Diplomacy
Southeast Asian countries enter Mr. Putin’s BRICSyard
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by Zachary Abuza
First Published in: Oct.29,2024
Nov.18, 2024
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Russian President Vladimir Putin last week hosted the BRICS summit, where Vietnam, Indonesia, Thailand, and Malaysia became official partner members – the first step toward full membership.
Putin had two main goals at the summit, where he tried to build up more international support for Russia against the backdrop of its invasion of Ukraine.
First, he wanted to convey that Moscow is far from isolated on the world stage despite being targeted by United States-led sanctions, and that some of the largest economies don’t see the war in Ukraine as an impediment to closer ties with Russia.
Second, Putin was trying to build up consensus to create an alternative to the U.S. dollar-led trading order, which has made Russia and a host of other countries, including Iran, vulnerable to sanctions from the West.
Putin made considerable progress on the first goal, but far less with the second one.
The four Southeast Asian states help explain why this is the case.
Multipolar?
Although Russia’s trampling of international law and use of military force to change borders sets a dangerous precedent for the countries of Southeast Asia, most states in the region see Russia as the path to a multipolar global order.
And for Southeast Asian states that are always trapped in an increasingly zero-sum competition between Washington and Beijing, Moscow presents itself as a guardian of multipolarity. To them, it is a model for standing up to the West, or at least charting a more independent foreign policy.
For countries, whose foreign policy is largely transactional, pursuing ties with Russia increasingly makes sense.
Indonesia – arguably, the country in the region that is most protective of its sovereignty – has repeatedly voted against Russia at the United Nations, but barely spoken of Russia’s invasion.
Former President Joko “Jokowi” Widodo hosted foreign Minister Sergei Lavrov and met with Putin. But his Russia policy was extremely unprincipled and transactional.
Russia has now supplanted Ukraine as Indonesia’s largest source for wheat imports. The country also is a major importer of oil from Russia, which has an internationally imposed price cap and sells below market rates.
Prabowo Subianto, Indonesia’s new president, is set to continue this policy. Before his inauguration, he met with Putin and Prabowo’s foreign minister, Sugiono, made clear at the BRICS summit that Indonesia was seeking full membership in the grouping founded by Brazil, Russia, India and China.
While Jokowi cared little about foreign policy, Prabowo seeks to assert Indonesia on the world stage with a much more active international policy and clout commensurate with its economic size.
Russia is key to realizing this ambition.
While Malaysia voted against Russia in two U.N. votes, its policy now is shaped by the conflict in Gaza, and Prime Minister Anwar Ibrahim’s seething anger towards the United States for its support of Israel.
Foreign corporations have recently pledged over U.S. $6 billion in investment to Malaysia’s semiconductor industry, one of the world’s largest.
Malaysia has angered Washington by repeatedly offering to sell semiconductors to sanctioned countries, including Russia and Iran. Anwar bristles at the unilateral imposition of U.S. sanctions on what he deems is a sovereign right to conduct foreign trade.
Anwar views BRICS as not only a hedge against Western sanctions, but also as an alternative source of capital.
Vietnam’s relations with Russia are long-standing and deep, and should be seen as part of its studiously neutral “bamboo diplomacy.” Vietnam voted with Russia in two U.N. votes, and abstained in a third. In July, Hanoi hosted Putin for a brief state visit.
Russia remains essential to Vietnamese security. Roughly 80% of its existing arsenal is Russian-made. While Vietnam seeks to diversify its supply chain, that will be difficult to do quickly.
The People’s Army leadership is close to Moscow. Its military is familiar with Russian equipment and produces many spare parts. Russia also allows licensed production of key weapon systems.
In 2023, Moscow and Hanoi concluded an agreement to use proceeds from a Vietnamese investment in Siberian oil to fund the next generation of weapons. This alternative payment system was established to evade U.S. dollar transactions and thus Washington’s ability to impose sanctions.
Thailand’s motivation in becoming a BRICS partner state has more to do with geopolitics than anything else.
A U.S. treaty ally, Thailand has been angered by Washington’s repeated imposition of sanctions as a result of military intervention in politics, including coups in 2006 and 2014.
China tried to fill that vacuum by maintaining close ties to the military leadership and increasing arms sales. Thailand feels caught between a rock and a hard place.
De-dollarization doubts
Putin’s second goal, of de-dollarization, was far more divisive at the BRICS summit.
Luckily for the four Southeast Asian states, which depend so much on trade with the United States and which have no interest in creating a dollar alternative, they had India to hide behind.
Indian Foreign Minister S. Jaishankar firmly rejected Moscow’s de-dollarization agenda and made clear that India would continue to settle the majority of its trade in U.S. dollars. That was all the cover the Southeast Asian states needed.
In sum, Jakarta, Putrajaya, Hanoi, and Bangkok are not seeking to upend the U.S.-led liberal international order through BRICS. They describe the grouping not as an “either-or” but an “and.”
A distant war
For Southeast Asia, the war in Europe is far away. And the countries remain in deep denial about the international legal precedent being set or what Russian success in achieving its war aims would mean for global security.
But Putin’s confidence presupposes the economic realities. While Russia has seemingly defied international sanctions and there’s still positive economic growth, expected to be 3.6% for 2024, this is now a war economy.
Foreign investment has fled and is unlikely to return. More than 600,000 of Russia’s educated urban middle-class has emigrated in a massive brain drain.
Domestic production, meanwhile, is geared solely to support the war effort. Interest rates are now 21% to help counter the 13.4% inflation rate.
With an estimated 1,000 battlefield losses a day, and over 70,000 new hires in Russia’s primary defense contractor, Rostec, the labor market is tight.
The IMF is predicting the Russian economy to finally feel the weight of prolonged sanctions and the war economy with GDP expected to fall to 1.3% and 1.2% in 2025 and 2026, respectively.
And even Moscow’s arms exports to Southeast Asia – one of its primary instruments of statecraft – are in doubt, as domestic demand surges. Between 2022-2024, Moscow’s arms exports fell by 60%, compared to the previous three-year period, according to the Stockholm International Peace Research Institute.
While Moscow sees the BRICS as the key to a multipolar world that would erode the dominant position of the United States, his moves to weaken the dollar’s grip is too confrontational for many of the new partner states.
Putin’s own bravado may be undermined by Russia’s isolated wartime economy and inability to be the security partner of choice for many developing states.
Copyright ©2015-2024, BenarNews. Used with the permission of BenarNews.
First published in :
Benar News
Zachary Abuza
Zachary Abuza is a professor at the National War College in Washington and an adjunct at Georgetown University.
