Russia-ASEAN Strategic Partnership as ASEAN’s Priority in the Establishment of ASEAN Community

2.5 Conclusion

Following the topic of this research, focused on the practical impact of cooperation between ASEAN and its external partners, Russia in this case, on the advancement of ASEAN Community it makes sense to highlight the issues problematic for ASEAN Community but crucial to deal with, to designate the matters where cooperation is required.

ASEAN Community Challenges

3. Russia- ASEAN Strategic Partnership

3.1 Historical context and interim results

After the Cold War and years bipolar rivalry splitting up the world into two camps the rapprochement between Russia and ASEAN was instituted in 1994 by the establishment of consultative partnerships within the ASEAN Regional Forum, which was elevated to Full Dialogue Partnership in 1996. Thus, it laid the foundation to the multifaceted relations between Russia and the Association formatting them within the official regulatory framework.

In 2003 the Ministers of Foreign Affairs of the Russian Federation and ASEAN signed a joint Declaration on Partnership for Peace and Security, and Prosperity and Development in The Asia-Pacific Region (APR) desiring to strengthen the cooperation in promoting the harmonious co-existence of the states in the APR, responding to the posed by globalization Joint Declaration of the Foreign Ministers of The Russian Federation and The Association of Southeast Asian Nations on Partnership for Peace and Security, and Prosperity and Development in The Asia-Pacific Region. (2003). // https://asean.org/joint-declaration-of-the-foreign-ministers-of-the-russian-federation-and-the-association-of-southeast-asian-nations-on-partnership-for-peace-and-security-and-prosperity-and-development-in-the-asia-pac/ as well.

In 2004 Russia acceded to the Treaty of Amity and Cooperation in Southeast Asia (TAC), which determines the fundamental basis of peace and stability in the region. In this context ASEAN and Russia also adopted the ASEAN-Russian Federation Joint Declaration on Cooperation in Combating International Terrorism. Also the Parties initiated a dialogue on this issue at the senior officials and expert level. The first ASEAN-Russia Joint Working Group on Counter-Terrorism and Transnational Crime (JWG CTTC) was convened in 2009. Russia organised several capacity building activities for ASEAN on the issues of combating terrorism, arms smuggling, drug trafficking, cybercrime, etc.

The importance of milestone carried the first Russia-ASEAN summit held in December 2005 in Kuala Lumpur, during which the Parties signed the Joint Declaration on Progressive and Comprehensive Partnership and adopted the Comprehensive Programme of Action 2005-2015 to detail and deepen the goals and objectives set out in the Joint Declaration. The Programme was aimed at enhancing cooperation to assist ASEAN in community building. Also the important intergovernmental Agreement on Economic and Development Cooperation was signed this year.

Russia and ASEAN established in 2007 the ASEAN-Russian Federation Dialogue Partnership Financial Fund with initial contribution of US$ 500,000 to finance the joint projects. However, subsequently Russia increased annual contribution up to US$1.5 million.

In 2009 the Russian permanent representative to ASEAN was instituted. However, the second Russia-ASEAN Summit was convened only in October 2010. During this Summit ASEAN and Russia signed the ASEAN - Russia Intergovernmental Agreement on Cultural Cooperation.

Another step was the endorsement of the ASEAN-Russia Trade and Investment Cooperation Roadmap in 2012, comprising five key areas as follows: High-level policy dialogue; Consultations at the Senior Economic Officials level; Sectoral dialogues between officials; Trade and investment facilitation; Enhancing dialogue with business.

In 2015 the ASEAN-Russian Ministerial Meeting was marked by the establishment of ASEAN-Russia Eminent Persons Group (AREPG) to analyze the relations and provide recommendations for their further advancement. AREPG presented its report the next year during the summit in Sochi.

Numerous documents were adopted regarding cooperation in energy sector, science and technology, including ASEAN-Russia Plan of Action on Science, Technology and Innovation (ARPASTI) 2016-2025, disaster management, tourism, cultural cooperation, etc.

Cooperation in science and technology formally started with the establishment of the ASEAN-Russia Working Group on Science and Technology (ARWGST) at the first ASEAN-Russia Joint Cooperation Committee (ARJCC) Meeting in 1997. In 2015 adopted the 7^th the Working Group adopted ARWGST Work Plan (2016-2025).

