2015: A mixed bag for Russia’s Asian ‘Pivot’; Ties with ASEAN and China grow, but relationship with Japan remains frosty

Asia Map

(Russia Beyond the Headlines – rbth.ru – AJAY KAMALAKARAN, RBTH – December 10, 2015)

Russia’s strategic and economic push towards Asia achieved mixed results in 2015, with Moscow strengthening ties with ASEAN countries and China, while its ties with Japan and Australia remained frosty.

“When it comes to Asia, the biggest strategic economic gains came to Russia from the ASEAN region,” says Agosh Suharpanto, a foreign affairs analyst and former Indonesian diplomat based in Jakarta. “There was a free trade pact signed between the Eurasian Economic Union (EAEU) and Vietnam, and talks are on for a similar agreement with Thailand and Singapore as well.”

Suharpanto adds that Russia may be looking at a wider free trade pact between the EAEU and ASEAN but that may not come to fruition as many ASEAN countries are joining the U.S.-backed Trans-Pacific Partnership (TPP).

Russia has also made a concerted effort to reach out to ASEAN countries politically. In November, Prime Minister Dmitry Medvedev became the first senior Russian leader to visit Cambodia in almost 30 years. The countries signed a host of agreements, including a memorandum of understanding to cooperate in the peaceful use of nuclear energy. In April 2015, Medvedev visited Thailand and Vietnam to as part of a wider Asian outreach.

Although Russia’s relationship with Malaysia was constrained over the former’s refusal to allow a United Nations Security Council probe into the July 2014 shooting down of Malaysia Airlines flight MH-17, Moscow and Putrajaya set up a set up a Joint Commission for Economic, Scientific, Technical and Cultural Cooperation. “It’s understood that Russia-Malaysia ties will continue to develop despite there not being common ground on MH-17,” Shuarpanto says.

Wider Asian partnership

Russian President Vladimir Putin has called for a wider economic partnership between the EAEU, ASEAN and the Shanghai Cooperation Organization (SCO).

“Together, our states make up nearly a third of the global economy in terms of purchasing power parity, Putin said during his annual state of the nation address on December 3. “Such a partnership could initially focus on protecting investments, streamlining procedures for the cross-border movement of goods, joint development of technical standards for next-generation technology products, and the mutual provision of access to markets for both services and capital.”

Analysts say there is potential for such a partnership but there would be too many competing interests. “The elephant in the room is the United States,” says Doris Tung, a political analyst based in Hong Kong. “Any partnership between these 3 groupings would be seen as an economic threat to the U.S., as well as Washington’s own Asian initiatives.”

Tung adds that many ASEAN countries, which have maritime territorial disputes with China and are afraid of Chinese economic domination, would be cautious about such a partnership.

Sino-Russian ties continue to grow

Putin and his Chinese counterpart Xi Jinping met four times in 2015, a year that witnessed a furry of political and defense engagement between the countries.

“China appreciates the fact that Russia has largely stayed neutral in the South China Sea maritime disputes,” Tung says. “The focus of the China-Russia relationship has been on common strategies at multilateral forums such as BRICS, APEC and G20.”

Moscow and Beijing are both eager to push for an alternate economic world order. The New Development Bank, which was started by the BRICS member, commenced operations this year, along with the

China-initiated Asian Infrastructure Investment Bank (AIIB), where Russia is third largest shareholder.

Russia and China agreed to expand the SCO to include India and Pakistan as full members, a move where both countries had to compromise given Moscow’s close ties with Delhi, and Beijing’s strategic relationship with Islamabad.

Although bilateral trade between Russia and China fell by a third this year, it was more a reflection of the economic slowdown in both countries.

The countries continued stepped up defense ties in 2015. In November, China agreed to buy 24 Sukhoi Su-35 aircraft from Russia for $2 billion. Beijing became the first foreign buyer of these multipurpose fighter jets.

Ties with Tokyo, Canberra remain frosty

Russia’s ties with Japan and Australia, two of the biggest U.S. allies in the Asia-Pacific region continued to remain strained. Both countries have extended sanctions against Russia for its alleged support to separatist rebels in eastern Ukraine.

Toeing Washington’s line, Canberra continues to blame Moscow for the shooting down of MH-17, although the anti-Russian public statements have reduced since Malcolm Turnbull became prime minister of Australia.

The biggest bone of contention between Russia and Japan remains the Southern Kuril Island territorial dispute, over which the countries still technically remain in a state of fighting World War 2. Vladimir Putin’s visit to Japan this year was indefinitely postponed over the lack of progress in settling the territorial dispute.

“The problem is that Japan and Russia have different interpretations of compromise on the dispute,” says Yu Tanaka, a historian based in Sapporo, Japan. “No government in Japan would be able to survive the backlash if it accepted just two of the four islands that are claimed by Tokyo.”

Tanaka adds that both countries are keen to develop economic ties despite the dispute. “Japan also sees Russia as a key to solving the North Korean problem,” he adds. “Russia and China are countries that can bring the North Koreans back to the negotiating table and start the six party talks.”

South Korea, whose economic ties are growing with Russia, has also requested Moscow’s help in reviving the nuclear talks. South Korean President Park Geun-hye met Vladimir Putin on the sidelines of the U.N. Climate Change Conference in Paris.

“I am asking for Russia’s active role in making North Korea face reality and have a rethink on its nuclear problem in order to resume meaningful talks on (North Korea’s) denuclearization,” Park told Putin.

Analysts see Russia pushing ahead with its Asian ‘Pivot’ in 2016. “There is a realization from the Russian leadership that the center of economic power is shifting to Asia, and the process to move closer to the continent is irreversible,” Suharpanto says. Tanaka adds that initiatives like the Vladivostok free port and specially designated ‘Territories of Accelerated Development’ in the Russian Far East will help Russia integrate its economy with emerging Asian powers.

Article also appeared at rbth.com/international/2015/12/10/2015-a-mixed-bag-for-russias-asian-pivot_549303