On the one hand, Moscow actively promoted a dialogue between the three Indochina states and the members of ASEAN, on the other — a search for consensus on the Cambodian issue at the UN Security Council level. Neither the famous Jakarta “cocktail parties”, nor the Paris Conference that led to the peace agreements of October 1991 could have been possible without significant Soviet input. Clearly, the common search for peace in Cambodia became the starting point not only for the rapprochement between ASEAN and the Indochinese states, but for that between ASEAN and the USSR as well. By the time ASEAN had become a ten-member Association, with Cambodia as one of the members, Moscow already enjoyed the status of ASEAN’s official dialogue partner. Only the Soviet Union did not survive its own internal turmoil, and the global landscape had changed beyond recognition.

1991 AND AFTER With the fall of the Berlin Wall and the disintegration of the USSR, overall Russian influence in Southeast Asia receded rapidly. Military and developmental assistance that used to be the cornerstone of Moscow’s ties with its Indochina allies — Vietnam, Cambodia and Laos, was no longer provided. Already in January 1991, when the Soviet and Cambodian foreign trade agencies switched to hard currency payments at world market prices for all settlements, trade and investment cooperation came to a near standstill. From 1991 through 1995, Russia exported some goods to Cambodia such as trucks, spare parts for machinery and equipment on a commercial basis. Under the terms of a May 1991 agreement with the Soviet Union, Cambodia’s imports (timber, natural rubber, soybeans) were used to repay outstanding

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debts. In 1992, citing serious economic difficulties, Cambodia suspended its loan repayments. Be that as it may, a new chapter in the history of bilateral relations was opened. In December 1991, King Norodom Sihanouk declared the recognition of the Russian Federation as the successor to the disintegrated USSR. In the early 1990s Russia participated in the UN peacemaking operations in Cambodia. During the crisis of July 1997, Moscow supported the Cambodian government. It also contributed to the restoration of the Cambodian membership of the UN. Since the middle of the 1990s the two partners started to create a new legal framework for their interactions. Thus, in 1995 they signed the Joint Declaration on the Foundation of Friendly Relations, the Intergovernmental Agreement on Trade and Economic Relations, the Intergovernmental Agree­ ment on Cultural and Scientific Cooperation, the protocol on consultations between the Ministries of Foreign Affairs of both countries. In 2003, they added to this set of documents the Intergovernmental Agreement on Cooperation in the Control of Illicit Trafficking of Narcotic Drugs and Psychotropic Substances.

THE LAST DECADE: A CHRONICLE OF VISITS More lively official contacts during the last decade indicate that Russia and Cambodia are developing new interest in each other. In May 2001, Mr Hor Namhong, Minister for Foreign Affairs and International Cooperation of the Kingdom of Cambodia, paid an official visit to the Russian Federation. In April 2004 Mr Sar Kheng, Deputy Prime Minister, Co-Minister of Interior of the Kingdom of Cambodia, was in Moscow on a working visit. Cooperation between the agencies responsible for control of illicit trafficking of narcotic drugs is also strengthening. In June 2005, a delegation of the Federal Drug Control Service (FDCS) of the Russian Federation visited Cambodia and signed an agreement on interagency cooperation with Cambodian National Authority for Combating Drugs. In March 2010, FDCS specialists held a series of lectures for Cambodian colleagues in Phnom Penh on the issues of application of anti-drug legislation. In April 2006, Mr Vyacheslav Lebedev, Chairman of the Supreme Court of the Russian Federation, visited Cambodia. During the talks that he had there it was agreed to establish cooperation between the judicial authorities of both countries. In May 2007, Mr Dith Munti, President of the Supreme

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Court of the Kingdom of Cambodia, paid a reciprocal visit to Moscow and signed the agreement on interagency cooperation. Relations between the parliaments are also developing steadily. In September 2004, a delegation of the State Duma of the Federal Assembly of the Russian Federation attended the 25th session of the ASEAN InterParliamentary Organization in Phnom Penh. In January 2007, a delegation of the National Assembly of the Kingdom of Cambodia headed by Mr Heng Samrin attended the 15th session of the Asia Pacific Parliamentary Forum (APPF) in Moscow. In November 2008 Mr Valery Yazev, ViceChairman of the State Duma of the Federal Assembly of the Russian Federation, visited Cambodia. In January 2009, Mr Sergey Mironov, then Chairman of the Federation Council of the Federal Assembly of the Russian Federation, had a meeting with Mr Heng Samrin, President of the National Assembly of the Kingdom of Cambodia, at the 17th Session of APPF in Vientiane. In October 2009, Mr Oum Sarith, Secretary General of the Senate of Cambodia, paid a visit to Moscow. Soon after that, in November 2009, the National Assembly President Heng Samrin visited Russia too. Next year Mr Yazev went to Cambodia within the framework of the 6th General Assembly of International Conference of Asian Political Parties (ICAPP). On that occasion he represented the United Russia Party. Against this background, the Foreign Ministries continue their own dialogue. In June 2003 their respective heads, Mr Igor Ivanov and Mr Hor Namhong met within the framework of the 10th ASEAN Regional Forum (ARF) in Phnom Penh. In February 2005, Phnom Penh hosted a regular round of consultations at the level of deputy ministers of foreign affairs of the two countries. Last year in Hanoi, at the 17th ARF, Russian Foreign Minister Mr Sergey Lavrov held a meeting with his Cambodian counterpart Mr Hor Nam Hong.

TRADE STATISTICS In 2009, the bilateral trade turnover between both countries amounted to US$38.5 million. During the first ten months of 2010, the volume of Russian-Cambodian trade amounted to US$33.2 million. The Fifth Session of the Russian-Cambodian Intergovernmental Commission for Trade, Economic, Scientific and Technical Cooperation was held on 19 November 2009 in Phnom Penh. The two sides reviewed the current situation in relations between Russia and Cambodia and outlined concrete steps aimed at further development of interaction in various spheres (see Table 1).

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Table 1 Bilateral Trade between Russia and Cambodia

Turnover (in US$ million) Growth in % Export Growth in % Import Growth in % Balance

2006

2007

2008

2009

1 Sept 2010

10.8

29

34.1

38.5

33.2

135.1 3 125.1 7.8 139.4 –4.8

268.2 11.2 369.0 17.8 229.1 –6.6

117.5 8.6 77.1 25.5 142.9 –16.9

112.8 9.2 107.6 29.2 114.6 –20

95.3 4.3 48.3 28.9 111.2 –24.7

Source: The Ministry of Economic Development of the Russian Federation and the Federal Customs Service, 2010.

TOURISM, CULTURE AND EDUCATION Cooperation in the sphere of tourism is growing: in 2010, more than 34,000 Russian visitors came to Cambodia for holidays. This represents an increase of 76 per cent from 2009. In December 2010 a Memorandum of Understanding on establishing sister city relations was signed between Veliky Novgorod of Russia and Cambodian Siem Reap. As for cooperation in the sphere of culture and education, one of its emerging areas is cinematography. In June and July 2007, a film crew from St. Petersburg worked in Cambodia on a documentary under the title “Rainy Season” — a project supported by the Ministry of Culture of the Russian Federation. In September 2007, a delegation of the Department of Cinematography of the Ministry of Culture and Fine Arts of the Kingdom of Cambodia attended the 5th International Film Festival of the Asia Pacific countries in Vladivostok. In December 2008 and October 2009, Russian Film Weeks were held in Phnom Penh. A delegation of the Library of the Cambodian Senate visited Moscow in November 2007. This is the first step towards restoration of cooperation between our libraries and librarians. In September 2008, the memorandum was prolonged by two years, the duration of the Intergovernmental Program of Cultural Exchanges for 2006–08 was signed in Phnom Penh. Over the years more than 8,000 Cambodian specialists have received their education in Russia and other Commonwealth of Independent States (CIS)

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countries. At present, more than 110 Cambodians are studying in Russia with its budgetary support. Among today’s Cambodian students, there are thirty-five military officers. Thousands of young Cambodians who had been trained in the Soviet Union and later the Russian Federation not only had the opportunity to access quality and free education in their respective fields of expertise. They also learnt Russian language and history, picked up Russian culture and enjoyed Russian food. Currently, these fellow graduates are holding positions of im­ portance in various governmental and higher education institutions across the country. Some are now top civil servants; some are military commanders; some are in business. Others are medics, engineers and architects. Even though they came home long ago, they still fondly remember the warmth and hospitality of the Russian people. They believe that it was the knowledge they gained in a far away country sitting on the border of Asia and Europe that had enabled them to become what they are now, and to lead dignified and prosperous lives.

CONCLUSION AND FUTURE PROSPECTS Cambodia and Russia are connected by a long-standing mutual respect and many years of fruitful cooperation. They share many views on what is happening in the world. Russia has been Cambodia’s good friend and will remain its friend eternally. The preconditions for much better trade and economic relations between the two countries are very significant. In order to explore this potential better, Russia may, for a start, consider the possibility of investments in the energy sector (including gas and petroleum) and agriculture. Joint projects dealing with the development of human resources and industry, promotion of cultural and military ties would be most welcome. On top of that, Russia is expected to assume a leading role in our common search for responses to regional security challenges.

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Section IV Business and Economics

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RUSSIA AND ASEAN-4: POTENTIAL AND REALMS OF COOPERATION Vladimir Mazyrin

INTRODUCTION While announcing its desire to integrate with the Asia-Pacific region in the first post-Soviet decade, Russia was in fact moving away from Vietnam, Laos, and Cambodia — the countries with which the USSR had very close and friendly relations. However, the decision to turn to Asia was hindered by an evident lack of political will. Customarily ascribing priority to its relations with the West, Russia only occasionally switched to cultivating ties with the Asia Pacific. Perhaps, Moscow was expecting larger, richer, and technologically more advanced partners to turn up. What followed was a lesson in pragmatism. As Russia pulled out of Indochina and expressed its readiness to do business with prosperous East Asian and Pacific nations, their own entrepreneurs, diplomats, and the military were quickly moving into the cooperation environment it had vacated. By the start of the twenty-first century, Russia’s former Indochina allies and Myanmar, too, had joined the Association of Southeast Asian Nations (ASEAN) and opened up for investments from Southeast Asian neighbours, China, Japan, South Korea, and the U.S. Having speeded up their economic growth, they are keeping sustaining it at a pretty high rate. 207

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THE ASEAN-4 In today’s perspective, repairing and advancing Russia’s relations with the group of “new” Association members (now known as ASEAN-4) looks neither secondary nor unpromising. In fact, it is the other way around. There is growing awareness, at least among the experts (and hopefully, among decision-makers too), that this is a chance to reinforce our position not just in terms of dealing with ASEAN but with the whole of East Asia. Memories of how the Soviet Union helped these countries in difficult moments of their recent past are still alive. The views of the present Russian leaders and their Indochina counterparts on global and regional politics are largely similar. There is also demand for Russian technologies, goods, and services, and for understandable reasons: not all the needs of the four Indochina countries are met by more developed neighbours and the West. The social and economic gap between the Association’s old-timers and newcomers remains too wide, and narrowing it is ASEAN’s official priority. By coming back to Indochina and contributing to the solution of this problem on mutually beneficial terms, Russia could simultaneously help itself, its old friends, and ASEAN. Presumably, things are now moving in that direction — towards longterm economic cooperation focused on projects and areas where Russia has comparative advantages and its contribution is expected most.

ARMS TRADE AND DISASTER RELIEF In today’s world, sellers and buyers of military hardware are rarely restricted by ideology. Their primary concern is the price and quality ratio, and here Russia holds a trump card. Apart from that, it agrees to be paid by deliveries of marketable local goods, and is willing to write-off some debts of old customers when they order new shipments of arms. Against this background, it is quite natural that in the last few years Russia’s military sales to the ASEAN-4 countries have been growing. A key importer of Russian weaponry in Indochina — and, actually, in the whole of Southeast Asia — is Vietnam. Its deals with Russia signed in 2009 and 2010 have a total value of US$5.5 billion. The contracts are for the delivery of modern sea and air vessels — six Kilo class submarines and twelve Su-MK30 fighters. Maintenance centres to provide them with ground services are to be opened as well.1 The Vietnamese army has never had anything like that. Nevertheless, these sales can rather support than

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disrupt the regional balance of power in the era of intensifying U.S.-China competition for influence in East Asia. Good prospects exist for joint efforts in the field of non-traditional security. Special attention is paid to building up cooperation in disaster relief. The Russian Ministry of Emergency employs skillful professionals and has significant technological assets to cope with natural and man-made disasters. Everyone knows how destructive a forest fire can be in the tropics. In the ASEAN area, Russian-made Be-200 firefighting amphibious aircrafts have already proved their worth in the midst of such calamities. Hit by frequent natural disasters but having no emergency services of their own, the Indochinese countries have had many occasions to appreciate Russia’s capabilities. The case of Myanmar in spring 2008 is just one example. Following a cyclone-induced flood that caused over 100,000 casualties, the Russian Ministry of Emergency delivered large humanitarian aid to Myanmar. The need for joining forces in situations of this kind has become even more obvious since the Fukushima nuclear accidents: even Japan with all its economic might cannot manage it alone. Russia backs the idea to establish an ASEAN Centre that will coordinate humanitarian efforts for mitigating the after-effects of natural disasters. It is ready to help the Association members to develop their national emergency services and to supply them with specialized equipment, including aircraft. The Indochinese countries may become a priority in this sense for they need this kind of assistance most. Russia’s recent staple offer is a satellite navigation system which is crucial for taking urgent measures in the face of natural disasters.

HIGH TECHNOLOGY AND HUMAN CAPITAL TRANSFER For Indochinese countries that want to modernize their existing industries and develop a knowledge-based economy, Russia remains an attractive partner in science and technology. In biotechnology, oceanology, telecommunications, oil and natural gas production, space research and nuclear energy, the Indochinese partners are either relying on Russian know-how or plan to do so. Addressing the 2nd Russia–ASEAN Summit in Hanoi in October 2010, President Dmitry Medvedev laid out a bolder vision for the future based on joint efforts in high-tech areas that include machine-building, new materials, medicine, remote Earth sensing and aerospace. The Russian economy is still in the process of being reformed. Apart from restructuring, it can be propelled to a higher level of development through

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the wider use of innovative technologies. Since transition to a knowledgebased economy is a matter of national priority, the emphasis on innovations in trade and economic exchanges with ASEAN is quite natural. Many hopes are pinned on cooperation in space-related projects. Some results are already there: Russian launching pads and carrier rockets have been used to launch the ASEAN countries’ communications satellites into orbit, and a number of space vehicles have been built on their orders. ASEAN partners are showing considerable interest in the Global Navigation Satellite System (GLONASS), the Russian space-based navigation system that, once developed to full global coverage, will be comparable to American NAVSTAR (GPS). Another area where there is much to be done together is public health. A joint Russian-Vietnamese ophthalmological centre was opened in Hanoi in 2009. In the meantime, Russian company Tana, established in neighbouring Malaysia, a network of remote video monitoring medical centres to help patients with grave infectious diseases, such as tuberculosis and malaria. Why not replicate this experience in the Indochinese countries? Being not as prosperous as the ASEAN founders, they need this type of assistance much more. Enormous past experience provides the basis for Russia and ASEAN-4 cooperation in numerous fields of scientific research. Before the breakup of the USSR, Soviet scientists conducted large-scale geological exploration, projects in plant selection and environmental protection, and laid the foundations for relevant schools of research in Vietnam, Laos, and Cambodia. Joint teams of scholars carried out studies in the fields of history, archaeology, ethnography and literature of these countries. In linguistics, such activities resulted in development of written languages that some small indigenous peoples of Indochina never had before. Moscow was helping its allies in starting-up their national film industries, radio and television, assisting them in building medical, technological, and agricultural institutes. Russian language centres established in that era operate until now.

EDUCATION COOPERATION A large segment of present-day intellectual and professional elites in the four Indochinese countries studied in the USSR and Russia. Over 30,000 Vietnamese and 8,500 Cambodians had their professional training in our higher education institutions. Today, hundreds of students from Cambodia and Myanmar study in Russia. According to Vietnam’s Embassy in Moscow, the number of Vietnamese students rose to 5,000 in the 2009/2010 academic

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year. Hundreds of them are given government scholarships. Is it not time to increase the academic quotas at Russia’s civilian and military high schools for students from Indochina countries? New opportunities of this kind will open up with the launching of the Pacific Science and Learning Center in Vladivostok, after the Asia-Pacific Economic Cooperation (APEC) Summit in 2012. As of today, educational exchanges between the Russian Far East and ASEAN countries are maintained by the Centre for Training Foreign Specialists at the Far Eastern State University. According to Alexander Sokolovsky, the Centre’s Director, about a hundred Vietnamese, along with students from other Southeast Asian countries, are now studying at the University, the biggest higher education institution in the Russian Far East. There are good prospects, too, for the export of educational services to those countries that, like Vietnam, invite foreign lecturers. The costs of developing educational links will yield high returns. Graduates from Russian universities hold important positions at research centres, various industries and governmental bodies of their countries (up to the top executive level). Fluent in Russian and familiar with Russian culture, they are living guarantors of good relations between the Indochina nations and Russia. Hence, cooperation in education has to grow, not wane as has been the case in the closing years of the twentieth century.

TOURISM AND RECREATION An influx of foreign tourists tends to stimulate domestic business activity in construction and services, agriculture and manufacturing. New external contacts add intensity to economic life. Vietnam and Cambodia have succeeded, to an extent, in achieving this effect. Now Laos and Myanmar try to follow their example. These developments should be taken into account. The more Russians are visiting these countries for pleasure or recreation, the more opportunities there are for bilateral and multilateral relations to expand and grow. The number of Russian travellers to Indochina is increasing. Vietnam alone was visited by over 80,000 Russians in 2010, or 3 times more than in 2005.2 Since the beginning of 2009, Russian tourists have been allowed visa-free entry to Vietnam, with a stay there of up to fifteen days. While just about 17,000 Russians visited Cambodia in 2009, last year their number had grown to 34,000.3 In fact, travelling to Cambodia, a land of beautiful landscapes and remarkable cultural heritage, will hardly seem costly compared to what the country offers. According to the Russian Federal

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Agency for Tourism, Russia and Cambodia are preparing a programme for cooperation in the travel industry. Looking at the subject from another angle, one cannot help but note that very few tourists from Indochina have been coming to Russia so far. The Tourism Forum in Hanoi in January 2009 passed a resolution on RussiaASEAN consultations in the travel industry. In September 2010, Vladivostok hosted delegates of the Tourism Promotion Organization for Asia-Pacific Cities (TPO). Such measures alone are not enough to change the situation, but, at the very least, they help to promote Russia and the Russian Far East in particular as promising tourist destinations.

FUEL AND ENERGY Fast economic growth in Indochina, like in Southeast Asia as a whole, creates a constantly growing demand for energy. How does Russia view this problem and its own contribution to its possible solution? So far, our direct energy supplies to the whole of East Asia, not to mention Southeast Asia, are scant — in the case of oil, it only meets 3 per cent of the region’s needs. According to forecasts, this percentage may rise by 2020 to 30 per cent.4 In the long run, this would give the Indochinese countries greater access to Russian petroleum products. Russian energy giant Gazprom has calculated that Russia, which has the world’s largest energy reserves, will supply some 110 billion cubic metres of gas to Southeast Asia by 2020, with the increasing share of liquefied natural gas (LNG). This scenario will only play out upon completion of the Sakhalin gas projects and once an oil pipeline from East Siberia to the Pacific coast is completed (though it cannot extend all the way to Southeast Asia). Today Russia can expand and diversify its presence in Indochina’s energy markets by relying on its technologies, its production experience, and the situation in the regional market. Vietnam and Myanmar, both producers of oil and gas, want to step up production, and build infrastructure to store, transport, and process hydrocarbons. Cambodia and Laos, where oil and gas reserves have been discovered, need the knowhow to develop them and to use other sources of energy. It would be mutually beneficial as well to establish national fuel and energy industries and build clusters of an integrated energy system (for example, pipelines and power transmission lines) for ASEAN-4 in each country.5 Whatever comes out of it, the parties’ desire to coordinate their energy policies is recorded in the 2010–15 ASEAN-Russia Comprehensive Program of Energy Cooperation. There are plans referring to the traditional oil, gas,

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and electric power energy sectors as well as to renewable sources, nuclear energy, and environmentally friendly technologies. During President Dmitry Medvedev’s visit to Hanoi in October 2010, a memorandum of understanding between the Russian ministry for energy and Vietnam’s ministry for industry was also signed. Currently, Russian oil and gas companies are jointly operating on Vietnam’s continental shelf with PetroVietnam Corporation. Vietnam is one of the few foreign countries whose state-owned company is a partner in oil production on the Russian territory. The RusVietPetro joint venture has already started to work an oil field in the Nenets autonomous district. The company, registered in 2008, is 51 per cent owned by Russia’s Zarubezhneft with the rest belonging to Vietnam. It has recoverable reserves of 95 million tonnes in the Nenets district.6 Russian-British joint venture TNK-BP bought BP’s assets in Vietnam (the deal is estimated at US$1 billion) and began to supply crude oil (100,000 tonnes per year) to the first Vietnam’s refinery in Dung Quat. Several Russian companies plan to take part in the construction of new electric power plants and in the modernization of the existing electric power facilities in Vietnam. Over the last fifty years, Russia has helped to build dozens of hydroelectric and thermal power plants with a total capacity of more than 4,000 megawatts (MW). This covers nearly 80 per cent of the country’s power needs.7 Russian electricity company Inter RAO EES is actively looking for partners and investors in Southeast Asian countries. Russia’s producers of power machines Silovye Mashiny and Rushydro are strengthening their presence in the region. The demand for their equipment has grown due to the construction and modernization of thermal and hydropower plants in Vietnam, Laos, Cambodia and Thailand. Things are more difficult for Russia in Myanmar: its oil and gas fields are already developed by Total of France and the America’s Unocal. A consortium set up there has built and now operates a gas pipeline running from the Yandan underwater gas fields to Thai territory. Unlike Russian companies, China is making persistent attempts to join in. In Laos, hydroelectric power generation can become a vital area of cooperation along with oil exploration. The ones who dominate in the local energy sector are Thai investors. More than 60 per cent of electricity generated in Laos is exported to Thailand. This brings annually between 15 per cent and 20 per cent of the republic’s foreign currency revenue.8 Projects undertaken with a share of Vietnamese and Russian capital pale in comparison. In Cambodia, electric power is generated predominantly by diesel power plants burning imported fuel. The Russian Diesel company

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supplies equipment for diesel power plants in several Cambodian cities. Growing prices of fuel compel Cambodia, just like Laos, to develop the hydroelectric power industry. Two hydroelectric power plants have been built with Chinese financial and technical assistance, and there are plans to build more.

NUCLEAR ENERGY As far as non-traditional energy sources (at least, by Southeast Asian standards) are concerned, Russia is ready to expand cooperation in nuclear power generation and safe handling of radioactive materials.9 Russia is one of the world’s leaders in the production of small nuclear power units. It has decades of experience in nuclear technologies, specifically in designing and operating fast neutron reactors. The average prime cost of electricity produced by Russian nuclear power plants is US$0.014 per kilowatt hour (kWh).10 The state-owned Rosatom Corporation helps to develop corresponding laws and regulations, and trains specialists in design, construction, and operation of nuclear reactors. Russian supplies of technologies and equipment do not break our obligations under the Treaty on the Southeast Asia Nuclear Weapons-Free Zone. Lately, Rosatom secured a contract to build Vietnam’s first nuclear power plant with two 1,000 MW facilities at a cost of US$10 billion.11 Moscow provided Vietnam with a loan for the construction. This nuclear power deal was among the most important documents President Medvedev signed in Hanoi during his recent visit. In spite of the Fukushima nuclear disaster, the Vietnamese are still enthusiastic about this programme. A joint centre for nuclear research has been started in Vietnam too. Russian experts are modernizing the Da Lat Nuclear Research Reactor and assembling equipment for the Hanoi gamma-ray unit. In 2002 and 2007 agreements on cooperation in the nuclear sphere were also signed with Myanmar. Russia undertook to install and start up the generating equipment of a research nuclear reactor of 10 MW thermal power capacity, to deliver nuclear fuel (uranium 235 enriched to less than 20 per cent) and spares. The centre is to have activation analysis and medical isotopes laboratories, a nuclear silicon alloying unit, etc.12 These agreements are still on paper only, probably not just because of holdups on either side, but due to outside political pressure as well. If such pressure is the real reason, it is yet another reminder of the bitter contest for Indochina’s markets.

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INFRASTRUCTURE AND TRANSPORT Geographic distances between Russia and its Indochina partners are a serious barrier to sustainable business cooperation between them. Initiating regular traffic by sea through Russia’s Far Eastern ports by Russian carriers is a way to stimulate commercial and economic relations between them. Today, though, commercial routes in this area are mostly operated by Japanese and South Korean companies. Building more roads in Indochina itself and improving their quality, and also that of transportation services, is a further high priority. Inadequate local road networks are an evident sign of economic underdevelopment. Relying on its experience in building major infrastructure projects of varying scales, Russia could help Indochina to modernize highways, railroads, and ports, build underground railroads, and so on. Special interest (so far theoretical rather than practical) arises over the possibility of surface infrastructure elements being built to extend as far as the countries’ borders with China to connect Southeast Asia across China’s territory to the Russian Far Eastern region. In particular, a joint project was seriously discussed with Myanmar back in 1995–97 to build a railroad running from Yangon across the country’s northern areas towards the Chinese border. The fact that the railroad has not been built so far is not yet proof that projects in the Russia-IndochinaChina format are impossible in principle.

TRADE FLOWS AND TRENDS The Russian Federation’s trade with the ASEAN-4 countries is conducted, above all, with Vietnam. In 2009–10, trade between them rose by 25 per cent from the year 2008, to almost US$1.8 billion. This was not much in comparison with the turnover between Vietnam and the U.S. (which is seven times bigger), but still significantly larger than what Russia has with Vietnam’s neighbours in Indochina. Over the last decade, Russia’s trade with Laos has never risen above US$30 million. In the latter half of the decade, Russia’s trade with Cambodia has risen to US$40 million a year.13 Direct trade with Myanmar, valued at just US$300,000 or even less annually in the early 2000s, went up to US$120 million at the end of the decade. Some of our products, such as paper, cement, metals, and chemical fertilizers, reach Myanmar through other countries.14 The structure of Russia’s trade with its Indochina partners has remained practically the same over the last few years. Russia mostly exports rolled

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metals, pulp, paper, chemical products, power plants equipment, trucks, aircraft spares, fertilizers, and building materials. High-tech products take a tiny share of Russian deliveries. Its principal imports are footwear and garments, seafood, tropical agricultural products, and woodwork. The vast Russian market, though, is attractive for Indochina countries, and Russia’s unique Eurasian position gives them a chance to enter Europe’s product markets. In turn, direct shipments to Indochina bypassing intermediaries could eventually expand the volume of Russian exports. The Russian Federation’s economic relations with ASEAN-4 could be scaled-up by a free trade area being set up, for a start with Vietnam. Its leaders are very supportive of the idea. Significantly, a consensus was recorded officially “to give greater consideration to the possibility of an agreement on a free trade area between Russia and Vietnam being signed” during the visit of Secretary General of the Central Committee of the Communist Party of Vietnam to Moscow in July 2010.15 When the parties began negotiations on the subject in December 2010 in Moscow, Vietnam’s delegates expressed their readiness to sign an agreement with the whole of the Customs Union (that is Russia, Belarus and Kazakhstan). There are other projects as well to promote trade with the countries of the region. Alexander Karchava, until recently Russia’s Ambassador to Malaysia, suggests setting up a consortium of Russian importers (and possibly exporters, too) operating in Southeast Asian markets. This measure could facilitate lending by Russian banks, as the agreements on cooperation between banks that Russia signed with Indonesia and Vietnam could apply to other members of the Association as well. On the whole, livelier bilateral trade will reinforce the scientific, technological, and investment components of economic relations between Russia and ASEAN-4.

TOWARDS FINANCIAL COOPERATION AND GROWING INVESTMENTS Major steps have been taken to clear away obstacles in Russia’s relations with ASEAN-4 countries. Debts they owe on loans made by the USSR have been written off. Since international classification puts Russia’s partners in the category of the “least developed” economies and they have special relations with it, Russia wrote-off 85 per cent of the debt owed to it by Vietnam in 2000 and Laos in 2003. The balances were restructured and their repayment was put off for thirty-three years at a cut rate. Vietnam will have to pay off US$1.7 billion and Laos, US$380 million by delivering goods, in hard currency, or by reinvestment.16 Cambodian debt repayment

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has been settled on still more favourable terms. These favourable debt repayment schemes should contribute to a better implementation of national development programmes. New channels are created to finance trade and investment. One of them is the Vietnam-Russian Bank (with charted capital of US$0.4 billion). The bank releases payments in hard currency and, in the interest of businesses in both countries, in roubles and dongs.17 A similar agreement was signed between the Russian Central Bank and the State Bank of Vietnam. Joint banks established with Vietnam that has the strongest financial system among ASEAN-4 countries can handle transactions in Laos, Cambodia, and Myanmar (even though these countries, too, may set up similar banks). Although the ASEAN experience cannot always be applied in Russia owing to socioeconomic and historical differences, we have been studying it carefully. There are many things that we could emulate, such as methods of attracting foreign investment, the establishment of special economic zones and free trade zones. Future-oriented projects — such as the one about the creation of a common regional currency, the Asian Currency Unit (ACU), should not be ignored either. In terms of the size and intensity of direct investments in the region, Russia is still far behind such competitors as China, Japan, and the Republic of Korea. It is still not too late for the Russian authorities and private companies to acknowledge the obvious facts. Labour is cheaper in the ASEAN-4 countries, and natural resources are richer than in Southeast Asia’s newly industrialized countries. These resources are virtually untapped in the peripheral areas. The national capital there, including state capital, is still not strong, and eager to cooperate with foreign partners, who have so far been shunning industries offering long payoff periods and low returns on capital invested. The conclusions are obvious enough.

CONCLUSIONS To sum up, opportunities for expanding cooperation between Russia and ASEAN-4 countries are there. For major headway to be made, Russia has to put in consistent efforts and big investments, not to mention developing a well-considered programme to reinforce our positions. The time is right to undertake feasibility studies, and then proceed to complete joint projects covering the four countries. For the benefit of its own domestic modernization plans, Russia needs more focus on commercial and technological ventures in Southeast Asia, and in Indochina in particular.

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Notes

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See “Đằng sau họp đong mua bán vũ khí”, . See Statistical Yearbook of Vietnam 2010, Hanoi, 2011, p. 538; (accessed 1 December 2009). See ; . See “Joint Declaration of the Heads of State/Government of the Member Countries of the Association of Southeast Asian Nations and the Head of State of the Russian Federation on Progressive and Comprehensive Partnership”, Kuala Lumpur, 13 December 2005; Asia Pacific Outlook 2004–2005, Moscow, 2006, p. 75. Gazprom company is interested in contributing to the construction of a TransASEAN gas pipeline. It has signed a memorandum on strategic cooperation with Thailand’s PTT and negotiates the issue of participation in the project with Malaysia’s Petronas. Igor Tomberg, “Russia-ASEAN Summit: Attempting to Crush Stereotypes”, International Affairs magazine, 1 November 2010. See E.V. Kobelev and A.S. Voronin, “A Colorful History of Friendship and Partnership: Sixty Years of the Establishment of Diplomatic Relations between the U.S.S.R./Russia and DRV”, Far Eastern Affairs, no. 1 (2010): 15. See . See ITAR-TASS, no. 34, 2007. Igor Tomberg, “Russia-ASEAN Summit: Attempting to Crush Stereotypes”, International Affairs magazine, 1 November 2010. See A. Biryukov, “Vietnam is Waiting for Russian Power Engineers”, (accessed 16 December 2009). It was reported in the Western press that foundations for a reactor had been laid near Magway in central Myanmar and that around 300 Burmese had received training in Russia to work on the project under construction. See . See P. Goncharov, “Russia is Ready for Broad Cooperation with Laos on the World Stage”, RIAN, 22 June 2003; ; . See ; latest data was provided by Russian Embassy in Myanmar. See . See “Asian Development Bank, Country Economic Review 2000”, Socialist Republic of Vietnam, Hanoi, November 2000, p. 24. See (accessed 16 Dec­ ember 2009).

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RUSSIA’S ECONOMIC RELATIONS WITH THE APEC REGION Carlos Kuriyama1

INTRODUCTION Since its inception, the Asia Pacific Economic Cooperation (APEC) forum has been working to build a sense of a strong Asia-Pacific community, based on the following economic pillars: trade and investment liberaliza­ tion, business facilitation and economic and technical cooperation. When Russia became a full member of APEC in November 1998, this news was received with some scepticism by the public in the Asia-Pacific region. As opposed to Peru and Vietnam, the other two newly admitted members in 1998, Russia’s economic links with APEC members were not that strong at that time. For example, whereas Peru and Vietnam exported 53.2 per cent and 67.3 per cent of their world exports to APEC in 1998, Russia only exported 18.2 per cent of its total exports to APEC. In the same way, the proportion of imports from APEC was lower in the case of Russia, at 19.2 per cent, as opposed to Peru and Vietnam (55.2 per cent and 83.5 per cent, respectively). Russia’s membership in APEC is not an isolated case of engagement with the Asia-Pacific region. It is a result of a series of previous approaches within the region. In fact, Russia’s interest in the Asia Pacific is not recent and dates back from the years of the Soviet Union. As part of the strategy to develop further relationships with the Asia Pacific, the Soviet Union started its engagement with the Pacific Economic 219

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Cooperation Council (PECC) in 1988 through the Soviet National Committee on Asia Pacific Economic Cooperation (SOVNAPEC). PECC is a tripartite partnership of individuals from business, government and academia interested in the Asia-Pacific region. SOVNAPEC formally joined PECC as a full member in September 1991 and in June 1992, the Russian National Committee on Pacific Economic Cooperation was confirmed as the successor to SOVNAPEC. Also, from a business perspective, the Soviet Union started to parti­ cipate as an observer in the Pacific Basin Economic Council (PBEC) in 1989 and Russia became a full member of PBEC in 1994. At the political level, Russia’s involvement with the Association of Southeast Asian Nations (ASEAN) also became more active in 1994, when it was accepted as member of the ASEAN Regional Forum (ARF) to discuss common issues concerning security matters. Despite a relatively low relevance of APEC in Russia’s economic relations vis-à-vis other members’ relationships with APEC, the paper will show that the APEC is becoming increasingly important for Russia in terms of trade, investment and economic and technical cooperation. A closer APEC-Russia relationship will benefit both sides, in part because of the existing complementarities among Russia and many of the APEC member economies.

APEC’s RELEVANCE IN RUSSIA’S ECONOMIC RELATIONS Why Russia’s Interest in joining APEC? From the global standpoint, being part of APEC involves belonging to one of the most dynamic regions in the world. APEC members represent 40 per cent of the world population, 44 per cent of global trade and 56 per cent of the world Gross Domestic Product (GDP). Between 1998 and 2009, APEC’s GDP in Purchasing Power Parity (PPP) terms increased at an average annual rate of 3.7 per cent; while the GDP (PPP) of the rest of the world increased at only 3.2 per cent per year. In the same way, APEC’s GDP per capita (PPP) went up from US$9,254 to US$12,674 between 1989 and 2008, which represented a 2.9 per cent annual average growth; whereas the GDP per capita for the rest of the world rose at a lower rate (1.6 per cent) from US$6,180 to US$7,398 during the same period.

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A hint of Russia’s interest in having a closer relationship with APEC came from the then-President of the Russian Federation, Vladimir Putin, in a speech at the APEC Australia 2007 Business Summit: Our key task is to make use of APEC’s possibilities so that Russia could join the Asia-Pacific integration mechanisms in a most effective and efficient way. This naturally complements Russia’s national plans for social and economic development. Top priority is given to projects of intensive development of Siberia and the Far East. A large scale modernisation of leading economic sectors, industrial and transportation infrastructure is being pursued, notably, by the Program for the Development of the Far East and Trans-Baikal Regions, i.e. the areas that directly belong to the Asia-Pacific Region.2

For Russia, a closer relationship with the Asia-Pacific region means greater chances to help develop the Russian Far East, which is suffering from a population decline in this region.3 The lack of proper infrastructure and the reduction of government subsidies as incentives to help developing the region have motivated many people to seek better opportunities in other places. Nonetheless, Russia possesses vast natural resources in the Far East (especially in terms of hydrocarbons and non-ferrous metals) and it is very interested in attracting foreign investment to develop the region. These resources are high in demand within the APEC region and it complements the needs of many APEC economies to import these goods. In particular, taking into account the geographical distance, the Russian Far East could benefit substantially from a strong partnership with Northeast Asia such as China, Japan and Korea, which are main consumers of raw materials and have proper resources that may help develop physical infrastructure as well as the energy and mining sectors in the Russian Far East. Putin also highlighted that Russia is interested in APEC’s activities that go beyond economic issues, such as those related to counter-terrorism, emergency preparedness, anti-corruption and prevention to money laundering. Another indication of Russia’s interests in APEC is related to the type of APEC events that Russia hosted in the past. The list in Table 1 mostly contains meetings associated to the sectors previously mentioned in this section. For Russia, hosting the APEC Leaders’ Week, as well as the main meetings at the Ministerial and Senior Officials levels in 2012 will represent a big opportunity to put itself under the spotlight. It is a unique chance to create awareness on what Russia is doing and show what the opportunities are to associate with Russia at all levels. It will also be a proper occasion to

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Table 1 APEC Events Held in Russia Date

Event

May 2001

Meeting of the APEC Business Advisory Council (ABAC)

June 2002

Innovative Forum “International Business Cooperation in the Sphere of Innovative Entrepreneurship”

August 2002

26th Meeting of the Telecommunications and Information Working Group

September 2002

3rd APEC Investmart

September 2002

7th APEC Investment Symposium

August 2003

APEC Non-Ferrous Metals Dialogue Test Seminar

June 2004

International Conference — SME and Big Companies Interaction

September 2005

26th Meeting of the Transportation Working Group

October 2006

32nd Meeting of the Energy Working Group

May 2007

32nd Meeting of the Industrial Science and Technology Working Group

May 2008

Meeting of the APEC Business Advisory Council (ABAC)

September 2010

Workshop on “Domestic Paperless Trading Environment”

Source: APEC Secretariat

strengthen the relationships with each of the APEC members. For example, since APEC is a staunch supporter of the multilateral trading system, the “Russia year” in APEC could be a good chance to finalize successfully Russia’s accession process to the World Trade Organization (WTO) with the support of the rest of APEC members. Russia is the only APEC member not part of WTO yet. Investment opportunities tend to increase in the APEC hosting econo­ mies. In addition, it is a good chance for Russia to implement projects to improve public infrastructure and facilities, as it is usually the case for the hosting economies.

APEC’s Participation in Russia’s Trade with the World As mentioned in the introductory section, the relevance of APEC in Russia’s trade with the world is much lower compared to the rest of APEC members,

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especially from the exports’ side. All APEC economies, with the exception of Russia, send more than 50 per cent of their exports to the APEC region. Only 18 per cent of Russia’s exports had an APEC economy as a destination in 2009 (see Figure 1). Despite the fact that exports to APEC increased at an average annual rate of 11.4 per cent between 1998 and 2009, APEC’s share in Russia’s exports has not increased. Historically, most of Russia’s exports have been destined into Europe. During the Cold War, the support given by the Soviet Union to many Central and Eastern European countries in the Warsaw Pact, influenced in creating markets for Soviet goods in these regions. After the Cold War and the collapse of the Soviet Union, the economic links between Russia and Western Europe increased, especially due to the demand of Western Europe for natural resources. Currently, the Euro Area represents the most important destination for Russian goods, explaining nearly 40 per cent of global Russian exports (see Figure 1). Figure 1 APEC Members: Percentage of Trade with the APEC Region Imports

Exports

100

80

60

40

20

Australia Brunei Darussalam Canada Chile China Hong Kong, China Indonesia Japan Korea Malaysia Mexico New Zealand Papua New Guinea Peru Philippines Russia Singapore Chinese Taipei Thailand United States Viet Nam 0 0 1998

20

40

60

80

100

2009

Sources: IMF, Direction of Trade Statistics; StatsAPEC.