In 2016 ASEAN and Russia celebrated the 20th anniversary of the Dialogue Partnership with a Commemorative Sochi Summit. The outcome was the Sochi Declaration “Moving Towards a Strategic Partnership for Mutual Benefit”. However, the goals and formats mentioned in the Declaration are general and abstract. Among the itemized are intention to enhance high-level engagement and cooperation within the framework of the ASEAN-Russian Federation Dialogue Partnership and ASEAN-led mechanisms, such as East Asia Summit (EAS), ASEAN Regional Forum (ARF), and ASEAN Defense Ministers' Meeting Plus (ADMM Plus); to explore the possibility of cooperation among ASEAN, EAEU and the Shanghai Cooperation Organisation (SCO). And ASEAN will only consider Russia's proposal to launch a joint feasibility study of a comprehensive free trade area between ASEAN and EAEU Sochi Declaration of the ASEAN-Russian Federation Commemorative Summit to Mark the 20th Anniversary of ASEAN-Russian Federation Dialogue Partnership “Moving Towards a Strategic Partnership for Mutual Benefit”. (2016). // https://www.asean.org/storage/2016/05/Sochi-Declaration-of-the-ASEAN-Russia-Commemorative-Summit-Final.pdf.

On the occasion of the Sochi Summit the Foreign Ministers of ASEAN and Russia adopted the Comprehensive Programme of Actions (CPA) to Promote Cooperation between ASEAN and the Russian Federation 2016-2020. Thereby the ongoing cooperation is being undertaken under the framework of the CPA, aimed at enhancing relations particularly through assisting ASEAN in Community building. In this context ASEAN-Russia Business Forum was held as part of the Summit.

ASEAN and Russia have created diversified multi-tiered system of numerous institutions and mechanisms for the cooperation. Among them can be mentioned:

· ASEAN-Russia Joint Cooperation Committee (ARJCC) and the Joint Planning and Management Committee (ARJMC). These coordinating bodies work on the efficiency of current state of relations as well as on the identification of promising areas and forms of cooperation. ARJCC also elaborates recommendations to the state authorities, considers and approves measures and programmes of cooperation;

· Russia-ASEAN Senior Officials Meeting (SOM);

· Of key importance are the annual conferences of Foreign Ministers in the ASEAN + 1 format, as well as consultations of Economic Ministers;

· Russia-ASEAN Business Council, which analyze the economic climate in the Southeast Asia and provides assistance to Russian businesses to enter ASEAN market, etc.

· Russia-ASEAN Business Dialogue within the Eastern Economic Forum (EEF).

· ASEAN Moscow Committee composed of ambassadors of the Association countries in Russia;

· Only in 2017 Russia launched a Permanent Mission to ASEAN in Jakarta.

· Since 2014 when Ministry of Internal Affairs of Russia acquired the status of an ASEANAPOL full partner Russia takes part in the Conferences of the organization combating with such global threats as terrorism, transnational crimes, illegal migration, human trafficking, etc.

· ASEAN Centre in MGIMO-University the MFA of Russia conducts joint and individual scientific projects and researches, supports humanitarian exchanges and people-to-people contacts among the academic and NGO representatives from Russia and ASEAN.

Apart from the bilateral initiatives Russia is also engaged in ASEAN-led and ASEAN-centric formats of cooperation such as ASEAN Regional Forum (ARF), where Russia has played a proactive role since the inception of the Forum in 1994, having participated in numerous activities at the Working Group level like the Inter-sessional Support Group Meeting on Confidence Building Measures and Preventive Diplomacy ;ASEAN Defense Ministers` Plus Meeting (ADMM-Plus), Post Ministerial Conferences and East Asia Summit (EAS). Notwithstanding, since Russia became a member of the EAS in 2010 President of Russia attended the Summit again only in 2018.

Over the past years Russia and ASEAN have managed to build dialogue mechanisms almost from scratch. So the prerequisites and the official frameworks for the Russia-ASEAN cooperation have been created. But to make premature conclusions about the achieved success would be naive as political will is the indispensable condition but not single. Sometimes the official intentions and proclaimed plans do not go beyond the discussions and bureaucracy that is why the analysis of practical outputs is also required.

