Asian Reversal | Latest news The Moscow Post
03 October 2022

Asian Reversal

Russia's trade policy can be redirected to Southeast Asia.

Foreign Ministry spokeswoman Maria Zakharova, answering a question from The Moscow Post journalist about Russia's relations with the Association of Southeast Asian Nations (ASEAN), said that this organization is a reliable partner. According to Zakharova, this confirms the current line for the implementation of decisions and programs adopted last year at the highest level.

In ASEAN countries, Russia's special operation in Ukraine is perceived calmly. Ten ASEAN foreign ministers expressed "deep concern" and called on the "parties concerned" to exercise maximum restraint, engage in dialogue and ease tensions. Singapore fell out of this row, joining the sanctions regime in terms of restrictions on Russian banks. This caused misunderstanding among most other ASEAN countries.

The consumer always decides

ASEAN is a dynamic mega-region comparable to both China and India. In terms of the number of inhabitants (more than 661.8 million people), ten association states occupy a place next to these giants, surpassing the European Union. The association in 1967 was formed by Indonesia, Malaysia, Singapore, Thailand and the Philippines.

Today, ASEAN includes Brunei (since 1984, 0.45 million people), Vietnam (since 1995, 97.6 million people), Indonesia (270 million people), Cambodia (since 1999, 16.3 million people), Laos (1997, 7.3 million people), Malaysia (32.6 million people), Myanmar (since 1997, 54.8 million people), Singapore (5.7 million people) Papua New Guinea and East Timor are observers.

If the region's economy were unified, it would rank fifth in terms of GDP in the world. Apart from the EAEU - a key development factor for Russia, ASEAN may take a place next to China or India. The market of this mega-region is growing at a rate higher than the global average (4-5% per year). According to 2019 data, the gross domestic product (GDP) of ten countries amounted to $3.1 trillion. According to per capita indicators ($4.5 thousand), the region does not reach half of the Chinese level of GDP per capita.

ASEAN's total exports outside its "region" in 2020 amounted to $1.09 trillion. About a fifth of exports go to the PRC market. Imports from countries outside the region in 2020 reached $1 trillion. About a third of purchases were in China. Among the trading partners are the EU, the USA, and Japan. Russia's economic presence in this part of the world is more than modest in terms of trade with ASEAN, comparable to Canada.

Under the umbrella of "big politics"

Russia became an ASEAN partner in regional dialogue in July 1996. In 2004, it joined the Treaty of Friendship and Cooperation in South-East Asia of 1976 (Bali Treaty). It enshrines the norms and principles of relations between countries and obliges its parties to refrain from any activity that threatens the political or economic stability of other parties to the treaty.

For economic relations with the association, favorable political conditions have been created. Russian President Vladimir Putin, taking part in the Russia-ASEAN summit on October 28, 2021, noted that the positions of Russia and ASEAN states on key global and regional problems are largely close. "The main thing is that we all advocate the development of equal and mutually beneficial cooperation in the vast Asia-Pacific space," he said.

In connection with the 30th anniversary of the establishment of relations between Russia and organizations, the Comprehensive Action Plan for 2021-2025 was adopted, supplementing the Joint Statement on Strategic Partnership, which crowned the third summit of the Russian Federation - ASEAN, held in 2018. The new plan was adopted taking into account the ASEAN Vision 2025: Together for the Future program.

In the plan for 2021-2025, security and health issues, the fight against terrorism and transnational crime are at the forefront. The parties support the central role of ASEAN in the architecture of political relations, stability and inclusive growth in Asia and the Pacific.

China also supports ASEAN's central role in shaping the regional architecture of inter-State relations. Moscow and Beijing are ready for practical cooperation between ASEAN and the Shanghai Cooperation Organization (SCO), including "the exchange of information on international security, experience and best practices in countering traditional and non-traditional threats and challenges."