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As opposed to the trade with East Asia and the rest of the APEC members, the infrastructure between Russia and Europe is better connected, which facilitates trade between both sides. The main transportation hubs in Russia are located closer to Europe. Also, the Russian economy has gravitated closer to Europe since most of the production centres and population are located in the European side of Russia. In contrast, as Figure 1 and Table 3 show, the participation of APEC in Russia’s imports went up from 19.2 per cent to 32.6 per cent of the global Russian imports between 1998 and 2009. Whereas Russia’s exports to APEC grew by more than three times during that period, Russia’s imports from APEC experienced a six-fold increase. A breakdown of Russia’s imports by origin shows that the relative importance of the former Soviet Republics registered a sharp decline, from 26.3 per cent to 9.4 per cent of Russia’s global imports. Imports from APEC, on the contrary, gained ground by moving up from 19.2 per cent to 32.6 per cent, in part due to Russia’s increasing dependency on import manufacturing goods (see Table 3).

Table 2 Russia’s Exports by Destination Exports Value (US$ million) Partner World Total* Advanced Economies   Euro Area Emerging & Developing Economies   Developing Asia   Europe    Central and Eastern Europe    CIS   Africa   Middle East   Western Hemisphere APEC

Share (%)

1998

2009

1998

2009

71,335.5 39,410.1 21,101.7 31,925.4 4,363.0 23,666.5 9,987.1 13,679.4 401.2 1,525.8 1,968.9 12,970.7

235,437.7 138,100.0 92,294.9 97,337.7 23,817.0 61,617.7 35,940.5 25,677.2 2,055.2 6,896.1 2,951.8 42,360.7

100.0 55.2 29.6 44.8 6.1 33.2 14.0 19.2 0.6 2.1 2.8 18.2

100.0 58.7 39.2 41.3 10.1 26.2 15.3 10.9 0.9 2.9 1.3 18.0

Note: * Trade with Cuba; North Korea and other non-specified areas are not included. Source: IMF, Direction of Trade Statistics

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Table 3 Russia’s Imports by Origin Imports Value (US$ million) Partner World Total* Advanced Economies   Euro Area Emerging & Developing Economies   Developing Asia   Europe    Central and Eastern Europe    CIS   Africa   Middle East   Western Hemisphere APEC

Share (%)

1998

2009

1998

2009

42,434.2 23,818.0 13,592.9 18,616.2 2,239.5 14,569.9 3,397.6 11,172.3 383.2 83.5 1,340.1 8,130.8

157,194.2 90,874.2 53,628.6 66,320.0 28,570.6 28,761.5 13,589.6 14,840.5 1,475.3 562.2 6,950.3 51,239.7

100.0 56.1 32.0 43.9 5.3 34.3 8.0 26.3 0.9 0.2 3.2 19.2

100.0 57.8 34.1 42.2 18.2 18.3 8.6 9.4 0.9 0.4 4.4 32.6

Note: * Trade with Cuba; North Korea and other non-specified areas are not included. Source: IMF, Direction of Trade Statistics

APEC’s Participation in Russia’s Inward Foreign Direct Investment A study by Kuznetsov in 2010 indicates that based on balance of payments statistics from the Bank of Russia, “Russia ranked on the 5th place in the world in 2008 and 6th place (after the United States, China, France, Hong Kong (China) and the United Kingdom) (…)” in attracting inward Foreign Direct Investment (FDI)4. Unfortunately, the statistics from the Bank of Russia do not show Russia’s inward FDI classified by geographical source. The Federal State Statistical Service (Rosstat) provides more detailed information, but the figures are only based on the amounts that the companies register through statistical forms. It is possible that the figures by Rosstat underestimate the real magnitude of the inward FDI stock by source of origin. According to the information by Rosstat, a predominant majority of the inward FDI stocks in Russia comes from Europe. Between the years

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2005 and 2009, 83 per cent of the registered inward FDI was European. Data from APEC members is limited and it is available for only eight of its members (Canada; China; Hong Kong, China; Japan; Korea; Malaysia; United States and Vietnam). These eight APEC members explained only 10 per cent of the registered inward FDI (US$4,979 million) in 2005. Despite that Russia’s inward FDI stocks originated from those APEC members went up at an average rate of 7.6 per cent per year, their participation fell to only 6.1 per cent (see Table 4). According to the data available in Rosstat, the arrival of FDI to Russia from APEC members has been limited compared to investments from Europe and Latin America and the Caribbean. However, it is important to clarify that more than half of the FDI registered from Latin America and Caribbean comes from tax havens such as the British Virgin Islands. It is possible that part of these investments belong to companies from other places, including APEC economies. Table 4 Russia: Geographical Distribution of Inward FDI Stocks Inward FDI Stocks Value (US$ million) Partner World Total Advanced Economies   Europe   North America   Other advanced economies Emerging & Developing Economies   Africa   Asia and Oceania   Latin America and Caribbean   Central Europe and CIS   Other Emerging and Developing    Economies APEC*

Share (%)

2005

2009

1998

2009

49,751 46,038 41,334 4,417 287 3,713 214 752 2,560 182 5

109,022 94,859 90,542 3,332 985 14,163 620 4,989 7,811 706 37

100.0 92.5 83.1 8.9 0.6 7.5 0.4 1.5 5.1 0.4 0.0

100.0 87.0 83.0 3.1 0.9 13.0 0.6 4.6 7.2 0.6 0.0

4,974

6,679

10.0

6.1

Note: * Data available for Canada; China; Hong Kong, China; Japan; Korea; Malaysia; United States and Vietnam. Source: Kuznetsov (2010), Inward FDI in Russia and Its Policy Context; Rosstat.

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227

RUSSIA’S TRADE WITH APEC By APEC Member Economy For both exports and imports, Russian trade flows with APEC are concentrated in four APEC member economies: China, the United States, Japan and Korea. In 2009, these four APEC economies represented 85.5 per cent of the Russian exports to the APEC region and 85.3 per cent of the Russian imports from the APEC region. Russia’s exports to all APEC members, with the exception of Chile as market destination, went up between 1998 and 2009. In 1998, the United States was the main market destination for Russian exports, explaining almost half of the exports to APEC (46.2 per cent), followed by China and Japan with 24.2 per cent and 16.7 per cent, respectively. No other APEC member explained more than 10 per cent of the Russian exports to APEC. In 2009, the picture was different. The faster growth of the Chinese economy and its increasing demand for natural resources moved China to the top of Russia’s export destinations within APEC. The exports to China accounted for 38 per cent of the Russian exports to APEC and were more than five times larger in value than those in 1998. The United States saw its participation reduced to 18 per cent, followed by Japan (16.6 per cent) and Korea (12.9 per cent). The case of Korea as Russia’s destination of exports is very remarkable. These export flows rose more than ten times between 1998 and 2009, which coincides with the period that Korea invested actively overseas to diversify its sources for raw materials. It is also possible that some Korean investments in manufacturing in Russia also generated some intra-firm trade between Korea and Russia (see Table 5). On the import side, Russia’s imports from all APEC members went up between 1998 and 2009, with the exception of those from New Zealand. In terms of the distribution of these imports, China took up the position as the top import source from the United States, by increasing its share from 14.1 per cent to 44.7 per cent. The United States, on the contrary, saw a decline in its share from 49.8 per cent to 16.9 per cent. In part, this is explained because of a change in the relative importance of the goods that Russia is importing from APEC (for example, food imports increased at a much lower rate than imports of consumer goods and intermediate goods), and a relative substitution of import sources in terms of consumption and capital goods.

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Table 5 Russia’s Exports to APEC Exports Value (US$ million) Partner APEC Australia Brunei Darussalam Canada Chile China Hong Kong, China Indonesia Japan Korea Malaysia Mexico New Zealand Papua New Guinea Peru Philippines Singapore Chinese Taipei Thailand United States Vietnam

Share (%)

1998

2009

1998

2009

12,970.7 7.2 – 139.5 17.5 3,144.4 143.9 13.3 2,171.3 516.0 116.9 78.8 6.3 – 82.1 33.4 55.6 142.2 31.8 5,995.3 275.1

42,360.7 54.5 0.2 488.4 12.2 16,092.7 672.9 282.9 7,011.9 5,475.5 216.6 347.5 108.7 1.6 151.7 406.9 1,326.0 791.1 439.3 7,637.6 842.6

100.0 0.1 – 1.1 0.1 24.2 1.1 0.1 16.7 4.0 0.9 0.6 0.0 – 0.6 0.3 0.4 1.1 0.2 46.2 2.1

100.0 0.1 0.0 1.2 0.0 38.0 1.6 0.7 16.6 12.9 0.5 0.8 0.3 0.0 0.4 1.0 3.1 1.9 1.0 18.0 2.0

Source: IMF, Direction of Trade Statistics

Japan’s share as a source of Russia’s imports also went up, while Korea’s share moved in the opposite direction. In the case of Japan, its participation grew up from 10 per cent to 14.2 per cent of the Russian imports from APEC, whereas Korea’s participation declined from 12.3 per cent to 9.5 per cent between 1998 and 2009 (see Table 6).

By Sectors Russia’s trade composition with the APEC region has experienced a sharp transformation in just one decade, especially from the exports side. Manu­

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Table 6 Russia’s Imports from APEC Imports Value (US$ million) Partner APEC Australia Brunei Darussalam Canada Chile China Hong Kong, China Indonesia Japan Korea Malaysia Mexico New Zealand Papua New Guinea Peru Philippines Singapore Chinese Taipei Thailand United States Vietnam

Share (%)

1998

2009

1998

2009

8,130.8 148.2 – 211.8 16.9 1,146.1 8.2 88.4 810.2 1,003.5 119.9 77.2 136.3 – 8.6 8.5 104.1 73.8 61.0 4,051.7 56.5

51,239.7 591.5 – 1,097.0 257.4 22,884.6 37.7 640.9 7,258.5 4,865.7 1,137.4 259.5 124.4 4.9 29.3 166.3 693.1 921.3 931.2 8,645.4 693.7

100.0 1.8 – 2.6 0.2 14.1 0.1 1.1 10.0 12.3 1.5 0.9 1.7 – 0.1 0.1 1.3 0.9 0.8 49.8 0.7

100.0 1.2 – 2.1 0.5 44.7 0.1 1.3 14.2 9.5 2.2 0.5 0.2 0.0 0.1 0.3 1.4 1.8 1.8 16.9 1.4

Source: IMF, Direction of Trade Statistics

factured goods accounted for 52.2 per cent of the goods exported by Russia to APEC in 1998. In contrast, non-manufactured goods explained 77.6 per cent of Russia’s exports to APEC in 2009. This change is mostly explained for the increase in the exports of mineral fuels, lubricants and related materials, which rose from US$569 million to US$22.3 billion, between 1998 and 2009. Hydrocarbons and its derivatives have become Russia’s main exporting goods to the world, including APEC. These goods explained only 4.7 per cent of the exports to APEC in 1998. A decade later, they explained more than half of exports to APEC (53.8 per cent).

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Also, the deterioration of the industrial structure in Russia affected the export of capital-intensive goods, such as machinery and transport equipment, to the APEC region. In this sense, their participation experienced the most significant fall by going down from 12.8 per cent to 3.6 per cent between 1998 and 2009. In the same way, the production of consumer goods was also affected during this period. According to the Standard International Trade Classification (SITC) nomenclature, most of these goods are categorized as miscellaneous manufactured articles. Russia’s exports to APEC in this category declined from 4.9 per cent to only 0.7 per cent. In absolute terms, this represented a reduction in more than 50 per cent from US$581 million to only US$279.9 million (see Table 7). Table 7 Russia’s Exports to APEC by Sector* Exports Value (US$ million) Sector Total S3-0 Food and live animals S3-1 Beverages and tobacco S3-2 Crude materials, inedible, except fuels S3-3 Mineral fuels, lubricants and related materials S3-4 Animal and vegetable oils, fats and waxes S3-5 Chemicals and related products, n.e.s. S3-6 Manufactured goods classified chiefly by material S3-7 Machinery and transport equipment S3-8 Miscellaneous manufactured articles S3-9 Commodities and transactions not classified elsewhere Manufactured goods Non-Manufactured goods

Share (%)

1998

2009

1998

2009

12,064.1 308.9 16.0 1,080.3

41,568.6 1,828.5 28.7 4,185.5

100.0 2.6 0.1 9.0

100.0 4.4 0.1 10.1

569.0

22,362.6

4.7

53.8

0.1

3.5

0.0

0.0

1,064.2 5,857.0

3,054.5 7,748.0

8.8 48.5

7.3 18.6

1,547.3 581.0 1,040.4

1,506.2 279.9 571.1

12.8 4.8 8.6

3.6 0.7 1.4

6,300.2 4,723.6

8,756.1 32,241.3

52.2 39.2

21.1 77.6

Note: *Data from Chinese Taipei is not available. Source: United Nations COMTRADE.

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The changes in the composition of Russia’s imports from APEC by sector have not been as striking as in the case of Russia’s exports. Nonetheless, the decline of Russia’s industrial faculties affected its capacity to produce manufactured goods to satisfy its domestic demand. In this regard, it is not surprising to see that the Russia’s imports of manufactured goods represented 87.4 per cent of the Russia’s total imports from APEC in year 2009, a higher proportion compared to year 1998 (65.7 per cent). The strongest increase in Russia’s imports from APEC came from machinery and transportation equipment (from 43.4 per cent to 53.5 per cent) and consumer goods under the category of miscellaneous manufactured articles (from 9.8 per cent to 17.2 per cent) (see Table 8). Table 8 Russia’s Imports from APEC by Sector* Imports Value (US$ million)

S3-0 S3-1 S3-2 S3-3 S3-4 S3-5 S3-6 S3-7 S3-8 S3-9

Total Food and live animals Beverages and tobacco Crude materials, inedible, except fuels Mineral fuels, lubricants and related materials Animal and vegetable oils, fats and waxes Chemicals and related products, n.e.s. Manufactured goods classified chiefly by material Machinery and transport equipment Miscellaneous manufactured articles Commodities and transactions not classified elsewhere Manufactured goods Non-Manufactured goods

Share (%)

1998

2009

1998

2009

8,166.5 1,599.9 485.9 203.5 297.6

50,282.6 4,174.7 354.5 801.2 206.2

100.0 19.6 5.9 2.5 3.6

100.0 8.3 0.7 1.6 0.4

66.8

546.1

0.8

1.1

446.5 595.8

3,459.7 5,151.5

5.5 7.3

6.9 10.2

3,542.3 796.1 132.2

26,884.5 8,626.5 77.8

43.4 9.7 1.6

53.5 17.2 0.2

5,366.9 2,667.5

43,923.6 6,281.2

65.7 32.7

87.4 12.5

Note: *Data from Chinese Taipei is not available. Source: United Nations COMTRADE.

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Top Products/Main Partners Table 9 shows the top ten types of products exported by Russia to the APEC region in the years 1998 and 2009. During this time, there have been some interesting changes in the composition of these exports that are worth mentioning. First, the concentration level of the top ten Russian exports to APEC intensified, by going up in almost 10 per cent. In 1998, these products explained 78.1 per cent of these exports and three of them explained around 50 per cent of this trade: non-ferrous metals, iron and steel and special transactions not classified elsewhere. In 2009, only petroleum and related products explained almost half of the Russian exports to APEC. The top ten products explained 87.4 per cent of these flows. Second, as mentioned in previous sections, the relevance of manufactur­ ing declined sharply. Capital-intensive goods such as other transportation equipment and power generating goods appeared in the top ten list in year 1998. None of these products appeared in the list in 2009. Only manufactured goods intensive in natural resources, included in the category of iron and steel and fertilizers are still part of this list. Third, the prime destinations of Russia’s most important exports to APEC have changed. The United States was the top market destination for four of the products in 1998. A decade later, the United States was the only main destination for non-ferrous metals. In the same way, the importance of China as a market destination rose especially concerning natural resources. For example, China explained 25.1 per cent of the cork and wood exported by Russia to the APEC region in 1998 and became the largest destination in 2009 by purchasing 82.9 per cent of the Russian exports to APEC. A similar situation occurred in the case of metalliferous ores and metal scraps, in which China’s participation went up from 38.6 per cent to 81.4 per cent.5 Fourth, for some Russian products, the dependency on the APEC market is rising fast, especially for natural resources. 30.1 per cent of the cork and wood exported by Russia worldwide had the APEC region as its destination in 1998. This share rose to 51.1 per cent in 2009. Likewise, the participation of APEC in Russia’s exports of metalliferous ores and metal scrap went up from 12.4 per cent to 46.3 per cent. APEC’s importance as a market for Russian petroleum and related products has also increased, even though APEC’s share is still relatively low. Also, APEC was already the most important market for Russia’s exports of fish, crustaceans and molluscs in 1998, explaining 74.1 per cent of the total. This percentage increased to 91 per cent in 2009 and Korea became the largest destination (see Table 9).

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1,040.3 706.6 559.7 540.9 406.5 370.1 286.8 273.2

S3-93 Spec. transact. not classd

S3-79 Othr. transport equipment

S3-56 Fertilizer, except Grp272

S3-24 Cork and wood

S3-71 Power generatng. machines

S3-33 Petroleum, petrol. product

S3-28 Metalliferous ore, scrap

S3-03 Fish, crustaceans, mollusc

All Products

12,064.1

9,418.2

2,484.8

S3-67 Iron and steel

Total of Top Ten Products

2,749.3

S3-68 Non-ferrous metals

1998

(US$ million)

100.0

78.1

2.3

2.4

3.1

3.4

4.53

4.6

5.9

8.6

20.6

22.8

(%)

Exports to APEC

16.7

21.2

74.1

12.4

2.7

30.1

5.2

37.5

37.9

13.9

45.3

30.9

APEC/World (%)

JPN

CHN

CHN

CHN

JPN

CHN

USA

USA

USA

USA

46.6

38.6

34.5

85.5

69.6

77.1

69.8

49.4

60.8

52.0

KOR

KOR

USA

USA

CHN

MSA

KOR

CHN

CHN

JPN

23.8

25.7

33.1

8.8

25.1

6.8

13.1

23.6

26.4

47.1

USA

USA

KOR

VN

KOR

USA

CHN

VN

CAN

KOR

12.4

17.9

15.3

2.6

4.9

5.7

5.4

11.1

2.7

0.5

Top Three APEC destinations/APEC (%)

Table 9 Top Ten Products Exported by Russia to the APEC Region

Russia’s Economic Relations with the APEC Region 233

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1,753.0 1,610.1 1,588.0 799.9 681.8 571.1

S3-32 Coal, Coke, briquettes

S3-03 Fish, crustaceans, mollusc

S3-56 Fertilizer, except Grp272

S3-28 Metalliferous ore, scrap

S3-34 Gas, natural, manufactured

S3-93 Spec. transact. not classd

Note: *Data from Chinese Taipei not available. Source: United Nations COMTRADE

41,568.6

2,394.6

S3-24 Cork and wood

All Products

3,184.1

S3-67 Iron and steel

36,309.3

3,832.5

S3-68 Non-ferrous metals

Total of Top Ten Products

19,894.0

S3-33 Petroleum, petrol. product

2009

(US$ million)

100.0

87.3

1.4

1.6

1.9

3.8

3.9

4.2

5.8

7.7

9.2

47.9

(%)

Exports to APEC

13.8

13.8

1.9

1.7

46.3

28.9

91.0

22.6

51.1

19.3

28.6

14.1

APEC/World (%)

Table 9  (Cont’d)

HKC

JPN

CHN

CHN

KOR

JPN

CHN

CHN

USA

CHN

57.7

88.0

81.4

36.2

44.6

40.1

82.9

29.8

50.6

34.2

USA

KOR

KOR

USA

CHN

CHN

JPN

VN

JPN

USA

19.9

7.9

14.9

19.2

41.7

37.1

13.9

17.8

30.8

19.6

CHN

CHN

USA

MEX

JPN

KOR

KOR

USA

CHN

JPN

14.6

4.1

1.2

15.8

13.0

22.1

3.0

16.5

13.0

18.1

Top Three APEC destinations/APEC (%)

234 Carlos Kuriyama

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1,186.6 932.7 540.7 467.7 448.4 371.1 339.5 336.6 302.2 290.9 5,216.5 8,166.5

S3-79 Othr. transport equipment

S3-01 Meat, meat preparations

S3-74 General industl. mach. nes

S3-12 Tobacco, tobacco manufact

S3-72 Special. indust. machinery

S3-76 Telecomm. sound equip etc.

S3-78 Road vehicles

S3-77 Elec mch appar, parts, nes

S3-87 Scientific equipment nes

S3-33 Petroleum, petrol. product

Total of Top Ten Products

All Products

1998

(US$ million)

100.0

63.9

3.6

3.7

4.1

4.2

4.5

5.5

5.7

6.6

11.4

14.5

(%)

Imports from APEC

18.7

31.7

25.2

31.2

20.1

20.1

29.6

20.8

39.4

20.8

45.3

68.5

APEC/World (%)

KOR

USA

USA

JPN

USA

USA

USA

USA

USA

USA

48.5

70.6

47.4

50.9

42.9

73.1

79.8

55.3

66.7

66.6

CHN

JPN

JPN

KOR

JPN

JPN

CHN

JPN

CHN

KOR

22.6

19.0

26.1

27.4

27.4

18.7

9.1

18.1

21.2

27.2

JPN

CHN

KOR

USA

KOR

CAN

CAN

KOR

AUS

CHN

12.6

4.2

14.0

17.2

11.4

3.3

5.8

13.6

5.4

4.2

Top Three APEC destinations/APEC (%)

Table 10 Top Ten Products Imported by Russia from the APEC Region

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4,675.6 4,072.3 3,662.5 2,723.0 2,403.6 2,005.2 1,921.5 1,759.9 1,718.0 31,878.3 50,282.6

S3-76 Telecomm. sound equip etc.

S3-75 Office machines, adp mach

S3-77 Elec mch appar, parts, nes

S3-74 General industl. mach. nes

S3-84 Clothing and accessories

S3-89 Misc manufctrd goods nes

S3-72 Special. indust. machinery

S3-85 Footwear

S3-71 Power generatng. machines

Total of Top Ten Products

All Products

Note: *Data from Chinese Taipei not available. Source: United Nations COMTRADE

6,936.6

S3-78 Road vehicles

2009

(US$ million)

100.0

63.4

3.4

3.5

3.8

4.0

4.8

5.4

7.3

8.1

9.3

13.8

(%)

Imports from APEC

29.4

45.7

36.4

77.6

26.6

41.8

59.0

25.0

40.0

84.2

60.3

49.5

APEC/World (%)

Table 10 (Cont’d )

USA

CHN

CHN

CHN

CHN

CHN

CHN

CHN

CHN

JPN

66.8

88.9

41.1

73.5

86.4

38.1

51.9

75.3

61.9

54.3

CHN

VN

USA

USA

VN

USA

USA

JPN

KOR

KOR

14.4

5.6

28.6

9.9

4.3

26.4

15.2

8.9

16.3

24.2

JPN

INA

JPN

JPN

INA

JPN

JPN

MSA

JPN

USA

10.4

3.1

12.8

5.0

3.2

13.3

12.9

3.6

9.0

10.8

Top Three APEC destinations/APEC (%)

236 Carlos Kuriyama

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Russia’s Economic Relations with the APEC Region

237

As opposed to the exports, Russia’s imports from APEC are more diversified. Table 10 shows the list of top products that Russia imported from APEC in 1998 and 2009. The top ten imports from APEC represented 63.9 per cent of Russia’s total imports from APEC in 1998 and it has remained steady around those levels. Russia’s main imports are comprised mostly of manufactured goods. However, in 1998, two of the ten most important imports from APEC consisted of meat products, tobacco and petroleum and its related products. This situation changed completely in 2009 when all the top ten most important products were manufactured goods, including some labourintensive goods such as clothing and footwear. Another interesting fact is that the top five Russian imports from APEC consist now of capital and technology-intensive products such as road vehicles, telecommunications devices, office machines, electrical appliances and general industrial machinery and equipment. China has become the main source of Russia’s imports from APEC, overtaking the United States from the top position. China’s advantage in producing manufactured goods at a lower cost is one of the reasons that the supply has shifted in that way. The dominance of China as main source for many of the Russian imports from APEC has become more evident in recent years.

RUSSIA’S INVESTMENT RELATIONSHIP WITH APEC Inward FDI Stocks Limitations in Russia’s investment data does not allow a thorough analysis of the FDI inward stocks originating from APEC members. However, the data available shows that the relevance of APEC in Russia’s inward FDI stocks seems to be lower than in the case of Russia’s trade. Data shown by Kuznetsov, based on available information from Rosstat, identifies the United States as the main source of FDI in Russia from the APEC region. However, the numbers show that the importance of the United States as investor has declined in recent years, despite having several U.S. companies as major investors in Russia.6 On the contrary, FDI inward stocks from China, Japan and Korea have increased substantially between 2005 and 2009 (see Table 11). It is possible that problems in the investment climate are dissuading companies to invest more actively in Russia. According to the Ease of Doing Business Index 2010, Russia is ranked in 122nd place among 183 economies, below all APEC members with the exception of the Philippines.7

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Table 11 Inward FDI Stocks in Russia from APEC Members

APEC Canada United States Japan China Hong Kong, China Korea Malaysia Vietnam

Value (US$ million)

Change

2005

2009

2005–09

4,974 56 4,361 175 149 8 140 56 29

6,679 368 2,964 875 938 114 1,129 63 228

7.6% 60.1% –9.2% 49.5% 58.4% 94.3% 68.5% 3.0% 67.4%

Source: Kuznetsov (2010), Inward FDI in Russia and Its Policy Context; Rosstat.

Despite these problems, a number of the most important foreign affiliates in Russia, ranked by turnover, correspond to companies from APEC members. Among the top twenty foreign firms in this list, five of them are American (Ford Motor, Philip Morris, Procter & Gamble, Mars and PepsiCo) and one of them is Japanese JTI [tobacco]. Likewise, in the banking sector, Citibank is the fourth largest foreign bank, based on net assets.8 In addition, some companies from APEC members have invested in recent years in greenfield projects. For example, Mitsubishi (Japan) associated with PSA Peugeot Citroen (France) in a project on the automotive sector valued at US$620 million. In the same way, Samsung Electronics (Korea) invested approximately US$200 million in the electronics sector.9 Furthermore, Vietnam has also been investing actively in the oil and chemical sectors in Russia.10 Japan’s Mitsubishi and Mitsui are also participating together with Russia’s Gazprom in the project Sakhalin-II to produce and distribute natural gas from Eastern Siberia and the Russian Far East.11

Outward FDI Stocks In general, Russian companies have started to increase their investments in foreign markets in the last few years, in part to diversify their risk and seek new profit sources. Most of the companies are related to the oil, gas and mining sectors.12 However, Russian firms have also started to invest overseas

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in the transportation, chemical, engineering, communications and retailing sectors.13 Unfortunately, the available data does not allow identifying exactly where the Russian investors have invested in APEC and in which sectors. A significant number of Russian investors register their transactions in tax havens such as Cyprus and Luxembourg, which makes it difficult to track the final destination of the investment flows. The Organisation for Economic Cooperation and Development (OECD) has estimated Russia’s FDI outward stocks in some of the APEC members, based on inward FDI stocks data reported by these members. Figures are available for Australia, Canada, Japan, Korea and the United States. All of these markets registered an increase of FDI from Russia (see Table 12). In terms of the value of foreign assets, the two most important Russian companies overseas are from the oil and gas sectors, Lukoil and Gazprom. Lukoil has declared investments in the United States.14 Gazprom is conduct­ ing exploration activities in Vietnam and has acquired Orton Oil Company from Minnesota, United States.15 Among the Russian companies in metals and mining, Severstal includes operations in the United States in the production of steel products.16 TMK, Russia’s largest steel pipes manufacturer, possesses operations in the United States, China and Singapore. Similarly, Norilsk Nickel has invested in facilities in Australia, Canada, United States and China.17 Also, Mechel is producing coal in the United States.18 Russian investment is also participating in the services sector. For example, VimpelCom provides wireless services, as well as voice and data services in Vietnam.19 Table 12 OECD: Russia’s FDI Outward Stocks in APEC Members (in US$ million) Destination

2005

2009

Australia* Canada** Japan Korea United States

29.4 33.9 45.8 11.9 511.0

133.1 342.1 59.7 22.8 7,792.0

Notes: * Most recent data available corresponds to year 2008 ** Data from year 2005 corresponds to year 2001 Source: OECD iLibrary

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In the manufacturing sector, Russia’s Acron is investing in the fertilizers market. In this regard, Acron has opened production sites in Canada and China, as well as distribution centres in China and the United States.20

ECONOMIC COOPERATION WITH RUSSIA After the end of the Cold War, the United States started active economic cooperation with Russia, through concessional loans, grants or technical cooperation programmes run by USAID, the Department of Agriculture, State Department, Defence Security Cooperation Agency, Peace Corps, among others. A quick review of the Foreign Assistance provided by the United States in the financial year (FY) 2009 shows that Russia was the eighth most import­ ant destination of economic and military assistance after Afghanistan, Iraq, Israel, Egypt, Sudan, Pakistan and the West Bank/Gaza.21 Also, in terms of U.S. economic assistance, based on obligations,22 Russia was the fifth most important destination among the upper-middle income partners, behind Colombia, South Africa, Mexico and Namibia.23 With regards to the areas in which U.S. economic assistance has been distributed in Russia during the period between the FY 1998–2008, most of this assistance was directed to projects concerning the defence nuclear nonproliferation. 52.4 per cent of the assistance, equivalent to US$5.49 billion, was allocated for that purpose. Defence security assistance came second with 20 per cent and food aid, third, with 12.8 per cent (see Table 13). Despite some unresolved territorial disputes as a consequence of World War II, Russia’s economic cooperation with Japan has also intensified in recent years. According to information by the Japan Bank for International Cooperation (JBIC), the accumulated loans and investment commitments with Russia by the FY 1999 totalled 401.5 billion yen (50 commitments), which represented only 0.6 per cent of the accumulated loans and investment commitments worldwide. This amount increased at the end of the FY 2009 to 1,421.9 billion yen (105 commitments), equivalent to 2.5 per cent of JBIC’s total accumulated loans and investment commitments.24 JBIC loan and investment commitments have covered a wide range of issues. Some commitments concerned the support of stabilization plans, such as those implemented right after the financial crisis that affected Russia in 1998. Other commitments concern the development of infrastructure, like the construction of pipelines from Western Siberia to Turkey to supply natural gas; and the development of oil and gas fields around Sakhalin Island. Commitments also include the support to fund manufacturing projects in

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telecommunication equipment, as well as the provision of capital investment to telecommunication companies. Support to the financial sector has also been given through loans to banks to support the import of machinery and equipment from Japan.25 Table 13 United States: Economic Assistance to Russia by Field FY 1998–2008 (in US$ million) Field

Economic Assistance, Total USAID and Predecessor, Total   Economic Support Fund/Security Support Assistance   Development Assistance   Child Survival and Health   Other USAID Assistance1,    Assistance for the Independent States of the     Former Soviet Union, USAID   Other Department of Agriculture, Total   Food Aid, Total   Other USDA Assistance State Department, Total   Global Health and Child Survival   Global HIV/AIDS Initiative   Narcotics Control   Migration and Refugee Assistance   Non-proliferation, Anti-Terrorism, Demining and    Related   Other State Assistance Other Economic Assistance, Total   Peace Corps   Department of Defense Security Assistance   Other Active Grant Programs    Defense Nuclear Nonproliferation, Department of     Energy    Others

FY 1998–2008 Amount

Share

10,483.6 1,291.1 7.1 4.1 34.6 245.3 1,069.8

100.0% 12.3% 0.1% 0.0% 0.3% 11.9% 10.2%

175.6 1,347.8 1,346.5 1.3 151.8 7.3 7.2 5.0 55.9 47.0

1.7% 12.9% 12.8% 0.0% 1.4% 0.1% 0.1% 0.0% 0.5% 0.4%

29.4 7,692.9 19.0 2,092.5 5,581.4 5,490.2

0.3% 73.4% 0.2% 20.0% 53.2% 52.4%

91.2

0.9%

Source: US Official Development Assistance Database — U.S. Overseas Loans & Grants [Greenbook]

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CONCLUSIONS Although Russia’s economic relations with the APEC region are less intense compared with those of the other APEC members, the links between Russia and APEC have been strengthened after its accession to APEC. Trade has expanded in both ways, as well as direct investment flows. Also, economic cooperation has been active between Russia and counterparts such as the United States and Japan, partnerships that during the Cold War would have been unexpected. Russia understands the need to open to the world in the present globaliza­ tion era. APEC’s membership is a positive sign in this regard, since it provides a powerful tool to strengthen economic and political links with the rest of its members at the bilateral, regional and multilateral level. In APEC, Russia’s interest and participation so far has been more active in groups related to the activities that Russia has been interested in promoting, such as the Mining Task Force, Energy Working Group, Industrial Science and Technology Working Group, Telecommunications and Information Working Group, Counter Terrorism Task Force and Anti-Corruption Task Force. All of these groups work under the umbrella of the Senior Officials Meeting (SOM) Steering Committee on Economic and Technical Cooperation (ECOTECH). It is possible that Russia’s participation in APEC, especially in the Economic Committee and the sub-fora associated to the Committee on Trade and Investment, will intensify as their turn to organize the major APEC meetings in 2012 gets closer. Perhaps, a future accession by Russia into the World Trade Organization (WTO) will boost this interest as well, in order to take advantage of the WTO framework, which may help to ease the implementation of further measures on trade liberalization and business facilitation. For Russia, it is a good opportunity to take advantage of the APEC year 2012, by increasing awareness in Russia of the importance to expand the relationships with the APEC region, as well as by showing the rest of APEC the business opportunities that can be developed with Russia. For instance, it will be a great chance to promote the Russian Far East. Nonetheless, the challenge for Russia will be what will happen after its APEC year. Keeping the impetus in the development of the relationships between Russia and APEC members and in the interest within Russia on APEC matters will be one of the main tasks afterwards.

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243

Notes

1



2



3



4



5



6



7 8



9



10

13 11 12

16 14 15



17 18

The author is Senior Analyst, APEC Policy Support Unit. The views expressed in this paper represent only those of the author and do not necessarily represent those of the APEC Secretariat or APEC Member Economies. The author expresses his gratitude to Hao Jing and Bernadine Zhang Yuhua for providing excellent research assistance. V. Putin, “Russia and APEC: Towards sustained and stable development in the Asia-Pacific Region”, 2007, . K. Kumo, “Demographic Situations and Development Programs in the Russian Far East and Zabaikalye”, May 2010, RRC Working Paper Series No. 24, The Institute of Economic Research, Hitotsubashi University. On page 3, Kumo shows that the population in the Russian Far East declined almost 20 per cent between 1991 and 2009. In 1991, around 8 million people used to live in this region. In 2009, only 6.4 million people lived there. A. Kuznetsov, “Inward FDI in Russia and Its Policy Context”, Columbia FDI Profiles, 30 November 2010, p. 2. In general, the demand from Northeast Asia (China, Japan and Korea) for raw materials and manufactures intensive in the use of natural resources is increasing significantly. A. Kuznetsov, “Inward FDI in Russia and Its Policy Context”, Columbia FDI Profiles, 30 November 2010, p. 3. However, based on mirror data from the OECD, the United States reports that Russia’s inward FDI stocks from the United States increased between 2005 and 2009 from US$9.3 billion to US$21.3 billion. See . A. Kuznetsov, “Inward FDI in Russia and its Policy Context”, Columbia FDI Profiles, 30 November 2010, p. 14. Ibid., p. 16. “Vietnam Boots Investment in Russia”, . See . Deutsche Bank, “Russia’s Outward Investment”, 30 April 2008, p. 1. B. Kheyfets, “Russian Investment Abroad: The Basic Flows and Features”, Institute for World Economy — Hungarian Academy of Sciences, Working Paper No. 184, October 2008, p. 8. See . See . See . See . See .

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See . See . 21 USAID, “Foreign Assistance Fast Facts: FY2009”, available at . Russia was the third most important destination worldwide for this kind of assistance in the FY 2008. 22 According to USAID, obligations are binding agreements that will result in outlays immediately or in the future. 23 The Upper-Middle income partners in the World Bank classification are those with a Gross National Income per capita between US$3,946 and US$12,195. 24 JBIC, Annual Reports FY 2009 and 2000, available at . 25 This information is available from JBIC Annual Reports, available at and JBIC Press Releases, available at . 19 20

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RUSSIA LOOKS EAST: MODERNIZATION PLANS AND COOPERATION WITH ASEAN1 Yaroslav Lissovolik2

In geographical, historical and cultural terms, Russia is intimately related not only to Europe, but also to Asia. Notwithstanding the underdevelopment of Russia’s Far East and the urgent need to boost its economy, the Russian Federation’s external economic policy was excessively Eurocentric, with top priority being accorded to forging closer economic ties with Europe. Issues pertaining to Asia were rendered secondary throughout most of the 1990s. In a long-term perspective, such a bias in Russia’s external economic policy is unsustainable. It appears that in the past several years, the understanding about the need for a more diversified approach to foreign economic policy and building stronger ties with Asia has been growing in the upper echelons of power3 (see Figure 1). In 2010, Russia’s Minister for Economic Development, Elvira Nabiullina, declared that while Europe was showing signs of lacklustre economic growth, Russia needed to interact more with the faster growing elements of the global economy, most notably in Asia. This was followed by stepped-up activism on the part of the Russian authorities in forging ties with East Asia, culminating in Russia’s 2nd Summit with the Association of Southeast Asian Nations (ASEAN) and Russia’s accession to the East Asia Summit (EAS). Ultimately, closer economic interactions with this part of the world are sought not just for the sake of a geographically more diversified trade, but also because of opportunities to benefit from a variety of external growth 245

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Yaroslav Lissovolik

Figure 1 Russia’s Trade with ASEAN (in US$ million) Russia’s exports to ASEAN countries 8,000 7,000 6,000 5,000 4,000 3,000 2,000

2009

2010 2010

2008

2006

2007

2005

2004

2003

2002

2001

Myanmar Lao, People's Dem Rep Singapore

2009

Brunei Darussalam Indonesia Philippines Vietnam

2000

1999

1998

1997

1996

1994

1995

1993

0

1992

1,000

Cambodia Malaysia Thailand

Russia’s imports to ASEAN countries 7,000 6,000 5,000 4,000 3,000 2,000

Brunei Darussalam Indonesia Philippines Vietnam

Myanmar Lao, People's Dem Rep Singapore

2008

2007

2006

2005

2004

2003

2002

2001

2000

1999

1998

1997

1996

1994

1995

1993

0

1992

1,000

Cambodia Malaysia Thailand

Source: IMF, Russia’s State Customs Service

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247

impulses. This, in turn, may lead to sectoral trade diversification and a qualitative improvement in Russia’s trade structure. Apart from the change in the strategic thinking about the future of the national economy, several other factors are prompting Russia to expand its trade in an eastward direction: • growing demand for fuel in the fast-growing countries of East and Southeast Asia; • Russia’s exigencies of expediting its modernization by attracting foreign investment, with inflows of capital increasingly likely to come from the regions with high rates of savings (rather than from the West that is so battered by the crisis); • fragmented nature of alliances in the East versus the monolithic inte­ gration bloc in Europe (in a sense that Russia has more leeway to build bilateral ties on the basis of Free Trade Agreements (FTAs) in Southeast Asia, while with respect to the European Union (EU), such an alliance is possible only with the entire trading bloc, which makes outright trade liberalization more painful for the sectors of the economy competing with imports). Above all, there is the exigency of developing Russia’s Far East — currently one of the most problematic of Russia’s regions due to a combination of sizeable outward migration into the European parts of Russia as well as the lack of and poor state of infrastructure. Russia’s decision to host the 2012 Asia-Pacific Economic Cooperation (APEC) Summit in Vladivostok in part reflects the drive of the Russian authorities to boost the development of infrastructure in the Far East in order to exploit the vast opportunities for trade and investment in that area. The key to sustainable growth in trade ties between Russia and ASEAN is the complementarity of the countries’ economies. One of the key attractions of boosting trade ties with Russia is access to its natural resource wealth, with Russia currently eyeing the possibility of diversifying its fuel supplies to Asia to reduce dependency on the European market. The process of organizing fuel supplies to Asia will not be quick and easy given the lack of pipeline, railroad and port infrastructure in the Far East. Once these problems are solved at least partly, Russia may try to exploit the possibilities associated with rising competition between the fast-growing economies of Asia, including China, Japan, South Korea and ASEAN for access to fuel resources in the Russian Far East. With these considerations in mind, the Russian government has prioritized the development of infrastructure directed at expanding fuel supplies to Asia.