In 2018 Russia was the 8^th ASEAN trading partner accounting approximately for 0, 9% of total ASEAN foreign trade ASEAN Statistical Yearbook 2019 // https://www.aseanstats.org/wp-content/uploads/2020/01/ASYB_2019.pdf. Electrical machinery and equipment and parts thereof, etc. accounted for 32, 9% of ASEAN export to Russia and only 0, 5% of total ASEAN Export. Among top exported commodities also are animal or vegetable fats and oils and their cleavage products; prepared animal fats; animal or vegetable waxes (9, 8%), nuclear reactors, boilers, machinery and mechanical appliances; parts thereof (8, 2%) and vehicles; other than railway or tramway rolling stock, etc. (7, 2%). The main import items were mineral fuels, mineral oils and products of their distillation; bituminous substances; mineral waxes (60, 5% of total import from Russia and 3, 8% of total ASEAN import), iron and steel (14, 8%), cereals (8, 6%) and fertilizers (5, 6%) Ibid..

Speaking about the commodity structure of trade between Russia and ASEAN, on should point out that Russia's exports are mainly raw-material oriented, whereas imports are dominated by finished industrial products. Russia's imports are much more diversified than its export to ASEAN. Another trend is that the volumes of Russia's trade with individual countries are extremely unbalanced Kostyunina G. M. (2019). Russia-ASEAN foreign trade: key development trends. Russian Foreign Economic Bulletin. №3. 2019. pp.43-59. // http://www.rfej.ru/rvv/id/500492F50/$file/43-59.pdf. The main importer of Russia's goods is Singapore and the main exporter - Vietnam, while there is almost no trade with Brunei.

Russia is the largest supplier of arms to Southeast Asia, accounting for 26% of all deliveries of major arms to the region in 2014-2018 years Siemon T. Wezeman. (2019, December). Arms Flows to Southeast Asia. SIPRI. // https://www.sipri.org/sites/default/files/2019-12/1912_arms_flows_to_south_east_asia_wezeman.pdf with 61% of total going to Vietnam. Among the other largest buyers of Russia's arms are Indonesia, Malaysia and Myanmar. Sometimes the deals are conducted through barter transactions like with Indonesia's order for 11 Su-35 combat aircraft when half the payment will constitute agricultural and other products.

However, it is still unclear whether the US CAATSA will to some extent obstruct Russia's arms sales to the region. Indonesia and some other states have already experienced US pressure and are hesitant about future deals with Russia like Philippines bypassing cheaper Russian helicopters in 2018 Ibid..

Low trade performance between ASEN and Russia is due to several reasons. Not to mention the drawbacks of Russia's internal economy and density of external players' interests in ASEAN, the primary reason is Russia's reluctance to upgrade its external relations for the benefit of business. Economic cooperation of Russia with the external partners is based mainly on interstate agreements and state contracts, since the Soviet Union times. Nowadays conditions of market economy imply that private enterprises should become if not the drivers, then active participants of external economic relations. While the conditions for business stay unfavorable and the mechanisms for cooperation are underdeveloped private business in economic relations with ASEAN countries will remain on the sidelines, this Russia will not be entrenched into the in Southeast Asia.

Russia experience shortage of export resources competitive to those already present in the regional market. If the weapons and commodities are relatively demanded, other segments of Russia's export are insignificant. The nomenclature of Russian export is scarce comprising only a few varieties of goods. Russia relies on the trade with traditional partners, neglecting the opportunities of cooptation with the others. Therefore, Russia is limited in the foreseeable opportunities of its economic expansion in the region, while ASEAN countries lack Russia's intentions to cooperate with them.

The third reason is that Russia acts on the ad hoc basis being deficient in its own production chains. Russia does not participate in regional integration project in Southeast Asia, while Russia's mega-projects, involving ASEAN, have not caused any fascinated reaction and their implementation have been postponed Rogozhin A.A., Rogozhina N.G. (2019) South East Asia - In the Priorities of Russian Policy “Pivot to Asia”. Outlines of Global Transformations: Politics, Economics, Law, vol. 12, no 1, pp. 185-203 (in Russian). DOI: 10.23932/2542-0240-2019-12-1-185-203. P. 197.. For example, Russia's brainchild Eurasian Economic Union (EAEU) and Vietnam in 2015 signed free trade agreement which could serve EAEU as an entry point into ASEAN markets. In 2019 similar agreement was signed with Singapore. Russia reckons to establish free trade zone between EAEU and ASEAN. Besides, Russia is eager to materialize its mega-project Greater Eurasian Partnership conjugating the EAEU, ASEAN and the Shanghai Cooperation Organization (SCO). This intention was even marked in Russian Foreign Policy Concept 2016 claiming that “Russia is determined to form a common, open and non-discriminatory economic partnership - a space for joint development of the ASEAN, SCO and EAEU member states in order to ensure complementarity of integration processes in the Asia-Pacific and Eurasian regions Foreign Policy Concept of the Russian Federation (approved by President of the Russian Federation Vladimir Putin on November 30, 2016). // http://www.mid.ru/foreign_policy/news/-/asset_publisher/cKNonkJE02Bw/content/id/2542248 .

