Vladimir Putin inherited the country from Boris Yeltsin with a ruined economy, smoldering armed conflicts, and a poor populace. According to official statistics, under Yeltsin Russia's GDP declined by roughly 60% - which is unprecedented in peace time - with all the ensuing consequences. Russia became weak and concentrated upon domestic problems, and by 1998 it had lost its erstwhile role and almost all influence in East Asia. Under Vladimir Putin, Russia managed to match its own GDP of 1990 only in 2006! Putin proved effective at stopping political and economic chaos, soothing armed conflicts inside Russia, and restoring a level of social and economic development. As a result, Russia has returned to the world stage as a strong state. It is expected that new president Dmitry Medvedev will continue that political course and that the energy dimension will become more considerable in Russia's foreign policy as President Medvedev previously served as Chairman of the Board of Directors of Gazprom.
During Russia's decline, the situation in East Asia, including Southeast Asia, changed a lot. First of all, the region as a whole has undergone rapid economic development and is transforming in a China-centric way. There are several important reasons for the increase of Chinese influence over the last 10 years. Most generally, China has shown impressive economic growth, and the regional balance of power has essentially shifted in China's favor. The financial crisis of 1997-1998 created conditions especially favorable for Chinese economic and political expansion. Some Southeast Asian political leaders accused the U.S. of organizing this crisis, and Beijing recognized the opportunity. China began to undertake a very active policy in the region: it refused to revalue its currency and even provided direct support to the most affected countries.
After the crisis, when the ASEAN countries had lost considerable amounts of foreign direct investment, China proposed the creation of a free trade area, excluding Japan and South Korea, and received support at the 2001 ASEAN summit in Brunei. Japan is the most economically developed East Asian country, but it has foreign military bases on its territory and Japan's foreign policy in the East Asian region is considered to be dependent on decisions taken by the U.S. War crimes committed by the Japanese army during World War II are still remembered by the local populations in China, both Koreas, and Southeast Asian countries. The unfortunate historical background and associations make modern Japanese dominance difficult; in a mid-term perspective Japan has no chance of being accepted as a regional political leader to promote East Asian interests.
China's "ASEAN Plus One" plan (in Russia, it is usually called "China Plus ASEAN") was motivated more by politics than economics; in the economic aspect China-ASEAN cooperation is much more favorable to the ASEAN countries than to China. All these factors contributed to the rising of local pan-Asian ideas. In the context of current financial instability in the U.S. and the falling dollar, for example, the concept of an Asian currency unit (ACU) should be noticed. It was proposed in 2006 as a weighted index of currencies for ASEAN Plus Three (China, Japan, and South Korea) to stabilize the region's financial markets. The improved financial interaction between related central banks could prevent such events as Asian financial crisis of 1997-1998.
China's increasingly centrality in regional affairs will underline this pan-Asianism, and it poses both challenges and opportunities for regional community building. Southeast Asia considers China as a new regional leader that could provide more favorable opportunities to ASEAN countries in their economic development, and in fact can provide an economic umbrella. The creation of China-centered free trade area in East Asia in general is not difficult to imagine, and China's economic growth and centrality will inevitably be converted into political influence and will provoke significant security changes first in Southeast Asia and later in East Asia as a whole. In context of practical absence of regional security system, the rise of China will obviously provoke a significant change in East Asian order. Such a China-centered transformation of the region would be contrary to U.S. interests.
The Vietnam question
In these circumstances, Vietnam is viewed as an especially significant country in Southeast Asia because of its geopolitical disposition on the continent, close to China. Vietnam remains a flashpoint of rivalry between major powers, not only because of its strategic location along vital Asian trade routes, but also because of the vast prospected oil reserves under the South China Sea. It is clear that intelligent use of the Vietnam factor could either hamper or accelerate China's southward strategic expansion. Various dispositions are considered not only in Washington, but also in Beijing, Hanoi, and Moscow; the players involved in these geopolitical calculations are mutually suspicious, and the future alignment of forces is not clear yet. But the "battle for Vietnam" will have far-reaching consequences for regional development, and so far China has acted more successfully than the others. Beijing is helped both by its own economic success and growing power, and recent international events.