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Yaroslav Lissovolik

In September 2007, the Russian Industry and Energy Ministry approved the Development Program for an integrated gas production, transportation and supply system in East Siberia and the Far East. The document stipulated potential gas exports to China and to other Asia-Pacific countries. It was named Eastern Gas Program, and Gazprom was identified by the Russian state as the programme execution coordinator. Under the plan, new gas production centres are to be established in the Eastern part of the country, notably in Krasnoyarsk, Irkutsk, Sakha-Yakutia, Kamchatka and Sakhalin. In 2009 the Russian government approved the Energy Strategy until 2030 in which it set out plans for the development of gas fields in East Siberia/ Far East and gas exports to the Asia-Pacific region. Today the incentives for Gazprom to diversify its export routes are stronger than ever following its problems in Europe. Despite its strong export business model based on longterm take-or-pay export contracts, Gazprom is seeking new opportunities which may well present themselves in the Asia Pacific. Hence, the talks with China and other Asian customers on gas exports have intensified. Under the Energy Strategy plan: • East Siberia and the Far East will generate 43–53 billion cubic metres (bcm) of natural gas by 2013–15, 91–122 bcm by 2020–22 and 130–152 bcm by 2030. Non-governmental experts view production plans until 2013–15 as overly optimistic. Some analysts only expect circa 33 bcm in 2015E. Their forecasts are circa 60 bcm of gas output in 2020E and circa 75bcm in 2030E, hence just half of the Russian government’s plans. Gazprom’s own plans do not stipulate any large-scale production from the fields in East Siberia before 2015. Apparently, Kovykta and Chayanda are to start large-scale production in 2017–20E. On Sakhalin Island, production may grow at Sakhlain-1 but the prospects of Gazprom’s Sakhalin-3 project are uncertain. • Based on the Energy Strategy, the Asia-Pacific region will account for 16–17 per cent of Russia’s total gas exports by 2020–22 and 19–20 per cent by 2030 (or 53–58 billion cubic metres per annum (bcma) and 66–74 bcma, respectively). The most recent framework agreement with China from October 2009 envisages beginning exports to China in 2014–15 at 30 bcma through a western corridor, followed by 38 bcma exports through an eastern corridor at an unspecified later date. It is likely that Gazprom will start exports to China in 2017–18E and may deliver as much as 30–40 bcma at peak.4 In my view, the future of Russia’s fuel supplies to ASEAN countries primarily resides in developing Russia’s liquefied natural gas (LNG) export

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facilities in Asia. Wood Mackenzie is forecasting continued steady growth in LNG demand in the Pacific Basin, with a compound annual growth rate (CAGR) up to 2020 of just below 5 per cent. It expects Japan, South Korea and Taiwan (JKT) to remain the biggest consumers. However, their total share of LNG demand is expected to decline from 86 per cent in 2009 to 64 per cent by 2020. Over the same time period, Wood Mackenzie expects China to progress from 3 per cent to 15 per cent of total regional demand. According to its predictions, Java of Indonesia, peninsula part of Malaysia, Pakistan, the Philippines and New Zealand will all become LNG importers by 2020.5 In terms of its share of the global LNG market, Gazprom is quite ambitious: it plans to gain 15 per cent by 2030. Those targets are expected to be achieved through LNG marketing from the Sakhalin-2’s existing operation, a newly constructed facility on the Barents Sea — the Shtokman project — and, potentially, Vladivostok LNG in the Russian Far East. Gazprom may also participate in Novatek’s Yamal LNG project on the Yamal peninsula in northern West Siberia. LNG production from the Shtokman and Yamal projects would target markets on North America’s East coast and in Europe. Novatek has recently tested a Northern Arctic route that could potentially be used for LNG deliveries to Asia. Sakhalin-2 sells most of its gas to Japan and South Korea, and it would be logical to assume that Vladivostok LNG would aim to capture the same markets.6 Wood Mackenzie believes the Pacific market to offer better potential as a means of monetizing Russia’s eastern gas resources, compared to the European market. This is due to the assumption that LNG prices in Asia are likely to retain a premium over the rest of the world in the medium term, and that Russia’s gas resources in the region are located in relative proximity to the established Asian LNG markets. Hence, the economics of expanding Sakhalin2 or a new Vladivostok facility appear more compelling than western-oriented LNG projects. The main decision which Gazprom will have to make in the east of Russia is whether to prioritize LNG over pipeline exports. So far, it looks like the company has decided in favour of the latter. As the world’s largest LNG importer, Japan is trying to negotiate additional gas supplies from Russia. However, Vladivostok-produced LNG would not necessarily be delivered to Japan that faces strong competition from South Korea. According to FSU Energy, South Korea will likely either import 10 bcm of Russian natural gas by pipeline or 7.5 million tonnes per annum (mtpa) of LNG through Kogas under a Memorandum of Understanding (MoU) signed back in 2008. The South Korean government had said earlier that it wanted to sign a firm follow up to the MoU. FSU Energy reported that

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according to Kogas, the company has wrapped up a study with Gazprom, but there is no decision on whether it should import pipeline gas or LNG.7 Ultimately, however, Russia’s goal is to steer its development towards nonoil/gas sectors via sectoral diversification, with Asia serving as an important conduit to reaching this goal. In this respect, Russia offers the potential of high-technology sectors such as nuclear energy, aviation and aerospace, and IT. One of the most recent examples of cooperation in the aviation sphere is the signing of a Russia–Malaysian contract in June 2011 on Russia’s supplies of fifty MS-21 aircrafts (from 2016 to 2020). Another contract signed in Farnborough by Russia with Indonesia’s Kartika Airlines envisages supplies of thirty SSJ100 aircrafts. In the past several years Russia also stepped up efforts to increase its presence in the telecoms markets in ASEAN. But perhaps one of the most promising venues for bilateral economic cooperation is services, including tourism. With Russia being increasingly one of the largest importers of tourism services in the world, ASEAN economies could divert this rising touristic flow into their region. According to the estimates of the Russian Union of tourism, in 2010 two million tourists came into Russia, while as many as 12 million Russian tourists travelled abroad. Overall, the Centre for Basic Research (CBR) data suggests that in 2010 outward tourism from Russia was estimated at US$26.5 billion, while inward flows associated with tourism reached US$8.9 billion. Other venues for cooperation in the services sector include insurance and financial services. In this regard the greater activism exhibited by Russia’s banks such as VTB in making inroads into Singapore are indicative of the efforts by the vanguard of Russia’s financial industry to take advantage of the fast pace of economic activity in East Asia, as well as the high pool of savings accumulated there. In particular VTB issued Eurobonds denominated in Singapore dollars in 2011, which is a way for Russia’s banks to broaden their investor base. Thus far, however, Russia’s trade ties with ASEAN are still subject to “low base effects”. According to the estimates of ASEAN, the trade turnover between Russia and ASEAN reached US$6.8 billion in 2009, which is significantly lower than US$9.8 billion in 2008. The notable decline in trade turnover in 2009, in the midst of the global crisis, reflects the high dependency of trade flows between ASEAN and Russia on oil prices. Foreign Direct Investment (FDI) flows are also very low — in 2009 they reached US$157.3 million, which is higher than US$82.3 million in 2008 but as a share of the total is less than 1 per cent.8 For Russia, the key sector needed to be developed with foreign capital participation is infrastructure. The new phase of infrastructure development

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is expected to take place in earnest in 2012, after the completion of the 2011–12 electoral cycle, with the most immediate goal in 2012 being the infrastructure effort in the Far East ahead of the APEC summit. A more active approach to forging alliances at the enterprise level, via joint ventures in sectors such as manufacturing and services, also appears to be a promising venue for economic cooperation. Other possible venues for cooperation in the investment sphere include possible cooperation/coordination in the policy of the sovereign wealth funds of Russia and those pertaining to ASEAN. In my view, the medium-term objective in the development of trade and investment ties between Russia and ASEAN should be the creation of a Free Trade Agreement (FTA). A FTA between Russia and ASEAN could be beneficial for Russia in diversifying its trade, attracting foreign investment and technology. On the other hand, Russia could serve as an important gateway for ASEAN countries into the Commonwealth of Independent States’ (CIS’) region, including Central Asia. There could also be a case for building FTA alliances between ASEAN and an integration group of CIS countries, such as the Customs Union or the Eurasian Economic Union. The creation of an FTA at the macro level could also act as a catalyst for the creation of ties/strategic alliances at the enterprise level. One factor that makes the FTA between Russia and ASEAN attractive is the significant preferential margin in trade arising from trade liberalization. According to the World Trade Organization (WTO), in 2008 Russia’s tradeweighted import tariff amounted to 10.3 per cent, which is roughly in line with the average level of the import tariffs across developing countries. At the same time the levels of import tariffs differ substantially across ASEAN economies — from 0 per cent in Singapore to 6.5 per cent in Vietnam and close to double-digits in Cambodia and Lao PDR. Given the significance of trade restrictions, an FTA accord between Russia and ASEAN would provide substantial scope for trade flows to increasingly gravitate towards mutual trade (see Table 1). More generally, the development of Russia’s trade ties with Asia will be driven by the high degree of underutilized potential in Russia’s trade compared to most of the countries in the region. Indeed, the use of the gravity model amply shows that Russia’s levels of trade are close to or above potential with most of the European countries, while being much lower than potential with respect to ASEAN countries, Japan or South Korea. These imbalances will likely be bridged over the long term, but they are unlikely to be dealt with by themselves. What is needed on the Russian side is a concerted effort and a prioritization of FTA policies spearheaded towards Asia. It requires a new paradigm of trade policy to be embraced by the

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Table 1 Levels of Trade-Weighted Import Tariffs in some ASEAN Countries and Russia in 2008 (%) Singapore Thailand Vietnam Malaysia Russia

0% 4.3% 6.5% 6.3% 10.3%

Source: WTO

Russian authorities, which involves a shift away from ad hoc agreements with individual countries towards a comprehensive policy of building FTAs across the globe. For that policy to be viable, one precondition needs to be fulfilled, namely Russia’s accession to the WTO. Without WTO membership, Russia will continue to be subject to new demands of unilateral trade liberalization without any reciprocity from WTO countries. Fortunately, the WTO accession process is all but completed. This allows the transition in trade policy by Russia towards a fully-fledged “competitive liberalization” pursued by most of the leading countries in the world. The term “competitive liberalization” assumes the optimization in the use of multilateral, bilateral and regional trade liberalization. For Russia, the sequence of steps towards such a policy would necessitate WTO accession, followed by stepped up efforts to forge integration in the CIS space and a coordinated approach towards boosting talks on FTAs with the EU as well as with individual East Asian economies and ASEAN as a whole. The path towards closer cooperation between Russia and the ASEAN countries should not be confined to trade, but needs to involve investment flows. Russia’s current modernization agenda involves the boost to infrastructure development and the creation of an international financial centre, something that Asian countries have proved to be successful in attaining in the past several decades. Strengthening of investment linkages, creating joint ventures, especially in high-tech sectors is crucial in terms of producing a real impact in the economic development of Russia and Southeast Asia. The success of ASEAN countries in modernizing their economies is a matter of considerable interest in Russia, with the Russian authorities being particularly attracted by the experience of Singapore in administrative reform

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and the development of an international financial centre. Characteristically, Singapore has been advising Russia on the operation of special economic zones for the past several years.

CONCLUSION In the final analysis, developing a real momentum in economic and trade cooperation with East and Southeast Asian partners may be just what Russia needs to modernize its economy quicker. To Southeast Asia, Russia will be both a source of energy materials and high technologies, a large market as well as a gateway to other CIS markets, with which it is currently rebuilding trade and investment ties via the customs union.

Notes

1



2



3 4

7 8 5 6

Some of the author’s points were previously made in the article entitled, “Is a Russia-ASEAN Free Trade Area of Any Use?”, International Affairs, Special Issue on Russia-ASEAN, Moscow, October 2010. I would like to acknowledge the contribution of Pavel Kushnir, DB Russia oil and gas analyst and Ilya Piterskiy, DB Russia equity strategist. . See DB research, Pavel Kushnir and Tatiana Kapustina, Natural (gas) partners, September 2010. Ibid. Kushnir, op. cit. Ibid. .

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INDONESIAN AND RUSSIAN OILMEN: SHARING EXPERIENCES AND LEARNING FROM EACH OTHER1 Victor Tarusin

INTRODUCTION Since Russia is a top producer and exporter of hydrocarbons, it would be natural to dwell on what it might do in this capacity in Southeast Asia — specifically, in cooperation with Indonesia, Malaysia, the Philippines, Vietnam and Myanmar, where oil and gas resources of this region are mostly concentrated. The overlapping of the global crisis and the Fukushima nuclear disaster reminds us once again about the vital importance of energy security in all meanings of the term. Against this background, I wish to share some observations on the prospects of the Association of Southeast Asian Nations (ASEAN)-Russia cooperation in the oil and gas sector and on the lessons I have personally learned while doing business in the biggest oil-producing country of Southeast Asia. Since late Soviet times, when the VietSovpetro joint venture was estab­ lished and started to operate on the Vietnamese shelf, we have enjoyed an excellent partnership in oil and gas production with Vietnam. Even the Russian domestic turmoil of the 1990s did not affect our position there. Two years ago these relations were further strengthened and diversified by the establishment of another joint venture — RusVietpetro. Created by the PetroVietnam and Zarubezhneft companies, it is designated to be the special 254

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purpose vehicle (SPV) of a major oil-producing project in the Northern part of Russia. Furthermore, last year another Russian-based company, TNK-BP took over the BP shares in upstream and downstream assets in Vietnam. This kind of base, however, is not something we can rely on in any other ASEAN country. There, we practically have to start from scratch. The companies that I am associated with have been looking for opportunities in Indonesia since 2006. These efforts have been successful enough to serve as a base for advice to other Russian colleagues. Close cooperation with Indonesian oilmen has taught me a number of practical and useful lessons, and I believe that my Indonesian counterparts have learned something too. Let me now list these lessons one by one.

LESSON ONE: PRODUCTION SHARING Before 2008 Indonesia was the only Southeast Asian country member of the Organization of Petroleum Exporting Countries (OPEC). But most of its oil fields are matured and annual natural decline is now about 18 per cent. Due to the sharp decrease in oil uplifting, Indonesia has suspended its membership of the organization since September 2008. Throughout the last five years, the government has been trying to increase exploration efforts by inviting foreign investors to participate in tenders for oil and gas blocks. Practically 70 per cent of oil production in Indonesia is generated by foreign oil companies — mostly such Western majors as ExxonMobil, Chevron, Shell, Total, British Petroleum, etc. Access to oil and gas blocks in Indonesia is quite easy and transparent in terms of procedure. Twice a year, the Indonesian Ministry of Energy and Mineral Resources announces open tenders for new blocks, providing all geological data to all interested parties. Foreign companies’ operations in Indonesia are regulated under pro­ duction sharing contracts (PSC). These are signed with the government, represented by the regulating agency, BP MIGAS. The mechanism, created half a century ago and polished by many generations of professionals, is known as the Indonesian PSC scheme. Among its major attractive features is the signature bonus amounting to only US$1.5–5 million (while in Libya until the recent crisis it used to be US$10–20 million, and in Iraq — up to US$50 million). Also, the proportion of production sharing is quite fair — namely, 65 per cent to 35 per cent for gas and 75 per cent to 25 per cent for oil, for the state and operator respectively.

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Compare it, again, to pre-war Libya where the government share was up to 90 per cent. In the Russian Federation, we have the opposite kind of imbalance. For example, under the production sharing agreement concerning the Khariaga oil field, in the Nenets Autonomous Region, the state is entitled to only 53 per cent of production. The Indonesian government is constantly trying to make its national oil industry more attractive for foreign investors. They continue to invent new incentive packages, like zero per cent import taxes for oil and gas equipment brought to the country under PSC terms. It should be mentioned, too, that the Indonesian PSC scheme provides 100 per cent cost recovery for the operator, which results in numerous disputes between the operators and the government. Until lately there was not a single Russian oil company with a PSC in Indonesia. In the last decade, I worked for a year as a consultant to prepare what might be called a penetration project. Eventually in November 2008, Sintez Group became the first Russian oil company to ever sign a PSC: the offshore block in question was East Bawean I. For us newcomers, to pass all the preliminary steps in the tender procedure was a real challenge. Now that the first step has been made, there are reasons to think that soon there will be more Russian companies on the list of PSC operators in Indonesia. A practical presence in the industry provides brilliant opportunities for business-to-business (B2B) and peer-to-peer (P2P) communications. As for Sintez, they recently completed a two-dimensional (2D) seismic acquisition programme and schedule to drill the first exploration well closer to the middle of 2012. On the whole, participation in this project has given me a new under­ standing of production sharing. In 2006–07, I worked as a top manager in a Russian oil company involved in a production sharing contract with French Total and Norwegian Norsk-Hydro. One should know that PSCs in Russia do not have a good reputation. Only three such contracts have been signed up until now, and public opinion about them is low, to say the least. For those two years, I was strongly against PSC in principle, fought with Total in an attempt to defend the interests of the state and tried to figure out how our authorities could ever sign such an unfair contract in the middle of the 1990s. While studying the Indonesian PSC scheme and comparing it to the Russian one, I found a lot of similarities. This should not be surprising: after all, we in Russia heavily relied on the Indonesian scheme while working on our own version of PSC. However, the Indonesian original is much more

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state-oriented: the shares are obviously split in favour of the state (75/25 or 85/15 net) while in case of Russia (53/47) the privileges of the contractor are striking by comparison. And the cost recovery mechanism is also tougher in Indonesia. Can the differences in natural conditions and climate explain the differences between the PSC schemes? Not in my opinion. In any case, since 2008, I have become a PCS supporter. The attention of the Russian authorities should be drawn to the Indonesian experience in PSC controllable application. In such ambitious future projects as the Arctic Sea offshore exploration, there can be no other alternative.

LESSON TWO: ENHANCED OIL RECOVERY Working closely with the representatives of the professional oil community in both countries, I have tried to identify the most promising areas for expansion of our business relations. One such area is enhanced oil recovery (EOR). As mentioned earlier, among the biggest problems of Indonesia’s oil industry is the natural decline at matured oil fields. New discoveries fail to cover the imbalance in demand and supply. Looking at this problem and its potential solution, it may be useful to remember that Russia is the motherland of EOR. Most of these technologies were invented in the second half of the twentieth century by the experts of the All-Union Oil and Gas Research Institute (VNIINEFT). Petros Technologies Company where I serve as Managing Director has its origins in this Institute. Today, our portfolio consists of more than twenty patented techno­logies. More than eighty projects have been implemented with a practically 100 per cent success rate. That is the kind of legacy we are ready to bring to Indonesia. Despite the great demand for EOR technologies in Indonesia, the introduction of Russian technologies there is not so easy. The first obstacle is certification. All oil and gas technologies are to be certified under the American Petroleum Institute (API) standards. Apart from being timedemanding and costly, this certification is, in fact, a measure to protect familiar players from competitors. The second obstacle is the continuation of the first one. The dominant positions of American oil companies among PSC operators in Indonesia result in a monopoly of the U.S.-originated EOR technologies. The most common EOR method in Indonesia is chemical flooding. It is based on sulfactan (polymer) injection into the layer. This method is very expensive and is not applicable for each and every oil field. Why it is so popular? The

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answer is obvious: cost is not a problem for an operator, because there is a cost recovery mechanism under PSC and the government of Indonesia will have to pay the bill. Hence, one American company will produce sulfactan, the other one will purchase it in huge quantities to inject it into the subsurface, and the state will cover the expenses. The other costly (although more ecologically friendly) EOR method applied in Indonesia is the so-called steam flooding. It is widely used by Chevron at one of its oil blocks in Sumatra. To increase production, they inject steam into the layer. To generate steam, they need natural gas. Chevron buys natural gas produced by another U.S. company, ConocoPhilips at the adjacent gas block. Essentially, it boils down to extracting gas for the sake of extracting oil. The more these players spend on production, the better for them — all costs are subject to recovery. The only losing party is the state. How do you like this lesson in market economics? Many Indonesian oil professionals still consider chemical flooding to be the most effective (if not the only) remedy as far as secondary production technologies are concerned. We take pride in exposing local engineers to a wider range of opportunities — more efficient and nature-friendly, and less expensive too. Probably, no one was more excited by these revelations than Pak Bazuki Soenandar — a top engineer from Pertamina Technological Centre who was sent to Russia to inspect our oilfields in Siberia. Apart from the superb know-how, he was thoroughly impressed by the weather: it was November, and temperature occasionally dropped to minus 35°C. Speaking about what we learned ourselves, I have to mention once again the restrictive role of the API certification. While the Russian state standards in reference to EOR are on the whole much tougher, without the API certificate one still cannot do anything.

LESSON THREE: THE IMPORTANCE OF GEOGRAPHICAL DIVERSIFICATION Before 2008, my attempts to promote Indonesia to the Russian oil producers and service companies as the place to do serious business did not bring many results. Most of the messages fell on deaf ears. However, with the advent of the Global Financial Crisis, the mood began to change and I got several requests from big Russian oil service companies to help them enter the Indonesian market. There is nothing mysterious about it: when Russian oil producers started cutting their investment budgets, many service companies lost their contracts

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and found themselves on the edge of survival. By contrast, in Indonesia with its 240 PSCs, there was no such problem: a considerable part of services under each PSC was secured with performance bonds and supported through cost recovery mechanisms. That is why Indonesia became a safe haven for so many oil service companies in 2009–10. Relating stories about this situation will help to remind our businessmen of the necessity to think strategically and to consider opportunities for geographical diversification before it is too late.

LESSON FOUR: THE IMPORTANCE OF INFORMATION AND INFRASTRUCTURE For the last five years, a whole number of Indonesian businessmen expressed interest in purchasing crude and oil products from Russia for Southeast Asian markets. Some of them tried too hard to act quickly and ended up signing unrealistic contracts with international fraudsters. To prevent such incidents and the heavy losses that accompany them, my associates and I had to undertake a series of investigations. In January 2010, when the pipeline system East Siberia–Pacific Ocean started to operate, Russia finally opened its “oil window” into East Asia. So far, too many of the deals and deliveries involving Russian oil are exercised in this part of the world are through traders. Is it not time to optimize crude oil trading by arranging direct links between Russian oil producers and regional refineries? If the answer is yes, then reliable information is as essential as ever (although in a different sense and for other reasons than a while ago).

LESSON FIVE: THE IMPORTANCE OF COMMUNICATION Working in the international environment is often a chance to identify opportunities in the areas adjacent to one’s core activities. This is what we (meaning, Petros Technologies) had in mind when in 2009 we arranged the first international seminar in Jakarta dedicated to Russian know-how not just in oil and gas, but in adjacent industries too. This assembly of Indonesian and Russian businessmen is now an annual event, and late in 2011 we plan to conduct the third such seminar. Some practical results are already there: this year, having completed certification of Russian designed NANO fire extinguishers, we have launched their retail sales in Jakarta.

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CONCLUSION Creating a platform to promote business linkages is not an easy task. Productive B2B and P2P relations require some preliminary building of trust. That includes initial information on partners and company screening. Whenever we try to facilitate communication between prospective business partners, we cover these fields and provide minimization of risks for potential counterparts. Here I have mentioned the most important lessons that I learned while working with Indonesian colleagues. Five years of this experience is worth a University degree or an MBA. We are eager to share our knowledge so that those who may want to start a business in/with Indonesia will not make unnecessary mistakes. Unfortunately, we are still not properly using the opportunities offered to us. After all, Indonesia is a huge market of 240 million people, developing and growing even in the midst of the Global Financial Crisis. And this is a country still waiting for our technologies and investments! But we have to be fast: each day those market niches that are still available to us are filled with more enterprising players, especially from China and America. They show us what it means to be proactive: they have established national investment funds specifically targeting Southeast Asian markets and aggressively acting all across the region. Without a similar approach, we will never have a meaningful business presence in Indonesia (not to mention of the region as a whole). Yes, Petros has made its choice (in a sense that we are keen to continue promoting technologies from Russia), but the real success may not be possible without competent support of these and other private efforts by the Russian state.

Note

1

Some of the author’s points were previously made in an article entitled “Indonesian Oil and Russian Technologies”, International Affairs, Special Issue on Russia-ASEAN, Moscow, October 2010.

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TOWARDS A ROADMAP FOR RUSSIA-ASEAN TRADE AND ECONOMIC COOPERATION Natalia N. Strigunova

INTRODUCTION In 2011 the Association of Southeast Asian Nations (ASEAN) and Russia are commemorating the 15th anniversary of their Dialogue Partnership. Development of cooperation with ASEAN and its member states is one of the priorities of our policy in the Asia-Pacific region. Russia became a fullscale partner in the dialogue with ASEAN in July 1996. Initially, political and security issues dominated the agenda of ASEAN-Russia interactions. But there was much unused potential in the economic sphere. In 2002, in order to promote economic contacts, the Working Group on Trade and Economic Cooperation was established. On 29 November 2004, Russia acceded to the Treaty of Amity and Cooperation in Southeast Asia (TAC). This move created still more prerequisites for a fruitful relationship. At the present time, economic environment in the region is favourable for increasing cooperation. Most Southeast Asian countries are going through industrialization, urbanization, and electrification. Many aspects of these processes are well known to Russia. In fact, we have already developed a substantial material and technical base. During the joint Russia-ASEAN ministerial consultations, it was noted by all ministers for economy that lack of information within business communities about partner countries is the main problem for cooperation between our companies. 261

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SIGNIFICANCE OF THE ASIA-PACIFIC REGION The Asia-Pacific region has an enormous potential in terms of natural resources, finance, investment, scientific knowledge and technology. During the last twenty years, the nations belonging to this area have been the leaders in economic growth. Today, the world economy is recovering as it gets over the 2008–09 recession. ASEAN countries have made a real contribution to this recovery through their positive growth achievements. The ASEAN economies are not just major exporters of industrial goods and raw materials. Being a key centre of post-crisis economic growth in the Asia-Pacific region, ASEAN is also emerging as a centre of technological development. This is especially important for Russia which is modernizing its national economy. Russia’s greater involvement in East Asian regional integration is another important objective of cooperation with ASEAN. Last year Russia was invited to join the East Asia Summit (EAS), in 2012 it is going to host the Asia-Pacific Economic Cooperation (APEC) Summit in Vladivostok. As a result of this, the broader regional context for interactions between Russia and ASEAN is becoming quite favourable. At this point the prospects for creating a Russia-ASEAN Free Trade Agreement (FTA) are being analysed. However, the Russian Ministry of Economic Development has started consultations on the feasibility of a FTA between the Customs Union (of which Russia is now a member, along with Belorussia and Kazakhstan) and Vietnam.

THE 1st ASEAN-RUSSIA SUMMIT The 1st ASEAN–Russia Summit held in Kuala Lumpur, Malaysia on 13 December 2005 was an important landmark in the development of the dialogue. The approval of the basic documents that form the regulatory base of economic cooperation between Russia and the Association was timed for this event. These documents are: 1. Joint Declaration of the Heads of State/Government of the Member States of the Association of Southeast Asian Nations and the Head of State of the Russian Federation on Progressive and Comprehensive Partnership; 2. Agreement between the Governments of the Member Countries of the Association of Southeast Asian Nations and the Government of the Russian Federation on Economic and Development Cooperation;

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3. Comprehensive Program of Action (CPA) to Promote Cooperation between the Association of Southeast Asian Nations and the Russian Federation 2005–15.

LAUNCH OF THE ROADMAP In July 2006, the mechanism of ASEAN-Russia economic consultations at the level of senior officials was launched in Singapore. In July 2010, at the second meeting of this series in Brunei, the representatives of the ASEAN countries supported the proposal to develop a Roadmap of Russian trade and economic cooperation with ASEAN in order to implement the CPA. The Roadmap idea was also supported during the first consultations between the ASEAN and Russian economic ministers in Danang, Vietnam on August 2010 and the concept was included in the draft Joint Statement of the 2nd Russia-ASEAN Summit. In accordance with the decisions taken at the first Russia-ASEAN meeting of economic ministers, the Russia-ASEAN Joint Expert Group on Economic Cooperation has been created. Draft regulations of this group prepared by the ASEAN secretariat have been submitted to the Russian side for consideration. The Ministry of Economic Development of the Russian Federation has already prepared a draft Roadmap and sent it to the ASEAN Secretariat. At the time of writing, the Roadmap will be discussed in detail during the Third ASEAN Senior Economic Officials Meeting on 23 June 2011. This takes place prior to the 2nd Russia-ASEAN consultations on the ministers of economy level scheduled for August 2011 in Indonesia. The Roadmap is supposed to specify the spheres of Russia and ASEAN’s mutual economic interests by taking into account elements of the Master Plan for ASEAN Connectivity. The development of cooperation in these areas will be mutually beneficial. It will contribute to the economic rise of Siberia and the Russian Far East, as well as help to minimize the gap in the level of economic development between ASEAN member states — which is quite timely in view of the creation of the ASEAN Economic Community. The Roadmap is supposed to determine promising areas for RussiaASEAN economic cooperation; to suggest the ways of eliminating/reducing the impediments to cooperation; and to assist in the implementation of key sectoral projects. The document contains plans of action for respective countries’ departments in order to eliminate systemic obstacles and barriers in trade and investment, especially in such spheres of cooperation as transport,

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energy, telecommunications and space, agriculture, manufacturing and banking. The main task for those who work on the Roadmap for ASEANRussia trade and economic cooperation is to give concrete and practical content to the ASEAN-Russia dialogue partnership in the economic sphere. If we succeed to give it concrete content by using the advice of businessmen from Russia and Southeast Asia, the Roadmap may become a truly useful working document. The document elucidates issues of promoting economic ties by exchanging information related to tariffs; sanitary, phytosanitary and other non-tariff regulations; technical regulations, standards and conformity assessment procedures; procedures for investors and investments defence; measures to stimulate participation of Russian companies in major economic projects in ASEAN member countries and vice-versa. Large investment projects involving all types of economic players should arise within the sphere of Russia and ASEAN cooperation. Small and medium enterprises (including those operating in research and innovative production) will have a special role to play. Creating incentives for small and medium businesses is also emphasized in the Roadmap. It is not always convenient for small and medium entrepreneurs from Southeast Asia to do business with powerful Western companies. While partners from Russia may not belong to the “heavyweight” category, they often possess considerable production and technology potential. In cooperating with them, it is easier to reach a balance between profitability and equality of rights. The Roadmap will pay attention to cooperation in the field of transport. It will aim to promote interdependence in different types of transport in order to provide efficient, operative and secure movement of people and goods between the Russian Federation and ASEAN member states. After consultations concerning the Master Plan on ASEAN Connectivity in Vietnam in December 2010, Russia was invited to cooperate in the transport sphere. Companies of the Russian transportation complex are ready to participate in projects outlined in the Master Plan. Russia has defined economic modernization as its priority. ASEAN countries too are choosing innovative development. This is the sphere where the interests of Russia and ASEAN countries overlap and we have a lot to learn from each other. We see the main goal of the “Roadmap” in creating favourable conditions for cooperation in such hi-tech spheres as commercial exploration of space, energy (including renewables and non traditional sources of energy), mining and exploration of minerals (also with the use of space

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systems), science of materials, medicine, IT and telecommunications. We have already implemented Russia-ASEAN projects in renewable energy, medicine, biotechnology, nuclear power and education.

BILATERAL TRADE The key indicators such as total trade and Foreign Direct Investment (FDI) between ASEAN and the Russian Federation have steadily grown over the years. Since the 1st Summit in 2005, the trade value increased three times from US$4.2 billion to US$12.5 billion in 2010 (according to Russian customs statistics). Trade is increasing in the right direction, although it suffered a temporary decline due to the global economic downturn. In spite of the growing volume in bilateral trade, the relative significance of Russia and ASEAN member states as trade partners remains low. Speci­ fically, in 2010, ASEAN accounted for 1.8 per cent of Russia’s total exports and 2.2 per cent of Russia’s total imports. This fact indirectly indicates that Russia-ASEAN turnover possesses unutilized potential. It can be activated by a partial reorientation of Russian trade flows from the Western to the Eastern direction as a result of infrastructural development in the region. A growth of direct economic and trade relations can also result in new commodity flows. The list of barriers for trade and investment cooperation between Russia and ASEAN includes high transportation costs, complexities in the areas of customs procedures and access to wholesale and retail networks domestic markets. Reciprocal access to the Russian and ASEAN members’ markets is particularly affected by national trade barriers (tariff and non-tariff ) as well as by a lack of essential information and language skills, different practices of accounts settlement, and specifics of insurance and contract implementation.

THE ASEAN-RUSSIA DIALOGUE PARTNERSHIP Project implementation on the platform of the ASEAN-Russia Dialogue Partnership, with support from the ASEAN-Russia Dialogue Partnership Financial Fund is an efficient way of encouraging mutual cooperation. It is not about major, capital-intensive projects, it is about promotion of joint research efforts, organization of conferences, seminars, training courses and so forth. Practices of this sort create working and expert links between the countries and provide businesses with an extra venue for developing contacts.

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ENERGY COOPERATION Recently, cooperation between Russia and ASEAN has become more dynamic in such fields as energy, space, emergency relief, culture, tourism, and environmental management. At the same time, direct relationships are being forged between specialized organizations. The ASEAN-Russia Energy Cooperation Work Program for 2010–15 has been adopted. A similar document on emergency relief is being discussed. As for cooperation in the sphere of energy, Russia has something to offer both to individual countries and the region as a whole. Energy cooperation can develop in a variety of ways. First, there may be projects in the sphere of energy security. Second, Russian companies can participate in geological exploration and exploitation of oil, gas and coal, in pipeline construction and building of all types of power plants, in development of alternative energy sources with the application of new technologies. Third, there is a possibility of coordinating energy policy (particularly, in the energy diplomacy format) with the partner countries, which have energy reserves and trade in energy materials on world markets.

MECHANICAL ENGINEERING COOPERATION There are plenty of opportunities for cooperation in the sphere of mechanical engineering with a number of Southeast Asian countries. Further liberalization of the trade and investment market can be used by Russian machine-building companies to create production chains in the ASEAN zone. Covering a number of countries, such chains would secure a more sustainable demand for their products. Another option is to promote industrial cooperation with ASEAN countries in aircraft construction.

TRANSPORT A substantial role in enhancing interactions in the transport sphere should be played by creation of profitable, sustainable and secure logistics chains between Russia and ASEAN countries. As for specific projects, the most promising involves the transit of goods from ASEAN through the main Eurasian transport corridor — the Trans-Sib (standing for Trans-Siberian railroad), which links up Europe and Asia, using seaport capacities in the Russian Far East. We see perspective in the creation of space infrastructure in ASEAN countries. For instance, the participation of Russian companies in the

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construction of an aerospace complex at the island of Biak in Indonesia. Implementation of this project will allow us to launch commercial telecom satellites and set up hi-tech aerospace assembly lines. No doubt, this will contribute to the innovative development of ASEAN countries.

INNOVATION Further increase in the modernization component of the Russia-ASEAN dialogue and partnership can be achieved through cooperation on Scolcovo innovation centre. ASEAN countries could seriously contribute to this project. In its framework we may exchange know-how and create the basis for joint development of cutting-edge technologies. Issues of sustainable and foreseeable development of the agricultural industry and food security become more and more acute today. Therefore intensification of exchange in innovative research and technologies referring to agriculture and food production, making them freely available internationally, especially for developing countries, should be emphasized. Only equal relationships can promote the development of new generation technologies, resulting in high quality and security of products, resource-saving, ecological security and competitiveness on the international market.

AGRICULTURE With a view to promote the effectiveness of international economic ties in agriculture, it is important to hold conferences on agricultural legislation in Russia and ASEAN, on issues of tariffs and trade in agricultural products. Besides, holding of an international trade fair on agriculture of Russia and ASEAN countries could contribute to intensification of mutual trade.

SOCIO-ECONOMIC DEVELOPMENT OF SIBERIAN AND FAR EASTERN REGIONS Bringing the relations with ASEAN in trade and investment to a new level is of great significance for the socio-economic development of the Russian Federation, as well as its regions. Russia pays great attention to issues of socio-economic development of the Siberian and Far Eastern regions, and their involvement in the Asia-Pacific integration processes. This was one of the aims of adoption of the Strategy of the Far East and Baikal region’s socio-economic development until 2025. The implementation of the strategy should increase the competitiveness of the region’s economy and the quality

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of the local population’s life, which, in turn, will increase the potential of international economic activity of Russia in the Asia Pacific. This target can be achieved only through active support and comprehensive economic cooperation with ASEAN.

CONCLUSION Once again, it is evident that Russia and ASEAN have a lot of unused potential in the economic and investment spheres. All prerequisites for its utilization are now in place. Hopefully the Roadmap, based on the maximum balance of interest of the parties, will play an important role in intensification of cooperation.

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THE BEST CITIES TO BUY INTO Alexander Karolik-Shlaen

SINGAPORE — AN ATTRACTIVE REAL ESTATE TARGET As the Russian economy is diversifying beyond oil and gas, investing in Singapore is the perfect diversification. The Singapore economy is based on services and on being the banking and tourism attraction of the region, the total opposite of the natural resources based Russian economy. One of the most attractive aspects of Singapore is its property, be it commercial, which is in big demand from corporations and businesses from all over the world, to residential, which is the safe haven for investors of the region and beyond. Hence, Singapore property is in high demand from both international investors and locals. In fact, the demand is so high that the Government of Singapore is acting to curb the excessive demand for residential property, which most likely eliminates the short-term speculators and opens the market to longer term, deep pocket investors, which means more stability to invest in. I will focus on the high-end residential property.

SIGNS OF THINGS TO COME — A MACRO AND MICO PERSPECTIVE So, what has changed since the Singapore government slapped the market with yet another cooling measure? In general, not much when it comes to the high-end and luxury real estate sectors. The highest end of the market will continue to rise, if slowly, 269

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because the highest end never really fully recovered. Also, more people in Singapore have more money, and they will buy more luxury properties. That is evident by the fact that prices of good class bungalows (luxury villas) are 20 per cent up during the past year (2010). On the other hand, development charges are up, foreign labour numbers down while their licensing prices are up. And commodities prices are up again as well. All this means properties will cost more to construct. To summarize Singapore’s situation, the government is acting to protect the mass market from overheating, sending a clear signal ahead of elections that the mass market will not be left to boil over. But not all is rosy on the real estate horizon. Singapore reported more than five million residents last year, a handsome growth of population, which is very much behind the demand for the property and rise in prices. Should the government limit inflows of foreign talent and tighten permanent residents’ numbers, there will be a softening of demand for property across the board. Hence, these inflow numbers should be watched.

A FEW RECENT MACROECONOMIC FACTORS • The Singapore dollar is strong versus many currencies, and is considered a safe haven currency by many investors. • Singapore is further strengthening its position as a regional hub for many banks and multinationals. • China could become the world’s biggest economy within a matter of years, and its real estate will soar no matter what cooling measures are introduced. Chinese will invest vigorously overseas, and Singapore is one of the potential hotspots on their radars. • Just three years ago Asia was just a major emerging market, one that supplied and manufactured goods for the West. But after the economic meltdown the picture has changed. The West is still in the grip of recession and everybody is expecting more bad news from Europe and the U.S. At the same time Asia is booming, leading many to realize the world’s economic centre of gravity is shifting from West to East. This also means a bigger flow of money from the West to Asian financial markets and properties, with Singapore likely to take a good share into its private banks and real estate. Throughout the region’s major markets, developers, investors and regular folk are not buying into the “cooling measures” of their governments. Real estate in Asia retains its attractiveness for Asians themselves, and especially

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for mainland Chinese. A few months ago I wrote in my article “China: A long term buy”, which was published in the regional real estate magazine Property Report, that the real estate market there is still performing strongly, simply because people there are in love with real estate and do not trust financial markets any more. And in fact, the Chinese real estate market is still performing strongly despite the aggressive cooling measures introduced by the government. Governments in the region will probably have to intervene further and more aggressively, especially in China, so strong is the desire of people to buy more real estate. And on the back of that, rich Chinese will definitely continue buying property outside their home country, still prioritizing Hong Kong and also the Singapore market.

