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Russia is playing a weak hand in Asia, despite China ties

Russian President Vladimir Putin's attendance at China's Victory Day parade on Sept. 3 signified that Moscow has a powerful friend in Asia. Yet there is no sign of a Russian "pivot" that could change the balance of power in South and Southeast Asia.

     At the dawn of the 21st century, Russia was quick to realize that economic power was shifting to Asia, and that closer ties with the Asia-Pacific region were essential to diversify its strategic options and reduce its dependence on relatively slow-growing Europe. Moscow also made significant moves to invigorate its links with Asian countries when the West imposed economic sanctions on Russia after its conflict with Ukraine in 2014.

     Since Russia's main exports are energy and arms, and it needs foreign investment urgently to upgrade its infrastructure, its relations with Asian countries hinge on what they can offer. For example, Russia has much to gain from good economic ties with Japan. But their political priorities differ. Last year, Japan joined the West in condemning Russia's annexation of Crimea, formerly part of Ukraine, and in imposing economic sanctions. A visit to Japan by Putin, scheduled for the fall of 2014, was indefinitely postponed.

     However, Russia has stopped short of endorsing China's view of Japan. Putin's presence at the Sept. 3 parade -- nominally a commemoration of the 70th anniversary of the defeat of Japan in World War II -- said more about Russia's desire to show that it is not internationally isolated than it did about Russian support for Beijing's rivalry with Tokyo. Economics explains why. Over the last year, 91% of total direct investment from Japan to Russia (around $10 billion) went to Russia's oil and gas rich far east. Energy is Russia's principal export to Japan.

     As Russia's priorities have shifted, so have those of Asian countries, including traditionally friendly countries such as India and Vietnam. China's claim to the whole of the South China Sea, through which some 40% of the world's seaborne trade passes, is contested by Vietnam, which has bought arms from the U.S., its one-time foe, to bolster its maritime security. In October 2014, Washington lifted a ban on arms sales to Hanoi imposed in 1975 at the end of the Vietnam War.

     Russia, a military retailer to Vietnam since the 1960s, will continue to help modernize the Southeast Asian nation's navy, in part through a contract for six Kilo-class submarines, which will be complemented by Klub surface-to-surface missiles. More generally, it will take decades for Vietnam to adjust to U.S. weaponry, which means that Moscow will remain a key arms seller to the country in spite of persistent tensions between Hanoi and Beijing in the South China Sea.

     Meanwhile, however, it is the U.S., not Russia, that has emerged as Vietnam's indispensable trading partner. The value of Vietnam's bilateral trade with the U.S. grew from $451 million in 1995 to nearly $35 billion in 2014. By contrast, trade between Vietnam and Russia is expected to reach about $7 billion in 2015.

     In South Asia, the slogan Druzhba-dosti ("friendship" in Russian and Hindi respectively) will continue to define the Indo-Russian relationship. Putin's visit to New Delhi in December 2014 made clear that India will not shun Russia because it invaded Ukraine. But U.S. President Barack Obama's presence as chief guest at India's Republic Day ceremony last January showed that New Delhi and Moscow are not in lock step with each other. This does not mean that India favors American hegemony in Asia, but it has much to gain economically, militarily and diplomatically from remaining on good terms with the U.S.

Well-oiled defense

Russia is a long-term supplier of arms to India, and the two countries are currently discussing the joint manufacture of military equipment. But Russia must contend with competition from Israel, France and the U.S. Last year, the U.S. replaced Russia as India's main arms supplier.

     Wanting to keep its defense industry well oiled, Russia has broken its own rules to sell arms to India's neighbors and rivals, Pakistan and China. Last November, Russia ended an arms embargo on Pakistan by announcing that its Mi-35M helicopters will replace some of Pakistan's American AH-1 Cobra attack helicopters, which are used for counterinsurgency operations. News of the sale came at a time when Washington was reportedly threatening to suspend military aid to Pakistan because of its failure to crack down on the Haqqani network, a group based in the country that is affiliated with the Taliban. The Haqqani network is responsible for some of the bloodiest violence of the Afghan war.

     However, the Russian helicopters cannot replace the massive U.S. arms sales to Pakistan since the launch of the anti-Taliban offensive in 2001. Meanwhile, Russia faces competition from China: Pakistan buys more than 40% of all Chinese arms shipments. The lesson is that Russia's arms sales to Pakistan will not affect security in South Asia.

     Russia has little to offer an economically ambitious India, which wants foreign investment to improve its transport and supply networks and to develop job-creating industries. More generally, China's economic prowess and its territorial disputes with India have impelled New Delhi to strengthen ties with Washington and Tokyo. The U.S. plans to invest $40 billion in India over the next three years, while Japan has said it will invest about $35 million over the next five years.

     All this leaves China as the Asian country with the most to offer Russia. Perhaps that is why it is the first to be sold Russia's S-400 air defense system, which can hit targets in India, Taiwan and Japan. But China produces many of its own weapons, including artillery, tanks and infantry fighting vehicles. It will not become a major arms client of Russia.

     Bilateral trade has been rising steadily, reaching $95 billion in 2014. Earlier this year China and Russia announced the intertwining of Beijing's Silk Road project and the Russian-led Eurasian Economic Union. However, the economic problems afflicting both countries are forcing delays and cancellations of major projects, including a $400 billion deal that could have seen as much as 38 billion cubic meters of Russian gas go to China annually from around 2018 to 2047. Separately, the proposed Altai pipeline linking western Siberia to the western Chinese region of Xinjiang is in cold storage.

     Mired in economic problems, short of friends and largely without influence, Moscow is juggling several balls in Asia, but is unlikely to be able to keep them all in the air. Unable to replace the U.S., Japan or China as the economic or military partner of choice of Asian countries, Russia is left with little to offer other than energy and arms. It cannot play a pivotal role in Asia on that basis.

Anita Inder Singh is a visiting professor at the Center for Peace and Conflict Resolution in New Delhi.

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