Sochi ASEAN summit: Russia eyes economic expansion in SE Asia

MOSCOW–Russia moved to forge stronger ties with the 10-nation Association of Southeast Asian Nations (ASEAN) last week, pledging to focus on economy rather than geopolitical alliances.

Local observers preferred to highlight geopolitical aspects of the rapprochement between Russia and Southeast Asia. Russian media outlets, including Sputnik International, noted that Russia looked to the East, seeking new allies among US partners in Asia.

The Russian Black Sea resort city of Sochi hosted the Russia-ASEAN summit on May 19-20. The confab marked the 20th anniversary of the partnership. Russian President Vladimir Putin welcomed Southeast Asian leaders amid Moscow’s continued disagreements with the West.

However, ASEAN top officials remained reluctant to concede that the Sochi summit had a geopolitical dimension. Lao leader Thongloun Sisoulith told a press briefing after the meeting that no western pressure was applied to discourage ASEAN leaders from attending the meeting.

Putin at ASEAN-Russia summit

Putin at ASEAN-Russia summit

No look East?

Likewise, Russian officials also refrained from geopolitical discussions. Ahead of the Sochi summit, Putin’s spokesman Dmitry Peskov dismissed talk about Russia’s strategic drift toward the East as “incorrect.”

Moscow’s official denials of the country’s perceived shift toward East Asia may not be in line with the current political realities. High-profile and top-level gatherings in Russia are serving the Kremlin’s goal of breaking what’s described in the West as Moscow’s international isolation. The Sochi summit also came as a convenient confirmation of the Kremlin’s arguments that Russia was too big to be isolated.

In the meantime, Russia seems to view ASEAN as an opportunity for economic expansion. Moscow apparently sought economic benefits from expanded ties with ASEAN — one of the largest international groupings — with a combined population of more than 600 million people.

During the summit, Putin repeatedly called attention to the fact that Russia’s trade with ASEAN countries amounted to only $13.7 billion in 2015, or well below the potential trade on both sides. Total mutual investments were also pegged at $11 billion, a number also described as too low.

Moscow also played its trademark economic maneuver — the promise of energy exports. During the summit, Putin pledged to supply Russian energy resources to ASEAN on a long-term basis. This pledge was echoed by other Russian officials. Russia is prepared to supply oil to ASEAN member-states, Energy Minister Alexander Novak said at the summit on May 20.

Russia’s planned mega-projects in ASEAN seemed to be concentrated in Indonesia. Following a meeting with Joko Widodo on May 18, Putin confirmed Russian interest in building a 190-kilometer railway transport facility in Kalimantan at an estimated cost of $1.9 billion. Russian officials also mentioned plans by energy giants Rosneft and Zarubezhneft to build a $13 billion refinery in Java. Russia’s Inter RAO also planned to build a $2.8 billion 1.8 GW thermo-power plant in Indonesia.

Vietnam project announced

Moscow also sought investment from ASEAN countries. Putin invited ASEAN businesses to join development projects in Russia’s Far Eastern regions.

Some joint ASEAN investment projects were rolled out shortly before the meeting in Sochi. One was a ground-breaking ceremony for a major cooperative agricultural project near Moscow attended by Vietnamese Prime Minister Nguyen Xuan Phuc. Investment on the project could hit $2.7 billion.

The summit also adopted a “strategic partnership” declaration and a cooperative development blueprint for 2016-2020.

Though Putin said no breakthroughs were expected from the summit, he stressed that the meeting was important and timely nonetheless. Putin also hailed Lao leader Sisoulith’s fluent Russian — a legacy of the Soviet era’s close ties between Moscow and Indochina’s three nations.

Moreover, it was announced during the Sochi summit that ASEAN would consider a free trade agreement (FTA) with the Russia-let Eurasian Economic Union (EEU). Last year, the EEU signed a free trade agreement with one ASEAN member-state, Vietnam.

China: The elephant in the room

The Sochi summit’s agenda didn’t touch on relations with China. But the issue inevitably surfaced in connection with the Shanghai Cooperation Organization (SCO). Putin told a press briefing after the meeting that the possibility of closer economic ties between EEU, ASEAN and the SCO had been discussed. As SCO is dominated by China, Putin conceded that the idea required further discussions with Beijing. But he voiced expectations of a positive response.

During the Sochi summit, Russia and the ASEAN member states reportedly supported the idea of adopting a code of conduct in the South China Sea. The notion was regarded as a sign that Russia was becoming part of the South China Sea dispute. However, as Russia has repeatedly pledged to develop a “strategic partnership” with China, the Kremlin apparently has no interest in meddling in the issue.

Sergei Blagov is a Moscow-based independent journalist and researcher. In the past three decades, he has been covering Asian affairs from Moscow, Russia, as well as Hanoi, Vietnam and Vientiane, Laos. He is the author of non-fiction books on Vietnam, and a contributor of a handbook for reporters.

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