THE HIP, THE FUN AND THE CELEBRITY EFFECT F1 is a great stage for celebrity sightings and is a magnet for the “A” list in prime race locations, such as Silverstone and Monaco. And now Singapore has joined the ranks of the glittering venues. The Singapore F1 event blasted its way into history books as the first fully lit night race. Furthermore, the organizers took it to the extreme heights, making it a street race. Street racing means that the world can see the cars racing past the city sights. What awesome advertising for the property — it doesn’t get much better than this! In Monaco, the only other F1 street racing location, the rare and few fortunate people who own flats with a view of the track, either host parties in their flats or rent them out during the event for huge profit. Trackside properties can benefit a lot. In Singapore the hotels along the route raised their prices by some 300 to 400 per cent. It is still not easy for them to achieve full occupancy, but given that the economy in the West is improving and that the Singapore race will become better known, it would not be a problem in the future for hotels to demand high room rates and to earn revenue from related events as well. Singapore does not have many residential properties along the route, but the units in the Sail which face Marina Bay are gearing up for the party. Some of the tenants, who are renting such units, have the F1 in mind and hence these prime units command a higher rental. Singapore has one of the best deals in the world to show off its crown-jewels. I am referring to the Marina Bay area and the future South Bridge project. Marina Bay Sands and the new high-rises by the bay are a breathtaking background for the event.

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Singapore is a relative newcomer to the world’s top fun city scene. Known more as a calm and green city, Singapore is remaking itself right infront of our eyes and it will be attracting more attention and resources from individuals who can visualize its potential. There are celebrities and tycoons from all over the world, who are buying into luxury real estate and put Singapore on the investment list of the regional and world rich and famous. The celebrity and tycoon factor can perform wonders for the image and the price of Singapore luxury property. Some of the world’s rich and famous recently made Singapore their home. The multi-billionaire commodity guru and ex-partner of George Soros, Jim Rogers from the USA, Richard Li’s (the scion of the richest family in Asia from HK) family, Indian billionaire Dr Modi, the chairman of Spice Corp, Hollywood stars Gong Li, Jet Li, and many other wealthy but less known people chose to move to Singapore. Many more regional and world wealthy individuals such as Jackie Chan and Thai beverage tycoon billionaire Charoen Sirivadhanabhakdi bought and hold multiple properties here. And more world top class developers and funds are bullish on Singapore property and getting more involved in local property development like never before.

THE RANKINGS AND THE REALITY Annually, various surveys or rankings by prominent companies with their smart analysts, who have crunched their data and statistics to perfection, are published. These purport to list various cities as the “most liveable”, “best” or “most expensive” in the world. I read some of these with amusement. So which is the most desirable city to live in? And more importantly, which is the one that the world’s wealthy and successful would like to have as a base or to purchase real estate as a second or third home? That is the toughest question to answer but also a very lucrative exercise. These rankings are typically based on a group of factors, which are designed to assist business decision-making when they relocate their expatriates on foreign assignments (such as the Mercer Quality of Living Survey, ). The liveability survey by the London-based Economist Intelligent Survey (EIU), for example, ranks Calgary as the fifth and Helsinki as the sixth in the world (as per EIU’s ten “best” cities in the world, see Table 1) but pardon me for doubting that there are many rich and successful people in the world who will be queuing up anytime soon to move to Helsinki or to Calgary unless they love to live in severe sub-zero temperatures and do not mind not seeing the sun for many

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months of the year. And some of the cities or rather towns are too small and too isolated to be desirable on the global scale. Hopefully, no one will be offended (see Table 1). The well-travelled, well-heeled and regular business people have already figured out the best food is in Japan, great shopping is in Hong Kong and fabulous parties are held in Tel Aviv on the cleanest beaches of the Israeli Mediterranean, where it so happens one can also find the world’s best performing real estate (RE), according to Knight Frank Global House Price Index.1 Instead of the above, I propose a “desirability” theory of cities and I can bet safely that most people will rather “live-in” and buy into Los Angeles, New York or Hong Kong, which are nowhere near these top rated cities in EIU ratings. To rate the most desirable cities in the world is a really pretentious task, which is worthy of big bucks for the simple reason: the best real estate is the one that more people desire. Therefore, this ranking will be the best possible outcome for investors. I am not pretending to have the capacity to work out such a list but I will address some characteristics in the cities from personal, hands-on experience, combined with the widely available research data with a focus on our region. My perspective is that the “best city to buy into” will be a fusion of one of the world’s priciest cities with the desirability of that city in the eyes of

Table 1 EIU’s Ten “Best” Cities in the World (2010) Rank

City

Country

 1  2  3  4  5  6  7  8  8 10

Vancouver Vienna Melbourne Toronto Calgary Helsinki Sydney Perth Adelaide Auckland

Canada Austria Australia Canada Canada Finland Australia Australia Australia New Zealand

Source: Economist Intelligence Unit (accessed from ).

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the wealthy and life loving investors. (Please remember, I am analysing the luxury part of the spectrum.) In this instance, a more appropriate and relevant basis for the estimation would be the Knight Frank-Citi Wealth Report which was published last year. The most expensive cities in the world with regard to RE are: (ranked in order from most expensive) Monaco, London, New York, Moscow, Paris, Tokyo, Hong Kong, Rome, Singapore and Sydney. I happen to be “lucky” to live in all three of the most expensive cities of Asia. Having been based in Tokyo for over a decade, I can tell you first hand of some insider traits of this vast, fantastic city. Tokyo has the glitz and modernity of a huge city coupled with the hidden charm of its many green, lively neighbourhoods and its infrastructure is superb. The best part of it all is that it serves up, arguably, the best food in the world. When Michelin rated more stars to Tokyo than to any other city in the world, it just made the people “in-the-know” grin with amusement. The secret was out. I can go on and on here for hours about the simple gourmet lunch sets, that can cost as little as US$5 that are simply not possible to describe. Japan can easily eclipse any other world city for its gourmet yet affordable food. But Tokyo is a challenging city to settle in and therefore not on the list of most wealthy investors. Commuting for hours in the world’s most populated metropolis of 33 million people is exhausting. Working, living and socializing properly without a decent understanding of customs and some language proficiency is close to impossible. Lastly, the cost of living is prohibitive in the prime areas. Thus I do not think many High Net Worth Individuals (HNWIs) would be buying into Tokyo, unless they are Japanese. Unfortunately, the demographics have not been in Japan’s favour in the last couple of decades and with the decreasing population, we could assume a real possibility for the RE to decline. (And I am not going to address the tragedy that hit Japan recently, as I believe its affect on the longer term of the great Japanese nation is going to be limited). The next Asian city on the KF-Citi list is Hong Kong. Anybody who has lived or visited the city will feel the vibes, buzz and excitement that only Hong Kong can generate. It is also the most photogenic city in the world, with its arresting Hong Kong skyline vistas. And many rich, especially the Mainland Chinese, do indeed vote with their purses thereby successfully bolstering up some of the Hong Kong RE to become the most expensive in the world. Great food, sophisticated shopping, some lovely islands around with fabulous views of the South China Sea could make one feel as in paradise, but alas, the air pollution sometimes blocks the views of the most beautiful

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harbour in the world and unsatisfactory air quality affects investors and dwellers. Last but not least, we have Singapore, which is the “cheapest” Asian city on the top ten list. At five million, its population is much smaller than its northern Asian contenders and more “liveable”. It scores especially highly for those wanting to achieve a “family vs. business” balance. The city-state has only just recently developed into a world-class destination and is still in the process. Though some may find the tropical, year round hot climate a negative, for many others, especially the wealthy from North America and Europe, it makes a welcome change. Political and economic stability has attracted vast amounts of foreign money to the private banking business, which has expanded by leaps and bounds in this English-speaking “Switzerland of Asia”. These HNWIs have also invested in the local RE. With F1 Formula street racing and the gorgeous casinos, it is very easy to see that the only other similar place in the world is Monaco, which is permanently ranked on the top of the most expensive RE in the world and is the epicentre of and the playground of the international jet-set and rich. With such strong leads, it is not difficult to conclude that Singapore will further shine as a magnet for the rich, successful and wealthy of the region and the world and so its luxury real estate.

Note

1

Knight Frank, Knight Frank Global House Price Index 2009, (accessed 17 August 2011).

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Section V Culture and Education

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Credentials of literature Vilen Sikorskiy

INTRODUCTION Thinking about the ways to improve Russia-Association of Southeast Asian Nations (ASEAN) connectivity beyond the present situation, especially in the field of culture, I cannot resist a reference to a remarkable Southeast Asian author whom I used to know personally. The point is to illustrate how really important literature and art are in the life of nations. In 1948, at the time when Indonesia already declared its independence but still had to fight for it, a young writer by the name of Utuy Tatang Sontani published a drama entitled “Suling”.1 This word stands for a bamboo reedpipe, a flute. The main character in this drama was Panji, the mythological forefather of Indonesians. He played the flute to accompany the dance of his sweetheart Sri — the Soul of Rice, the Goddess of Fertility and, in that particular case, the impersonation of a newborn nation. Panji had four advisers, all of whom begged him to stop playing this useless music and switch to more productive activities. According to the first adviser, only through politics would it be possible to achieve independence and a brighter future. For the second one, the only key to prosperity was the economy. The third adviser praised law and ethics as means to pave the road to genuine self-improvement and happiness. The fourth was all for promotion of religion and faith. Later Utuy explained that the prototypes of these advisers had been Soekarno, Hatta, Ki Hadjar Dewantoro, and Hadji Mansur — the four leaders of the Pusat Tenaga Rakyat or Centre for People’s Activity that was officially established under the Japanese occupation. 279

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Once the four advisers took away Panji’s flute, the inspiring melody was stopped and Sri, not hearing it anymore, became unconscious. Eventually Panji succeeded in getting back the flute and bringing his beloved back to life. As the final curtain falls, she sings: Remember, please, all of you, // that the Greatness and Prosperity // of countries and peoples, their salvation and peace of mind // cannot be achieved // if your heart, mind and actions // are not irradiated with the shine of the art, // that lifts the spirit of the people // and calls them to innumerable deeds.

To ASEAN’s credit, it has never underestimated the importance of culture and literature. In 1979, it even introduced the SEA Writers’ Award for writers from each of the Association’s member countries. Up until the present, the winners have been announced eleven times. most of them are far from being affluent and this award is a very laudable act. But it would be still more advantageous if such prizes were followed by translations of the winners’ works into other languages of the ASEAN member states for the sake of better mutual knowledge. Indeed, literature at its best contains in itself the aspiration of every nation, their very souls. Translations of the finest poems, novels and plays may help more than most of us realize, in promoting respect and understanding between nations all over the world. That is why I want to propose a project that may attract more attention to Russian literature in Southeast Asia and, vice versa, to short stories, poems and novels from the ASEAN countries among the Russians. In theory, subsidizing translations might be the most effective means to achieve this goal. However, in today’s conditions, this is hardly possible on a regular basis. Therefore, we propose to at least make account of the treasures that we already possess — in other words, to collect and produce the bibliography of those translations of Russian literature that have already been published in ASEAN countries, and a similar bibliography of literary works from ASEAN countries that appeared in Russian translations. Much information has been already collected, at least concerning translations into Russian. We still need more data, though, for a full bibliography of transla­ tions of Russian poetry and prose in each of the ten ASEAN countries. Here is a preliminary table with the numbers of such publications in Russia and each ASEAN country (both in book form, as well as in periodicals), as well as the numbers of the authors whose works have been translated. As can be seen, there are still a few omissions and information concerning Laos and Brunei is lacking completely (see Table 1).

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Table 1 Publications translated from Russian and translated into Russian COUNTRY

Brunei Cambodia Indonesia Laos Malaysia Myanmar Singapore Thailand Philippines Vietnam

Translations into Russian Publications (in book form & in mass media) – 10 + 11 = 21 46 + 28 = 74 – 22 + 38 = 60 25 + 5 = 30 5 + 8 = 13 10 + 15 = 25 44 + 26 = 70 46 + 40 = 86

Translations of Russian literature

Authors

Publications (in book form & in mass media)

Authors

– 6 150 – 66 40 18 15 52 110

– 57 68 + 30 = 98 – 10 + 31 = 41 – – – 10 150

– 30 55 – 37 – – – 6 145

Source: Compiled by the Author.

Let me remind you again that this is just a preliminary count, and after more pointed research, some numbers will definitely change. Nevertheless, one can already predict that the sizes of “national bibliographies” will surely differ from country to country. Such differences can be often explained by various degrees of political and cultural closeness between the USSR/Russia and certain Southeast Asian countries. That is why, for instance, there are more translations of Soviet/Russian authors in Vietnam and Indonesia than elsewhere. One may notice a rather good balance between translations from and into Russian in the Malaysian section. However, this is not stipulated so much by the recent improvement in relations, as by the remarkable activism of two scholars. One of them was Dr Boris Parnickel (1935–2004) who taught the Russian language and traditional Malay literature in the 1990s and early 2000s in various Malaysian Universities. Even more prolific has been his younger colleague, Victor Pogadaev, the author and co-author of five Russian-Malay and Russian-Indonesian dictionaries, and since 2001 a University of Malaya professor.

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Among the Russian classics recently translated by Professor Pogadaev are Pushkin’s works (namely, The Tale of the Fisherman and the Fish and The Squire’s Daughter), as well as Leo Tolstoy’s Haji Murat, published as a pocket book in two editions. Commenting on the popularity of this latter work with the local public, the United Nations Educational, Scientific and Cultural Organization (UNESCO) Prize Laureate Aziz Deraman linked it to the fact that Tolstoy’s masterpiece had been translated directly from the Russian, and the translator managed to show the power of the original. Another major project carried out by Victor Pogadaev was Mawar Emas: Bunga Rampai Sastera Rusia (The Golden Rose: An Anthology of Russian Literature) published in Kuala Lumpur in 2009 and received in Malaysia very warmly.2 The volume’s title comes from the novel by Konstantin Paustovsky. The book introduces the readers to Russian folklore — epic stories, tales, proverbs, limericks and folk songs, as well as samples of works by thirty-seven masters of Russian poetry and prose, from the giants of the nineteenth century (Pushkin, Lermontov, Turgenev, Dostoyevsky and Tolstoy) to the twentieth century Nobel Prize Laureates (Bunin, Pasternak, Sholokhov, Solzhenitsyn and Brodsky). In a foreword to the anthology, which was published in 3,000 copies — not a small amount by local standards, Sasterawan Negara, or National Writer of Malaysia Abdul Samad Said emphasized that at last Malaysians would be able to get acquainted with the treasure-trove of Russian literature in translations made directly from Russian, which retained the original freshness and living intonation of the original. The latest addition to a long list of Professor Pogadaev’s translations is a collection of short stories from Malaysia and Indonesia entitled Malayskaya Krov’ (Malay Blood) and published in Moscow in 2011.3 I also want to draw your attention to the case of Cambodia. In the late twentieth century, the country suffered a horrible trauma. Until today, it does not have good printing and publishing facilities. But there are about sixty books by twenty authors that have been translated from the Russian language. In fact, almost all these books were translated and printed in the Soviet era in the framework of a special programme. Two thirds of the publications are richly illustrated books for children, some of them in two languages. The others are thick volumes of “serious” works (for example, by Chengis Aitmatov, Anton Makarenko or Konstantin Paustovsky). Similar programmes, especially as far as children’s books are concerned, were implemented in some other Southeast Asian countries. Some Singaporean writers, whose works were translated into Russian, have been counted in Table 1. However, we are not aware of any Russian literary works translated and published in this country. Probably, those

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multilingual Singaporean readers who are interested in Russian literature prefer to turn to the translations produced and published in China, India, Malaysia, or — in case they mostly like to read in English — the UK and the United States. Let us now get back to the proposed bibliography. It will consist of an introduction in the English and Russian languages and a section dedicated to each of the ten ASEAN countries (with prefaces in the national, English and Russian languages). The book will be addressed to the general public and must be as comprehensible as possible, i.e. without complicated references, abbreviations and so on. We may also think about splitting the all-ASEAN bibliography into portions referring to each country and printing them there, with prefaces and explanations in the national languages. What will come next? Maybe, a publication of a small book of Russian folk tales or other stories for children in the national languages of ten ASEAN countries, and a simultaneous publication of ten similar books, one from each ASEAN country, in Russia? All such editions might contain one additional page with a text about the country of origin that is easy enough for a young reader (or listener) to understand. If even some of the parents and grandparents read these stories to their younger ones to lull them to sleep, it may mean that elementary knowledge about our countries is brought to representatives of all age groups. Whatever we try to do in future to add more substance to our relations, let us never forget that without lively cultural exchanges these relations may not really develop fully.

Notes

1

Born on 1 May 1920 in Cianjur, West Java, Utuy Tatang Sontani was among the leading voices of Angkatan 45, the generation of young Indonesian writers that matured in the midst of fighting for independence. Among his major works were Tambera, a historical novel about the early effects of Dutch colonization, and such plays as Suling and Bunga Rumah Makan (The Flower of a Café). He had also published numerous short stories. After the 1965 coup Utuy who was closely associated with the Leftist Lembaga Kebudayaan Rakyat (Society of People’s Culture) stayed abroad — at first in China, then in the Soviet Union. In exile he produced several novels and autobiographical pieces. One of the novels, Kolot-Kolotok, was translated into Russian by the author of this article and published posthumously in 1989, ten years after the writer’s death in Moscow on 17 September 1979. An English-language account of Utuy’s pre-exile literary activities is available in A. Teeuw, Modern Indonesian Literature, vol. 1 (The Hague, Martinus Nijhoff, 1979), pp. 190–95.

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Mawar Emas: Bunga Rampai Sastera Rusia (The Golden Rose: Anthology of Russian Literature), Penyelenggara dan Penterjemah Victor Pogadaev (KL, Institute Terjemahan Negara Malaysia, 2009). Malayskaya Krov’. Antologiya malayskogo i indoneziyskogo rasskaza (Malay Blood: Anthology of Malay and Indonesian Short Stories, in Russian) (Moscow, ID Klyuch, 2011).

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A SENTIMENTAL JOURNEY THROUGH ASEAN (IN THE RUSSIAN WAY)1 Vladimir Anisimov

INTRODUCTION As a professional painter, I strongly believe that my colleagues have something special to contribute to communication between the people. The language of a canvas and a drawing, a sculpture or an ornament needs no translation. Anybody who speaks it well is capable of sending messages which may be profoundly universal and typically local at the same time. A masterful artistic representation of a country, be it your own or a foreign one, will always carry something that a business report or a political review cannot convey — a strong, instantly appealing human sentiment.

AIMS This is more or less what I felt when in 1991 I was setting up the Bureau of Creative Expeditions in my studio in downtown Moscow. The main idea behind the project was to make Russian art better known in the world and to speak to the Russians about the world in the language of art.

EXPEDITIONS AND EXHIBITIONS Twenty years have passed, and as the Head of the Bureau for all this time, I can say that we have certainly tried to accomplish our task. There have 285

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been more than thirty expeditions of Russian artists to such countries as Afghanistan, Cuba, India, Indonesia, Kuwait and Nepal. Pictures and other works of art created during these trips by both acknowledged masters and gifted novices were displayed at scores of exhibitions in these countries. In Moscow and in some other Russian cities similar exhibitions were held in the most prestigious galleries. Catalogues and albums were published, and wide media coverage was there too: the activities of the Bureau have been reported in almost 300 newspaper and magazine articles in Russia and abroad. All these artistic and organizational efforts could not be carried out without close cooperation with many governmental and nongovernmental bodies of Russia — not to mention the sponsors in the countries that we visited.

INDONESIA Each of these trips is memorable, each place we visited is unique in its own way, but if I am to single out a country where we worked most often during the last decade, it is Indonesia. We arrived there for the first time in the year 2000, on the invitation of Megawati Sukarnoputri, at that time Indonesia’s Vice-President. After a month-long journey across Java, we had a large exhibition in Jakarta, at the National Gallery. Half of the exhibits were works that represented the life of Russia – its history, religion, small towns and big cities. The other half was composed of our artistic impressions about Indonesia’s amazing nature and cultural heritage, its dignitaries and common folk. As one trip followed the other, our Indonesian Collection kept growing. Today it consists of more than 3,000 works of art. Besides Java, our destinations were Sumatra, Kalimantan, Sulawesi, Madura, Lombok — and Bali, of course. In the spring of 2010, the Necklace of the Equator — such was the name of the exhibition dedicated to Bali — became the hit of the Moscow season. For a month, the works inspired by the stay of our group in Pulau Dewata (or the Island of Gods, as this incredible place is often called) were on display in the State Museum of Oriental Art. Thinking about our Indonesian experience, I cannot help but mention that at some point this journey culminated in something unexpected but deeply symbolic — a virtual meeting with a classic Russian nineteenthcentury painting. It all started when in 2003 Madame Megawati, at that time already the President of Indonesia, visited one of our Jakarta exhibitions. Obviously pleased with what she saw, she turned to me and said: “Bapak Vladimir,

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many years ago when I was still a little girl, my father visited the Soviet Union and your Premier Nikita Khrushchev presented him a picture by a well-known Russian artist. To our joy it appeared that my father’s close friends had bought another picture by the same artist from a private collection in Italy for decorating the residence of our Head of State. Their style and even size were almost similar. On father’s instruction, both pictures were hung in one room of the Bogor palace. Since then this room is called ‘Russian’.” As she remembered, on one of the canvases there was an incomprehensible signature, which was later covered with paint in the process of amateurish restoration.

RESTORATION OF KONSTANTIN MAKOVSKY’S PAINTINGS Next, Madame Megawati noted that it might be good to put the pictures in order and asked whether our experts could restore them. The answer was a firm “yes”, although it was pretty clear that we were facing a serious challenge for at least two reasons. First, both pictures were really huge: each of the two canvases had a size approximating 15 square metres. Second, the author was no other than Konstantin Makovsky (1839–1915) — a remarkable virtuoso, who had a special preference for themes from Russian history and ancient mythology, along with a talent for presenting them in a truly grand manner. In terms of what they portrayed, the pictures from Sukarno’s collection in Bogor could stand as examples of Makovsky’s favourite subjects. The one that was brought from Italy carried a telling name of “Spring Bacchanalia”. The other was depicting a lavish wedding in Moscow prior to the reign of Peter the Great. The brilliancy of the technique was such that any restoration effort required a lot of nerve and self-confidence. At the preparatory stage my colleagues and I had to collect and study a lot of archival material. Unfortunately, no documents referring to the picture presented to Sukarno in Moscow were found. Therefore, it remains unknown where it had come from and to whom it had belonged initially. But there was a person who had seen how it was presented to the Indonesian President, and who remembered a lot of details. His name is Vladlen Sigayev, and he is a veteran Soviet diplomat. In the latter half of the 1950s and the early 1960s, when Moscow’s relations with Jakarta were thriving and the two leaders, Nikita Khrushchev and Sukarno, met regularly, Mr Sigayev was often by their side as an expert in Bahasa Indonesia and an excellent interpreter. As he remembers, President Sukarno’s third visit to Moscow that took place in 1961 was specially timed for his 60th birthday. On the morning of

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Vladimir Anisimov

June 6, his birthday, a group of Soviet leaders came to his residence in the Kremlin. As they greeted him, they mentioned the presents to be given to him: a two-metre female figure by the well-known sculptor Matvei Manizer and the “Chaika” limousine, the best car ever made by the Soviet industry. The President was shown the photos of both items that were delivered to him in Indonesia some time later.

PAINTING’S PRESENTATION TO PRESIDENT SUKARNO As for the picture by Makovsky, it was presented at the end of the visit. On that day, having stepped out of his rooms, Sukarno saw a large rectangular object covered with cloth. Nearby stood Leonid Brezhnev, then Chairman of the Presidium of the USSR Supreme Soviet, and Anastas Mikoyan, First Deputy Chairman of the USSR Council of Ministers. Mr Sigayev was there as well. “Dear Comrade Sukarno”, said Anastas Mikoyan as he addressed the distinguished guest. “On behalf of the government of the Soviet Union and our entire people, we sincerely congratulate you on your birthday. Please, accept this gift which could occupy a worthy place in your collection.” The cloth was then removed and the President saw a grand canvas stretched on props without a frame. Sukarno was struck dumb, most probably by the sheer size of the work. He took a seat and started scrutinizing the picture with an eye of a connoisseur. The wedding ceremony depicted on the canvas was taking place in a mansion very much like the Kremlin hall, where a dinner in his honour was given the day before. For a moment, it might seem that the Rus of the Boyars, in its festive attire embroidered with silver and gold, was staring from that picture at the foreign guest … Some of the best professional restorers of Russia came to Indonesia to work on the paintings by Makovsky. Their labours in a studio set-up for that special purpose inside the Bogor palace lasted for more than two months. Hopefully, these beautifully restored masterpieces bring a sense of joy to anybody who sees them. Recently the Sukarno collection has been replenished with twelve pictures by modern Russian artists. Among them are People’s Artist of the Russian Federation, Vitaly Popov; Members of the Russian Academy of Art, Stanislav Nikireyev and Vladimir Pereyaslavets; Honoured Artists of the Russian Federation, Alexander Voronkov, Victor Popov, Olga Yausheva, Yuli Petrov, Anatoly Rybkin and the author of this piece.

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ART EXPEDITIONS TO ALL THE OTHER NINE ASEAN COUNTRIES Since Indonesia, which is now so familiar and dear to us, is an integral part of Southeast Asia and one of the ASEAN founders, the Bureau is planning to extend its activities to all the other nine countries that form the association. Time-wise, the year 2011 when we celebrate the 15th anniversary of RussiaASEAN dialogue partnership is an excellent starting point. As before, the day-to-day project management will be carried out by the Bureau. The duration of an expedition to every country will be two to four weeks. As we see it now, we may need around three years to complete the project. We hope to find material and moral support both in Russia and in Southeast Asia. In Russia, we look forward to cooperation with the Ministry of Foreign Affairs, the Ministry of Culture, the Union of Russian Artists and the Russian Academy of Arts, plus a number of charity foundations. The travel expenses from Russia to Southeast Asia will be covered by the Bureau. While in the region, we shall need some local sponsorship to meet the costs of living. Most probably, our first destination will be the Philippines. A group of ten artists that we plan to bring there before the end of 2011 is to produce an exhibition dedicated to the 35th anniversary of Russia-Philippines diplomatic relations. The possible locations for their work include Manila, Aurora and Cebu. Rural and urban landscapes, historical sites, images of young and old Filipinos from different walks of life are among the themes to be explored.

CONCLUSION After the Philippines, we plan to travel from Singapore to Myanmar. Each trip will result in an exhibition dedicated to a particular ASEAN country. Once the journey is completed, a collection of the best works created in the process will be presented in all the Southeast Asian capitals — and, naturally, in Moscow. Knowing the sensitivity of my colleagues and the vibrant spirit of the region, I am perfectly sure the collective image of ASEAN nations presented by the Russian artists will be anything but trivial and boring.

Note

1

Some elements of this text appeared previously in the essay entitled, “To Russian Artist Konstantin Makovsky in Bogor”, International Affairs, Special Issue on Russia-ASEAN, Moscow, October 2010.

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FOOD FOR THE SOUL AND THE STOMACH Julia Sherstyuk-Viswanathan

It is only in recent years that Singapore and Russia have stepped up their engagement. While the future Russian Tsar Nicolas II visited Singapore as early as 1891 during his year-long voyage to the East, Russia and Singapore had only a nodding acquaintance until much later. Geography may be to blame as the huge distance between Russia and Singapore conditioned the absence of long political and trade connections. Another culprit is mass media. While Western publications offered a rather slanted and biased vision of Russia to most of the world, their Russian counterparts of recent times perpetuated false statements and misleading facts about the city-state. Luckily, in today’s Singapore, myths about Russia are being dispelled and stereotypes are being broken. Behind this shift in awareness were a number of people and organizations, both Singaporean and Russian. One of them was Mr G.K. Goh, whose father’s company Yew Lian Pte. Ltd. exported rubber to Russia in the 1960s, dealing with Raznoimport Moscow. There was also Moscow Narodny Bank, predecessor of VTB Capital, Russia’s leading investment company today. Founded in 1911 and later becoming a cornerstone of Soviet trade, Moscow Narodny Bank opened its branch in Singapore in 1971 and for about three decades provided a financial bridge between the Soviet Union and the global economy. Six years ago, Ambassador Michael Tay founded the Russia-Singapore Business Forum, which is a business-to-business platform engaging

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entrepreneurs from Russia, Singapore and other Asian and CIS countries. There is a Muscovite, Katya Drozdova, who set up a Russian language school in Singapore and has a great number of locals as her students. After spending seven years in Singapore, I felt I could contribute to the further building of Singaporean-Russian ties initiated by all these people before me. While the city-state’s history may be short, Singapore definitely has a story to tell the world, especially so in the Russian language as, apart from travel guides, there were very few books about Singapore in Russian. On the other hand, I am proud to be Russian and wanted to help unveil this riddle, wrapped in a mystery, inside an enigma, as Winston Churchill once characterized my country, to Singaporeans. With the assistance of my closest friends, the idea of publishing a bilingual English-Russian magazine was born. We wanted it to serve as a cultural bridge between Singapore and Russia, or, in a wider context, in all the countries where both the Russian and English languages are widely spoken.

FILLING IN THE CULTURAL GAPS The pilot issue was published under the name of Russian Singapore. However, very soon we realized that it did not do justice or give full credit to the rather comprehensive coverage of our magazine, which consisted of sections like Diplomacy, Business, Traditions, Food, Lifestyle, Science, Trends, History, Faces of Russia and Literature. This was why as early as Issue 2 was in the pipeline we renamed it 103rd Meridian East. This is the imaginary line that runs through both Singapore, straight above Changi Airport, and Russia, where it lies a few kilometres west of Baikal Lake, one of the most recognized natural icons. In our initial stage, three years ago, we conducted a survey in several Russian cities and towns, where we asked people what they knew about Singapore. The results were rather disappointing: • “Banana-lemon Singapore” was the most common answer, which referred to a line from Tango Magnolia, a song popular in Russia a good century ago; • the chewing of gum in Singapore is punishable by caning; • ogling at women in Singapore will lead to jail time; • men wearing shorts and women sporting deep necklines are heavily fined;

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• married couples are not allowed to have more than two children; • it is in China… Hong Kong… Africa… India… One rare treat was when somebody mentioned “Singapore has the coolest airport in the world” and that Singapore used to be a British colony. The survey reassured us that writing about Singapore in Russian was timely, as there were definitely some geographical and cultural gaps for us to fill. At the same time, we also asked Singaporeans what they knew about Russia. The answers we received boiled down to the following: • • • •

Russia is a very cold country; Russian women are very beautiful; There is a lot of corruption in Russia; Russia lives off its oil and gas deposits.

These answers are all true, no doubt, but Russia has much more to offer. So we once again were reassured that writing about Russia in English was no less timely, and decided to devote a sizable portion of our magazine to Russia, its culture and affairs. In the course of the magazine’s existence, we received various requests to expand our Russian content. Singapore Airlines, which has been taking 103rd Meridian East on-board their Singapore-Moscow-Houston flight for the last two years, informed us that their international passengers expected more features on Russia from a magazine that was half in Russian. It was an indication of a rekindled interest in Russia.

FROM SOULS TO STOMACHS Some of the feedback on 103rd Meridian East was both surprising and inspiring. Singaporeans sent text messages, emails and comments via our website. But one phone call became a turning point for us. A year ago, a late caller asked in Singlish whether we sold Russian pies. It turned out that his girlfriend had read our feature about Northern Russian pies in Issue 6 of 103rd Meridian East and was dying to taste them. Impressed with the chivalry of this young man (the call was at about 9pm and he was ready to go to any place in Singapore to get his sweetheart a pie) and the obvious interest of Singaporeans in Russian cuisine, I toyed with the idea of introducing authentic Russian food to the local dining scene. That call also brought back the memory of Russian President Dmitry Medvedev’s visit to Singapore in the framework of the APEC Summit in 2009.

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The Russian head of state had raised the question of what the procedure for opening a Russian restaurant in Singapore would be. It was obvious that the interest in Russian cuisine was coming from both ends. From this point on, we wondered how to actually open a truly authentic Russian restaurant in Singapore. This led to a score of challenges. The first question was how we could truly recreate the essence of a Russian eating house whilst meeting the discerning expectations of the Singaporean gourmet crowd. We needed to find the best location, the best team of talents and, of course, the best possible ingredients in order to give Russians in Singapore and Singaporeans alike a memorable dining experience. We did not want to fall into the trap of preconceived ideas of what a Russian restaurant would be like or actually is in most parts of the world — being a kitsch representation of Russia of Lenin-matryoshka-balalaika or a copy of a European fine dining restaurant. With this in mind, we decided to portray different eras and environments found in the banquet halls of ancient Russian princes, the interiors of a mediaeval Russian monastery or castle and a wooden Russian chalet. This was obviously easier said than done, as it is clear that Singaporean interior designers, constructors and architects do not have much experience in designing, drawing and building Russian palaces, chalets, let alone castles. So this was the beginning of the journey, getting them to understand our expectations by compiling pictures, drawings and paintings of what we wanted recreated. As the overall ambiance of the place would have an ancient feel to it, it was only logical to move to an area representing some of the most iconic architectural heritage of Singapore. We were lucky enough to find the perfect spot on Duxton Hill in the form of two shop houses that we combined into one. One does not simply move into a conservation building in Singapore and expect to be free to do as one pleases. One must go through the very tedious process of applying to a multitude of governmental agencies for various permits and licences involved in the opening of a food and beverage outlet within premises of historical architectural significance. The good thing about this situation was that it gave us ample time for our culinary team to perfect their skills and understanding of Russian food under the supervision of our Russian Chef Kirill Shiraev. It also gave us time to source the best possible ingredients to recreate a truly authentic Russian dining experience.

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Now comes the part where one must prepare a menu that somehow accurately represents the complexity and varied nature of Russian cuisine. Not a simple task, I can assure you. We started with a selection of over 500 recipes from Russia and the former Soviet republics, having our culinary team prepare every single one of them with the overall objective of remaining authentic in the preparation and ingredients used in the dishes, which would appeal to our Singaporean and expatriate guests alike. Let’s not forget that getting the right produce for a restaurant is never as simple as going to the supermarket. One has to talk to a multitude of suppliers, bargain, negotiate and convince them to bring in products not previously available in Singapore, such as the famous Kamchatka crab, the northern cloudberry, lingonberry and Russian sunflower oil, which have an ever so distinctive taste. Of course, a Russian restaurant would not be complete without a distinc­ tive selection of vodkas, both clear and fruit-based house infusions based on recipes taken from a book dating back to the early eighteenth century. These infusions, with flavours as exotic as lavender and cloudberry, are rapidly gaining in popularity among Singaporeans and the expatriate crowd alike. We are also proud to be the only people outside of Russia to carry AbrauDurso, champagne that has been produced in Russia since 1891 in a winery by Prince Leo Golitsyn. This champagne can certainly compare with some of the finest French Champagnes. So after nine months of painful processes, with the assistance of a very large team of experts from various fields, what is the result? The result is a stunning 8,000 square feet restaurant with three very distinct areas serving truly authentic Russian food and delicacies by a skilled team of professionals in a unique environment never before seen in Singapore. One will be able to see for themselves a bar that is set in a room depicting the interior of a Northern Russian chalet, a place where rusticity and comfort go hand in hand. The only thing missing, perhaps, is a fireplace, but we are not sure the Urban Redevelopment Authority of Singapore would have actually allowed us to install one in a conservation area. If one is in the mood for something more refined and sophisticated, one may be led to our fine dining rooms where one will be able to enjoy the hand-painted frescoes depicting scenes from the everyday lives of the ancient Russians. With a view of our wine cellar, one will be able to have a sneak peak at some very rare bottles of wine never ever seen here in Singapore prior to our opening. We have a very unique bottle of Yellow Wine from French Jura dating as far back as 1821, a bottle that never left the chateau in which

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it was produced till now, a bottle that should be enjoyed as a piece of art and a piece of history, as 1821 was the year of Napoleon I’s death in exile on the island of Saint Helena. In conclusion, we are proud to say that no efforts were spared to bring Russia to Singapore through the best possible means of cultural exchange: national cuisine.

