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Vladimir Putin

As Putin pivots to Asia, will more Russian defence and energy deals be the new normal in the region?

  • Dmitriy Frolovskiy says Vladimir Putin’s decision to attend the East Asia Summit signals his determination to diversify Russia’s relationships away from Europe
  • Whether Malaysian Prime Minister Mahathir will warm to Russia, as the Philippines and Indonesia have recently, remains to be seen
PUBLISHED : Monday, 12 November, 2018, 1:31pm
UPDATED : Monday, 12 November, 2018, 7:11pm

Vladimir Putin is sending a clear signal that he seeks to expand the multifaceted diplomatic efforts that comprise Moscow’s “pivot to Asia” by attending the East Asia Summit in Singapore, on November 14 and 15. With the never-ending battle over sanctions souring Russia’s relations with both Europe and the United States, Asia remains the most promising arena for Russian diplomatic and commercial engagement.

The Russian president’s attendance is already noteworthy in and of itself, given that the Kremlin has typically sent Dmitry Medvedev in his stead since Russia became a full member of the summit in 2011. But whether this higher profile will bring tangible progress for Russia’s Asian outreach remains an open question.

This increased focus on East Asia represents something of a course correction for Putin. The Kremlin has overlooked the rise of the Asia-Pacific over the past quarter of a century. Instead, Russia continued to look to Europe as its major political and economic partner in the period following the fall of the Soviet Union up until the diplomatic breakdown that followed the annexation of Crimea.

Russia’s policymakers and business community now perceive East Asia in general – and increasingly the Association of Southeast Asian Nation countries in particular – as an outlet to diversify international relationships away from Europe, and more particularly the sanctions hitting the Russian economy.

Having neglected the region in the past, Russia is now having to play catch up to compete with China, the US and Japan. As Putin pointed out in a Bloomberg op-ed published almost exactly a year ago, the share of Russian foreign trade pertaining to the Asia-Pacific Economic Cooperation (Apec) economies grew from 23 per cent to 31 per cent from 2012-2017. Among the individual Asean countries, that growth has often been even more pronounced.

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For example, trade turnover with Vietnam, Russia’s staunchest regional partner reached US$5.2 billion in 2017. This represents the highest level since 1991. Russia is also Hanoi’s second-largest foreign investment destination, bringing in nearly US$3 billion. This growth has been propelled by the Vietnam-Eurasian Economic Union free trade agreement that came into force in late 2016.

While Moscow’s defence exports have always found buyers in the region, the Russian defence industry has recently undertaken a more active approach to sales. In September, Hanoi placed orders for Russian weapons worth more than US$1 billion. In August 2017, Indonesia announced it would buy 11 Sukhoi fighter jets worth US$1.14 billion, and insisted last month it would proceed with the payment despite the threat of American sanctions.

[Russia’s] strategy is simple: maintain warm defence relationships – and sign lucrative deals – with all sides

As Russian news agency TASS reported last month, the country’s aviation industry is also looking to sell both passenger jets and military helicopters to Indonesia. Russia has also signed a “gift deal” with the Philippines, which still relies mostly on US weapons, to grease the wheels for Russian expansion in the local market.

These inroads come in addition to the Kremlin’s strong security ties with India and China, and demonstrate how Russia is profiting from tensions in the South China Sea. The strategy is simple: maintain warm defence relationships – and sign lucrative deals – with all sides.

Defence represents one of two critical fronts for Russia in the region. The other is energy. Russia’s Asean energy exports have grown five times over since 2013. Southeast Asia’s fast-growing economies are obviously important markets for Russian oil and gas but, on cleaner energy fronts, Asean countries also represent growth markets for the Russian nuclear industry.

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The Russian nuclear energy corporation Rosatom has been in talks with Indonesia and the Philippines to build nuclear plants, and was until recently slated to build plants in Vietnam. Unlike in Europe, where Moscow is notorious for weaponising energy exports for geopolitical advantage, Russia’s energy role in the Asia-Pacific is far more anodyne.

This is not to say that all Asean countries necessarily have the bandwidth – or the interest – to engage with Putin when he travels to Singapore. In Malaysia, for example, Putin has seen former premier Najib Razak replaced by nationalistic nonagenarian Mahathir Mohamed. Mahathir’s initial moves in office have already put a dent in ties with both China and the US. In August, for example, the new government’s decided to cancel or delay US$22.3 billion in Chinese investments, and the prime minister criticised Donald Trump during his September visit to New York. A disastrous BBC interview where Mahathir called Jews “hook-nosed” and challenged the Holocaust did little to endear him to Western audiences.

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Will Russia prove to be the exception? For now, it does not appear to be on Mahathir’s radar. While Najib was a deft diplomat, balancing US and Chinese interests while also engaging with Russia, Mahathir seems focused on internal issues, such as prosecuting his predecessor, his family and political allies.

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This could, of course, change. Over his half a century in politics, Mahathir’s world view has focused on trying to address an inherent conflict between Asian and Western values that could make him remarkably appealing to Putin’s own nativist vision. With Russia’s state-run news agency Sputnik News announcing plans to boost its presence in Malaysia, Moscow does still seem to be laying the groundwork for greater cooperation.

Ultimately, Putin’s priorities at the East Asia Summit and Russia’s geopolitical policies in Asia in the years to come will be dictated by opportunism. Whenever there is an option to seize the momentum in times of turmoil or another power’s shrinking influence, as has proven the case for Washington in the Middle East, the Kremlin will always try to squeeze in. The Asia-Pacific could yet prove to be the next area in which Russia applies this tactic, one that has proven remarkably effective even in the absence of longer-term strategies.

Dmitriy Frolovskiy is a political analyst and independent journalist. He is a consultant on policy and strategy, and has written about Russia’s foreign policy