The first step in this direction was taken in 2005, when the Memorandum of Understanding between the SCO Secretariat and the ASEAN Secretariat was adopted. The comprehensive action plan also provides for the possibility of cooperation between ASEAN and the Eurasian Economic Union (EAEU), as well as ASEAN and the SCO.

Washington and Tokyo contrasted this with plans for the interaction of "democracies" within the Indo-Pacific region. It should also be noted that Japan, including the Government and corporations, view the ASEAN region as a fiefdom and jealous, if not hostile, of China's growing position in the UVA region. In turn, ASEAN attributes the maneuvers in the Indo-Pacific "square" (QUAD) to the anti-Chinese policies of the United States, Japan and Australia.

Trade flows...

Russia's ties with ASEAN countries, except Vietnam, Indonesia and Malaysia, to put it mildly, are not well developed, especially in exporting Russian products. According to the results of 2021, trade with the five founding states and Vietnam amounted to $19.3 billion, a third are exports, two thirds are imports from ASEAN countries. As the head of the Chamber of Commerce and Industry (CCI) of Russia Sergey Katyrin suggested, speaking at the session of the Russia-ASEAN Business Dialogue of the Eastern Economic Forum, the restoration of trade volumes to the level of 2019 occurred. Katyrin also proposed "to concentrate on creating infrastructure inside cities, building modern housing, providing services, improving the conditions for doing business," referring to the cities of the Russian Far East.

Meanwhile, Russia's share in ASEAN's foreign trade is only about 1%, although in 2000 it was at 0.2%. Last year's indicators are encouraging:

- In 2021, Russia's trade turnover with Indonesia amounted to $3.3 billion (an increase of 40.65% compared to 2020). Exports of the Russian Federation grew by 20.86% to $0.68 billion due to fertilizers, aluminum and products from it, seafood.

- Trade with Malaysia grew by 23.8% to $3.3 billion. Exports amounted to $1.4 billion, grew by 36.5% due to oil and oil products, fertilizers.

- Trade with Thailand grew by 28.9% to $2.3 billion. Exports amounted to $0.5 billion (an increase of 39.7%). The main share of supplies came from metal and metal products, products of the chemical industry, fuel.

- Trade turnover with Singapore amounted to $2.3 billion (35.2% growth). Exports grew by 44.6% to $1.67 billion due to the supply of fuel, oil and petroleum products, bitumen and mineral wax.

- Trade with the Philippines amounted to $1 billion and grew by 12.1%. Exports amounted to $0.5 billion and grew by 0.88%.

Of the 103 items of the Comprehensive Plan of Action adopted on October 28, 2021 at the Russia-ASEAN summit, paragraphs 30-72 are designed to support trade and investment, energy and agriculture, transport, food, and tourism.

In recent years, more than half of Russian exports have come from oil and petroleum products, which may meet the challenges facing the oil industry under Western sanctions. In the structure of Russian supplies, metals and products from them occupy an important place. There is a growing demand for food and fertilizer in the UVA countries. Russia is one of the "ten" suppliers to the ASEAN countries of crude oil and oil products.

… through organizational debri

The mechanisms of the "dialogue partnership" Russia-ASEAN are under the jurisdiction of the Ministry of Foreign Affairs of the Russian Federation and include the following structures: Meeting of senior officials, Joint Cooperation Committee, Joint Planning and Management Committee, Financial Fund of the dialogue partnership. The Russia-ASEAN Business Council is led by the CCI of the Russian Federation, the group on science and technology is the Ministry of Education and Science.

Since 2010, consultations of the Ministers of Economy of the Russian Federation and ASEAN countries have been held annually. The agenda for ministerial meetings is worked out at the consultations of senior officials on the economy (SADL). The Chairman of the Board of the Eurasian Economic Commission (EEC) and the Secretary General of ASEAN signed a Memorandum of Understanding between the EEC and ASEAN in Singapore on November 14, 2018. Last year, the Roadmap for Trade and Investment Cooperation was clarified, as well as the program for its implementation for 2021-2025.