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NO BOOKS ABOUT SINGAPORE IN RUSSIAN? GIVE ME A BREAK! (An Editor’s Note) Victor Sumsky

Julia Sherstyuk’s determination to bring Singapore and Russia closer together by providing more “food for soul and stomach” is certainly commendable. Personally, I find 103rd Meridian East to be a highly readable general-interest magazine. Julia’s Buyan restaurant (9/10 Duxton Hill, ) may be recommended as a cozy refuge to spend an evening tasting designer versions of Russian dishes and drinks. What I cannot swallow with equal delight is Julia’s rather sweeping statement on the lack of books about Singapore in Russian. Any Russian who is curious about Singapore’s geography or history, past or present, political trends or economic achievements, will find enough things to read in his (or her) native language — be it academic works or journalistic articles. Efforts to present Singapore and the neighbouring countries to the Russian reading public are by no means a recent phenomenon. For instance, between 1856 and 1869, Morskoy Sbornik (The Nautical Collection) — a St. Petersburg journal established in 1848 to cover naval matters and published until today — carried no less than ten articles dedicated to the sea currents near the port of Singapore and the specifics of navigation in the Straits of Malacca. Readers can check this information in the section on “Malaya and Singapore” of The Bibliography of Southeast Asia (1960).1 All in all, 296

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this book provides references to 3,752 Russian-language publications about this part of the world that appeared before 1958. Anyone who opens the 1980 sequel to that volume will discover that between 1959 and 1970 there were no less than 67 Russian-language monographs, brochures and articles in academic journals and news magazines about Singapore.2 As for the total number of Soviet publications on Southeast Asia in that period alone, it was 6,965. Among those academic writings in Russian that were published about that time and in the two subsequent decades, I would single out such inform­ative pieces of research as Singapore by Gennady Chufrin (1970), Singapore: Problems of a City-State by Nikolai Kalashnikov (1981), The Political System of Contemporary Singapore by Emma Gurevich (1984), Singapore in the Economy of Southeast Asia by Vitaly Kurzanov (1985), Singapore: A Handbook edited by Gennady Chufrin (1988) and Singapore’s Foreign Policy by Gurevich and Chufrin (1989).3 One more book that was written in the same era deserves a special mention. In 1971, Yuri Savenkov — a speaker of Mandarin and a lover of all things Chinese — came to Singapore as the correspondent of Novosti News Agency (now RIA Novosti). The next six years that he spent in the island republic gave him enough “food for soul” to produce Sketches of Singapore (1982) — a description of clever pragmatism at work by an irrepressible romantic.4 With his penchant for detail, keen interest in culture and the sensitivity of a poet, this author just could not help but admire Singapore’s consistent perfectionism. Looking through the 175 pages of Savenkov’s Sketches (published, by the way, in 30,000 copies) I find no traces of “false statements and misleading facts about the city-state”. Today a translation of that book into English might still be a worthy undertaking for at least two reasons. First, it tells you how Singapore of the 1970s looked like to an intelligent visitor from the other side of the Iron Curtain. Second, the very fact that works like these were fit for print in the USSR is an indication that real life and real people over there were a bit different from the caricatures in James Bond novels and movies. But did the Soviet readers have the chance to learn anything at all about Singapore from Singaporeans themselves — for instance, from masters of modern fiction? Translations of Singaporean literature into Russian were not numerous, but they still were there. First there came Singapore Mosaics (1980) — a book compiled of short stories originally written in Chinese by a dozen different authors.5 In 1989, this was followed by Singapore’s Modern Prose, introducing such popular English language writers as Goh Poh Seng and Catherine Lim to the Soviet public. The core of this collection

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(published, just like Singapore Mosaics, in 50,000 copies) was Goh’s If We Dream Too Long, acclaimed as the first authentic Singaporean novel depicting local realities.6 The overwhelming changes of the late 1980s to early 1990s that led to the emergence of post-Soviet Russia brought about new opportunities for the country’s interactions with the world. On the Singaporean side, few people grasped it quicker than Mark Hong who served in Moscow as Singapore’s Ambassador during 1995–2002. How many foreign diplomats leave behind them a book or two to explain their nations to the hosts? That was exactly what Mark did, and he obviously enjoyed doing something unorthodox and smart. While in Moscow, he wrote, got translated into Russian and published not one or two but three such books — The Secrets of Singapore’s Success, The Reasons for Singapore’s Success and Singapore’s Education System.7 Carrying so many facts and valuations related to Singapore’s remarkable rise, its place in ASEAN and the globalizing world, these books stimulated demand for more information on the subjects. In a sense, they prepared the ground for the Russian language edition of Lee Kuan Yew’s From Third World to First: The Singapore Story, 1965–2000 (2005).8 It should be mentioned that few other foreign statesmen (and hardly anyone from Asia) can match Mr Lee in terms of popularity with the contemporary Russian elite. Soon after publishing his memoirs, the prestigious MGIMO-University of Moscow conferred upon him its Honorary Doctorate. To the long list of awards and decorations presented to the father of modern Singapore, the Russian Government added the Order of Friendship. Mr Lee also sits on the Board of Governors at the newly established Skolkovo Business School, patronized by the Kremlin. In the meantime, research on the ever-changing and ever-successful Singapore continues. Twice a year, the Institute of Oriental Studies in Moscow prepares a collection of articles on the current trends and events in Southeast Asia. Surely, almost always there are pieces about Singapore — its foreign policy and investment strategy, its measures to eradicate domestic corruption, its assistance to Russia in creating special economic zones. As time goes, new names appear on the list of the authors, but the familiar ones — such as those of Emma Gurevich and Marina Osipova — are invariably there too.9 Not long ago Lyudmila Pakhomova, one of the most experienced Southeast Asia-watchers among the Russian economists, published a monograph on the new industrial countries of the region. Its opening chapter is about Singapore.10

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In fact, Singapore is now praised so often and so lavishly, that once in a while one may want to view it in a different light simply for the sake of it. That may be the case of Leonid Mlechin — a Russian TV personality and a remarkably prolific writer of both detective stories and non-fiction. Among his countless writings is a short novel called A Place to Kill Good Boys. Can you imagine that this refers to Singapore? Even if you cannot, it does. Below the surface of everyday urban routine, the author discovers a terrorist conspiracy, rivalries between the CIA and the Japanese intelligence, bitter memories of the war on the Pacific, and so on. Much of the plot rotates around the reminder that Changi — an area in the eastern part of Singapore now globally famous because of its outstanding international airport — has a history of human suffering: several prisoner-of-war and internment camps were located there during the Japanese occupation.11 Whatever may be said about the merits of this story, the next Russian book on Singapore will be surely something else. I am told that Emma Gurevich, the number one expert on Singapore politics at the Institute of Oriental Studies (if not in the whole of Russia) has completed her work entitled Singapore: A 20 th Century History. Once it is published, it will be a welcome addition to similar volumes on Indonesia, Burma/Myanmar, Cambodia, Malaysia and the Philippines produced by her colleagues in the last few years.12

Notes

1



2



3



4



5

See: Bibliografiya Yugo-Vostochnoy Azii [The Bibliography of Southeast Asia] (in Russian) (Moscow: IVL, 1960), p. 179. See: Bibliografiya Stran Yugo-Vostochnoy Azii [The Bibliography of Southeast Asian Countries] (in Russian) (Moscow: GRVL Nauka, 1980), pp. 332–35. See: Chufrin G., Singapur [Singapore] (in Russian) (Moscow: Mysl’, 1970); Kalashnikov N.I., Singapur: Problemy Goroda-Gosudarstva [Singapore: Problems of a City-State] (in Russian) (Moscow: Znaniye, 1981); Gurevich E.M., Politicheskaya Sistema Sovremennogo Singapura [The Political System of Contemporary Singapore] (in Russian) (Moscow: GRVL Nauka, 1984); Chufrin G.I. ed., Singapur: Spravochnik [Singapore: A Handbook] (in Russian) (Moscow: GRVL Nauka, 1988); Gurevich E.M., Chufrin G.I., Vneshnyaya Politika Singapura [Singapore’s Foreign Policy] (in Russian) (Moscow: GRVL Nauka, 1989). See: Savenkov Yu., Singapurskiye Etyudy [Sketches of Singapore] (in Russian) (Moscow: GRVL Nauka, 1982). See: Singapurskaya Mozaika [Singaporean Mosaics] (in Russian) (Moscow: Progress, 1980).

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See: Sovremennaya Proza Singapura [Singapore’s Modern Prose] (in Russian) (Moscow: Raduga, 1989). Four years after the publication of that book Boris Parnikel who wrote a preface to it organized a conference on Singapore’s cultural situation at the Maxim Gorky Institute of World Literature in Moscow. Some papers presented on that occasion were later published by the Nusantara Society that brings together Russian scholars who deal with Southeast Asia — linguists and anthropologists, specialists on culture, ancient and modern history, economics, political development, etc. See: Singapur — Perekryostok Malaiskogo Mira [Singapore as a Crossing of the Malay World] (in Russian) (Moscow: Krasnaya Gora, 1996). 7 See, for example: Mark Hong, Prichiny Uspekha Singapura [The Reasons for Singapore’s Success] (in Russian) (Moscow, 2000). 8 See: Lee Kuan Yew, Singapurskaya Istoriya: Iz “Tret’yego Mira” — v Pervyi [Singapore Story: From Third World to First] (in Russian) (Moscow: MGIMO, 2005). 9 See, for example: Osipova M.G., “Singapurskaya Sistema Bor’by s Korruptsiyei” [Singapore’s System of Fighting Corruption] Yugo-Vostochnaya Aziya v 2002 g. Aktualniye Problemy Razvitiya [Southeast Asia in 2002: Urgent Problems of Development] (in Russian) (Moscow: IRAN, 2003); Geisherik M. Ya., “Rol’ Singapura v Sozdanii Rossiyskikh Osobykh Ekonomicheskikh Zon” [Singapore’s Role in the Creation of Russian Special Economic Zones] Yugo-Vostochnaya Aziya: Aktualniye Problemy Razvitiya: Vypusk XII, 2008–09 gg. [Southeast Asia: Urgent Problems of Development: Issue #12, 2008–09] (in Russian) (Moscow: IV RAN, 2009); Matyukhin M.V., “Singapurskiye Investitsii Za Rubezhom: Dinamika I Struktura” [Singapore’s Investments Abroad: Dynamics and Structure] (in Russian) [Southeast Asia: Urgent Problems of Development: Issue #12, 2008–09]; Gurevich E.M., “Partiya Narodnogo Deistviya Singapura: 50 Let u Vlasti” [People’s Action Party of Singapore: 50 Years in Power] (in Russian) Yugo-Vostochnaya Aziya: Aktualniye Problemy Razvitiya: Vypusk XIV, 2009–10 gg. [Southeast Asia: Urgent Problems of Development: Issue #14, 2009–10] (in Russian) (Moscow: IV RAN, 2010); Astafyeva E.M., “Nekotorye Aspekty Politiki ‘Natsiyestroitelstva’ v Singapure” [Some Aspects of Nation-Building Policy in Singapore] (in Russian) Yugo-Vostochnaya Aziya: Aktualniye Problemy Razvitiya: Vypusk XIV, 2009–10 gg. [Southeast Asia: Urgent Problems of Development: Issue #14, 2009–10]. 10 See: Pakhomova L.F., Modeli Protsvetaniya: Singapur, Malaiziya, Tailand, Indoneziya [Models for Prospering: Singapore, Malaysia, Thailand, Indonesia] (in Russian) (Moscow: Institute of Oriental Studies, 2007). 11 See: Mlechin L., Mesto, Gde Ubivayut Khoroshikh Mal’chikov [A Place to Kill Good Boys] (in Russian) (Moscow: Tsentrpoligraf, 2008). 12 See: Drugov A. Yu., Tyurin V.A., Istoriya Indonezii. XX vek [Indonesia: a 20th Century History] (in Russian) (Moscow: IV RAN, 2005); Vasilyev V.F., Istoriya Birmy/Myanmy. XX vek [Burma/Myanmar: A 20th Century History]

6

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(in Russian) (Moscow: IV RAN, 2010); Mosyakov D.V., Istoriya Kambodzhi. XX vek [Cambodia: A 20th Century History] (in Russian) (Moscow: IV RAN, 2010); Tyurin V.A., Tsyganov V.A., Istoriya Malaizii. XX vek [Malaysia: A 20th Century History] (in Russian) (Moscow: IV RAN, 2010); Levtonova Yu.O., Istoriya Filippin. XX vek [The Philippines: A 20th Century History] (in Russian) (Moscow: IV RAN, 2011).

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National University of Singapore (NUS)-Russia: State of Collaboration Anne Pakir1

ABSTRACT This paper elaborates on the state of collaborations between the National University of Singapore (NUS) and Russian institutions, following a similar presentation made at the “ASEAN-Russia Conference: Foundations and Future Prospects” organized by the Institute of Southeast Asian Studies (ISEAS) in Singapore on 26 April 2011. It seeks to present a summary of NUS with a particular focus on international and Eastern European partnerships and invoke discussion on prospects for future cooperation. An overview of NUS and its future direction is necessary for an informed discussion of potential collaborations and thus is presented. Not resting on its laurels, the University will increasingly look east in achieving its vision to be a global knowledge enterprise centred in Asia and influencing the future, providing transformative global education and continually scaling its own peaks of excellence, in response to intense competition all over the globe.

NUS Today and Nuances of Vision The National University of Singapore (NUS) is a leading, research intensive university. Since its earliest beginnings as a small medical school in 1905, NUS today has grown into a globally ranking university of high academic 302

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repute. With fifteen faculties and schools in three campuses, NUS offers its student populace of 37,000, of which one in three are graduate students, a full range of disciplines — from the arts, humanities and social sciences to the natural sciences, life sciences, biomedical sciences and medicine, to computational sciences and engineering. In research and education, NUS has partnerships with top universities all over the world. NUS has three Research Centres of Excellence (with National Research Foundation funding), and twenty-two university level research institutes and centres. Its professors and researchers are also working in sixteen national level research institutes and centres.

A Globally Ranked University Although global university rankings are subject to much debate, NUS is a strong performer across indices. It was rated among the top 3rd and 4th universities in Asia by QS World University Rankings (QS) and Times Higher Education (THE) rankings (both UK based), and among the top ten in Asia according to the Australian High Impact Universities Research Performance Index (RPI) and Russian Global University Ranking (GUR) (see Table 1). Table 1 NUS Performance in World University Rankings University Rankings 2010 QS THE Australian RPI Russian GUR (in 2009)

Asia Rankings

World Rankings

3 4 3 9

31 34 82 88

Source: Compiled by the Author.

NUS “Globalization” NUS’ internationalization trajectory began in the late 1990s, when it resolved to be a global knowledge enterprise and begun forging ahead with international partnerships and collaborations. Prime facie, the internationalization of a university is a key factor in its performance in global university rankings and academic reputation.2 But the main player of internationalization was globalization, which led

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to close integration of national economies with global trade and finance, unprecedented mobility of labour and the rise of the knowledge economy. In the words of NUS’ President Tan Chorh Chuan, universities can shape the future by providing transformative global education, creating positive impact through high quality research, application and thought leadership, and, by becoming more global institutions. This strategy was tied together with the university’s efforts at recruiting foreign talent and upgrading its education offerings through introducing a modular system and interdisciplinary learning. NUS graduates are oriented towards creating solutions to global challenges, which require different perspectives and ability to work with people of many nationalities, cultures and disciplinary backgrounds. Hence, a highly diverse campus environment was created. Students today come from 100 countries. Currently, about 33 per cent of enrolled students are international students. Some 65 per cent of faculty members and research staff are from abroad (see Table 2).

Table 2 NUS in comparison to other large universities, with a public education mandate QS World University Rankings 2010

U-Michigan UC Berkeley U-Tokyo U-Manchester NUS U-Sydney Peking University NTU (Taiwan) Yonsei University

2010

2009

2008

  15   28   24   30   31   37   47   94 142

  19   39   22   26   30   36   52   95 151

  18   36   19   29   33   37   50 124 203

Source: QS World University Rankings 2010

International Partnerships NUS students are exposed to a broad base of education and given flexibility to chart their academic course through a wide range of modules across

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disciplines in order to build critical thinking capacity. They can choose a pathway of obtaining an overseas degree from the NUS home university itself, through over sixty joint, double, concurrent degree programmes with partners from around the world. The courses include the following (see Tables 3 and 4). Table 3 Double/Concurrent Degrees Master & Bachelor in Engineering, NUS

Diplôme d’Ingénieur +

Master in Public Administration

Master in Public Policy

Lee Kuan Yew School of Public Policy

+

Bachelor in Science Computational Biology NUS

Global Public Policy Network Partners (Columbia University, LSE, Sciences Po) Scientiae Magister in Computer Science (Computational Biology)

+

Bachelor of Laws NUS

French Grand Écoles

Brown University Juris Doctor

+

New York University

Source: Compiled by the Author.

Table 4 Joint Degrees Master of Arts in Southeast Asian Studies NUS

+

Australian National University

+

UCLA Los Angeles

+

IIT Bombay and IIT Madras

+

Karolinska Institutet

Executive MBA NUS Ph.D. in Science, Engineering or Computing NUS Ph.D. in Genetic and Molecular Epidemiology NUS Source: Compiled by the Author.

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Table 5 Top Exchange Destinations (AY2004 to AY2009) Rank

AY2004/05

AY2005/06

AY2006/07

AY2007/08

AY2008/09

AY2009/10

 1

US

US

US

US

US

US

 2

Canada

Canada

UK

Canada

UK

Canada

 3

UK

UK

Canada

UK

Canada

UK

 4

Sweden

Sweden

China

Sweden

Sweden

Sweden

 5

China

China

Germany

Germany

Germany

Germany

 6

Germany

Germany

Sweden

China

France

UK

 7

South Korea

Australia

HK

France

China

China

 8

Australia

NZ

Netherlands

HK

HK

Netherlnds

 9

France

HK

Australia

Netherlands

South Korea

South Korea

10

Denmark

France

France

Australia

Netherlands

Denmark

Source: Compiled by the Author.

The strategy has been described as taking NUS students out to the world and bringing the world to NUS. In student exchange alone, NUS has some 180 partner universities around the globe. As of Academic Year (AY) 2010, about one in two undergraduates have some form of overseas educational exposure and about one in four spends a semester abroad. The top partners of five years remain English speaking countries (U.S., Canada, UK, and Australia), then Sweden, Germany and China. In one year, NUS sends about 1,400 students out into the world and hosts a similar number of incoming international students (see Table 5). NUS also sends students out on several other types of international programmes, including internships, summer and research attachments, language immersions, conferences and community service projects. To encourage enterprise and innovation, seven NUS Overseas Colleges have been launched in the entrepreneurial hubs of the world — in Silicon Valley, “Biovalley” in Philadelphia, also in Beijing, Shanghai, Bangalore, Stockholm. The newest NUS College in Israel was established in 2011. The popular programme allows students to intern in a technology start-up while taking courses at a partner university for a year.

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Eastern European Partnerships In the past decade, NUS’ collaborations with Eastern Europe have mainly been through the Eastern Europe Research Scientists and Students Exchange Collaborations Programme (EERSS). The EERSS was an initiative by the Defence Science and Technology Agency (DSTA), a statutory board of the Singapore Ministry of Defence. Run from December 2001 to March 2009 and managed by the International Relations Office, the EERSS was a platform to bridge research ideas and collaborations between scientists from the two regions and to foster academic relations between NUS and the Eastern European institutes. It supported ninety-two scientists and nineteen students from Eastern Europe, including countries such as Poland, Romania and Czech Republic. The bulk of the intellectual capital exchange was with Russia and in the fields of Engineering, Science, Computing and Mathematics (see Table 6). Table 6 EERSS Participant Universities/Institutions Bauman Moscow State Technical University Far Eastern National University (through APRU) General Physics Institute Institute of Automation and Electrometry Institute of Problems of Chemical Physics Institute of Solid State Physics Ioffe Physico-Technical Institute Kirensky Institute of Physics Krasnoyarsk State Technical University Landau Institute for Theoretical Physics Lebedev Physical Institute Mendeleev University of Chemical Technology Moscow Aviation Institute Moscow Institute of Physics & Technology Moscow State Engineering Physics Institute Moscow State Institute of Radio-engineering, Electronics & Automation Moscow State University Novosibirsk State University Russian Research Centre “Kurchatov Institute” Saint Petersburg State Electrotechnical University “LETI” Saint Petersburg State Institute of Fine Mechanics and Optics Saint Petersburg State Polytechnical University Semenov Institute of Chemical Physics Sobolev Institute of Mathematics Steklov Mathematical Institute of the Russian Academy of Sciences Tomsk Polytechnic University

Source: Compiled by the Author.

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Through the Commonwealth of Independent States and Eastern Europe Award, NUS gave out some S$300,000 to help students who came to NUS on student exchange. The top undergraduate exchange partners were Poland, Croatia, Hungary and Estonia (see Table 7): Table 7 Undergraduate Student Exchange 2005/2006

2006/2007

2007/2008

TOTAL

In

Out

In

Out

In

Out

In

Out

Croatia Estonia Hungary Latvia Lithuania Poland Romania Russia

0 0 2 0 0 4 2 0

0 0 0 0 0 0 0 0

7 2 3 0 0 6 0 0

1 0 2 0 0 2 0 0

7 2 5 1 1 5 1 3

0 0 4 0 0 3 0 0

14 4 10 1 1 15 3 3

1 0 6 0 0 5 0 0

TOTAL

8

0

18

5

25

7

51

12

Source: Compiled by the Author.

NUS’ interactions with Eastern Europe have built increased awareness of the region among students and of NUS in Eastern Europe, The EERSS facilitated student and academic mobility, and led to research collaborations particularly in magnetic field sensing and advanced computational applications. Since 2002, NUS has hosted seven Russian President Scholars who were funded by the Russian government for their stay in NUS. NUS had gained much value from our engagements with the region. Eastern European students and NUS students alike describe their induction as a good experience into the respective country’s research landscape. They returned with experience, technical skills and broadened horizons.

Engaging Eastern Europe in Future — Collaborative Approaches The question now is what next after the EERSS programme? How can NUS continue to sustain exchange with Eastern Europe and Russia? There are

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several trends of note, which Eastern European institutions and NUS can possibly leverage on: 1. Regional groupings to promote inter-regional fora and studies: From forming mainly bilateral partnerships in the earlier years, NUS has shifted to forming increasingly larger scale and multilateral collaborations, in both education and research. Examples include the S3 University Alliance, a tri-university colloquium with Fudan University and Korea University, which runs the S3 Asia MBA, which takes students to the three business schools of three vibrant Asian cities: Shanghai, Seoul and Singapore. The Center for Translational National Legal Studies cofounded by NUS Faculty of Law is a collaboration that spans eighteen countries and five continents. Besides needing the diversity to address global issues effectively, there is the logic of strength in numbers. A grouping speaks louder and carries greater clout than isolated entities. NUS is actively involved in strategic networks such as the International Alliance of Research Universities (IARU), the Association of Pacific Rim Universities (APRU), and also with the regional ASEAN University Network (AUN) and Universitas 21 (U21). NUS could promote/ package Eastern Europe as a regional bloc internally. Eastern Europe can engage NUS through the AUN by positioning itself as a regional bloc. As the respective regions increase in importance, so will the value of inter-regional studies — particularly with ASEAN anticipating regional economic integration by 2015 and talk of possible expansion of the European Union eastwards. 2. Complementary research collaborations: NUS produces research of world quality and impact in a broad range of fields, and has among the best research facilities. Scopus rated NUS with an impact factor of four in the 2009 QS rankings. In testimony to excellence, NUS was chosen for three of Singapore’s four nationally supported Research Centres of Excellence (RCEs) in the fields of quantum technology, cancer and mechanobiology. NUS together with the Nanyang Technological University set up the 5th RCE-the Singapore Centre on Environmental and Life Sciences Engineering (SCELSE). This is a centre envisioned to contribute to Singapore’s national priorities in water, energy and urban sustainability. Besides the said fields, NUS’ other recent research thrusts are in translational medicine, environment and water technology, energy studies and interactive and Digital Media. In another recent development, NUS created interdisciplinary research clusters on Ageing, Finance and Risk Management, Integrative Sustainability Solutions,

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Biomedical Sciences and Translational Research. The research clusters will pursue globally competitive research in an Asian context. Potential NUS and Eastern European partnerships therefore need find niche areas where the sides offer specialized expertise and complementary field strengths which the other does not have to work on issues of common concern. For instance, health care and policy is of major concern to both Singapore and Russia, and indeed Europe at large, all of which are facing an aging population. In a speech, the NUS President described this pairing as “mutually beneficial academic outsourcing” where: …educational programmes which are unique and of exceptional quality (can be) built around complementary academic strengths in two universities. In other words, if University A is very strong in a particular area and University B has great strengths in a complementary area - if the two universities work together to put up a joint programme, this will be of exceptional quality.

The Yale-NUS College is one such illustration. The first liberal arts college in Singapore (opening in 2013) offers a “novel West-meets-East educational approach” that will “place us (NUS) at the leading edge of the profound currents of change sweeping higher education in Asia”.3 3. Eastern Europe as a Source of Talent: In a 2010 survey conducted by the International Relations Office, NUS, it was found that most NUS Faculties value Eastern Europe as a recruitment ground for talent. Eastern Europe has a reputation for high education levels and achievements in science, engineering and mathematics. In building a super research corridor NUS, especially working with research centres within close proximity to its Kent Ridge campus (Biopolis, Fusionopolis, One North, Singapore Science Parks, National University Health System), could look out potentially to Eastern Europe as a source of talent. In addition, the new Campus for Research Excellence and Technological Enterprise (CREATE) funded by the National Research Foundation (NRF) will be located at University Town — itself envisioned to be a new NUS model of living and residential learning. CREATE will also bring together a complex of top research institutions and labs with partners including MIT, ETH Zurich and the Israeli Technion Institute of Technology. CREATE expects to house 1000 young research talent at steady state. Could Russia and Eastern European countries present a talent pipeline for Singapore research?

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4. Dreaming with BRICS: Singapore and NUS are increasingly looking closer at BRIC nations (Brazil, Russia, India and China) given that the BRIC economies have the potential to eclipse the economies of the G7 countries by 2050. Interest in Russia as one of the big “four” fast growing nations should therefore grow over time. Russia is expected to rank sixth by 2050 in GDP and be a potential reservoir of future consumers. NUS Faculties such as the School of Business have started developing strategies to engage Eastern Europe. 5. STEER to Russia: The International Relations Office (IRO) has a Global Opportunities section, which develops international programmes such as international Summer Programmes (i-SPs), international Research Attachment Programmes (i-RAPs) and international internships (iIntern). This section was set up in 2010 to cater to projected increase in demand by students for short term programmes overseas and work related exposure. In projecting an anticipated rise in student interest, especially among Singaporeans, to go global, NUS will raise its numbers for Student Exchange Programme (SEP) and other international programmes such as i-SP, i-RAP, and i-Intern. The Office of the Vice-President for Global Relations (OVPUGR) has completed a framework for sending students on exploratory trips especially to less traditional destinations. The NUS Study Trip in Engagement and Enrichment (NUS STEER) students have gone and will go to the Middle East (2010, 2011) and to India (2010, 2011). IRO is considering an exploratory programme to Europe’s east. A STEER is planned for Vietnam in 2011 and possibly Russia in 2012 or 2013. IRO will work with bodies such as International Enterprise Singapore, which spearheads the island’s external economy and the growth of Singapore-based enterprises. What NUS needs in Russian cooperation would be host universities and companies willing to try out NUS interns. 6. Singapore-Russia/Eastern Europe Fair: Year round, IRO organizes Internationalisation@Home events, to bring the world to NUS students. Events include an annual International Exchange Day to showcase all our partners and exchange destinations. In 2010, IRO organized a Study in Japan Day, a Middle-East Day, a Southeast Asia Day, Study in Europe Day and the first China-India-Singapore Higher Education Dialogue. These events allow students to understand and appreciate the respective regions. With rising interest in the BRICs, and support from sponsors, the first Russia or Eastern European exhibition, forum or cultural fair could be considered.

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Conclusion In both East Asia and the Pacific and Eastern European countries, intraregion mobility is on the rise. In a long view of the future, given the ascent of Russia, inter-region mobility with Eastern Europe will increase. NUS is currently in a phase of development that will increasingly look inwards to Asia. There has been a subtle but important shift in NUS’ vision and mission. From becoming a Global Knowledge Enterprise, NUS’ vision since 2009, is to be “a leading global university centred in Asia, influencing the future”. In the President’s words, NUS has the opportunity to “assume leadership in research and scholarship in selected areas of importance to Asia” — in a nutshell, to be the authority in Asia, on Asia. NUS has explored research centres relevant to NUS integrative research clusters in India and China. In 2011, NUS launched the first NUS Research Institute in China, in China’s Suzhou Industrial Park. Prospects may appear relatively weaker in the light of the proximity of China and India to Singapore for deeper engagement with Eastern Europe. However, the Russian economy will determine how far it realizes its BRIC potential, alongside India and China given time. Whilst IRO can facilitate opportunistic and programmatic possibilities for its student mobility vision as sketched here, resources and imagination may be needed to bring about a sustained collaboration with Russia and its universities. In the absence of a funding source such as the EERSS, this kind of collaboration will be a major challenge.

Notes

1



2



3

Special thanks to ISEAS for the kind invitation to speak at the Forum on 26 April 2011 and to Louise P.L. Chew of IRO for support and help in the preparation of this paper. For QS international faculty and students constitutes 10 per cent of total score and for THE 5 per cent. NUS was 12th in the world for academic reputation, 7th in the world for international faculty and 13th for international students. The Australian RPI calculates a g-score for each faculty, which is divided with that of high globally performing faculty. NUS’ President Tan Chorh Chuan, 2011.

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SOFT POWER: A COMPARISON BETWEEN BRITAIN, FRANCE AND RUSSIA Amy V.R. Lugg

INTRODUCTION The concept of “soft power” as defined by leading academic and international relations expert Joseph Nye Jr in 1990 referred specifically to “the ability to get what you want through attraction rather than coercion”.1 According to a recent research proposal from Chatham House in the United Kingdom, “The conventional wisdom is that Russia has no soft power.”2 This might on first reading seem to be an unfair assessment however, when compared to other former Empires such as Britain and France, at face value this does seem a rather accurate statement. This paper aims to examine the implementation of soft power by Britain and France and how Russia can learn from these examples to bolster Russian influence on the global stage.

BRITAIN’S SOFT POWER Britain and her use of soft power has largely been the product of her former Empire. Through colonization and expansion, the utilization of English as the lingua franca among the people of the world today is perhaps the most overlooked symbol of soft power, and one which has been highly advanta­ geous to Britain and her standing on the world stage. Long before the term “soft power” was developed as a concept, Britain was conscious of its role and 313

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influence in the world and the importance of fostering cultural ties and links with the rest of the world. This was highlighted in particular by the formation of the British Committee for Relations with Other Countries, what we now know as the British Council in 1934, whose specific aim was to “improve the understanding of Britain across the world”.3 The strategies and methods in which the British Council has achieved this include: • Arranging for lecturers to be sent overseas • Supporting British institutes and societies and English schools in other countries • Arranging visits for individuals to the UK • Organizing music performances and art exhibitions4 Not limited to only education and cultural cooperation initiatives, The British Council has partnered with other government agencies such as VisitBritain to help promote Britain as a tourist destination. Recent projects include the “Football Unites” scheme, where fans of England and Russia have been brought together through sport and friendships formed. They have been able to pit their skills against each other in friendly games, and watch both Club matches such as that between Manchester United and Spartak Moscow and international games between England and Russia, and Wales and Russia, while also visiting museums and the London football academy.5 Another well-known instrument of Britain’s soft power is the BBC. Through the World Service, 24-hour television news and its website BBC News, the BBC is able to reach across the globe. The recent uproar that was sparked by the proposal to cut the Foreign Office funding of the BBC World Service is testimony to its enduring influence in the arena of soft power. The Chairman of the Foreign Affairs Select Committee, Richard Ottaway stated that: The value of the World Service in promoting the UK across the globe, by providing a widely-respected and trusted news service, far outweighs its relatively small cost. The recent dramatic events in North Africa and the Middle East have shown the ‘soft power’ wielded through the World Service could bring even more benefits to the UK in the future than it has in the past.6

In this ever-changing, global world where interconnectivity is becoming more and more important, the reliability of newsfeeds such as that of the BBC World Service to those who may not have access to the Internet or other forms of media is vital in the dissemination of information.

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FRANCE’S SOFT POWER Predating the British Council, the Alliance Francaise, which was founded in 1883 in Paris, France, has the sole aim of promoting French as a second language around the world and through the course of language instruction, the cultural links that are associated with it. Similarly to the British Council, which is a registered charity operating under the auspices of the Foreign Office, the Alliance Francaise is a “not-for-profit” organization however, it differs from the British Council in that it has no political or religious affiliations.7 Annually, the Alliance Francaise has: • • • • • •

10,000 students 160 nationalities 2,300 teachers trained 450 corporate clients 25 partner schools and universities 110 permanent qualified teachers8

It prides itself on being “the leading cultural network worldwide, with over 1,040 establishments in 136 countries on all five continents”.9 Another leading media group, Agence-France Presse (AFP) has its roots in France with its original founding in Paris as “the world’s first independent news agency”10 in 1835 initially as Agence Havas. It was renamed in 1944, after liberation from Nazi occupation. AFP has garnered a global reputation for providing timely and accurate news coverage that can be accessed from anywhere in the world and is not limited to an English-speaking audience. Providing 5,000 reports a day in English, French, Spanish, German, Portuguese and Arabic,11 the global reach and perceived neutrality of its reporting allows for factual and unbiased information to be disseminated globally and picked up by rival news wires. France has a long cultural involvement with Russia which dates back to the time of Peter the Great and therefore predates the founding of both the Alliance Francaise and the AFP. During that time, the aristocracy in particular was interested in the utilization of French language and education, however, the cultural cooperation that has existed since then and throughout the Cold War has somewhat stagnated.12

COMMONALITIES IN SOFT POWER PROJECTION For both Britain and France, their respective use and manipulation of soft power as a means to gain influence is not limited to the institutional format.

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As Joseph Nye pointed out in his 2004 article “Europe’s Soft Power”,13 there are other “resources”14 for soft power, and it cannot be merely coincidence that both Britain and France find themselves ranked close to the top in the following aspects: • • • • • • •

Nobel Prizes for Literature (France – 1st, Britain – 3rd) Nobel Prizes for Physics and Chemistry (Britain – 2nd, France 4th) Music Sales (Britain – 3rd, France 5th) Book Sales (Britain – 4th) Internet Website Hosts (Britain - 5th) Political Asylum (Britain – 1st) Spending per Capita in International Cultural Relations (France – 1st with over US$17, Britain – 3rd)15

This tends to suggest that through the use of other mediums such as cuisine, handicrafts, tourism etc., there are other means to exert soft power.

RUSSIA’S SOFT POWER Returning to the statement in the introduction from Chatham House that “Russia has no soft power”,16 while it is true that she does not have the global institutional tools at her disposal such as the British Council, Alliance Francaise or media arms such as the BBC or AFP, to say that she has “no soft power” rather simplifies the matter. Perhaps it would be better to argue that Russia has not implemented its soft power potential effectively?17 Everyone is well aware of Russia’s “hard power”, its military might and expertise together with abundant energy resources that allow for a position of dominance. What is hoped is that Russia will learn from the examples set by other great powers and utilize her soft power to reassert her position on the world stage. “Soft power” as an idea is not new to Russia but it is perhaps the execu­tion that has been called into question. Back in November 2004, then President, Vladimir Putin visited the Ukraine to show his support for a presidential candidate keen on bolstering ties with Russia, in what the New York Times journalist, Steven Lee Myers dubbed “Russia’s soft imperialism”,18 and while Mr Lee Myers acknowledged that this was not an attempt to rebuild the Soviet Union, it was viewed as a strategy to “forge an economic, social and military facsimile, with Moscow again at the core, in all but three of its former republics”.19 A sentiment that was echoed in the same article by Fiona Hill from the Brookings Institution that “Russia is on its way to recover the degree of soft power the U.S.S.R. once enjoyed in its immediate sphere of influence.”20

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Following the New York Times article, Ms Fiona Hill’s 2006 article “Russia Discovers Soft Power” for the Brookings Institution, highlighted Russia’s newly acquired soft power in its “near abroad”, principally: A range of new Russian products, a burgeoning popular culture spread by satellite television, a growing film industry, rock music, Russian popular novels, a revival of the crowning achievements of the Russian artistic tradition, and new jobs in the service and other sectors have made Russia an increasingly attractive country for the region around it.21

However, there are those that argue that dominating the “immediate sphere of influence” is not enough for Russia to be taken seriously in the global arena. At a time when the other great powers such as the United States, Great Britain and France are grappling with their own financial and economic issues, leading to cutbacks as already mentioned in the BBC and the British Council as examples, there is an opportunity for Russia to step into the arena and reassert her global position. Of course, capitalizing on the potential for soft power influence in the immediate surroundings is a far easier task than reaching beyond regional boundaries; however, it would seem that despite the best intentions, the tendency to resort to hard power as a means to influence is far too easy with the example of the Georgia conflict in 2008. All the positive steps that were taken in the realms of developing soft power were quickly eroded by the use of military might to once again engage in “great-power politics”.22 Local and international scholars began mooting the idea of soft power as being more relevant to the world today in 2010, the first being Nikolai Zlobin, who is a Russian academic based in Washington D.C. He commented to the Xinhua News Agency that “the fierce competition among countries was primarily a contest for development models and soft power” 23 adding that: We see that previous factors, including energy, technology, nuclear arsenals, and perhaps one country’s overall military power, may not necessarily guarantee absolutely advantageous influence across the world now.

It would seem that in order for Russia to compete in this rapidly changing world, the weight of hard power should be shifted to soft. Ten years ago, Russia formulated a concept paper entitled, “Russian Foreign Ministry Guidelines for the Development of Cultural Relations with Foreign Countries”, which by and large serves as a tool to foster “international cultural cooperation”.24 The author of the article, Georgy Filimonov, from the Department of Theory

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and History of International Relations of the Peoples’ Friendship University of Russia, believes that this concept paper should now be fully implemented and focus on two aspects: • High culture and high art as Russia’s easily recognizable image in the world and its main cultural export item (measures to promote exhibitions of works by Russian masters of classical art and its contemporary forms, an increase in the number of tours by Russian performance companies, cultural exchanges etc.). • Wider production and export of domestic products of mass culture, but not through cheap imitations of Western patterns of different trends in contemporary music, choreography, etc., but by cultivating original, exclusive styles based on all available formats. Furthermore the highly professional execution of original ideas in niche popular culture and subcultural movements, as well as authentic music styles which can by no means be attributed to universal mass culture (folk songs, Russian romances and various trends in contemporary Russian folk music, etc.).25 In addition to the possibility for foreigners to come to Russia and study at institutions of higher education and a challenge to the misperception of Russia as a land of factories and grey, cold winters, in other words to capitalize on its varied landscape and areas of outstanding natural beauty, such as Lake Baikal, and actively promote Russia as a tourist destination of choice. Mr Filimonov writes of the need to establish “Russia’s own international media”,26 not dissimilar to that of the BBC or AFP as mentioned earlier. It would seem the main stumbling block to all of these soft power aspirations, is that there is no public authority that exists according to Mr Filimonov to implement them. It is not all doom and gloom however, and steps are being taken in the right direction. At the start of 2011, Reuters reported that “Russian aims to increase clout with soft-power campaign”,27 the article stated that Russia is “considering setting up a national body to rival the U.S. Agency for International Development (USAID)”,28 with an aim to revamp Russia’s image among its immediate neighbours. The trouble is that this has largely gone unreported, despite increasing the budget for foreign aid by five times to US$7.5 billion.29 On a more positive note and in the spirit of bilateral cultural cooperation, in early April 2011, it was reported by the BBC that a statue of Yuri Gagarin will be unveiled in London to mark fifty years of his achievements in space. “The 3.5m (12ft) statue is a gift from the Russian Space Agency (Roscosmos)

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to the British Council…” 30 What is significant and goes someway to dispelling the Chatham House comment that “Russia has no soft power” 31 is that this gesture is “part of a series of cultural events to mark the Gagarin 50th anniversary”.32

CONCLUSION Britain and France have been effectively deploying a consistent policy of soft power for decades, in the latter case for over 100 years. As one of the great powers, Russia needs to reassert itself on the world stage through an effective and consistent use of soft power. The misperceptions that exist of Russia being seen only as a military heavyweight, and some would argue a bully when it comes to its control over energy supplies need to be countered by a systematic implementation of a soft power policy that allows Russia to capitalize on all of her other significant attributes, such as tourism, cuisine, literature, arts and culture. The current climate where the other great powers such as Britain, France, the United States and Japan who are undergoing financial, economic, and in Japan’s case, humanitarian trials and tribulations, presents an opportunity for Russia to exert influence in the global arena. The notion that soft power in Russia is non-existent is inaccurate; it has merely not been coordinated and implemented effectively. No doubt the resources are there to support a stronger soft power policy but the tendency remains to fall back on hard power. Clearly, the onus is on the authorities to implement policy from the top down but perhaps through more conferences such as this ASEAN-Russia conference, where communication is encouraged and ideas exchanged, on a one and one and group basis, slowly but surely, Russian soft power will start to gain momentum and a foothold in strategic thinking.

Notes

1



2



3

“Soft Power — The Means to Success in World Politics”, Tysha Bohorquez reviews Joseph Nye Jr.’s book on the importance of soft power, 12 January 2005, UCLA International Institute, (accessed 20 April 2011). “Russian Soft Power: A Reassessment”, Chatham House, Research, Russia and Eurasia, Current projects, 26 May 2010, (accessed 12 April 2011). “The British Council — Facts and Figures”, (accessed 20 April 2011).

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4 5



6



7



8 9



10



11 12



13

16 17 14 15



18

21 19 20



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Ibid. “Football Unites”, British Council Russia, Autumn 2007 and Spring 2008, (accessed 13 April 2011). “BBC World Service ‘should not be cut’”, BBC News Entertainment & Arts, (accessed 14 April 2011). “Alliance Francaise, Who are we?”, 11 February 2011, (accessed 20 April 2011). Ibid. Ibid. “About AFP: Our history”, (accessed 20 April 2011). Ibid. Martine Mespoulet, “French Influence in Russia”, Encyclopedia of Russian History, 2004, (accessed 14 April 2011). Joseph Nye, “Europe’s Soft Power”, The Globalist, 3 May 2004, (accessed 20 April 2011). Ibid. Ibid. “Russian Soft Power: A Reassessment”, op. cit. My co-editor, Dr Victor Sumsky kindly reminded me that there are indeed some “Modern Russian Soft Power Instruments” and these include “Russia Today”, a global television channel in English, Arabic and Spanish; Russian Information Agency “Novosti” (news) and Russkiy Mir Foundation, helmed by conference participant Dr Vyacheslav Nikonov, which aims “to promote understanding and peace in the world by supporting, enhancing and encouraging the appreciation of Russian language, heritage and culture”; Russkiy Mir Foundation website, (accessed 8 August 2011). Perhaps these need to be publicized more to enable them to be “front of mind”? Stephen Lee Myers, “Putin Uses Soft Power to Restore the Russian Empire”, New York Times, (accessed 12 April 2011). Ibid. Ibid. Fiona Hill, “Moscow Discovers Soft Power”, Brookings, 1 October 2006, (accessed 12 April 2011). Edward Luttwak, “Georgia conflict: Moscow has blown away soft power”, The Telegraph, 16 August 2008, (accessed 12 April 2011). “Development model, soft power key to global competition: Russian scholar”, Xinhua News Agency, (accessed 12 April 2011). Georgy Filimonov, “Russia’s Soft Power Potential”, Global Affairs, 25 December 2010, (accessed 12 April 2011). Ibid. Ibid. Conor Humphries, “Russian aims to increase clout with soft-power campaign”, Reuters, (accessed 12 April 2011). Ibid. Ibid. Jonathan Amos, “London statue to celebrate Gagarin”, BBC News Science & Environment, (accessed 14 April 2011). “Russian Soft Power: A Reassessment”, op. cit. Ibid.