Relatively low profile to these initiatives is due to ASEAN amalgamating its existing free trade zones with the five major partners into a single framework of the Regional Comprehensive Economic Partnership (RPEC). Against this background, to establish new free trade zone with Russia could be of less the importance and rather distracting for the Association because of quiet sophisticated regional economic structure.

Russia's energy companies are interested in commercial deals and projects in the Southeast Asia. LUKOIL through its trading company LITASCO SA cooperates with Malaysia, Thailand, Singapore, Indonesia, Cambodia, supplies one shipments to Philippines.

Gazprom Neft in consortium with Malaysian company Petronas develops the Badra field in eastern Iraq. Gazprom Neft is a project operator, holding 30% stake, while Petronas holds 15%.

Gazprom together with PetroVietnam established on a parity basis joint operating company Vietgazprom, conducting geological exploration in blocks 112 and 129-132 on the Vietnamese continental shelf. Since 2013 Gazprom and PetroVietnam have been carrying out commercial gas and condensate production at the Moc Tinh and Hai Thach fields of offshore Vietnam. In 2015 joint venture focused on the use of natural gas as a vehicle fuel PVGAZPROM Natural Gas for Vehicles was registered.

Rosneft has offshore projects on the exploration and production of hydrocarbons in Vietnam. Since 2013 together with PetroVietnam Rosneft as an operator has been realizing project on coastal shelf (Block 06.01). Rosneft also drills production wells within the framework of the Block 05.3/11 development.

Zarubezhneft JSC is another Russia's company having projects in Vietnam. On parity basis with PetroVietnam Zarubezhneft owns its most effective projects joint venture JV Vietsovpetro operating on the coastal shelf since 1981.

In October 2019 Rusatom Overseas and the Philippines signed Memorandum of Intent and agreed to conduct a pre-feasibility study on construction of nuclear power plant based on small modular reactors. In May 2018 Rusatom Healthcare (subsidiary of ROSATOM) signed with Beta Gamma Malaysia a Project Development Agreement on construction of network of irradiation centres in Malaysia. And in September Rusatom Healthcare and Asian American Medical Group signed a Memorandum of Understanding to develop a Nuclear Medical Centre in Johor Bahru in Malaysia.

Rosneft and Indonesian company Pertamina in 2016 established joint venture PT Pertamina Rosneft Pengolahan dan Petrokimia to develop refinery and petrochemical complex in Tuban, Indonesia. Rosneft claims that this project is crucial for the implementation of company's strategy of creating goodwill and to strengthening its positions in the high-margin market for petroleum-based products in the region.

Some energy companies from Russia have projects in Southeast Asia providing the region with electricity and renewable energy. For example, Inter RAO started the elaboration of the hydroelectric power plant Sekong-5 project in Lao PDR, planning to cooperate with Thailand as well. Russian Energy Agency cooperates with Thailand on the issues of clean energy and others, intending to launch a pilot project on implementation of an automated energy management system in Thailand. This system allow to monitor online energy consumption, subsequently to analyze and forecast resource consumption, as well as evaluate the economic efficiency of measures aimed at improving energy efficiency. LLC Hevel is interested in construction of solar power stations in Indonesia and nuclear hybrid (sun-diesel) power plants in remote territories. Company Innovation systems supplies wind turbines to Vietnam and assists in the local production of wind turbine units.

Russia's companies consider Southeast Asia as a prominent direction for robust cooperation. Nonetheless, Russia is only 8^th major supplier of ASEAN crude oil in 2018 (in 2014 ranked 5). Plenty of memorandums signed between Russia's companies and their partners from Southeast Asia still remain on the paper. Many companies express their interest to enter ASEAN market, but still are only negotiating or searching for the niches to occupy. At the same time, Russia lacking its goodwill in the region, has managed to gain a foothold for the future beneficial for itself as well as for ASEAN.