Is everything done for the real development of the UVA markets? "We operate in the format of the Eurasian Economic Union (EAEU), Russia cannot act separately here from other EAEU countries," explained the Permanent Representative of Russia to ASEAN A.A. Ivanov in an interview with the TASS news agency, December 7, 2021. "In the future, we do not exclude the possibility of negotiations on the creation of a free trade zone in the format of the EAEU - ASEAN,... We are establishing cooperation between the SCO and ASEAN, "the permanent representative continued.

Of the most recent events noted on the website of the Permanent Mission of the Russian Federation to ASEAN, the opening ceremony of the Year of Scientific and Technical Cooperation Russia-ASEAN - 2022 with the participation of the Ministry of Education and Science of Russia is listed on February 14. The ceremony was organized by Cambodia, which coordinates scientific and technological cooperation with the Russian Federation.

Project activities within the framework of the Russia-ASEAN Partnership Dialogue include seminars, conferences, financial and economic expertise and research, exchange of delegations, professional training and other activities to promote cooperation in the economic, scientific, technical, trade, cultural and other fields.

The Ministry of Economic Development in this regard calls "significant multilateral projects" implemented through the Financial Fund of the Russia-ASEAN Dialogue Partnership:

· IT solutions for exporting small and medium-sized companies

· Women in business

· Regional economic integration in the EAEU

· Biotechnology in agriculture and wastewater treatment systems

· Interactive Communication Network on Agriculture

· Sustainable technologies to clean up aquatic ecosystems (Lake Batur)

· Exchange of experience in the diagnosis, treatment and prevention of tuberculosis

· Russian language for the ASEAN tourism industry

· Smart and sustainable cities.

Reports on the implementation of the document should be published at the annual ASEAN-Russia post-ministerial conferences in the format "10 + 1." The message about the last such meeting is posted on the website of the Ministry of Foreign Affairs.

What are the offices silent about?

So it turned out that the "voyage" of Russia to the West, which lasted three decades, ends, causing both disappointment and indignation with sanctions, including asset blocking. But not only. Relations with the European Union have hardened, strengthened faith in their own forces and proven allies, like Vietnam. This is the only country in the UVA region that Russian presidents visited five times (Vladimir Putin - in 2001, 2006, 2013 and 2017; Dmitry Medvedev - in 2010). In June 2017, Vietnamese President Chan Dai Quang came to Russia.

Trade with Vietnam in 2021 amounted to $7.1 billion (increased by 25.9% over the year). Exports grew by 38.6% to $2.2 billion due to the supply of metal and metal products. On November 30, 2021, Russian President Vladimir Putin and Vietnamese President Nguyen Suan Fuk adopted a joint statement on the vision for the development of relations between the comprehensive strategic partnership of the Russian Federation and the SRV for the period until 2030.

As it should be for a document of this level, they set guidelines for bilateral relations, which are also relevant for Russia's ties with other ASEAN countries, including (1) Free Trade Agreements between the EAEU and the CPR, (2) Mutual investments, including priority projects, (3) Cooperation in the field of fuel and energy complex, (4) Industrial cooperation and assembly production, (5) Mutual supply of agricultural and fishery products, (6) Cooperation in the credit and financial sphere.

These specific positions, like paragraphs 30-72 of the Comprehensive Action Plan adopted on October 28, 2021 at the Russia-ASEAN summit, require an operational reaction from the Ministry of Economic Development. If not Maxim Reshetnikov, then who "will meet ASEAN," as formulated by his experienced Japanese colleagues? There is not much time left to "step towards."

There has been no change in the work plans of the joint mechanisms, both at the high and expert levels. Despite the obstacles that they pose and invent in the West, the Association does not question the need to further expand practical interaction with Russia, Maria Zakharova emphasized.

Indonesia will host the G20 summit in November. And Thailand in the same month will become the host of the summit of the Organization for Asia-Pacific Economic Cooperation (APEC).

Photo: timacad.ru

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