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EPILOGUE

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RUSSIA’S SEARCH FOR AN ENHANCED ROLE IN SOUTHEAST ASIA Paradorn Rangsimaporn1, 2

INTRODUCTION This epilogue examines how Russia perceives Southeast Asia and the potential roles it has tried to play in the sub-region. Russia aspires to become a more significant player in the sub-region as well as in the wider Asia-Pacific region as befits its great power aspirations. This was especially the case under President Putin when foreign policy was based on pragmatism, aimed at transforming Russia into a “normal” great power through economic modernization and development, as the foundation for restoring Russia’s greatness and relevance to world affairs and that of neighbouring regions, including East Asia.3 This foreign policy approach has generally been continued by President Medvedev. The paper will also examine the different roles Russia has tried to play in Southeast Asia. Firstly, Russia as a “balancer” in the regional balance of power where ASEAN plays a leading role in regionalism, is a rising centre of power in a multi-polar Asia, and is seeking for other powers to help balance the growing influence of China. Secondly, the ASEAN market holds much potential for Russia’s economic role in the sub-region, including through the utilization of its primary economic assets — arms and energy — and also for further expansion and diversification of economic ties, including through cooperation in science and technology. Lastly, ASEAN is a diversified entity, whose 325

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members Russia assigns different levels of priority to and holds different opportunities for Russia to play an enhanced role in Southeast Asia.

HISTORICAL OVERVIEW Southeast Asia’s significance for Russia has historically been limited. Even when Tsarist Russia’s expansion into the Far East reached its peak in the latter half of the nineteenth century, it was the countries of Northeast Asia which lay next to the Russian Far Eastern territories that drew Russia’s immediate attention. Southeast Asia, however, was seen as too distant for Russia’s strategic interests, apart from the need to secure shipping lanes for naval and supply vessels from the Black Sea to Russia’s Far Eastern port at Vladivostok, especially in light of the other European powers’ colonial expansionism in this sub-region.4 The same strategic significance applied to Soviet thinking in the 1970s during the Soviet naval build-up in the east and their naval and surveillance facilities at Cam Ranh Bay in Vietnam, which were crucial for Soviet naval operations in the Pacific and Indian Oceans. However, Southeast Asia before the 1970s was not a priority for the Soviets even in the Third World, where the Middle East and South Asia were more important for Soviet strategic interests. Soviet relations with the Association of Southeast Asian Nations (ASEAN), which then excluded Vietnam, Cambodia, Laos, and Burma, were limited and marked by mutual suspicion and neglect. While ASEAN was created in 1967, ostensibly to foster regional cooperation and a stable external environment for nation building, it was also aimed at presenting a united front against the communist threat. Thus, the Soviet Union, and its alliance with Vietnam, was viewed by ASEAN members as a threat to varying degrees, while the Soviet Union often perceived ASEAN as a tool of Western imperialism.5 Furthermore, Southeast Asia and ASEAN were often viewed through the prism of Sino-Soviet rivalry during the Brezhnev years. The Gorbachev period saw a thaw in relations with ASEAN countries, especially due to the Soviet role in the Vietnamese withdrawal of troops from Cambodia, though this was primarily motivated by the Soviet desire to normalize relations with China.6 During the early post-Soviet years, the Asia-Pacific region again became peripheral to Russian foreign policy and interests, as the “Westernizers” who dominated foreign policy-making assigned more importance to relations with the West. By 1993, amidst internal criticisms of Russian neglect of Asia and the lack of expected full-scale assistance from the West, Russia strove to pursue a more balanced policy between East and West, as befits its status as a Eurasian power. Nonetheless, Southeast Asia remained marginal even

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within Russia’s Asia policy until Yevgeny Primakov became Foreign Minister in 1996. His approach included improved relations with Asia, wherein lay many power centres, which accorded well with Primakov’s vision of multipolarity, especially since some Asian states shared Russian concerns over U.S. unilateralism. Moreover, the end of the Cold War paved the way for mutual reappraisal of Russo-ASEAN relations. Russia was no longer regarded as a threat by ASEAN. ASEAN’s “economic tigers” were seen as potentially significant trading partners for Russia as well as economic models that Russia could emulate. Furthermore, ASEAN’s political weight and utility increased in Russian eyes as the organization has expanded to include all Southeast Asian states since the mid-1990s.

RUSSIA’S ROLE IN THE REGIONAL BALANCE OF POWER Post-Soviet Russia has constantly tried to portray itself as a Eurasian power, using its physical presence as well as its unique Eurasian identity to justify a greater role and presence in the Asia Pacific as well as its participation in regional organizations and the regionalism process.7 In this respect, ASEAN was important for Russia as it was “in the driver’s seat” of Asia-Pacific regionalism through its leading role in the formation of regional institutions, such as the ASEAN Regional Forum (ARF), Asia-Pacific Economic Cooperation (APEC), and the East Asia Summit (EAS). For Russia to assure itself a place in this process required endorsement by ASEAN.8 Moreover, for Moscow, Russian participation in such forums reflected regional recognition of Russia’s importance and great power status. For example, when Russia was elevated to full ASEAN dialogue partner status in July 1996, Russian diplomats saw this as ASEAN’s recognition of Russia’s significant role in the Asia Pacific, the usefulness of its presence in Southeast Asia, and the necessity of its participation in the regional political and economic structures and in Southeast Asian affairs more generally.9 For ASEAN countries, Russia was seen as a useful “balancer” to other regional powers, which accorded well with Russia’s desire for regional acceptance and greater role. Indeed, balance-of-power considerations were very much in ASEAN’s mind when they established the ARF in July 1993 as ASEAN wanted to engage the U.S. in the region while engaging China’s rise within a collective code of conduct.10 Russia was seen as another potential “balancer” and became a member at the ARF’s inception. For Moscow, joining the ARF was not only an issue of gaining regional acceptance but also due to a genuine appreciation of the Forum’s potential to maintain regional

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security, which was important for Russia given its then relative weakness. For example, Moscow initiated the development of a Code of Conduct for Inter-State Relations in the Asia Pacific (“Pacific Concord”) since 1995, and worked closely with ASEAN on a revised version which was signed as a Russian-ASEAN Joint Declaration in Cambodia, June 2003.11 Indeed, Russia’s indispensability to regional security was often stressed by senior Russian diplomats like then Foreign Minister Andrei Kozyrev, who claimed that no regional security system would work without Russia’s participation and that Russia could assume an important role in the regional balance of power.12 One Russian diplomat further claimed that ASEAN considered Russia an “inalienable” component of the Asia-Pacific balance of power and wanted to see this “great power” counterbalance other regional powers.13 However, Russia’s “balancer” role was initially not enough for Russia to join the EAS, when its application for membership was rejected at the first summit in Malaysia, December 2005. Indonesia, Singapore, Australia, and Japan opposed Russian membership due to the lack of substantive relations and fears of diluted ASEAN significance. This was despite the fact that Russia had met two of the three criteria for membership: having dialogue partner status with ASEAN and having signed the Treaty of Amity and Cooperation in November 2004. ASEAN endorsement was not forthcoming as ASEAN was divided on the issue with only Malaysia, the Philippines, Thailand, Laos, Cambodia, Myanmar and Vietnam supporting Russian participation.14 The view expressed by then ASEAN Secretary-General Ong Keng Yong that Russia’s significance for ASEAN remained “under question” prevailed.15 As a compromise, Russia was granted observer status, and Putin was invited to give a speech at the inaugural summit. Russia’s membership was further delayed when ASEAN announced a freeze on membership for two years in May 2006.16 It was only in October 2010 that ASEAN extended its invitation to Russia and the U.S. to participate in the EAS from 2011. This “welcoming” could be interpreted as increasing ASEAN concerns over China’s rise and increasing predominance. Expanding the EAS would help counterbalance China. As one Russian expert noted, Russia and ASEAN share an interest in China’s rise as both are neighbours to this regional giant.17 Russian attempts to play a “balancer” role in the region not only corresponded with how ASEAN countries saw Russia but also with Russian strategic thinking towards ASEAN. Russia had long espoused a policy of multipolarity, which was often associated with Primakov and the counterbalancing of U.S. power and the enhancing of Russia’s own interests. Asia was seen as a multipolar region, with China, Japan, India, and ASEAN as centres of power with whom Russia could do business, in order to counterbalance U.S.

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strength. Indeed, Foreign Minister Sergei Lavrov declared that the process towards multi-polarity is “vividly pronounced in the Asia-Pacific space”.18 Within this multi-polar region, Russia’s strategic objective, as stated in the Putin-approved Survey of Russian Foreign Policy in 2007, was to pursue balanced relations with all regional powers, including ASEAN, to secure longterm stability in the region which was essential for Russian development. ASEAN was thus seen as one centre of power which Russia should forge good relations with and a potential counterweight to U.S. influence.19 Nonetheless, while many Russian diplomats and regional experts agreed that ASEAN was an important power, some were relatively sceptical. As one noted, ASEAN countries “always meant and will always mean much less to Russia than China or Japan”.20 Nonetheless, Moscow continued to believe that close cooperation with ASEAN was logical, especially amidst the growing problems in relations with the U.S. and the EU and their antiRussian rhetoric.21 Friendly Russian-ASEAN relations were also seen by both sides as strengthening the military-political balance in ASEAN relations with China and Japan, especially in light of China’s rise and probable U.S. partial withdrawal.22 Indeed, according to former ASEAN Secretary-General Rodolfo Severino, it was not Russia’s trade potential but rather its global political standing which made Russia an important partner for ASEAN, along with Russia’s scientific and technological advances and energy resources.23 However, not all of the elite on both sides were convinced of Russia’s utility in the regional balance of power, especially during the early postSoviet years. Some Russian observers dismissed Russia’s role as a guarantor of regional security in the early 1990s, warning that Russia would be placed in a difficult position if conflicts arose between China and ASEAN over the Spratly Islands.24 On the ASEAN side, one diplomat viewed Russia as an “absent power” in the region, and Singapore’s former Prime Minister Lee Kuan Yew predicted in 2000 that Russia will not be a major player in East Asia for at least another twenty years.25 ASEAN views, however, were not uniform. Philippine President Fidel Ramos, for example, consistently supported Russia’s place in the regional balance of power throughout the 1990s. Malaysia was another firm supporter of Russia’s regional role and saw eye to eye with Moscow on many political issues including concerns over U.S. power.26 Inheriting a steadily growing economy buoyed by rising oil prices, the stature of Putin’s Russia gradually grew in ASEAN eyes and eventually led to its acceptance into the EAS under Medvedev. In 2006, then ASEAN Secretary-General Ong Keng Yong stated that ASEAN acknowledged Russia as one of the key players in the Asia-Pacific region and saw Russia as a strategic partner.27 Dialogue relations

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intensified during the Putin and Medvedev years. Putin attended the first ASEAN-Russia Summit held in Kuala Lumpur in December 2005, during which a Comprehensive Program of Action to Promote Cooperation between ASEAN and Russia 2005–15 was adopted, and Medvedev attended the Second ASEAN-Russia Summit in Hanoi after a five-year hiatus.

RUSSIA’S ECONOMIC ROLE AND PROJECTING INFLUENCE Persistently weak economic links between Russia and Southeast Asia have hindered Russia’s search for a greater role to play in the subregion. Although Russo-ASEAN trade grew by 716 per cent from 1993 to 1996, Russia remained the ASEAN dialogue partner with the smallest trade share with ASEAN throughout the late 1990s. The financial crises in 1997–98 in Asia and Russia severely affected Russo-ASEAN trade, which plummeted by 41 per cent and recovered only slightly by 14.5 per cent in 1999. While RussoASEAN trade did increase under Putin, ASEAN’s share of Russia’s total trade in 2006 was only 1.07 per cent whilst Russia’s share in ASEAN’s was 0.3 per cent — the second lowest amongst ASEAN’s dialogue partners.28 The situation did not improve under Medvedev, with Russia’s share in ASEAN’s total trade only at 0.4 per cent in 2009, compared to China’s share at 11.6 per cent, Japan’s at 10.5 and the U.S. at 9.7.29 This problem was well recognized by Russia and at the second ASEAN-Russia Summit; Medvedev stressed the need for a road map for trade and economic investment cooperation in promising areas such as energy, and science and technology.30 Russian authorities were also dissatisfied with the trade structure. Russia mostly exported rolled metal and metal scrap, fertilizers and chemical products, and raw minerals to ASEAN countries. Moscow would like to see an increase of industrial and high-technological products and processed goods in its export structure to ASEAN. ASEAN states themselves wanted greater cooperation in the field of scientific research, high technologies, energy technology, and commercial use of innovative products.31 Under Putin, there were some advances. Moscow agreed to train and send a Malaysian cosmonaut to space as part of Malaysia’s US$900 million purchase of eighteen Su30MKM fighters in 2003. Indonesia also expressed interest in Russian training of Indonesia’s first cosmonaut. Russia held high-tech exhibitions in Kuala Lumpur and Bangkok, and Russian research laboratories received their first contracts from Singapore for conducting research and design projects.32 The problem of meagre economic relations, however, is also partly psychological. Russian Southeast Asia experts bemoan the fact that Russia is relatively

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unknown amongst ASEAN peoples. ASEAN and Russian businesses have insufficient information about the economic opportunities of the other, and Russia’s difficult foreign investment climate acts as a powerful deterrent.33 Steps towards addressing this problem were the creation of Russia-ASEAN Business Forums in 2000 and of an ASEAN Centre in the Moscow State Institute of International Relations (MGIMO) in 2010. Furthermore, when Russia became an ASEAN dialogue partner in 1996, it undertook to create a fund for cooperative activities, but it took almost ten years for the fund to be established. The ASEAN-Russia Dialogue Partnership Financial Fund was finally launched in 2007.34 Russia has since contributed US$1.75 million to the fund in 2007–09, though Foreign Minister Lavrov himself admitted that the sum is not big when compared to the multi-million ASEAN cooperation funds set up with other dialogue partners. Nonetheless, he stressed that it has allowed joint activities in the spheres of renewable energy, small and medium enterprises, Russian language learning, tourism and healthcare to be implemented with cooperation projects in disaster management and biotechnologies on the way.35 One area where Russia can potentially play a significant economic role is energy. Both sides have expressed interest in enhancing cooperation in this sphere. The 2003 Putin-approved Energy Strategy envisaged a rise in the Asia-Pacific share of Russia’s oil and natural gas exports up to 30 per cent and to 15 per cent respectively by 2020. It also proposed the construction of an oil pipeline to the Pacific which would serve the Asia-Pacific market.36 However, the primary market would be Northeast Asia. As for Southeast Asia, Russia has focused more on forging bilateral cooperation projects rather than multilateral. For instance, Russia’s Zarubezhneft is a long-time player in Vietnam’s offshore oil fields through its joint venture with Vietnam’s Petrovietnam — Vietsovpetro — which contributed almost US$500 million to the Russian budget annually. Gazprom also estimated that Russia will be able to supply around 110 billion cubic metres of gas to Southeast Asia by 2020, with the share of liquefied natural gas (LNG) growing.37 Russia also agreed in May 2007 to help Myanmar build its first nuclear reactor.38 Russia has made no secret of its use of energy diplomacy and state energy monoliths like Rosneft and Gazprom to enhance its influence worldwide. Since 2003, the Russian state has moved to consolidate its control over the energy sector, beginning with the major oil company Yukos. Under Putin and Medvedev, Russia increasingly used energy to project Russian influence abroad and try to reap both economic and political gains. Southeast Asia’s increasing thirst for energy, including enhanced interest in nuclear energy, is thus an attractive market for Russia’s energy sector. As a

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report by the influential Russian Council on Foreign and Defence Policy predicted, “…the ASEAN countries would use Russia’s energy, and on this basis the political weight of Russia also, as a counterweight to the influence of the U.S., China and Japan in Southeast Asia.”39 In July 2010, an ASEANRussia Energy Cooperation Work Program 2010–15 was adopted to deepen energy cooperation between the two parties. Arms sales were seen as another foreign policy tool for Russia to ensure its presence in the subregion.40 For Moscow, Southeast Asia represented a vast potential market for Russian arms sales and the expansion of Russian influence, especially as Russia is no longer viewed with suspicion. In 2002, the Russian arms export monopoly Rosoboroneksport estimated the Southeast Asian market to be worth US$20 billion over the next decade. Moreover, selling arms to Southeast Asia was strategically convenient as these countries could not threaten Russian security.41 Some previously U.S.-oriented ASEAN countries started to look to Russia for alternative and cheaper sources of arms. For instance, Indonesia’s defence minister referred to a US$1 billion arms deal with Russia in September 2007 as reducing Indonesia’s dependency on the U.S.42 Thailand, another traditional U.S. ally, also expressed interest in Russian goods. The Thaksin government pushed for a deal to purchase Russian Su-30 fighters to be paid partly by barter of Thai goods, in spite of objections from the Royal Thai Air Force. With Thaksin’s ouster, however, the military-installed government decided to purchase Swedish Gripen jets instead.43 Russian arms sales also received a boost from perceived acts of U.S. aggression such as that in Iraq. In that year, Indonesia, Malaysia, and Vietnam all placed large orders for Sukhoi fighters.44 However, payment problems plagued arms sales to the region, especially in times of financial turmoil, when payment was given in the form of bartered goods like Malaysia’s one million tonnes of palm oil in payment for half of its orders for eighteen MiG-29s in the late 1990s. Nonetheless, due to Russia’s desperation to penetrate new markets, barter agreements continued under Putin; for instance the 2003 deal to supply Malaysia with eighteen Su-30MKMs was to be partly paid for in barter. But Moscow highlighted the strategic benefits instead, hailing this deal as a contract that would open the regional market to Russia.45 By 2007, however, a more economically confident Russia meant that Putin was able to offer US$1 billion worth of loans to Indonesia to buy a range of weaponry, including two Kilo-class submarines, over the next fifteen years. Indonesia had earlier agreed to buy six Sukhoi fighters worth US$355 million, though the requisite funds were then yet to be found.46 Another source of concern that may undermine Russia’s regional standing was that Russian arms sales might encourage a regional arms race. Some

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Russian diplomats believed that ASEAN states saw Russian arms transfers to China as increasing the likelihood of Chinese military action to seize the Spratly Islands.47 Moscow, however, denied that their arms transfers affected the regional military balance. Indeed, a number of Russian Asia experts held the view that Russian arms sales to China were in fact restoring the regional balance, given U.S. military predominance in East Asia. Some believed that the tense military and political situation in Southeast Asia raised these countries’ interests in Russian air-defence and fighter jets, while others advocated Russia to play an active role in helping Southeast Asian states catch up with China.48 Furthermore, Russia’s fifteen MiG-29 sales to Myanmar in 2001 caused neighbouring Thailand to purchase eight AIM-30 advanced mediumrange air-to-air missiles from the U.S. in response. Myanmar’s decision to purchase the fighters was in turn prompted not only by Thailand’s purchase of U.S. F-16s in 1999 but also Malaysia’s acquisition of Russian MiG-29s in 1995, suggesting that Russian arms sales did affect strategic calculations in Southeast Asia.49 A more recent example is Vietnam’s major purchase of Russian arms in 2009–10 including six Kilo-class submarines and twelve Su30MKK fighters, which caused fears of a regional arms race and increasing tensions with China over the disputed Spratly Islands.50 While countries like Thailand which are not involved in the dispute did not see a direct threat from Vietnam’s arms purchases, they were nonetheless apprehensive of the regional arms race and instability it may cause.51 Nevertheless, given that the arms market is highly competitive, partial barter arrangements remain, and regional demand unsteady, arms sales proved a poor substitute for real substantive economic relations between Russia and ASEAN. Up until 2010, Russia was not invited to join the EAS and Singapore rejected Russian proposals to regularize ASEAN-Russia Summit meetings on the grounds that Russian economic relations with ASEAN were “insubstantial”.52

OPPORTUNITIES IN DIVERSITY The diverse nature of ASEAN states represents different opportunities for Russia to assert itself in the subregion, using traditionally close relations with states like Vietnam and closer relations with leading ASEAN countries like Indonesia as a “window” into ASEAN. Indeed, ASEAN’s enlargement in the 1990s to encompass Cambodia, Laos, Myanmar, and Vietnam, some of whom were former allies of the Soviet Union, presented greater opportunities for Russia and enhanced its standing among ASEAN members as an important element of the regional balance of forces. It is noteworthy that Russia was awarded the status of a full dialogue partner of ASEAN soon

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after Vietnam joined the Association and the second Russia-ASEAN summit took place under Vietnam’s Chairmanship in October 2010.53 Although Russian diplomats deny any assignment of priority to particular ASEAN countries, focus was inevitably placed on states relations with whom could enhance Russia’s standing in Southeast Asia, notably Indonesia, Malaysia and Vietnam.54 Indonesia, by virtue of its geographical size and large population, was seen as the traditional regional power, which is now increasingly confident on the world stage, having fully recovered from its domestic upheavals in the late 1990s. As Putin noted prior to his visit there in September 2007, Indonesia was seen as “a key and promising partner of Russia in the AsiaPacific region, and as one of the most important ‘growth point’ of the world economy”. Apart from the arms sales deal worth US$1 billion struck during the visit, agreements on mining and energy cooperation were also concluded.55 Russia also placed much importance on relations with Malaysia due to it being the most vocal ASEAN state against U.S. unilateralism, especially under Prime Minister Mahathir Mohamad. Putin saw in Malaysia another ally in promoting a multi-polar world. Putin’s campaign for an Asian counterbalance against U.S. hegemony resonated with Dr Mahathir, who, as a staunch critic of the West, sought to include Russia in Asia-Pacific forums whenever possible.56 Indeed, the fact that both Malaysia and Indonesia are large Muslim states was also seen as important for improving Russia’s standing in the Muslim world and with its own Muslim population.57 Russia assigned primary importance to deepening traditional close ties with Vietnam, not only for bilateral benefits but also as an entry point into ASEAN more generally.58 Although Vietnam was neglected in Russia’s foreign policy during the early 1990s, relations picked up when in 1994 the two countries signed a Treaty on Principles of Friendly Relations, which was later upgraded into a Strategic Partnership during Putin’s visit to Hanoi in March 2001.59 Despite closer relations under Putin, the decision was taken to evacuate Cam Ranh Bay, which was announced in March 2002, explaining that Russia’s military presence there had become an outdated method of achieving strategic goals and denied that evacuation was symbolic of Russia’s declining influence in Asia.60 Indeed, Putin’s decision should be seen within the context of his more pragmatic foreign policy approach. Vietnam remained important for Russia but more likely so in economic terms.61 Vietnam is also the only Southeast Asian country in which Russia has made significant investment — more than US$1.7 billion in 2006.62 Russia sees energy as the key area for cooperation and has helped build several electric power stations and will help create a nuclear power industry in Vietnam. This was highlighted during Medvedev’s visit to Hanoi in October 2010, during which

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he also declared that Vietnam was one of Russia’s key strategic partners in the Asia-Pacific region.63 Indeed, primary development of a strategic partnership with Vietnam was singled out in the Medvedev-approved Foreign Policy Concept of 2008 in the reference to Russian policy towards Southeast Asia.64 Moreover, some Russian regional experts see Vietnam as a potential leader in ASEAN, especially since it is not afraid to confront China.65 Another significant group are those ASEAN members traditionally close to the U.S., improved relations with whom would represent both substantive and symbolic diplomatic victories for Russia. Within this group, Singapore had long been an economic partner for Russia. As former Singaporean Ambassador to Russia Mark Hong noted, Singapore had always been pragmatic about the Soviet Union in its economic cooperation.66 Singapore’s economic development success story has attracted Russian interest to study its experience in establishing special economic zones and attracting foreign investment, as well as stoked hopes that Singapore would play a leading investment role in Russia, which it partly did when in January 2008, the Singaporean government’s real estate investment fund announced it was investing US$233 million into a real estate project in the Moscow region.67 Furthermore, the high-level Russia-Singapore joint commission in September 2010 negotiated an agreement on mutual protection of investments and that Russia would study Singapore’s “e-government” experience.68 Singapore is also assisting Russia in setting up two Special Economic Zones and several other projects. Of the founding members of ASEAN, Thailand has enjoyed the longest diplomatic ties with Russia since they were established in 1897, but with distant relations when Russia turned communist. Historically, Thailand saw Russia as a useful counterweight to outside powers and some Thai commentators see Russia as potentially playing a similar role today, although Russia’s persistent limited economic reach has cast doubts on this prospect.69 Political relations, however, have intensified with Putin becoming the first Russian leader to visit Thailand in over 100 years in October 2003, and in July 2007, the Thai Queen, HM Sirikit, embarked on a state visit to Russia to mark the 110th anniversary of diplomatic relations. Within people-topeople relations, there is much promise with Thailand becoming a popular tourist destination for Russians, numbering around 170,000 annually. Some Russian analysts see relations with Thailand as a promising area and a potential centre for Russian political influence in Southeast Asia, if energy and military-technological cooperation potential is fully utilized.70 The first arms deal between the two countries in 2008, when Thailand bought six Mi-171 helicopters from Russia, was the first step in this direction.

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Another close ally is the Philippines, which played host to the first Russian diplomatic mission in Southeast Asia in 1820. Like Thailand, the Philippines supported Russia’s role and participation in regional forums like the EAS. As the closest Southeast Asia country to the Russian Far East, including the oil and gas fields off Sakhalin Island, the Philippines expressed interest in positioning itself as a regional hub for the delivery of Russian fuel and energy products to other Asia-Pacific countries. Manila also aimed to diversify its energy sources and see energy cooperation with Russia as a key to secure the Philippines’ energy security. Russian diplomats see such cooperation as a “promising area” for development.71 Given Myanmar’s complicated relations with the West, Russia sees Myanmar as a state in which it could assert influence without Western competition. During the April 2006 visit to Russia by General Maung Aye, the second highest-ranking member of Myanmar’s military junta, Prime Minister Fradkov declared that Russia saw relations with Myanmar as a priority in Russia’s Southeast Asia policy. 72 Like China and India, Russia’s position vis-à-vis the ruling junta was helped by the fact that it viewed Myanmar’s domestic upheavals as purely an internal affair.73 Russia has sought ways to exert influence in Myanmar, assisting the country’s development in areas which have raised concerns from the international community — arms sales and energy. In the face of Western opposition to Russian negotiations with Myanmar on nuclear cooperation, the Russian Ambassador to Myanmar stated “do not demonise Myanmar. They should not be denied the right to develop their own atomic energy.” The Russian Foreign Ministry spokesman similarly emphasized that nuclear cooperation was not in conflict with the Non-Proliferation Treaty or International Atomic Energy Agency (IAEA) requirements and would proceed. 74 Moscow’s general support for the military junta paid off when a Russian company won the exploration rights for gold and other minerals in Myanmar in 2008. Russia also sought to take part in projects to develop transportation infrastructure in Myanmar, seeing Myanmar’s location as ideal for playing the role of a link between South Asia and Southeast Asia.75 However, with the somewhat positive internal developments after the Myanmar general elections held in November 2010 and the seemingly greater opening of the country to the West, it remains to be seen how the dynamics of Russia-Myanmar relations will consequently be affected. Laos, Cambodia, and Brunei represent for Russia the periphery of ASEAN. Nonetheless, Russia sees their participation in ASEAN as giving Russia additional opportunities to strengthen cooperation with that forum. For instance, both Laos and Cambodia supported Russian membership in the

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EAS. Russia has generally close political ties with Laos and Cambodia since Soviet times (diplomatic ties with Cambodia were broken off during Khmer Rouge rule from 1975–79) and thousands of Laotians and Cambodians studied in the Soviet Union. Russia sees promise for utilizing its scientific and technological knowledge in areas such as energy, transport and com­ munications in developing deeper ties with these countries.76 Diplomatic relations with Brunei, on the other hand, were established relatively recently in 1991, and are thus at an early stage. Brunei has been generally supportive of Russia’s role in the region and with ASEAN. The Sultan of Brunei made his first visit to Russia in June 2005, during which Russia expressed interest in helping Brunei diversify its economy which is primarily based on energy. Russia sees prospects in cooperation with Brunei in metallurgy, electro-energy, and military technology.77 The possibility of arms trade cooperation between Russia and Brunei was also discussed during the Sultan’s meeting with Medvedev in October 2009.78 In general, Russia sees potential in utilizing its science and technology “know-how” as well as arms and energy potential to enhance cooperation with these “peripheral” states.

CONCLUSION While Southeast Asia was generally neglected in Russian foreign policy during the Yeltsin years, the subregion’s importance for Russia grew due to its expanded membership and leading role in East Asian regionalism. Russia under Putin attached greater importance to relations with Asia more generally and tried to position itself as a significant regional player. Russia sees ASEAN as ripe with opportunities for Russia to enhance its influence in Southeast Asia and the broader Asia Pacific. Russia cultivated ties with ASEAN in order to be included in the Asian regionalism process, ensuring Russia a voice in regional affairs. Russia played on its perceived role as a balancer for ASEAN in its relations with other regional powers, thereby maintaining a Russian role in the evolving regional strategic balance. Increasingly so under Putin, Russia attempted to utilize its energy and military resources to enhance its role in Southeast Asia and as a entry-point into particular states. ASEAN’s diversity presented Russia with variable entry points through which Russian influence can be projected and expanded. Russia’s traditional closeness to the new ASEAN members opened a new “window” for Russia to assert its influence in this organization and in Southeast Asia. Despite some significant advances, notably on the political and arms-transfers front, Russia’s weak economic links with ASEAN continue to undermine the realization of Russian influence in Southeast Asia. Putin’s policy approach to Southeast

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Asia and the Asia Pacific has generally been continued by Medvedev with significant achievements in 2010, when Russia was invited to join the EAS and participated in the second ASEAN-Russia Summit in October 2010.79 It was also in October 2010 when Russia was admitted to the Asia-Europe Meeting (ASEM) after several attempts. The ASEM membership would help signify Russia’s unique role as a bridge between Europe and Asia, which Russia has tried to play for a long while. Nonetheless, significant challenges remain for Russia under Medvedev who must now try to translate these significant political but largely symbolic gains into tangible ones. Russia must now focus on exploring and creating the right opportunities for more substantial trade and investment, as well as the enhancement of cooperation in energy and science and technology in order to be accepted as a real major player in Southeast Asia. As pointed out in the Pacific Strategy of Russia drawn up by Russia’s Council for Security Cooperation in the Asia Pacific (CSCAP) for its meeting with Medvedev in July 2010, a key turning point for Russia to advance its regional role as well as integrate into the AsiaPacific region is when it hosts the APEC meeting in 2012 in Vladivostok — Russia’s “window to the East”.80

Notes

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Paradorn Rangsimaporn is First Secretary at the Royal Thai Embassy and Permanent Mission of Thailand in Vienna. This chapter is a revised and updated version of his article, “Russia’s Search for Influence in Southeast Asia”, Asian Survey 49, no. 5 (2009): 786–808. The views expressed herein are the author’s own and does not reflect the views of the Royal Thai Government. Editors’ Note: Dr Paradorn Rangsimaporn did not participate in the ASEANRussia Conference, 26–27 April 2011 on which the majority of the content of this publication is based. However, the editors welcome his contribution as a fitting epilogue to the book, as Dr Rangsimaporn is one of the few Southeast Asian scholars for whom Russian foreign policy studies has become a primary academic interest. His 2009 publication entitled, Russia as an Aspiring Great Power in East Asia: Perceptions and Policies from Yeltsin to Putin, has been wellreceived by specialists in this area. Andrei Tsygankov, “Vladimir Putin’s Vision of Russia as a Normal Great Power”, Post-Soviet Affairs 21, no. 2 (2005): 132–58; and Vladimir Putin, “Annual Address to the Federal Assembly”, 16 May 2003, (accessed 21 May 2005). See R. Quested, The Expansion of Russia in East Asia 1857–60 (Kuala Lumpur: University of Malaya, 1968); Karen A. Snow, “The Russian Consulate in

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Singapore and British Expansion in Southeast Asia (1890–1905)”, Journal of Southeast Asian Studies 25, no. 2 (1994): 344–67; and M. G. Kozlova, Rossiia i Strany Iugo-Vostochnoi Azii [Russia and the countries of Southeast Asia] (Moscow: Nauka, 1986). Bilveer Singh, Soviet Relations with ASEAN, 1967–88 (Singapore: Singapore University Press, 1989), pp. 2–7, 36. See also Robert O. Tilman, Southeast Asia and the Enemy Beyond: ASEAN Perceptions of External Threats (Boulder and London: Westview Press, 1987), pp. 63–83. See Leszek Buszynski’s Soviet Foreign Policy and Southeast Asia (London & Sydney: Croom Helm, 1986), and Gorbachev and Southeast Asia (London & New York: Routledge, 1992). Paradorn Rangsimaporn, “Interpretations of Eurasianism: Justifying Russia’s Role in East Asia”, Europe-Asia Studies 58, no. 3 (2006): 371–89. Leszek Buszynski, “Russia and Southeast Asia: A New Relationship”, Contemporary Southeast Asia 28, no. 2 (2006): 285; and Aleksandr Ivanov, “Russia’s Asian Face”, International Affairs (Moscow) 52, no. 2 (2006): 56. Iu. Raikov, “Rossiia-ASEAN: Pervyi Opyt Sotrudnichestva” [Russia-ASEAN: First experience of cooperation], in Rossiia v ATES i v ATR [Russia in APEC and APR], edited by I. Ivanov and M. Titarenko (Moscow: Russian Foreign Ministry and the Institute for Far Eastern Studies — IDVRAN, 2001), p. 136. Ralf Emmers, “The Influence of the Balance of Power Factor within the ARF”, Contemporary Southeast Asia 23, no. 2 (2001): 275–91; and “ASEAN is for Russia’s Participation in Talks on Security”, ITAR-TASS (Moscow), 18 May 1993. Vladimir Fedotov, “Aseanovskii Regional’nyi Forum i Rossiia” [ARF and Russia], in Rossiia i ASEAN, edited by Bazhanov et al., pp. 44–45; and “Sovmestnaia Deklaratsiia o Partnerstve v Dele Mira i Bezopasnosti, a Takzhe Protsvetaniia i Razvitiia v ATR” [Joint Declaration on Partnership in Peace and Security, and also Prosperity and Development in the APR], Diplomaticheskii Vestnik 7 [Diplomatic Bulletin 7] (Moscow) (July 2003): 50–51. “First APR Security forum may become permanent mechanism”, ITAR-TASS, 24 June 1994; Eunsook Chung, “Explaining Russia’s Interest in Building Security Mechanisms in East Asia”, in Understandings of Russian Foreign Policy, edited by Ted Hopf (Pennsylvania: Pennsylvania State University Press, 1999), p. 262; and ITAR-TASS, 23 July 1994, Foreign Broadcasting Information Service (FBIS)-SOV, 94/142. Iu. Raikov, “Rossiia-ASEAN: Partnerstvo v Interesakh Bezopasnosti i Razvitiia” [Russia-ASEAN: Partnership in interests of security and development], in Rossiia i ASEAN: Tematicheskii Sbornik [Russia and ASEAN: Thematic collection], edited by Evgenii Bazhanov et al. (Moscow: Nauchnaia Kniga, 2004), p. 14. Buszynski, “Russia and Southeast Asia”, pp. 290–91; and “ASEAN Ministers Deadlocked over Russia’s Bid to Join East Asia Summit”, Asian Political News, 19 September 2005.