As to cooperation in investment field, it is inhibited due to unfavorable investment climate in Russia and by the inexperience of Russia's businessmen in commercial activity in the Southeast Asia markets and vice versa. Russia's private business is poorly presented in Southeast Asia and often is overwhelmed by more experienced competitors. Therefore, major part of the investment operations made by Russia in ASEAN is of public sector companies. And, as it was already noted, Russia has neither available resources, nor political will to compete in the investment area without support of the official intergovernmental agreement. Thus Russia's FDI account only for 0, 04% of total inward flows in ASEAN ASEAN Statistical Yearbook 2019 // https://www.aseanstats.org/wp-content/uploads/2020/01/ASYB_2019.pdf, directed mainly in Thailand and Vietnam.

One of core events fostering the deepening and building up ASEAN-Russia partnership was the business forum in Sochi attended by over 500 businessmen from Russia and ASEAN countries. During the event ASEAN leaders met with the entrepreneurs. The discussions showed that the participants are eager to increase commodity circulation, enhance business ties and developing joint projects in the field of energy, agriculture, and high technology.

As a paramount milestone was a result of the 3^rd Russia-ASEAN Summit in Singapore in November 2018, to be precise a Joint Statement on Strategic Partnership, what reassured ASEAN and Russia's high level of mutual trust, value of the partners and commitment to bolster the content of cooperation. Alongside with the status upgrade Summit was noteworthy because of a Statement of the Russian Federation and ASEAN on cooperation in ensuring the information security and the information and communication technologies themselves.

Apart from this on the sidelines of the Summit the Eurasian Economic Commission and ASEAN signed a Memorandum of Understanding (MoU) on Economic Cooperation witnessed by the leaders of ASEAN member states and Russia. The level of MoU shows that the relations are the starting point; however, it indicates the interests to further coordination in the outlined direction.

Some may argue that cooperation with Russia is of low importance for ASEAN as economic content of the cooperation leaves much to be desired. However, actually it is not so true because of the following reasons. Russia has not been a longtime partner of the Association thus lacking well-established ties and goodwill the country is to craft them and embed itself in the regional structure. Being on the way despite the obstacles Russia makes a steady progress, while ASEAN representatives express their interest through numerous contacts, agreements and official statements.

Moreover, stating its intentions to act globally playing more decisive role in the world issues and being the driver and hub of integration and progress, ASEAN has to broaden the range of its foreign relations, seeking for cooperation not only with the traditional partners but also with the new ones. The Association strives to preserve its centrality hence has to balance the other ambitious actors expanding their influence on the ASEAN domain.

Revitalization of Russian participation in regional relations, including ASEAN-led multilateral mechanisms, happens simultaneously with the collision of regional projects of China and the United States as Southeast Asia lies in the intersection of great powers' interests. The contradictions among them can hinder the effectiveness of ASEAN initiatives. However, this situation creates new opportunities for Russia. Although Russia is not able yet to offer as much as China and the US it has no expansionist intensions towards Southeast Asia. Hence in contrast to the other's Russia's agenda is more cooperative and equitable. As tensions of interests between China and the US are unlikely to be reconciled soon Russia could be considered as a possible balancer welcomed by ASEAN countries committed to hedge their bets.

Against this background, ASEAN has definite motivation to develop cooperation with Russia as there are other areas and issues of strategic concern that could and have to be secured through mutual aspirations and collaboration.

3.2 Russia's goals and challenges in Southeast Asia

The creation of ASEAN was driven by the common for the Southeast Asian countries fear for communism. Thus till the dissolution of the USSR the group was in opposition to the “red threat”, except for Vietnam and those being influenced by him, Laos and Cambodia. Russia's presence in the Asia-Pacific international relations for a long time was based on the ideological and military instruments. But with the end of the Cold War Russia's political influence in the APR has greatly weakened Akaha, T. (2012) A Distant Neighbor: Russia's Search to Find Its Place in East Asia, Global Asia. 7(2): 1-14. . The independent Russia going through hard times was deprived of enough resources even to maintain ties with its regional partner. As a result Russia has been alienated from the region not being perceived as its part and has failed to develop network of partners. Hence integration with ASEAN countries is exacerbated by the lack of political and cultural background.