Despite its increasing positive influence in Hanoi, China is very sensitive to recent contacts between Vietnam and the U.S. As reported in the Russian mass media in 2005, "... the U.S. Deputy Secretary of State Robert B. Zoellick's visit to Vietnam provoked real turmoil in Beijing. The Central Committee held an extraordinary session and the whole evening was devoted to discussion of the `Vietnam question.' The phantom of `color' revolution appeared in the region which is considered as a main direction of economic and political Chinese expansion... In late May, Hu Jintao gave a special paper at a closed Party conference...`To win opposition without fire: how to prevent U.S. and European attempts to organize `color' revolutions in China's neighboring countries and how to destroy U.S. plans to organize `color' revolution in China.'"
According to American experts, Vietnam should seek an alliance in order to offset the unfavorable balance of power that is evident in its rivalry with China over small islands in the South China Sea. In this connection Vietnam is viewed by the U.S. as a natural alliance partner. But in the context of previous wars, recent American ideological pressing on "human rights" and "religious freedom" is considered by Vietnamese authorities as the threat to the stability of their regime. Vietnam is regarded by the U.S. as one of the most effective tools that could stop Chinese expansion in a southward direction, but some recognize that "Vietnam will never want to be seen as part of a containment policy against China." Hanoi is certainly worried by a possible regional stand-off between China and the U.S. and does not want to be played in the same way Afghanistan was as part of efforts to contain the Soviet southward expansion 30 years ago. Existence between hammer and anvil is not new to Vietnam and the general rule is the same - the more powers involved in the geopolitical game, the more space Hanoi has to maneuver. So the question of which orientation (toward Beijing or Washington) is more favorable to Vietnam in the current geopolitical situation remains open. It is well-known that Vietnam is very skillful in balancing between major powers, and through its history has traditionally followed a very flexible policy.
In this context Russia is the only involved country which never invaded Vietnam and has always maintained a balanced policy vis-à-vis Hanoi. Conversely, Vietnam is viewed in Moscow as a traditional and reliable friend in Southeast Asia. East Asian powers, including Russia, could influence the development of a China-centric Asia by their foreign policies vis-à-vis Vietnam, but of course the situation will also depend on the position that Vietnam develops independently.
Developments in Russia's foreign policy
The issues of "unilateral and illegitimate actions" as well as "disdain for international law" and "uncontained hyper use of force" were brought up by Vladimir Putin at the Munich Conference on Security Policy in February 2007, and his views are supported by many countries. Asian governments fear that the U.S. will use the "war on terror" as a pretext to interfere in their internal affairs. Such an attitude toward U.S. policy in the "non-western world," especially in the context of events related to the former Yugoslavia, Afghanistan and Iraq, has provoked the regional arms race in East and Southeast Asia. As a result, there is the strong wish to foster regional integration and to find a reliable security umbrella provided by local, East Asian power.
During the "reforms" of the 1990s, Russia lost influence in East Asia. Later, as Russia went forward and began to develop its economy, its activities in East Asia became more and more numerous and reasonable. Indeed, the East Asian region will play a steadily increasing role in Russia's foreign policy. Russia's strategy in the region is aimed at maintaining the status quo and the balance of forces between the major powers. The smaller states of the region conduct a policy of maneuvering between the United States and China, but as noted above, in the last 10 years they have become oriented more and more toward Beijing. The Southeast Asian countries view China-centered regional cooperation as a model that could protect them from the influence of "hostile forces." They regard China's economic growth and prospective political umbrella as an opportunity for developing their own economies.
Now Russia has come back ready to take a more active part in world affairs. Russia is consistently developing multivector cooperation with various nations not only on a bilateral level but also in the framework of key international and regional organizations. The current state of affairs in East Asia should be viewed as one of unstable equilibrium. There are several high intensity points around China (the Korean peninsula, the Taiwan Strait, the South China Sea, Vietnam, Tibet, the Xinjiang Uyghur Autonomous Region, and Central Asia). Each of these flashpoints has huge destructive potential and could be regarded as a part of U.S. power projection system.
A reanimated Russia and a rising China are members of UN Security Council and Shanghai Cooperation Organization (SCO). For example, in August 2007, the Russian and Chinese Ministers of Foreign Affairs proposed ASEAN countries to advance security cooperation in the frameworks of the SCO. Russian President Vladimir Putin took part in various summits: Asia-Pacific Economic Cooperation, Organization of the Islamic Conference, and the East Asia Summit. All these activities enhanced Russia's cooperation with East Asian countries and reinforced its role in regional affairs.