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Cited from Evgenii Kanaev, “ASEAN i Rossiia: Otnosheniia Posle Kholodnoi Voiny” [ASEAN and Russia: Relations after the Cold War], MEiMO 2 (Moscow) (2007): 74. 16 “President Vladimir Putin Took Part in the Inaugural East Asia Summit, Kuala Lumpur, Malaysia, 14 December 2005”, IPD-RFM (Information Press Department, Russian Foreign Ministry); and “East Asia Summit Freezes Membership for 2 Years”, Times of India, 20 May 2006. 17 Victor Sumsky, “Modernization of Russia, Geopolitics of East Asia and the ASEAN Factor”, International Affairs (Moscow) 56, no. 6 (2010): 23. 18 Gennady Chufrin, “Asia in Russia’s International Posture”, in Russia and Asia: The Emerging Security Agenda, edited by Gennady Chufrin (New York: Oxford University Press, SIPRI, 1999), p. 485; and “Article of Russian Foreign Minister Sergei Lavrov on the ARF”, IPD-RFM, 28 July 2005. 19 Obzor Vneshnei Politiki Rossiiskoi Federatsii [Survey of Russian Foreign Policy], 27 March 2007, (accessed 14 March 2008); “Opening Statement by Evgenii Primakov”, 29th AMM/PMC, 24–25 July 1996, Jakarta, (accessed 4 November 2003); and “Russia’s Putin Hails ASEAN Business Forum”, ITAR-TASS, 11 April 2000. 20 Author’s interviews, Bangkok and Moscow, April, October–November 2005; and citation from Victor Sumsky, “Russia and ASEAN: Emerging Partnership in the 1990s and the Security of South-East Asia”, in Russia and Asia, edited by Chufrin, p. 411. 21 German Gref, “Russia and Southeast Asia: Commitment to Cooperation”, RIANovosti [Russian Information Agency News], 23 May 2007. 22 Rafis Abazov, “Dialogue between Russia and ASEAN”, International Affairs (Moscow) 45, nos. 5–6 (1996): 88–90; Anatolii Boliatko, Dal’nii Vostok: v Poiskakh Strategicheskoi Stabil’nosti [The Far East: in search of strategic stability] (Moscow: IDVRAN, 2003), p. 80; and Nikolai Maletin, SSSR/RF-ASEAN (1967–2002) [USSR/Russian Federation-ASEAN] (Moscow: MGIMO, 2003), p. 22. 23 Rodolfo Severino, “ASEAN Engages Russia”, in ASEAN-Russia Relations, edited by Gennady Chufrin, Mark Hong, and Teo Kah Beng (Singapore: ISEAS and IMEMO, 2006), p. 5. 24 B. Nikolaev, “Rossiia-ASEAN: Psikhologicheskii Bar’er Preodolevaetsia” [RussiaASEAN: the psychological barrier overcame], Aziia i Afrika Segodnia [Asia and Africa today] 7 (1993): 51. 25 Mark Hong, “Asia-Pacific Perspectives on Russia”, Conference paper, ISEAS, Singapore, June 2003; and “Need for a Balancer on East Asia’s Way to World Eminence”, International Herald Tribune, 23 November 2000. 26 Interfax (Moscow), 11 September 1997, FBIS-SOV-97-254; and Fidel Ramos, “Russia and the Philippines”, International Affairs (Moscow) 44, no. 1 (1998): 62. 15

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Ong Keng Yong, “ASEAN-Russia: Partnership for Peace and Prosperity in Asia Pacific”, 9 October 2006 at the “International Economic Forum Russia — the Asia Pacific: Towards Strategic Economic Partnership and Civilisation-toCivilisation Dialogue”, Moscow, (accessed 13 March 2008). 28 Amado Mendoza, Jr., “ASEAN’s Role in Integrating Russia into Asia-Pacific Economy”, in Engaging Russia in Asia-Pacific, edited by Koji Watanabe (Tokyo: JCIE, 1999), p. 133; Sumsky, “Russia and ASEAN”, p. 415; Vladimir Danilov, “Trade and Economic Cooperation between Russia and ASEAN”, Far Eastern Affairs 4 (2001): 45; and Russia’s share in ASEAN’s trade figures from (accessed 13 March 2008). 29 (accessed 26 June 2011). 30 “Speech at the Second ASEAN-Russia Summit”, 30 October 2010, (accessed 26 June 2011). 31 Danilov, “Trade and Economic Cooperation”, p. 46; Datuk Yahya Baba, “Great Potential of Cooperation with Russia”, International Affairs (Moscow) 44, no. 1 (1998): 74; and Rodolfo Severino, “ASEAN Engages Russia”, in ASEANRussia Relations, edited by Gennady Chufrin et al. (Singapore: ISEAS-IMEMO, 2006), p. 5. 32 “Russia, Indonesia to Develop Trade, Energy, Space Links”, RIA-Novosti, 1 December 2006; and Gref, “Russia and Southeast Asia”. 33 Author’s interviews, Moscow, October 2005; Danilov, “Trade and Economic Cooperation”, p. 46; and Gennady Chufrin, “Russian Perspectives on ASEAN”, in ASEAN-Russia, edited by Chufrin, Hong, and Beng, p. 13. 34 Rodolfo Severino, “Russia, ASEAN and East Asia”, in Russia-ASEAN Relations: New Directions, edited by Chufrin and Hong (Singapore: ISEAS and IMEMO, 2007), p. 11. 35 Sergei Lavrov, “Russia and ASEAN can achieve a great deal together”, International Affairs (Moscow) 56, no. 6 (2010): 11, (accessed 26 June 2011). 36 Putin’s speech at the inaugural EAS, Kuala Lumpur, 14 December 2005, IPDRFM; Ong Keng Yong, “ASEAN-Russia”; and “Energeticheskaia Strategiia Rossii na Period do 2020 goda” [Energy Strategy of Russia until 2020], 28 August 2003, (accessed 21 February 2006). 37 Sergei Luzianin, Vostochnaia Politika Vladimira Putina: Vozvrashchenie Rossii na “Bol’shoi Vostok” (2004–2008) [The Eastern policy of Vladimir Putin: Russia’s return to the “Big East”] (Moscow: AST, Vostok-Zapad, 2007), p. 406; and Gref, “Russia and Southeast Asia”. 38 “Myanmar Drops a Nuclear Bombshell”, Asia Times, 24 May 2007. 39 Sergei Karaganov, ed., Mir Vokrug Rossii: 2017 [The World around Russia] (Moscow: Kul’turnaia Revoliutsiia, 2007), p. 97. 40 Stephen Blank, “What is Russia to Asia?”, Orbis 47, no. 4 (Autumn 2003): 584. 27

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Dan Eaton, “Russia Woos Southeast Asia with Weapons, Technology”, Johnson’s Russia List, no. 6159, 27 March 2002; and John Helmer, “Russia Stresses Regional Role”, Bangkok Post, 17 August 1996. 42 Indonesia had been a major U.S. arms customer but sought alternative suppliers once Washington cut military ties in 1999 over human rights concerns. Although the ban was lifted in 2005, Jakarta continued to look elsewhere. “Putin Signs Indonesia Arms Deal”, Guardian, 6 September 2007. 43 Mongkol Bangprapa, “PM: Chicken Barter Deal for Arms Possible”, Bangkok Post, 1 September 2004; and Gareth Jennings, “Thailand Agrees Deal to Acquire JAS 39 Gripens”, Janes Defence Weekly (JDW) 44, no. 43 (2007): 14. 44 Alan Boyd, “Russia Eyes East Asian Arms Market”, Asia Times, 18 April 2003. 45 Alexander Sergounin and Sergei Subbotin, Russian Arms Transfers to East Asia in the 1990s, SIPRI Research Report no. 15 (New York: Oxford University Press, 1999), pp. 97–98, 102–3; Mikhail Khodarenok, “Malaiziia. Samolet. Pal’movoe Maslo” [Malaysia, Planes, Palm Oil], Nezavisimaia Gazeta [Independent Gazette], 20 May 2003; and Sergei Blagov, “Putin Gets Down to Business in Malaysia”, Asia Times, 7 August 2003. 46 “Putin Inks $1 Billion Jakarta Arms Deal”, Moscow Times, 7 September 2007; and Jon Grevatt, “Indonesia Lacks Funds for Agreed Sukhoi Buy”, JDW 44, no. 36 (2007): 23. 47 Paradorn Rangsimaporn, “Russia’s Debate on Military-Technological Cooperation with China: from Yeltsin to Putin”, Asian Survey 46, no. 3 (2006): 477–95; and Vladimir Marchukov, “Ostrova Spratli i Problemy Obespecheniia Bezopasnosti v Iugo-vostochnoi Azii” [Spratly Islands and problems of securing security in Southeast Asia], in Rossiia i ATR, edited by Anatolii Boliatko [Russia and the Asia-Pacific Region] (Moscow: IDVRAN, 2002), p. 122. 48 “Putin Says Russia Won’t be Dictated to over Arms Exports”, RIA-Novosti, 31 October 2007; author’s interviews with Russian experts, Moscow, October– November 2005; Sergei Kandaurov, “Condition and Prospects of Arms Markets in East and SEA (Parts 1–2)”, Eksport Vooruzheniy Journal [Arms export journal], CAST (May–June/July–August 2000); and Dmitrii Vasil’ev, “Russian Arms Trade with Southeast Asia and Republic of Korea”, Moscow Defence Brief 1, 2005. 49 Bertil Lintner, “MiGs Spell Trouble”, Far Eastern Economic Review, 2 August 2001; Richard Ehrlich, “Thailand Joins the Missile Game”, Asia Times, 6 November 2003; and A. Simoniia, “Rossiiskii Voennyi Eksport v Strany IugoVostochnoi Azii” [Russian arms export to countries of Southeast Asia], in IugoVostochnaia Aziia [Southeast Asia], edited by Nikolai Maletin et al. (Moscow: IVRAN, 2005), pp. 209–10. 50 Stephen Blank, “Vietnam is Russia’s biggest arms customer”, Eurasia Daily Monitor 7, no. 22 (2010). 51 “Rethink this arms buildup”, Bangkok Post, 21 December 2009; and author’s conversations with Thai intelligence officials, June 2010. 41

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Buszynski, “Russia and Southeast Asia”, pp. 290–91. Vyacheslav Urlyapov, “ASEAN Expansion: Motives, Significance, Effects”, International Affairs (Moscow) 57, no. 1 (2011): 116. 54 From the author’s interviews with Russian diplomats and experts in Moscow, October–November 2005, these three countries were the most mentioned. 55 Vladimir Putin, “Indonesia-Russia: New Perspectives of Cooperation”, RIANovosti, 5 September 2007; and Andrew Symon, “Russian Revival for Southeast Asia”, Asia Times, 11 September 2007. 56 Luzianin, Vostochnaia Politika, pp. 420–21; and Buszynski, “Russia and Southeast Asia”, pp. 286–87. 57 Putin, “Indonesia-Russia”. 58 Luzianin, Vostochnaia Politika, p. 409. 59 Aleksei Poliakov and Vladimir Klimov, “Russia-Vietnam: from Strategic Interest to Strategic Partnership”, Far Eastern Affairs 3 (2001): 33. 60 Chufrin, “Russian Perspectives on ASEAN”, pp. 8–9; and “Russia to Withdraw from Cam Ranh Bay”, 27 March 2002, (accessed 18 May 2008). 61 Rafis Abazov, “ASEAN i Rossiia: Perspektivy Sotrudnichestva” [ASEAN and Russia: Prospects for cooperation], Aziia i Afrika Segodnia 9 (1996): 32. 62 Luzianin, Vostochnaia Politika, p. 406. 63 “Vietnam is Russia’s key partner in Asia-Pacific region – Medvedev”, RIA-Novosti, 30 October 2010. 64 “The Foreign Policy Concept of the Russian Federation”, 12 July 2008, (accessed 26 June 2011). 65 Luzianin, Vostochnaia Politika, p. 406; Aleksandr Alekseev, “A New ‘Tiger’: 60th Anniversary of Independent Vietnam”, International Affairs (Moscow) 51, no. 5 (2005): 78; and author’s interviews with experts, Moscow, October 2005. 66 Mark Hong, “Russia-Singapore Relations: Thirty-seven Years of Cooperation and Dialogue”, in ASEAN-Russia, edited by Chufrin, Hong, and Beng, p. 66. 67 “Singapore invests in Moscow Region”, Moscow Times, 22 January 2008. 68 “The Year 2010: Was Russia Looking to the East?”, International Affairs (Moscow) 57, no. 2 (2011): 171. 69 Aleksandr Losiukov, “Russia-Thailand: 110 Years on the Path of Mutual Understanding”, International Affairs (Moscow) 53, no. 4 (2007): 122; and Kavi Chongkittavorn, “Rejuvenating the Stalled Friendship with Russia”, Bangkok Post, 2 July 2007. 70 Luzianin, Vostochnaia Politika, p. 418. 71 “Statement of the Hon. Dr. Alberto G. Romulo, Secretary of Foreign Affairs”, 4 October 2005, (accessed 23 May 2008); and Andrei Tatarinov, “30 Years of Diplomatic Relations with the Philippines”, International Affairs (Moscow) 52, no. 4 (2006): 173. 52 53

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Luzianin, Vostochnaia Politika, p. 425. Nikolai Listopadov, “Myanmar-Russia Track Record”, International Affairs (Moscow) 49, no. 3 (2003): 166. 74 Citations from Eaton, “Russia Woos Southeast Asia”, and “Moscow stands by Myanmar nuclear cooperation deal”, RIA-Novosti, 21 July 2009, respectively. 75 “Russian-linked Firm Hits Myanmar Gold”, Moscow Times, 18 February 2008; and Listopadov, “Myanmar-Russia”, p. 167. 76 “Answers by Mr S. Lavrov to the Questions of Vientiane Times, English Lao Newspaper”, IPD-RFM, 6 December 2004; and “Russian-Cambodian Relations”, Russian Embassy in the Kingdom of Cambodia, (accessed 4 June 2008). 77 “Press Statement Following Talks between Russia and Brunei”, Russian Embassy in Malaysia, (accessed 4 June 2008); and Luzianin, Vostochnaia Politika, pp. 426–27. 78 “Russian President discusses trade with Brunei leader”, RIA-Novosti, 15 October 2009. 79 Evgeny Kanaev, “Southeast Asia in Russia’s Foreign Policy under D. Medvedev: An Interim Assessment”, Eurasian Review 3 (November 2010): 110. 80 “Going East: Russia’s Asia-Pacific Strategy”, Russia in Global Affairs, 25 December 2010, (accessed 13 June 2011). 72 73

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RUSSIA’S ASIAN STRATEGY1 Sergei Karaganov2

INTRODUCTION For some Russians, economic movement towards Asia spells deviation from the European way of development and closer relations with Europe. For the past four years or so, in all sorts of analytical reports and speeches I have been criticizing Russian policy in Asia for the lack of initiative in linking this country to the Asian economic locomotives. In the meantime, the United States, Latin America and — in many respects — Europe have attached themselves to this engine quite successfully. True, in the past eighteen months the situation has begun to improve. Both the president and the prime minister on several occasions have pointed to the need for an economic turn to Asia. The top officials of the Russian Foreign Ministry have repeatedly come out with reasonable proposals. Dozens of protocols and agreements on new projects have been signed with China. Some are already up and running — for example, an oil pipeline to the Pacific coast with a branch towards China. The construction of a pipeline has begun, a project for building a pulp and paper mill is reported to start soon, and a number of mining projects have been launched. The Trans-Siberian highway has been opened to traffic — to our dismal shame, we did not have one until just recently.

THE INTELLECTUAL INFRASTRUCTURE Some interesting intellectual products have emerged. The Russian National Committee of the APEC has issued a report calling for Russia’s new strategy 345

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in the Pacific. Well-remembered is the brilliant article “A Turn to the East” by Professor Victor Kuvaldin, an expert at the Gorbachev Foundation. The need for turning Russia towards new Asia has been recognized in chorus by some leading experts on international affairs who would seldom look eastwards, if at all, just five years ago: Fyodor Lukyanov, Vyacheslav Nikonov and Dmitry Trenin. The ice has been broken.

NEEDED: A COMPREHENSIVE ASIAN STRATEGY Apparently, any long-term and comprehensive Asian strategy has yet to be devised. It is vital and must be linked with the strategy for the development of the entire country, and not just its Siberian and Far Eastern regions. It must also be coupled with domestic policy, which suffers from the clots plugging the channels of upward mobility and lack of decent career opportunities for ambitious, creative and educated young people — “the generation of the 1990s”; in fact the country’s first free young generation. Until now, many young people have been voting “with their feet” in favour of living abroad, while the less educated have been getting rebellious. The Strategy 2020, drafted on Vladimir Putin’s order, does not seem to provide for a decisive turn towards Asia. Meanwhile, it is an urgent need. But first, it is important that a wide range of people of thought and action see where Russia’s interests regarding possible strategies in Asia lie. After much discussion and research, I have arrived at the conclusion that the main force holding us back from pursuing a reasonable and purposeful Asian policy is ignorance, misunderstanding of the opportunities, and myths about the real state of affairs in that region.

THE CHINA PERSPECTIVE To the Russian public mind and most of the elite, China is still more a threat than an opportunity. It is believed that China may directly threaten Russia’s sovereignty. At the same time, there is a grievous underestimation of both the current level and prospects of its development. There is a hidden — and often overt — expectation that China will not be able to develop as expediently and as fast as it does now for too long. For some Russians, the economic movement towards Asia is tantamount to departure from the European way of development, from closer relations with Europe, and even to the adoption of the Chinese model, which is still more undemocratic than ours. Another group of our fellow citizens, on the con­ trary, hope that we are still capable of flexing muscles and go the Chinese way.

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Widespread is the illusion that we can and must fight for positions in the markets of the New World and in Asia with our innovative, high-tech industrial products. Our knowledge of Southeast Asia is confined mostly to images of health resorts and tourist priorities. I will try to allay these fears and illusions by drawing an adequate picture of the present-day developments in Asia, and then I will outline a strategy — above all, a foreign economic one — towards this rapidly rising continent. But first, let me cite a few facts that look indisputable to me.

NO ASIAN ALTERNATIVE There is no Asian alternative to Russia’s cultural and political orientation to­ wards Europe. The great Chinese civilization and its “peripherals” — Japanese, Korean, Vietnamese and other Indochinese — are incredibly far away from the Russian one. And their social experience in Russia is inapplicable. It is another matter that some of their economic innovations readily offer themselves for copying. The embattled civilization of the Muslim world is a little closer to us. But its best experience is already in use (take a look at Tatarstan); as for any other, it would be far better to steer clear of it. “The Asian way of development” will take us not to advanced Asia (we cannot go there), but to Africa — where we seem to be already moving with our monstrous corruption and disdain for morality and culture. And if things continue like that, the joke by Helmut Schmidt, the West German chancellor and a brilliant wit, in which he called the Soviet Union “Upper Volta with missiles”, which then looked like an insulting exaggeration, may become a reality.

ESTRANGEMENT FROM EUROPE Estrangement from Europe threatens us with the further loss of the country’s identity and social and cultural degradation. Either we move closer to Europe, or go barbaric. Russian civilization — with its entire ethnic flavour — is still part of the European one. And without that, it cannot exist as a civilization. Partial economic reorientation towards Asia, which I have been pressing for, also is not fraught with the risk of disengagement from Europe, because over the past two years or so, Russia has officially made a decisive (although superficial) turn in favour of a closer integration with the European Union — through overcoming the residual military confrontation (President Medvedev’s idea of a new treaty on European security and his and Chancellor

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Angela Merkel’s Meseberg initiative for establishing a mechanism of online coordination of Russian and EU foreign policies). And even more — through Putin’s ideas, advanced in recent months, of ​​a single, integrated economic and humanitarian space of Greater Europe and the formation of a single energy complex. The point at issue is movement towards an Alliance of Europe. Another thing is that, in the context of our current domestic situation and because of the progressing incapability of the EU, progress in promoting the implementation of these ideas has been extremely slow. But the guideline has been declared.

PERSPECTIVES ON CHINA By virtue of several internal reasons, its fast growth is bound to last long enough. Despite the slowdown in population growth, no labour shortages are due there for a decade or two. At the same time, an accelerated technological modernization is guaranteed, with increasing investments in science and education. Already now, China accounts for more than 20 per cent of the world’s export of high technology goods. The United States’ share is 13 per cent, and Germany’s, 9 per cent. Singapore is next with almost 7 per cent. Russia’s share of this market is several tenths of one percentage point, and it is shrinking. Chinese high-tech goods are manufactured with imported or replicated know-how. But investment in education and science helps to improve the quality of Chinese human resources, and China develops ever more new technologies of its own. The United States is recognizing with alarm that China has already become the world’s leader in the most advanced sector — green energy. In most industries, competition with new Asia will be senseless. Especially if one bears in mind the strength, quality and — most importantly — high cost of labour in Russia. The exodus and ageing of research and technical personnel have to be taken into account, too. This situation has to be changed. But the tendency of lagging behind stems from the policy of recent decades. Industrial production is drifting to new Asia from far more developed countries. Something can and should be retained — two or three industries, or maybe three or four, if it is possible to unite them with those of Europe and create trans-European manufacturing complexes. But fighting on all fronts, declaring the need for new industrialization is, at best, harmful idealism. We have already witnessed Chinese military parades demonstrating hardware of exclusively domestic manufacture, albeit partially replicated.

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Russia’s military exports to China are declining rapidly, and in five to seven years from now, there will emerge the question of technology purchases from China.

EUROPE’S SLOW ECONOMIC DEVELOPMENT More than 50 per cent of Russia’s trade turnover is currently with Europe. Along with other Europeans, Russians keep recalling this with pride. But the problem is the European market will not be growing to any significant extent any more. Europe has entered a period of slow economic development. I am not predicting a “decline of Europe” once again. It retains strong accumulated resources and a high quality of life; both can be consumed for a long time. The quality of life plus the accrued cultural wealth will allow the old continent to live in relative comfort in the foreseeable decades, even if it will be gradually ceding positions in the production of goods and knowledge — even though it will increasingly turn into a tourist and ecological paradise, a place of rest and leisure for many hardworking people from new Asia. The latter is already overcrowded, lacks recreational resources and experiences relative paucity of material culture, which, in contrast, is marvellous in Europe. Russia needs to integrate economically with the rest of Europe, primarily with the remaining engines of innovation available there, especially German ones, and to move towards a pan-European economic space, a single energy complex of Europe, while staying aware that the growth potential of foreign economic relations is in the Asia-Pacific region. Today, that region, including the U.S., accounts for about 20 per cent of Russia’s foreign trade. This share is growing — yet very slowly.

CHINA AS PARTNER NUMBER ONE Partner number one is China. Russia supplies it with fertilizers, seafood, timber, non-ferrous metals, and more and more crude oil, and ever less industrial products. Mutual investment is meagre, and not only in relations with China, but also with other Asia Pacific Economic Cooperation (APEC) countries. Russia imports from China not so much consumer goods as engineering products. Such trade dynamics cause understandable irritation. There have been frequent calls for its diversification, for increasing the share of industrial products. But with the current vector of Russia’s development, which, let me say it once again, unfortunately has already been set for the coming years, the

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situation will not change. The pipelines, those under construction and the already laid ones, will shift this structure in favour of oil and gas.

A RAW MATERIAL APPENDAGE Simultaneously, another process, potentially more alarming from my point of view, has been unfolding recently. Russia’s regions east of the Urals and, above all, its Far East are being transformed into a raw material appendage of rising China. More than that, human and educational contacts are being reoriented. While commentators have been speculating about the danger of Chinese demographic colonization of Russia’s eastern regions, far more Russians have been resettling in China than Chinese to Russia. People go there in pursuit of a less costly and more comfortable life. And those who do stay have been reorienting themselves to China economically. From the geopolitical standpoint, the situation is not dangerous yet. Territorial expansion is not China’s historical trait. The two countries have excellent political relations. I would dare say that for the time being, a strong and friendly China is Russia’s geopolitical asset. The other APEC countries, especially Japan, the Association of Southeast Asian Nations (ASEAN) countries and the U.S., fear further rapprochement between the two states and the possibility of Russia’s going semi-dependent on China, which will add a great deal to its international weight. But if the current economic trends persist, it is very likely that Russia east of the Urals and later the whole country will turn into an appendage of China — first as a warehouse of resources, and then economically and politically. This will happen without any “aggressive” or unfriendly efforts by China, it will happen by default. The geopolitical implications of such developments are obvious. There will be no chances for Russia of playing the “Chinese card”. Beijing will rely on Moscow, whose real sovereignty over the eastern territories will be de facto wearing thin. The Chinese are already offering us — quite rationally from their point of view — several projects that are similar to those they promote in some African states: the development of resources with Chinese money and Chinese labour force (which is still redundant at home); the construction of roads and local infrastructures; and the supply of ore and timber back to China for further processing. To my knowledge, some of these projects have already materialized. I am not over-dramatizing the possibility of Russia’s transformation into a raw material appendage, and in the future, into a political satellite of China.

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I feel sincere respect and admiration for its leadership and people, and their ability to rebuild their great civilization after a two-century-long collapse. But I believe that my country, Russia, can claim, in principle, a more dignified and beneficial place in a future world order. But such a place of dignity has to be struggled for. For a start, one should probably give up the illusions about the possibility of “catching up and overtaking” great powers, including through reindustrialization of the country and its eastern regions. Nor will one-sided economic orientation towards Europe help.

INCREASING RESOURCES SHORTAGES In implementing interrelated strategies of development of Siberia and the Russian Far East and in harnessing the economic locomotive of new Asia, Russia should rely not on starry-eyed dreams, but on real competitive edges. And it surely has some. In recent decades, the rising markets of Asia were experiencing relatively stable shortages of food. This is due primarily to the growing well-being and, as a consequence, an increase in meat consumption. Its production requires fodder and grain. This largely explains why grain prices have long been on the rise the world over. Energy and fuel prices have been rising as fast, if not faster. The region is experiencing growing shortages of fresh water and farmland. In China, the shortages have for several years pushed down the production of grain and a number of other foods. The major exporters of grain — the U.S., Canada, Australia and Ukraine — are faced with shrinking opportunities for increasing grain production. Meanwhile, Russia’s potential of building up grain output is enormous. China and other East Asian countries have shown rapid growth in the consumption of paper and wood products — despite earlier forecasts to the contrary. China is expanding the import of paper from around the world, even from Finland (which, I suppose, makes it also from Russian timber). Also, China is witnessing a beer consumption boom and growing shortages of recreational resources. In the meantime, Russia, as we must constantly tell ourselves, has 23 per cent of the world’s forests, 20 per cent of fresh water and nearly 10 per cent of arable land. Especially great are the unused reserves in the south of Siberia and the Russian Far East. Climate change is probably improving the conditions for food production in those regions — while worsening those in the rest of Asia. According to our estimates, Russia could increase its arable area by 10 million hectares, and yields, 2.5 times. It is easy to calculate that this country

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can increase grain exports several-fold. Before, limited demand was a brake on grain exports. Now, China and countries in new Asia offer an almost unlimited market. Until just recently we have been playing with stupid projects for turning part of the water flow from the northbound rivers south. We have also told ourselves scary stories of looming conflicts over water. Meanwhile, our water resources are relatively easy to commercialize. But this should be done in a different way. We should sell not water, but so-called virtual water. Each kilogram of food, depending on its type, contains several dozen litres to several hundred litres of water used to produce it. The production of pulp and paper products is very water intensive too. So, what is proposed?

A FRAMEWORK OF SECURITY AND DEVELOPMENT FOR THE ENTIRE PACIFIC REGION First, we should move faster towards the creation of a framework of security and development for the entire Pacific region — something similar to Europe’s irrelevant and quietly dying Organization for Security and Cooper­ ation (OSCE), but adequate to today’s Asian realities. China has begun to understand the danger of its neighbours’ fear of its growing might, and it is about to agree to the creation of such an organization. Russia for a number of reasons will be playing a much more important role in it than the one it might count on, given its moderate economic strength. And yet the most important thing for Russia in Asia is not politics, but creation of conditions for building up its economic potential. This requires a new long-term strategy for the economic revival of Russia’s Trans-Urals regions. Many strategies have been written already, but they all lacked realism and were pegged to the Soviet past and the idea of self-reliance. Quite predictably, they failed even before they began to be translated into life. There was no actor that might implement such strategies — gone was the Soviet state, which had counted neither money nor the lives of its citizens, sending millions of them to labour camps and sacrificing them for the sake of tapping the region’s potential.

PROJECT SIBERIA A modern strategy — let us call it Project Siberia — should be internationally oriented from the outset. Roughly speaking, it should combine Russian political sovereignty with foreign capital and technologies. And not only and not just from China, but also from the U.S., Japan, the EU states, South

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Korea and the ASEAN countries, all of which are keenly interested to ensure there should be no exclusive dominance of China east of the Urals. Russia is a country with a poor investment climate and terrible cor­ ruption. If we wish to retain real sovereignty over the eastern part of the country, we will have to create special privileges for investment and special economic zones. Special economic conditions identical to those in Skolkovo should be extended to whole regions. Foreign investment is needed not only as such, but as a tool to fight Russian corruption — that is, if we really decide to fight it. Foreigners are stripped of their money less frequently; they enjoy international protection. And we will have to provide special Russian protection, if we can. The workforce for the new project can be found. There are still a few million surplus workers in Central Asia. It is also possible to import seasonal workers from India and Bangladesh. There is an enormous surplus of labour there. Some will have to be brought in from China, but under very strict quotas. Managers and engineers for the new companies will have to be recruited from around the globe. But the best solution of all will be to give a chance to the generation of the 1990s, thus preventing its just-started exodus. Siberia was most often a threat. Now it can become an opportunity, as it was for the Russian pioneers who trekked east and for Stolypin’s peasants. Now, the main thing — what is to be done, and not how? In some regions of Siberia and the Russian Far East, where there are the good conditions (as our studies conducted at the School of International Economics and Foreign Affairs of the National Research University–Higher School of Economics (NRU–HSE) indicate — excellent ones), there should be created clusters of high-yielding agricultural production, addressed to the bottomless markets of China and East Asia — the production of grain, fodder, meat, poultry, pork and, possibly, beer. The policy for creating such clusters will have a multiplication effect on a number of industries of domestic engineering and will help preserve them. There will emerge demand not only for importing equipment, but also for the creation and development of the existing factories for the manufacture of agricultural machinery and plants for the production of refrigerators. We do have such opportunities. Very advantageous, in view of the demand in Asian markets, will be the construction of two or three additional pulp and paper mills in Siberia and the Russian Far East. Of course, such a strategy will require the construction of highways, bridges, railways and seaports. (There are practically no grain export terminals in Russian eastern regions.) As for the infrastructure, maybe the Chinese build them with our money

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and with the use of foreign technologies. It will be far cheaper that way. And less will be stolen. I have heard quite a few fears from some people, including senior officials: we will create infrastructures, roads, bridges (which are ridiculously few between us and China now) — and crowds of Chinese will be flocking in. My answer is this: if we stay where we are, like a dog in the manger, the hay will rot, and the dog will run away. This is precisely what is happening now. Conditions will emerge for the loss of real sovereignty. Of course, Project Siberia should envisage an increase in production and the maximum processing of the resources being produced. The export of round timber to both Europe and Asia should be stopped. Advanced innovative production facilities should be created wherever possible — but those focused on servicing the industries where we have a competitive advantage. And this, let me say it again, applies to natural resources and potentially to agriculture, as well as the manufacturing of pulp and paper products. The project should be aimed at making Russian eastern regions one of the resource and food bases of rising Asia. A provider of goods with a relatively high degree of added value, and not just round timber, oil, ore or seafood as it is now. Such a scenario would strengthen Russia’s geopolitical positions and begin to eliminate the feeling of vacuum that occurs in everyone who looks at the demographic and economic development trends in Russian eastern territories. Agriculture can and must be promoted and upgraded in Central Russia. This modernization is already underway inconspicuously. Of course, the proposed path of transforming Russia and especially through developing its Trans-Urals regions into a great agricultural power looks a little offensive. What about innovation? What about new technological systems? We need to develop them wherever possible and necessary — in space technologies, in nuclear power, in aircraft building and in arms manufacturing. But they will not develop Siberia and the Russian Far East. They can only protect them, and not very reliably. These regions need to be developed by proper means that will really work, such as water-intensive businesses: agriculture, manufacture of paper and cardboard products, forest products, petrochemistry, enriched ore production and not just oil and gas. High-tech products should be manufactured there where there are still people able to make them. There are such places east of the Urals. But mostly they are concentrated in the European part of Russia. Project Siberia should have a European dimension, too. European com­ panies, capital and technologies should be invited to join in. Europe should

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be extended to new frontiers. The frontiers Russian pioneers once reached to bring with them the European way of life. What makes the proposed way of development so good is that it is beneficial to all. Russia will maintain its real sovereignty over the eastern territories and create a new platform for development. China, new Asia and the whole world will get a new resource and food supply base, easing the emerging shortages. The water problem will be partially solved. The international nature of the proposed project will prevent a geopolitical vacuum that would be ultimately unfavourable to China, too. The possibility of eastern Russia, and then of the whole of Russia getting into the sphere of Chinese influence only enhances the sentiment in favor of the “containment” of China.

CONCLUSION In short, I think this is a wonderful project. One should give thought to it, when and if we calmly go over the elections and will have an opportunity to think of the future, if we really want to.

Notes

1



2

The article was first published in Russian in Rossiyskaya Gazeta (Federal Issue) No. 5505, 17 June 2011. See . Editors’ Note: Dr Sergei Karaganov did not participate in the ASEAN-Russia Conference, 26–27 April 2011 on which the majority of the content of this publication is based. However, the editors welcome his contribution as a suitable post-script to the book as Dr Karaganov has been an active participant in the debates on the necessity to partially reorient Russian global policy towards East Asia. His article that originally appeared in the Rossiyskaya Gazeta (17 June 2011) contains some ideas not previously expressed in this debate.

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Index

103rd Meridian East, 292, 296 A Abdul Halim Mahmud, 188 Abdullah Ahmad, 187 Abdullah Majid, 187 Abdul Rahman, Tunku, 185 Abdul Razak, Tun, 38, 187–88 Abdul Samad Ismail, 187–88 Abdul Samad Said, 282 Abhisit Vejjajiva, 167–68 Abrau-Durso, champagne, 294 ACD (Asia Cooperation Dialogue), 33, 119, 165 ACU (Asian Currency Unit), 217 Adam Malik, 38 Admiral Nikolai Kuznetsov, aircraft carrier, 20 ADMM-Plus (ASEAN Defence Ministers Meeting Plus), 26, 36, 117, 122, 125 Afghanistan, invasion of, 45, 48, 114–15, 185, 189 AFP (Agence-France Presse), 315–16, 318 Agence Havas, 315 Ahmad Abdullah Badawi, 185 Ahmad Shabery Cheek, 191 Ahmad Zahid Hamidi, 128 Alexander I, Tsar, 45

Alexander III, Tsar, 161 Al-Jazeera, 16 Alliance Francaise, 315–16 Alliance of Europe, 348 Alltech Telecom, 183 All-Union Oil and Gas Research Institute (VNIINEFT), 257 AMDA (Anglo Malayan Defence Agreement), 186 America, see United States American Petroleum Institute, see API AMM (ASEAN Ministerial Meeting), 12 Anglo-French agreement, 170 anti-Islamic policy, 186 anti-ship ballistic missiles (ASBMs), 127 APEC (Asia-Pacific Economic Cooperation), 11, 15, 20, 27, 33, 46, 51, 53–55, 72, 81, 85, 117–18, 125, 165–66, 168, 174, 211, 242, 247, 251, 262, 327, 338, 349–50 economic cooperation with Russia, 240–41 events held in Russia, 222 exports, 219, 227–28 FDI, in Russia, 225–26 GDP, 220 investment relationship with Russia, 237–40

356

19 Asean-Russia.indd 356

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Index

Russian membership, 220–22 trade with Russia, 222–25, 227–37 APEC Leaders Week, 221 APEC Summit, 9, 15, 292 API (American Petroleum Institute), 257–58 APPF (Asia Pacific Parliamentary Forum), 202 APRU (Association of Pacific Rim Universities), 309 Arctic Sea Route, 6, 130 Arab countries, revolts in, 149 ARF (ASEAN Regional Forum), 20, 22, 24, 26, 33, 36, 46, 51, 85, 98–100, 115, 117, 121, 125, 131, 168, 202, 220, 327 ASEAN+3, 22, 33, 72, 74, 94–95, 117 ASEAN-4, and Russia arms trade and disaster relief, 208–9 education cooperation, 210–11 financial cooperation, 216 fuel and energy, 212–14 infrastructure and transport, 215 nuclear energy, 214 technology transfer, 209–10 tourism and recreation, 211–12 trade, 215–16 see also ASEAN; Russia ASEAN+6, 70, 72–73, 75 ASEAN+8, 75 ASEAN (Association of Southeast Asian Nations), 3–5, 11, 20–21, 33, 38, 40, 46, 51, 53, 71, 73–78, 85, 94, 97–98, 100–3, 105–6, 112, 114–20, 125–27, 129, 146–47, 156, 164–65, 168, 181, 187–88, 192, 197, 200, 207, 217, 220, 245, 248, 250, 255, 261–62, 298, 326, 350, 353 culture and literature, 280, 283 Dialogue Partners, and, 22–25, 110, 115, 118, 121, 156, 173, 184, 200, 289, 327–28

19 Asean-Russia.indd 357

357

founding of, 62, 68 Initiative for ASEAN Integration, 14, 28 identity, 23 Master Plan for ASEAN Connectivity, 263–64 MOU signed, 130 ranked, 139 regionalism, 23, 325 Russian military industrial complex, and, 127–29 South China Sea, interests in, 101–2 trade partners, 53 Trans-ASEAN gas pipeline, 218 see also ASEAN-4, and Russia; ASEAN-Russia ASEAN Business and Investment Summit, 29 ASEAN Centre, 13, 27, 119, 169, 209, 331 ASEAN Charter, 12, 23, 116 ASEAN-China trade, 25 ASEAN Committee on Disaster Management (ACDM)-Russia Consultation, 14 ASEAN Community, 39 ASEAN Coordinating Centre for Humanitarian Assistance on Disaster Management (AHA Centre), 26 ASEAN Declaration, 38 ASEAN Defence Ministers Meeting Plus, see ADMM-Plus ASEAN diplomacy, 122 ASEAN Economic Community, 24, 263 ASEAN-European Community Mixed Working Group, 82 ASEAN Foreign Ministers Meeting, 75 ASEAN Human Rights Mechanism, 55 ASEAN Inter-Parliamentary Organization, 202

3/12/12 2:57:56 PM

358

ASEAN Ministerial Meeting, see AMM ASEAN Plus Three, see ASEAN+3 ASEAN Post-Ministerial Conference, 13, 116 ASEAN Regional Forum, see ARF ASEAN+RIC, 94 ASEAN-Russia arms sales, 65, 117–18 economic role, 330–32 energy cooperation, 266 foreign direct investment, 13, 250, 265 free trade agreement, 14, 251, 262 historical overview, 326–27 military links, 62–66 oil and gas cooperation, 254 opportunities in diversity, 333–37 relations, 12–14, 24–25, 27–28, 52–56, 71, 132, 279, 319, 327–30 roadmap, 263–65 trade, 25, 52, 118, 246, 251, 265, 330 transport, 266–67 see also ASEAN; ASEAN-4, and Russia; Russia ASEAN-Russia Business Council, 29, 122 ASEAN-Russia Comprehensive Plan of Action, see CPA ASEAN-Russia Comprehensive Program of Energy Cooperation, 212 ASEAN-Russia Cultural Cooperation Agreement, 13 ASEAN-Russia Dialogue Partnership, 12–13, 27, 46, 85, 116, 261, 265 ASEAN-Russia Dialogue Partnership Financial Fund, 24–25, 265, 331 ASEAN-Russia Disaster Management Cooperation Work Plan, 26

19 Asean-Russia.indd 358

Index

ASEAN-Russia Energy Cooperation Work Programme, 14, 25, 266, 332 ASEAN-Russia Joint Cooperation Committee, 25 ASEAN-Russia Summit, 262–63 ASEAN-Russian Federation Senior Officials Meeting on Transnational Crime (SOMTCRussia), 26 ASEAN-Russia Summit Meeting. 24–26, 29, 120 ASEAN-Russia Trade, Economic and Investment Cooperation Roadmap, 26 ASEAN-Russia Working Group on Counter-Terrorism, 26 ASEAN-Russia Working Group on Science and Technology, 13 ASEAN Senior Officials on Energy (SOME)-Russia Consultation, 14, 25 ASEAN Summit, 70 ASEAN Treaty of Amity and Cooperation, see TAC ASEAN University Network, see AUN ASEAN-U.S.-China bloc, 49 “ASEAN Way”, 22–23, 95, 116 ASEF (Asia-Europe Foundation), 83 ASEM (Asia-Europe Meeting), 10–11, 15, 20, 32–33, 46, 51, 53, 80, 119, 338 history, 82–84 members, 83 regional cooperation, 81–82 Russia in, 84–86 ASEM Ministerial Meeting on Transportation, 85 Asia share of world GDP, 3 U.S. relations with, 73–74 Asia Cooperation Dialogue, see ACD Asia-Europe Foundation, see ASEF

3/12/12 2:57:56 PM

Index

Asia-Europe Meeting, see ASEM Asia-Pacific energy partnership, 5–7 regionalism, 327 security, nuclear dimension of, 126–27 significance of, 262 Asia-Pacific Community, 74 Asia-Pacific Economic Cooperation, see APEC Asia Pacific Fleet, 117 Asia Pacific Parliamentary Forum, see APPF “Asian Collective Security System”, 187 “Asian community building”, 32 Asian Currency Unit, see ACU Asian Development Bank, 122 Asian financial crisis, 72, 83, 165, 201, 330 see also financial crisis, global “Asian moments”, 46, 51, 55 Association of Pacific Rim Universities, see APRU Association of Southeast Asian Nations, see ASEAN “Atlantists”, 165 “A Turn to the East”, article, 346 AUN (ASEAN University Network), 309 Aung San Suu Kyi, 157 Australian High Impact Universities Research Performance Index (RPI), 303 avian flu, 35 Aziz Deraman, 282 B Bali Treaty, 71, 74 “Baltika”, tanker, 6 Bank of Russia, 225 Bazuki Soenandar, 258 BBC, 16, 314, 316–18 Beeline, telephone network, 183

19 Asean-Russia.indd 359

359

Berlin Wall, 200 Bessmertnykh, Alexander, 189 Bhumibol Adulyadej, King, 166 Bibliography of Southeast Asia, The, 296 Big Powers, 114, 119 “black” period, 114 Bolshevik Revolution, 47, 162 Bolshoi Ballet Theatre, 19 Bout, Victor, 167–68 BP (British Petroleum), 192, 255 BP MIGAS, 255 BrahMos cruise missile, 67 Brezhnev, Leonid, 164, 288, 326 BRIC (Brazil, Russia, India, China) group, 11, 21, 81, 91, 193, 311–12 BRICS (Brazil, Russia, India, China, South Africa) group, 51, 81, 91, 118–19 Britain, and soft power, 313–14 British Council, 119, 314–17, 319 Brookings Institution, 316–17 Brunei, relations with Russia, 115, 121, 337 Buddhism, 163 Bulganin, Nikolai, 151 Bush, George W., 73, 93 Buszynski, Leszek, 185, 187, 189 C Cambodia invasion of, 49, 114–15, 163, 185, 326 U.S. bombings, 197 Cambodian Armed Forces, 199 Cambodian Institute of Technology, 198 Cambodian National Authority for Combating Drugs, 201 Cambodia-Russia relations, 196 diplomatic relations, breakdown of, 198 last decade of, 201–2

