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#11 - JRL 7026
Asia Times
January 20, 2003
Russia's retreat from Southeast Asia
By Stephen Blank

Southeast Asia was a major battleground of the great powers throughout the Cold War. And since the global war on terror began it again has been the scene of major police operations and rising interest by both China and the United States as both those governments jockey to bring the area into a closer relationship with themselves, either through trade pacts or through security agreements. However, nowhere to be found in these maneuvers is Russia. Indeed, the decline in Russian power and presence in Southeast Asia has continued under Vladimir Putin without letup.

Undoubtedly financial weakness underlies much of the problem. Russia publicly abandoned its base at Cam Ranh Bay even before its lease was up and even before September 11, 2001, because Vietnam's price for retaining its lease was unaffordable. Moreover, Russia no longer has important defense and security interests in Southeast Asia so there is no compelling need to maintain the base under conditions of financial weakness. Indeed, Russia, as its leaders well know, can barely hold on in Northeast Asia, part of its territory and thus the source of vital security interests. In this light a base in Cam Ranh Bay becomes an unaffordable luxury.

But Russia's problems do not end here. Recently it was revealed that Russia is cutting back on its participation in major oil projects off Vietnam's shores and in its territorial waters (see Russia refines Vietnam oil ventures, January 3). This clearly is an important sign of the times regarding Russia's position in Asia generally and the vanergy industry's place there. Energy is the most important export that Russia has to offer. At the same time there has been a lot of publicity and hype concerning major projects involving Russian energy deposits in Northeast Asia. In one case, Sakhalin, Russia has secured backing from Indian, US and Japanese firms, and is talking of building a pipeline for the gas to China as well. But most of the other major projects under consideration have yet to be consummated contractually, let alone implemented as construction projects. Therefore it is essential for Russia's future in Asia that these projects move toward fulfillment.

Accordingly, much of Russia's policy toward Southeast Asia, to the extent that one could discern it, involved an effort to elicit Southeast Asian participation in major energy and infrastructural projects in both Russia and in their own territory. The purposes of these projects, beyond the obvious one of selling Southeast Asian regimes the energy they need to meet rising demand, were to demonstrate Russia's reliability as a partner, make money for investment back home in energy and other industries, and ultimately to restore a significant Russian economic and political position in Southeast Asia.

However, just as it can no longer sustain military power in this area, Russia apparently cannot sustain or pay its share of these major projects. As a result it does not look like an attractive investment partner for major energy projects and cannot push for them because it cannot afford them in any case. While its other major export, weapons, is sometimes attractive to Southeast Asian states, they do not compete well with Western, especially US, systems (see Russia shoots to rule Asian skies, July 20, 2002). And once India begins to produce indigenously made Russian weapons, as is envisaged under recent Indo-Russian agreements, and starts selling them to Southeast Asia, those weapons will compete with Russia's and probably drive them out of the market (see India, Russia: Friends in arms, April 13, 2002). As China too is increasingly competing for the Southeast Asian arms market now dominated by Western firms, there does not appear to be too much space for a major upsurge of interest in Russian weapons that could allow Russia to regain a place in the regional defense agenda due to real power rather than courtesy.

Russia's continuing failure to secure reliable footholds in critical areas of Southeast Asia's interests bespeaks not just its ongoing failure to formulate and implement a viable strategy and policy for this area of the world. It also showcases the larger dangers of Russia's economic-strategic marginalization in East Asia more generally. Putin and other elites have frequently pointed out the danger of losing de jure or de facto control of the Russian Far East and the danger of falling too far behind in major economic competition for influence and access there. They also have repeatedly warned that the area is increasingly one of major security challenges and risks to Russia. Therefore the continuing retreat of Russian power from Southeast Asia is part of the larger process of marginalization that these officials have warned against and a telling sign of the ongoing failure of the Russian state to fulfill its policy responsibilities and devise effective policies for Asia.

Not surprisingly, since nature abhors a vacuum, other major powers have begun to fill the place vacated by Russia. The United States has substantially stepped up security cooperation with Southeast Asian states against the threat of indigenous Muslim terrorism and is clearly eyeing Cam Ranh Bay as a port of call if not a permanent lodgment. Washington has also begun security cooperation with India in the Indian Ocean. This cooperation is also part of India's grand design or Look East policy to augment its influence in Southeast Asia and curtail what it perceives to be potential Chinese threats there. Both China and Japan have signed major trade arrangements with Southeast Asia in order to create free-trade agreements and they are furiously competing with each other for preeminence in the regional economy. China has also signed a major agreement with the Association of Southeast Asian Nations (ASEAN) that in essence secured its position and claims regarding the potentially rich and strategic Spratly Islands (see The Spratlys pact: Beijing's olive branch, November 6, 2002). This agreement virtually ensures that there will be no major controversy over the islands for the foreseeable future, an outcome that basically confirms China's previous land grabs there.

All these moves testify to the fact that Southeast Asia's potential importance as a strategic area is again on the rise and that it will become the object of sustained major power rivalry, though not necessarily of externally supported or inspired violence. Russia, for the foreseeable future, will have little or no role here and will be in essence a spectator to those trends. It may be invited to participate in the annual ASEAN Regional Forum out of courtesy, but unless it institutes major changes in its politics and economics that presence will be one of courtesy, not one due to its large regional presence.

But this spectator status threatens to become the situation in Northeast Asia as well for Russia unless the requisite changes are made. Therefore the recent announcements of reduced Russian presence in and around Vietnam's energy programs as well as its withdrawal from Cam Ranh Bay are events that have more than a regional significance. While on the one hand they are merely the latest chapter in the epochal retreat of Russian power from Asia, on the other hand there are no signs that this retreat is over or of what it really portends.

Stephen Blank is an analyst of international security affairs residing in Harrisburg, Pennsylvania.

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