Energy security is one of the most discussed topics of Russia's foreign policy. The East Asian region is a net oil importer, as is well-known, and the problem of energy security is extremely important. As East Asia is the fastest developing region, its dependence on crude oil imports will rise in the foreseeable future. This has prompted Northeast and Southeast Asian countries to display a growing interest in energy cooperation with Russia, recognizing that Russia is the world's second largest oil exporter after Saudi Arabia, and has the biggest gas reserves. Russia plans to make its contribution to regional energy security by building pipelines from its oilfields to Nakhodka (Kozmino) with a branch line to Daqing in order to support the growing demand for oil in East Asia. Realization of this project could considerably increase energy security in East Asia and will enable Russia to play a more significant role in regional integration; in these ways Russia could support stability and economic growth in East Asia.
The most important strategic goal of Russia's foreign policy in East Asia is to become involved in regional integration, primarily with neighbor countries and traditional allies, in order to have more opportunities to develop East Siberia and the Russian Far East. So the main directions of Russian foreign policy in the region support that goal. Russia hopes to advance cooperation with China, Japan, North and South Korea, and the ASEAN countries. Russia will try to maintain the balance of power and develop large scale economic cooperation with East and South East Asian countries. At the same time, Russia should promote its interests strictly and avoid any possible confrontation or destabilization, especially along its borders, as well as in the Korean peninsula and the Taiwan Strait.
Russia is vitally interested in the maintenance of peace, normalization, and predictability on the Korean peninsula, because it still plans to develop one prospective project - a railway through Russia connecting both North and South Koreas to the EU. Realization of such a plan will help transform the current stand-off to a situation of mutually beneficial economic cooperation. The Korean part of this project is exceptionally important. That is why Russia is deeply involved in the Six-Party Talks and supports denuclearization of the Korean peninsula, but North Korea's concern over "unilateral and illegitimate actions" also should be taken into consideration. The problem of North Korea's security is really difficult, because "firm guarantees" and general declarations are not believed any more. This problem was highlighted by Vladimir Putin in Munich when he mentioned "guarantees that were made and that are not being observed today" regarding current NATO expansion toward Russia's boarders. This lesson was soon learned by the international community, first of all in East Asia, and it resulted directly and immediately in a lack of trust and an unprecedented arms race.
The Taiwan Strait is relatively far from Russian borders, but the situation there could affect China, Russia's strategic partner in the framework of the SCO. In 1992 Russia tried to advance economic cooperation with Taipei, but this idea was soon rejected. Later Russia's position was definitely clarified, on July 18, 2000. According to the Beijing Declaration, Russia recognizes that "the government of the People's Republic of China is the only legitimate government representing China, and that Taiwan is an inalienable part of the Chinese territory ... The Taiwan issue is exclusively the internal affair of China and involvement of outside forces is inadmissible." Russia is very sensitive to security developments along its borders. Any conflict with China or North and South Korea would affect Russia, because it would mean a considerable destabilization of the entire East Asian region with unpredictable consequences.
During the last eight years Russia has acted as a responsible member of international community, and according to its foreign policy priorities, all conflicts should be resolved on the basis of international law. In this regard Russia's position is very clear and predictable. One of Moscow's main tasks is to build a constructive relationship with the United States, an extremely important component in preserving the equilibrium and balance of power and enhancing stability and security in East and Southeast Asia. The diversification of Russia's exports, which so far are limited mainly to raw materials, military-technical cooperation, and energy security issues, remains one of the most essentials tasks. But in comparison with the 1990s, current results could be considered as significant progress.
It is supposed in Asia that Russia does not pose a threat to any country in the region and could strengthen regional security and stability by its role in international affairs. The Russian Federation does not need any kind of conflicts and does not have plans to overthrow local political regimes through "peaceful transformation" or "color revolutions." Russia therefore is considered in East and Southeast Asia as a reliable and responsible partner which is open to honest cooperation with all countries on the basis of mutually profitable economic relations without confrontation and ideological stereotypes.
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