3/12/12 2:57:56 PM

360

military assistance, 199–200 trade, 198–99, 202–3, 214 under Norodom Sihanouk, 196–98, 201 Cambodia-Soviet Hospital, 198 Campus for Research Excellence and Technological Enterprise, see CREATE Cam Ranh Bay, 121, 128, 176, 326, 334 capitalism, state-directed, 138 CBR (Centre for Basic Research), 250 CCP (Chinese Communist Party), 48, 101 CCTV, 16 CECAs (Comprehensive Economic Cooperation Agreements), 35, 146 Central Provident Fund, see CPF Centre for People’s Activity (Pusat Tenaga Rakyat), 279 Centre for Training Foreign Specialist, 211 CGDK (Coalition Government of Democratic Kampuchea), 198 Chakrabongse, Prince, 162 Chan, Jackie, 272 Charoen Sirivadhanabhakdi, 272 Chatham House, 313, 316, 319 Chea Sim, 197 chemical flooding, 257–58 Cheonan, ship, 98, 100 Chevron, 255, 258 Chiang Kai Shek, 48 China arms sale to, 61–62, 67 “external enemy”, as, 186 missile capability, 126–27 perspectives on, 348–49 purchasing power, 3 raw materials, 350–51 real estate market, 271 South China Sea, interests in, 99–101

19 Asean-Russia.indd 360

Index

China-ASEAN Joint Working Group, 101 China-Russia partnership, 349–50 relations, 14–16, 94 trade, 11, 118 “China’s dilemma”, 40 Chinese Civil War, 48 Chinese Communist Party, see CCP Chulalongkorn, King, 113, 160–62 Chulalongkorn University, 169 Churchill, Winston, 291 CIS (Commonwealth of Independent States), 60, 192, 203, 251, 252–53, 291, 308 Citibank, 238 cities, ranking, 272–74 Clinton, Hillary, 70, 74, 98–99 CNN, 16 CNPC (China National Petroleum Corporation), 192 Coalition Government of Democratic Kampuchea, see CGDK Cold War, 8, 25, 32, 37, 45–46, 49, 59, 62, 72, 81, 90, 92, 94, 111, 112–14, 120, 124, 128, 149, 154, 161–63, 168, 185–86, 192, 196–97, 223, 240, 242, 320, 327 Comintern (Communist International), 47–48, 186 Commonwealth of Independent States, see CIS communism, 163, 187 Communist Party of Thailand, 163 Communist Party of the Russian Federation, 176 Communist Party of the Soviet Union, see CPSU Communist Party of Vietnam, see CPV “competitive liberalization”, 252 Comprehensive Economic Cooperation Agreements, see CECAs “Concert of Asia, A”, 37

3/12/12 2:57:57 PM

Index

Confucius Centre, 119 Confucius Institute, 15 ConocoPhilips, 258 Council for Mutual Economic Assistance, 50, 121 Council for Security Cooperation in the Asia Pacific, see CSCAP counter-terrorism, 130–31 CPA (ASEAN-Russia Comprehensive Plan of Action), 13, 28, 263 CPF (Central Provident Fund), 137–38 CP Group, 167 CPSU (Communist Party of the Soviet Union), 56 CPV (Communist Party of Vietnam), 176, 216 CREATE (Campus for Research Excellence and Technological Enterprise), 310 CSCAP (Council for Security Cooperation in the Asia Pacific), 12, 122, 338 Cultural Revolution, 49, 163 Customs Union, 216, 251, 262 D Da Lat Nuclear Research Reactor, 214 “Days of Hanoi in Moscow”, 178 “Days of Russian Culture in Vietnam”, 178 Defence Science and Technology Agency, see DSTA Defence Security Cooperation Agency, 240 Deng Xiaoping, 61, 104 “desirability” theory of cities, 273 Dith Munti, 201 DOC (Declaration of the Conduct of Parties in the South China Sea), 98, 101–4 Doha Development Round, 35, 91, 146

19 Asean-Russia.indd 361

361

“Doi Moi” policy, 173 DPFF (Dialogue Partnership Financial Fund), 24–25 Drozdova, Katya, 291 DSTA (Defence Science and Technology Agency), 307 “dynamic equilibrium”, 39 E EAS (East Asia Summit), 3, 11, 15, 20, 22, 26, 32–36, 46, 54, 70, 72–74, 77, 94, 101, 106, 117, 120, 125, 190, 327 Russia’s entry to, 71, 75–76, 245, 262, 328, 333, 336–37 Ease of Doing Business Index, 237 East Asia definition of, 33–34 geopolitical entity, as, 76 East Asian Community, 35, 71, 73–74, 117 East Asian regionalism, 72, 189, 337 East Asian trends, 73–75 East Asia Summit, see EAS Eastern Europe Award, 308 Eastern Europe Research Scientists and Students Exchange Collaborations Programme, see EERSS Eastern Gas Program, 248 “East of Suez” policy, 186 East-Siberia-Pacific Ocean pipeline, 18, 105, 259 economic crisis, 18, 73 “economic tigers”, 327 Economist Intelligence Unit (EIU) Survey, 138, 272–73 Economist, The, 137, 148 ECOTECH (Economic and Technical Cooperation), 242 EDC (Enterprise Development Centre), 147 EERSS (Eastern Europe Research Scientists and Students Exchange

3/12/12 2:57:57 PM

362

Collaborations Programme), 307–8, 312 EEZs (Exclusive Economic Zones), 127 military activities in foreign, 98 Einstellung Effect, 149 energy security, 5, 45, 129 English, as lingua franca, 313 “Entente Cordiale”, 170 Enterprise Development Centre, see EDC EOR (enhanced oil recovery), 257–58 ESCAP (United Nations Economic and Social Commission for Asia and the Pacific), 148 ETH Zurich, 310 Etorofu Island, 18 Eurasian Economic Union, 251 Eurobonds, 250 Europe slow economic development, 349 “Soft Power”, 316 European Coal and Steel Community, 7 European Community, 82 European Union (EU), 7, 25, 45, 80, 82, 85, 247, 252, 309, 347–48 Export-Import Bank, Thailand, 167 ExxonMobil, 255 F FAO (Food and Agriculture Organisation), 102 Far Eastern Federal University, 169 Far Eastern State University of Vladivostok, 169, 211 FDCS (Federal Drug Control Services), 201 FDI (foreign direct investment) ASEAN and Russia, 13, 250, 265 Federal Assembly of the Russian Federation, 176 Federal Drug Control Services, see FDCS

19 Asean-Russia.indd 362

Index

Federal State Statistical Service (Rosstat), 225, 237 Filimonov, Georgy, 317–18 financial crisis, global, 5, 10, 80, 84, 93, 179, 258, 260 see also Asian financial crisis Five Power Defence Arrangements, see FPDA FoC (Flags of Convenience) vessels, 131 Food and Agriculture Organisation, see FAO “Football Unites”, 314 foreign direct investment, see FDI Forex reserves, 10 FPDA (Five Power Defence Arrangements), 187 Fradkov, Mikhail, 151, 336 France, and soft power, 315–16 French Indochina, 62 Friendship Treaty, 10 From Third World to First: The Singapore Story, 1965–2000, 298 FSU Energy, 249 FTA (free trade agreement), 35, 124, 146–47, 247, 252 ASEAN-Russia, 14, 251, 262 Asia-Pacific region, 12 East Asia, 10 Fudan University, 309 Fukushima nuclear accident, 4–6, 20, 105–6, 209, 214, 254 FUNCINPEC, 198 G G7, 195, 311 G8, 27, 51 G20, 9, 51, 81, 118–19, 148 Gagarin, Yuri, 318–19 Gandhi, Indira, 16 Gazprom, 181, 212, 218, 238–39, 248–50, 331 geopolitical environment, 39, 62

3/12/12 2:57:57 PM

Index

geopolitical rivalry, 98 geopolitics, 102 Georgia, conflict, 317 Germany, purchasing power, 3 Ghazali Shafie, 188, 193 glasnost, 56 globalization, 81, 93, 124, 242, 303 GLONASS (Global Navigation Satellite System), 85, 210 Goethe Institute, 119 Goh, G.K., 290 Goh Poh Seng, 297 Golitsyn, Leo, 294 Gong Li, 272 “Good Governance, Six Principles of ”, 141–42 Gorbachev Foundation, 346 Gorbachev, Mikhail, 50–51, 58, 61, 114–15, 120, 164, 188–89, 200, 326 Graham, Thomas, 165 GRC (Group Representation Constituency), 140 Greater Mekong Region, 10 “Great Game, the”, 45, 47, 59 “great-power politics”, 317 Greco-Roman Christian heritage, 32 Group of 20, see G20 Gtel Mobile, 183 Gulf War, 67 Gurevich, Emma, 297–99 H HADR (high availability disaster recovery), 125 Hanoi State University, 182 “hard power”, Russia and, 316–17 Hatoyama, Yukio, 74, 78 Heng Samrin, 197, 202 Hill, Fiona, 316–17 Hoa Binh hydropower station, 180 Ho Chi Minh, 48 Hong, Mark, 298, 335

19 Asean-Russia.indd 363

363

Hor Namhong, 201–2 Hu Jintao, 40 Humanitarian Assistance and Disaster Relief, 131–32 Hun Sen, 197 Hussein Onn, 187 hydrocarbons, 4–5, 177, 254 hydroelectric power, 213–14 hydropower plants, 180 I IAEA (International Atomic Energy Agency), 152–53, 336 IAI (Initiative for ASEAN Integration), 14, 28 IARU (International Alliance of Research Universities), 309 ICAPP (International Conference of Asian Political Parties), 202 ICBM (Intercontinental Ballistic Missiles), 126 If We Dream Too Long, book, 298 IGC (Inter-governmental Commission), 175, 177 IMF (International Monetary Fund), 91, 148 India arms sale to, 61, 67 purchasing power, 3 Indochina, 200, 207–12, 214–17 “communisation”, of, 163 geopolitical changes, 114 Indochina War, 62, 177 Indonesia art, and, 286–89 “Confrontation”, 186 Indonesian Communist Party, 38 Indonesian National Army, 38 Indonesia-Russia arms sale, 127–28, 332, 334, 341 communication, 259 EOR (enhanced oil recovery), 257–58

3/12/12 2:57:57 PM

364

geographical diversification, 258–59 information and infrastructure, 259 production sharing, of oil, 255–57 Indo-Soviet friendship, 49 Initiative for ASEAN Integration, see IAI Institute of Applied Technology, 148 Institute of Oriental Studies, 298–99 Institute of Southeast Asian Studies, see ISEAS Institute of World Economy and International Relations, 3 “integrationists”, 164 Intercontinental Ballistic Missiles, see ICBM Intergovernmental Agreement on Cooperation in the Control of Illicit Trafficking of Narcotic Drugs and Psychotropic Substances, 201 Intergovernmental Agreement on Military and Defence Cooperation, 177 Inter-governmental Commission, see IGC Intergovernmental Commission for Trade, Economic, Scientific, and Technical Cooperation, 199, 201–2 Intergovernmental Program of Cultural Exchanges, 203 International Alliance of Research Universities, see IARU International Atomic Energy Agency, see IAEA International Civil Aviation Organization, 86 International Conference of Asian Political Parties, see ICAPP International Energy Agency, 3 International Enterprise Singapore, 311 International Film Festival of the Asia Pacific countries, 203

19 Asean-Russia.indd 364

Index

International Monetary Fund, see IMF International Space Station, 192 International Tech Park, 147 International Thermonuclear Experimental Reactor, see ITER international transport corridors, see ITCs Interpol, 148 Inter RAO EES, 180, 213 Inya Lake Hotel, 151 Iraq war, 192 ISEAS (Institute of Southeast Asian Studies), 10, 75, 302 Israeli Technion Institute of Technology, 310 ITASPS (Trans-Asia/Trans-Siberia/ Cross-Polar Routes High Level Steering Group), 86 ITCs (international transport corridors), 85 ITER (International Thermonuclear Experimental Reactor), 4 Ivanov, Alexander A., 12, 129 Ivanov, Igor, 202 J Jaem, Richard Riot, 191 Jane’s Defence Weekly, 191 Japan disaster relief, 18, 20 Meiji, 49 Japanese Imperial Army, 49 Japanese occupation, 279 Japanese Self-Defence Forces, 18 JBIC (Japan Bank for International Cooperation), 240 Jet Li, 272 Jewish Autonomous Region, 11 Joint Declaration on Strategic Partnership, 174 Joint Declaration on the Foundation of Friendly Relations, 201 Juwono Sudarsono, 128

3/12/12 2:57:57 PM

Index

K Kaliningrad Region, 10 Kampuchea, see Cambodia Karchava, Alexander, 216 Kasyanov, Mikhail, 165 Kesavapany, K., 75 KGB, 193 Khariaga oil field, 256 Khmer People’s Liberation Front, see KPNLF Khmer Rouge, 163, 197, 336 Khrushchev, Nikita, 151, 163, 287 Khvatov, Gennady, 59, 66 “Kilo” submarine, 63, 68, 128, 208 Kirienko, Sergey, 152 KMT (Kuomintang), 48–49 Knight Frank-Citi Wealth Report, 274 Knight Frank Global House Price Index, 273 knowledge-based economy, 209–10 Konfrontasi, 38 Korea National Ballet, 19 Korean Peninsula, problems, 8–9, 55 Korea-Russia Festival, 19 Korea University, 309 Kozyrev, Andrei, 50, 328 KPNLF (Khmer People’s Liberation Front), 198 Kriangsak Chamanan, 163 Kuomintang, see KMT Kurile Islands, 18, 125 Kuvaldin, Victor, 346 L Langkawi International Maritime and Aerospace Exhibition, see LIMA Lavrov, Sergei, 10–11, 70, 94, 167, 202, 329, 331 Law of Territorial Sea and the Contiguous Zone, 99, 101 Lebedev, Vyacheslav M., 151, 201 Lee Kuan Yew, 137, 148, 329 book, 298

19 Asean-Russia.indd 365

365

six principles of good governance, 141–42 Leninist theory, 49 Lenin, Vladimir, 59, 90 Library of the Cambodian Senate, 203 LIMA (Langkawi International Maritime and Aerospace Exhibition), 190 Lim, Catherine, 297 Li Peng, 104 Li, Richard, 272 LNG (liquefied natural gas), 212, 248–50, 331 Lon Nol, 197–98 “Look East Policy”, 92, 146 “Look Southeast Policy”, 146 Losyukov, Alexander, 166 LTE network, 183 Lukoil, 239 M Maha Chakri Sirindhorn, Princess, 164 “Mahathirism”, 73 Mahathir Mohamad, 64, 72, 185, 334 Malaysia under, 188–90 memoirs, 188, 194 Mahbubani, Kishore, 83 MAI (Moscow Aviation Institute), 191 Makovsky, Konstantin, 287–88 Malaya, see Malaysia Malayan Communist Party, 47–48 Malaysia anti-communism, 186 “Confrontation”, 186 independence, 185 Mahathir years, under, 188–90 May 13 incident, 186 palm oil, 189–90 Soviet espionage, alleged, 187–88 students in Russia, 122–23 Malaysia-Russia relations, 184, 191–92 arms sale, 190–91, 330, 332–33

3/12/12 2:57:58 PM

366

Cold War to détente, 185–88 contract, 250 FDI, 191 historical overview, 185 trade, 189 Malaysian Federation, 38 Manizer, Matvei, 288 Marcos, Imelda, 121 Marina Bay Sands, 271 MaRVs (manoeuvrable re-entry vehicles), 127 Marxism, 66, 111 Massachusetts Institute of Technology, see MIT Master Plan for ASEAN Connectivity, 263–64 Maung Aye, 151, 336 Maxim Gorky Institute of World Literature, 300 Ma Ying-jeou, 101 Mechel, 239 Medvedev, Dmitry, 12, 15–16, 18, 51, 53, 61, 67, 116, 120, 122, 174, 209, 213–14, 292, 325, 330–31, 334–35, 337, 347 views of, 10–11 Megawati Sukarnoputri, 286–87 Memorandum of Understanding, see MOU Mercer Quality of Living Survey, 272 meritocracy, 138 Merkel, Angela, 348 Meseberg initiative, 348 MGIMO (Moscow State University of International Relations), 10, 13, 27, 148, 168–69, 298, 331 Middle East, instability, 4, 9, 20 MiG-29 fighter, 63–64 Mikoyan, Anastas, 288 Military Academy, 198 Military Hospital, 198 military observers, 58–59, 66 Mironov, Sergey, 202

19 Asean-Russia.indd 366

Index

MIRV (multiple independently targetable re-entry vehicle), 126–27 MIT (Massachusetts Institute of Technology), 310 Mitsubishi, 238 Mlechin, Leonid, 299 MNCs (multinational corporations), 138 Modi, Dr., 272 monarchy, 163 Mongol Empire, 47 Mongolia, as client state, 59, 66 Morskoy Sbornik (The Nautical Collection), 296 Moscow Aviation Institute, see MAI Moscow Metro Construction Authority, 158 Moscow Narodny Bank, 290 Moscow Olympics, 48 Moscow State University, 182 Moscow State University of International Relations, see MGIMO MOU (Memorandum of Understanding), 130, 147, 151, 203, 213, 249 multilateralism, 116–17 multiple independently targetable re-entry vehicle, see MIRV multi-polar world order, 91, 334 Munich Security Conference, 99 MV Nordic Barents, 130 Myanmar arms sale, 333 disaster relief, 209 economic developments, 157 general elections in, 156–57 generational change, 157 resources, 157–58 western sanctions, 158 Myanmar Air Force, 153 “Myanmar issue”, 156

3/12/12 2:57:58 PM

Index

Myanmar Oil and Gas Enterprise, 153 Myanmar-Russia agreements, 158–59 nuclear cooperation, 151–53, 155 relations, 151, 156–59, 336 trade, 153, 158, 215 Myers, Steven Lee, 316 N Nabiullina, Elvira, 245 Najib Razak, 126 NAM (Non-Alignment Movement), 94, 197 NANO, fire extinguishers, 259 Nanyang Technological University, see NTU Natalegawa, Marty, 39 National Assembly of Vietnam, 176 “national bibliographies”, 281 National Emergency Management Centre of Russia, 26 National Crises Management System, 14 nationalism, 37, 101 National Research Foundation, see NRF National Research University-Higher School of Economics, see NRUHSE “National Security Strategy 2010”, 100 National Theatre of Korea, 19 National University of Singapore, see NUS NATO (North Atlantic Treaty Organization), 45, 50, 90 Nautical Collection, The, (Morskoy Sbornik), 296 “Naval Operation Concept 2010”, 100 NAVSTAR (GPS), 210 “near abroad”, 60, 112, 317 Nenets Autonomous Region, 256 Net Investment Inflow, 118 New Straits Times, 187

19 Asean-Russia.indd 367

367

New Transatlantic Agenda, The, 81 New York Times, 16, 316–17 Nguyen Tan Dung, 128 Nicholas II, Tsar, 160–61, 290 Nikonov, Vyacheslav, 320 Nixon, Richard, 49, 197 Nizhny Novgorod State Medical University, 191 Nobel Prize, 19, 282 Non-Alignment Movement, see NAM Non-Proliferation Treaty, 336 Norilsk Nickel, 239 Norodom Sihanouk, 196–98, 201 Norsk-Hydro, 256 North Atlantic Treaty Organization, see NATO Northeast Asia Regional Cooperation, 10 Northeastern Shipping Company, 130 Northern Sea Route, see NSR North Korea missiles inventory, 126 ship attack, 98 Six-Party Talks, 20 see also South Korea “Novatek”, company, 6 Novikov, Sergey, 155 Novosti News Agency, 297, 320 NRF (National Research Foundation), 303, 310 NRU-HSE (National Research University-Higher School of Economics), 353 NSR (Northern Sea Route), 106, 130 NTU (Nanyang Technological University), 309 nuclear energy, 4–6 nuclear power station, 4–6, 214 Nusantara Society, 300 NUS (National University of Singapore), 148, 302–3 Eastern Europe partnerships, 307–11

3/12/12 2:57:58 PM

368

global ranking, 303–4, 312 international partnership, 304–6 research clusters, 309–10 NUS Overseas College, 306 NUS Research Institute, 312 NUS STEER (NUS Study Trip in Engagement and Enrichment), 311 Nye Jr, Joseph, 313, 316 O OAO Rosneft, 192 Obama, Barack, 93, 100 OECD (Organisation for Economic Cooperation and Development), 239, 243 OIC (Organization of the Islamic Conference), 190 oil and gas supplies, 4 oil price, fluctuations, 5 “oil window”, 259 “one-party system”, 141 Ong Keng Yong, 328–29 OPEC(Organization of the Petroleum Exporting Countries), 129, 255 “open door” policy, 138 Open Skies Agreement, 146 Organisation for Economic Cooperation and Development, see OECD Organization of Security and Cooperation in Europe, see OSCE Organization of the Islamic Conference, see OIC Organization of the Petroleum Exporting Countries, see OPEC Orton Oil Company, 239 OSCE (Organization of Security and Cooperation in Europe), 6, 352 Osipova, Marina, 298 Ottaway, Richard, 314 Oum Sarith, 202

19 Asean-Russia.indd 368

Index

P Pacific Basin Economic Council, see PBEC “Pacific Concord”, 328 Pacific Economic Cooperation Council, see PECC Pacific Region International Defence Exhibition, The, 68 Pacific Rim countries, 58 Pacific Science and Learning Centre, 211 Pacific Strategy of Russia, 12 Paknam crisis, 161 Panama Canal, 130 PAP (People’s Action Party), 140 Paustovsky, Konstantin, 282 Paracel islands, 101 Paris Peace Agreement, 121 Parnickel, Boris, 281, 300 Path Dependent Theory, 142, 149 PBEC (Pacific Basin Economic Council), 220 Peabody Institute, 149 Peace Corps, 240 PECC (Pacific Economic Cooperation Council), 219–20 People’s Action Party, see PAP Peoples’ Friendship University of Russia, 318 People’s Liberation Army, see 64, 127 perestroika, 188 Pertamina Technological Centre, 258 Peter the Great, 45, 287, 315 Petronas, 191–92, 218 Petros Technologies Company, 257, 259–60 PetroVietnam, 181, 183, 213, 254, 331 Philippines, the, relations with Russia, 336 Place to Kill Good Boys, A, novel, 299 PLA (People’s Liberation Army), 64, 127

3/12/12 2:57:58 PM

Index

Pochentong Air Force Base, 198 Pogadaev, Victor, 281–82 Preah Vihear Temple, 200 Prem Tinsulanonda, 164 Primakov, Yevgeny, 90, 164–65, 327–28 Project Siberia, 352–55 Promexport, 68 Property Report, magazine, 271 protectionism, 91 PSA Peugeot Citroen, 238 PSC (production sharing contracts), 255–59 publications, translations in, 281 Pusat Tenaga Rakyat (Centre for People’s Activity), 279 Putin, Vladimir, 29, 50–51, 53, 61, 67, 77, 113, 116, 122, 160, 165, 174, 189–90, 221, 316, 325, 328–32, 334–35, 337, 346 Q QS World University Rankings (QS), 303–4, 309 “Quadrennial Defence Review Report 2010”, 100 R “Rainy Season”, documentary, 203 Rajaratnam, S., 38 Rama IV, 161 Rama V, see Chulalongkorn Ramos, Fidel, 329 Ramos, Narciso, 38 Rangoon Institute of Technology, 151 “Razak boys”, 187 Raznoimport Moscow, 290 RCSC (Russian Centre for International Scientific and Cultural Cooperation), 123 Ream Navy Base, 198 recession, 262, 270 Red Guards, 49

19 Asean-Russia.indd 369

369

Research Centres of Excellence (RCEs), 303, 309 Reuters, 318 RIA Novosti, 297 RIC (Russia-India-China) “strategic triangle”, 90–95 Rimland of Eurasia, 16 River Military Base, 198 RMAF (Royal Malaysian Air Force), 191 Rogers, Jim, 272 Rollton Ltd., 181 Rosatom Corporation, 214 Rosatom (Russian Atomic Energy Agency), 155 Roscosmos (Russian Space Agency), 318 Rosneft, 331 Rosoboronexport, 68, 332 Rosstat (Federal State Statistical Service), 225, 237 Rosvooruzheniye State Corporation, 63, 68 Royal Malaysian Air Force, see RMAF Royal Thai Air Force, 166, 332 Royal Thai Embassy, 168 RPI (Australian High Impact Universities Research Performance Index), 303 RSMU (Russian State Medical University), 191 Rudd, Kevin, 74, 78 Rushydro, 213 Russia APEC, economic cooperation with, 240–41 APEC events held in, 222 APEC FDI in, 225–26 arms export, 122, 208 arms sale to India, 61, 67 ASEM, and, 84–86 Asia-Pacific power, as, 125–26 Asian strategy, 346–47

3/12/12 2:57:59 PM

370

Brunei, relations with, 115, 121, 337 defence sector, 63, 68 disaster relief, joint efforts in, 209 economy, 19 EAS, entry to, 71, 75–76, 245, 262, 328, 333, 336–37 Energy Strategy, 248, 331 FDI to Malaysia, 191 Foreign Policy Concept, 335 geostrategic perspective, 31 “hard power”, 316–17 influences on, 111–13 land territory, 112 Malaysia students in, 122–23 military industrial complex, and ASEAN, 127–29 national identity, 51 oil and gas reserves, 129, 192 perceptions of role, 8–9 regional balance, role in, 327–30 regional dynamics, and, 118–20 soft power, and, 19–20, 119, 316–19 South China Sea, policy options in, 105–7 Southeast Asia, and, 49–54, 113–15, 325–38 Strategy 2020, 346 “Time of Troubles”, 50 trade partner, 53 U.S. economic assistancea, 241 see also ASEAN-4, and Russia; ASEAN-Russia; Soviet Union Russia-ASEAN dialogue, 3, 121 Russia-ASEAN relations, 12–14, 24–25 Russia-Cambodia relations, 196 diplomatic relations, breakdown of, 198 last decade of, 201–2 military assistance, 199–200 trade, 198–99, 202–3, 215

19 Asean-Russia.indd 370

Index

under Norodom Sihanouk, 196–98, 201 Russia-China partnership, 349–50 relations, 14–16, 94 trade, 11, 118 Russia-India-China (RIC) “strategic triangle”, 90–95 Russia-Indonesia arms sale, 127–28, 332, 334, 341 communication, 259 EOR (enhanced oil recovery), 257–58 geographical diversification, 258–59 information and infrastructure, 259 production sharing, of oil, 255–57 Russia-Malaysia arms sale, 190–91, 330, 332–33 Cold War to détente, 185–88 contract, 250 historical overview, 185 relations, 184, 191–92 trade, 189 Russia-Malaysia Business Council, 191 Russia-Myanmar agreements, 158–59 nuclear cooperation, 151–53, 155 relations, 151, 156–59, 336 trade, 153, 158, 215 Russian Academy of Sciences, 3 Russian Atomic Energy Agency, see Rosatom Russian Central Bank, 217 Russian Centre for International Scientific and Cultural Cooperation, see RCSC Russian Centre of Science and Culture, 178 Russian Council on Foreign and Defence Policy, 332 Russian Diesel company, 213 Russian Embassy, 168–69

3/12/12 2:57:59 PM

Index

Russian Far East development plans for, 4–6, 267–68, 346, 351 population, 221, 243 Russian Federal Agency for Tourism, 212 Russian Federation, 39 Russian Film Weeks, 203 Russian Global University Ranking (GUR), 303 Russian Ministry for Emergencies, 175 Russian National Committee, of the CSCAP, 12 Russian Revolution, 111, 142 Russian Singapore, 291 Russian Space Agency, see Roscosmos Russian State Medical University, see RSMU Russian Trade and Industrial Exhibition, 186 Russian-Vietnamese Tropical Research and Technological Centre, 177 Russia-Singapore cuisine, 293–94 cooperation, 148–49, 335 cultural exchange, 290–92 publications, 297–98 trade, 144–45 Russia-Singapore Business Forum, 290 Russia-Thailand challenges, 167–68 contemporary developments, 165–68 economic ties, 167 foreign policy concepts, 168–69 historical overview, 161–65 ideological split, 162–64 relations, 113, 160, 335 royal friendship, 161–62 Russia Today English TV, 16, 320 Russia-Vietnam cultural and economic cooperation, 177–81

19 Asean-Russia.indd 371

371

defence cooperation, 176 intergovernmental contacts, 175–76 inter-parliamentary ties, 176 joint-ventures, 179–81 political and military ties, 174–77 relations, 113, 262, 334 trade, 178–79, 215–16 “Russia year”, 222 Russkiy Mir Foundation, 27, 320 Russo-Indian relations, 16–17, 61 Russo-India Summit, 11 Russo-Japanese war, 17, 45–47 Russo-Japan relations, 17–18 RusVietPetro, 213, 254 RusViet Telecom, 183 S S3 University Alliance, 309 Saddam Hussein, 15 Saint-Petersburg State University, 169 Sakhalin gas projects, 212, 238, 248–49, 336 SAMs (surface-to-air missiles), 63–64, 68 Samsung Electronics, 238 Sar Kheng, 201 Savenkov, Yuri, 297 Saxena, N.C., 138 “Scarab” missile, 64 SCELSE (Singapore Centre on Environmental and Life Sciences Engineering), 309 Schmidt, Helmut, 347 Scolcovo innovation centre, 267 Scopus, rating, 309 SCO (Shanghai Cooperation Organization), 10–11, 15, 20, 27, 46, 51, 118–19, 125, 130–31 sea lines of communications, see SLOCs SEANWFZ (Southeast Asian Nuclear Weapon Free Zone), 125, 127, 189

3/12/12 2:57:59 PM

372

SEATO (Southeast Asia Treaty Organization), 62, 113, 186 SEA Writers’ Award, 280 Second Indochina War, 62 Second World War, see World War II Senior Officials Meeting, see SOM Senkaku Islands, 99 SEP (Student Exchange Programme), 311 Severino, Rodolfo, 73, 329 Shanghai Cooperation Organization, see SCO Shanghai Five, 60 Shangri-La Dialogue, 126 Shanmugaratnam, Tharman, 148 Sheikh Muszaphar Shukor, 192 Shell, 255 Shevardnadze, Eduard, 115, 164 Shiraev, Kirill, 293 Siam, see Thailand Siberia development plans for, 4–6, 267–68, 346, 351 fresh water resources, 15 Project Siberia, 352–55 Siddhi Savetsila, 164 Siddiq Mohamad Ghouse, 188, 193 Sigayev, Vladlen, 287–88 Silovye Mashiny, 180, 213 Singapore currency, 270 doing business in, 146–48 financial centre role, 142–43 general election in, 140–41 lessons from, 137–38, 143 real estate, 269–72, 275 Singapore Airlines, 292 Singapore Centre on Environmental and Life Sciences Engineering, see SCELSE Singapore Chinese Chamber of Commerce and Industry (SCCCI), 147

19 Asean-Russia.indd 372

Index

Singapore Civil Service, 138 Singapore F1, 271, 275 Singapore Indian Chamber of Commerce and Industry (SICCI), 147 Singapore Mosaics, 297–98 Singapore-Russia cuisine, 293–94 cooperation, 148–49, 335 cultural exchange, 290–92 publications, 297–98 trade, 144–45 Singapore’s Modern Prose, 295, 298 Singh, Bilveer, 188 Singh, Manmohan, 16 Sino-Indian rivalry, 92 Sino-Russian relations, see China-Russia relations Sino-Soviet conflict, 49, 163, 200, 326 Sintez Group, 256 SIPRI (Stockholm International Peace Research Institute), 67, 69, 122 Sirikit, Queen, 160, 166–67, 335 SITC (Standard International Trade Classification), 230 Six-Party Talks on North Korea, 20 “Six Principles of Good Governance”, 141–42 Sketches of Singapore, 297 Skolkovo Business School, 298 SLOCs (sea lines of communications), 103, 106, 126 SMEs (small and medium enterprises), 26 socialist system, 111 Soeharto, 38 “soft power” Britain, and, 313–14 definition, 313 Europe, 316 France, and, 315–16 Russia, and, 19–20, 119, 316–19 Sokolovsky, Alexander, 211

3/12/12 2:58:00 PM

Index

SOM (Senior Officials Meeting), 242 Soros, George, 272 South China Sea American interests in, 99–100 ASEAN interests in, 101–2 China interests in, 99–101 conflict potential, 97 defusing tensions, 102–5 military activites, 98–99 priority of East Asian powers, as, 98–102 Russian policy options in, 105–7 Southeast Asia influences on, 111–13 neutrality, 187 Russia, and, 49–54, 113–15, 325–38 U.S. influence in, 100 Southeast Asian Nuclear Weapon Free Zone, see SEANWFZ Southeast Asia Treaty Organization, see SEATO South Korea arms sale to, 61, 67 ship attacked, 98, 100 soft power, 19 see also North Korea South Korean Culture Ministry, 19 Sovcomflot, shipping company, 130 sovereign wealth fund, 138 Soviet-Chinese Treaty on Friendship, Alliance and Mutual Assistance, 48 Soviet National Committee on Asia Pacific Cooperation, see SOVNAPEC Soviet Pacific Fleet, 58, 128 Soviet Union, 15, 17, 28, 37, 46–47, 94, 110–14, 121, 154, 162–64, 185–89, 196–99, 208, 219–20, 223, 290, 316, 326, 335–36, 347 arms transfer, 67

19 Asean-Russia.indd 373

373

collapse of the, 48, 56, 59–61, 151, 164, 173, 180, 200 espionage in Malaysia, alleged, 187–88 invasion of Afghanistan, 45, 48, 114–15, 185, 189 late period, 50–51 reconfigured relations, in Asia, 59–60 Southeast Asia, and, 49–50, 113–15 see also Russia “Sovkomflot”, company, 6 SOVNAPEC (Soviet National Committee on Asia Pacific Cooperation), 220 Soyuz spacecraft, 185, 192 Special Economic Zones, 146, 157, 335 Spice Corp, 272 Spratly Islands, 119, 329, 333 Stalin, Joseph, 162 Standard International Trade Classification, see SITC State Bank of Vietnam, 217 State Museum of Oriental Art, 286 steam flooding, 258 Stockholm International Peace Research Institute, see SIPRI Straits of Malacca, 130, 154, 189, 296 Straits Times, 11 “String of Pearls”, naval bases, 92 Student Exchange Programme (SEP), 311 Suez Canal, 130 Sukarno, 38, 120, 287 art collection, 288 “Suling”, drama, 279 Sun Yat Sen, 48–49 surface-to-air missiles, see SAMs Survey of Russian Policy, 329 Susilo Bambang Yudhoyono, 128 Suzhou Industrial Park, 147, 312 “Switzerland of Asia”, 275

3/12/12 2:58:00 PM

374

T TAC (ASEAN Treaty of Amity and Cooperation), 12, 15, 24, 53, 71, 116, 121, 261, 328 Tana, Russian firm, 210 Tan Chorh Chuan, 304 Taunggyi General Hospital, 151 Tay, Michael, 290 Technopromexport Company, 180 Teo Chee Hean, 26 Thai-Cambodia tensions, 34 Thailand, military coup, 167 Thailand-Russia challenges, 167–68 contemporary developments, 165–68 economic ties, 167 foreign policy concepts, 168–69 historical overview, 161–65 ideological split, 162–64 relations, 113, 160, 335 royal friendship, 161–62 Thaksin Shinawatra, 165–66, 332 Thammasat University, 169 Thanat Khoman, 38 The Impeccable, surveillance ship, 98 Third World, 92, 120, 163, 326 Tiananmen massacre, 64 “Time of Troubles”, 50 Times Higher Education (THE) rankings, 303 Times of India, 16 TMK, steel pipe manufacturer, 239 TNK-BP, joint venture, 213, 255 Tokyo, cost of living, 274 Total, oil company, 213, 255–56 Tourism Forum, 212 TPO (Tourism Promotion Organization for Asia-Pacific Cities), 212 Tran Duc Luong, 174 Trans-ASEAN gas pipeline, 218

19 Asean-Russia.indd 374

Index

Trans-Asia/Trans-Siberia/Cross-Polar Routes High Level Steering Group (ITASPS), 86 Trans-Pacific Partnership, 14, 36 Trans-Siberian Railroad, 85, 266 Treaty of Peace, Friendship and Cooperation, 61, 121 Treaty on the Foundations of Friendly Relations, 173 Treaty on the Southeast Asia Nuclear Weapons-Free Zone, 214 trilateral strategic balance, 17 Tyazhpromexport, government-owned enterprise, 153 U UNESCO (United Nations Educational, Scientific and Cultural Organization), 282 Union Solidarity and Development, 156 United Front for National Salvation of Kampuchea, 197 United Nations Economic and Social Commission for Asia and the Pacific, see ESCAP United Nations Security Council, 17, 20, 27, 121, 155 “United Russia”, 176 United Russia Party, 202 United States activism in East Asia, 75 “benign hegemon”, as, 103 Cambodia bombings, 197 economic assistance to Russia, 241 economic integration, 36 hegemony, 90, 93, 184, 334 influence in Southeast Asia, 100 purchasing power, 3 relations with Asia, 73–74 South China Sea, interests in, 99–100 Universitas 21 (U21), 309 University of Malaya, 281

3/12/12 2:58:00 PM

Index

University of Technology and Design, 148 University Town, 310 Unocal, 213 U Nu, 151 USAID (U.S. Agency for International Development), 240, 244, 318 U.S.-China competition, 17 U.S.-China-Pakistan “triangle”, 93 U.S.-China relationship, 77 U.S. Congressional Research Service Report, 127 U.S. unilateralism, 334 U Shwe Mann, 151 USS Harold E. Holt, frigate, 58 USSR, see Soviet Union U Thaung, 152 Utuy Tatang Sontani, 279, 283 V Vietgazprom, joint venture, 180 “Vietkieu”, 180 Vietnam arms sale to, 208, 333 “Doi Moi” policy, 173 GDP, 177 intervention of Cambodia, 49, 114–15, 163, 185, 326 Paracel islands dispute, 101 seafood production, 183 State Bank of Vietnam, 217 Vietnamese Committee on Search and Rescue, 175 Vietnamese Communist Party, 48 Vietnam Post and Telecommunications, see VNPT Vietnam-Russia cultural and economic cooperation, 177–81 defence cooperation, 176 intergovernmental contacts, 175–76 inter-parliamentary ties, 176

19 Asean-Russia.indd 375

375

joint-ventures, 179–81 political and military ties, 174–77 relations, 113, 262, 334 trade, 178–79, 215–16 Vietnam-Russian Bank, 217 Vietnam War, 38, 48–49, 113, 186 VietSovPetro, joint venture, 179–80, 183, 254, 331 VimpelCom, 239 Virtuous Cycles: The Singapore Public Service and National Development, book, 138 VisitBritain, 314 VNIINEFT (All-Union Oil and Gas Research Institute), 257 VNPT (Vietnam Post and Telecommunications), 183 VTB, 250 Vympelcom Company, 183 W war on terrorism, 98 Warsaw Pact, 50, 223 Watan, weekly, 188 “watershed election”, 140 weapons of mass destruction (WMD), 14, 131 West New Guinea problem, 37 White, Hugh, 37 White Paper, 68 Wood Mackenzie, 249 Workers’ Party, 140 Workshops on Managing Potential Conflict in the South China Sea, 103 World Bank, 91 world’s “best” cities, 273 World Economic Forum, 82 World War II, 10, 18, 31, 37, 45, 49, 113, 142, 162, 240 WTO (World Trade Organization), 35, 81, 118, 122, 165, 179, 222, 242, 251–52

3/12/12 2:58:00 PM

376

X Xi Jinping, 138 Xinhua News Agency, 317 Y Yale-NUS College, 310 Yang Jiechi, 99 Yanukovych, Viktor, 148 Yazev, Valery, 202 Yeltsin, Boris, 50–51, 337

19 Asean-Russia.indd 376

Index

Yew Lian Pte Ltd., 290 Z Zahid Hamidi, 191 Zarubezhneft, 181, 183, 213, 254, 331 Zheng Bijan, 39 Zlobin, Nikolai, 317 ZOPFAN (Zone of Peace Freedom and Neutrality), 184

3/12/12 2:58:01 PM