The Bear Is Back? Russia’s Return to Southeast Asia

After a long absence of nearly 30 years, Russia is more involved in Southeast Asia than it has been since the Cold War ended. While the punditry is obsessed with China’s influence in the region, it’s worth reviewing recent Russian activities. Russia will always be a minor player in the region, dwarfed by China and the United States, but Southeast Asia is a cost effective place for Moscow to advance some of Russia’s national interests. Although its influence in Southeast Asia is largely predicated on arms sales, Moscow has proven to be adroitly opportunistic, especially when it perceives weakness or disengagement from Washington.

Southeast Asia is peripheral to Russia’s security interests, which entail a buffer around Russia and frozen conflicts that it can escalate or de-escalate at will, using asymmetric force, “little green men,” active measures, and cyber operations. While Russia’s security posture has an implicit recognition of “spheres of influence,” it clearly sees an opening in Southeast Asia.

Southeast Asia is far from Russia’s borders and while its security interests may be peripheral, the region does have utility for President Vladimir Putin. Southeast Asia has proven to be a very low cost place, free of prolonged conflicts that could drag Russia into another Syria-like quagmire, to advance five key Russian interests:

Undermining the U.S.-led liberal international order;

1. Sowing mistrust in democracy and promoting authoritarian-led governance;
2. Undermining the United States’ network of alliances;
3. Ensuring that Russia has a seat at the table to resolve any global issue, and indeed reminding states that Russia still has global interests and is not just a European power; and
4. Not just selling arms, but rendering the Countering America's Adversaries Through Sanctions Act (CAATSA) sanctions effectively moot.

The End of the Cold War

In 1991, following the collapse of the Soviet Union, Russia relinquished its naval base in Vietnam’s Cam Ranh Bay. While some face was saved with the concurrent U.S. withdrawal from Subic Bay in the Philippines, it was still a humiliating retreat for a bankrupt Russia. Moscow, however, continued to maintain a signals intelligence facility in the country.

By 1990, all Soviet military and economic assistance to Vietnam and its two clients, Cambodia and Laos, ceased. While sizable at the time, the aid was largely wasted due to the economic inefficiencies of central planning. Throughout the 1980s, Russia provided Vietnam with an average of $1 billion annually in military assistance and another $1 billion annually in economic assistance; it also provided roughly $1 billion a year to the governments of Laos and Cambodia, then clearly satellites of Hanoi. Nonetheless, Russia had little to show for its investments in the region. Indochina was a blackhole that Moscow shoveled rubles into, and its influence immediately dissipated.

The First Foray: Palm Oil for Jets

Russia’s first foray back into Southeast Asia came through arms sales to a new customer base, in a desperate attempt to keep Russian weapons factories open. Russia began to supply Malaysia and Indonesia with fighter jets, weaning them of their reliance on Western armaments.

In 2003, Russia exported 16 Su-27s to Indonesia. It was Moscow’s first deal with Jakarta. Russia then followed suit with a deal to sell Malaysia 18 MiG-29s.

Two factors made Russian weapons attractive to countries that had long been dependent on U.S. arms. First, Russian weaponry was sold with no strings attached, in stark comparison to U.S. conditionalities. Indonesia had long been frustrated with its inability to procure spare parts for weapon systems due to U.S. sanctions over the Indonesian National Armed Forces’ poor human rights record and lack of accountability. The second attraction to Russian arms was simply the lower cost of the weapons, and not having to navigate the labyrinthine U.S. acquisitions process.

But there was a third reason why Russian arms were attractive: Russia appeared willing to barter palm oil, bananas, rubber, and coffee for fourth-generation fighters. For example, on a 2009 visit to Malaysia, Putin signed a $900 million deal for 18 Sukhoi Su-30 planes, financed through the sale of palm oil.

Cash-strapped Indonesia hoped to follow suit. In 2017, Indonesia and Russia negotiated a barter of key commodities for 11 Sukhoi Su-35 jets, a deal worth $1.14 billion. However, by June 2021, the deal had still not been finalized, despite two high level meetings between Indonesian Minister of Defense Prabowo Subianto and his Russian counterpart.

Malaysia, too, was unable to negotiate another barter agreement for fifth-generation fighter jets. Despite the fact that Malaysia and Russia later established a joint venture company, Aerospace Technology Systems Corp, to service the MiG-29 and Su-30MKI jets, many of the planes remain grounded. In 2019, Malaysia halted its $2 billion acquisition of fifth-generation planes to focus on aerial ISR and slower ground attack craft, needed for counterinsurgency and anti-piracy operations in Sabah. There appears to be no barter proposal on the table for MiG-35s or Su-35s, as some in Malaysia had hoped.

Malaysia is now considering purchasing Yak-130 ground-attack aircraft, especially for Sabah where the threat of attacks from Philippine-based militants is ongoing.

The promise of deeper ties with Indonesia has also fallen short. Other than disputes over commodity valuations, Indonesia has been pushing for technology transfer for its defense industries. In 2019, the two sides initiated a Military Technical Cooperation meeting to discuss licensing and tech transfer, yet there have been few deliverables.

From 2000-2016, Malaysia and Indonesia accounted for just 1.3 and 1.1 percent of total Russian arms exports. Indonesia, which is currently the 18th largest arms importer in the world, accounted for 10 percent of Russian arms sales to the region from 2000-2017; Malaysia a mere 1 percent. While Moscow may have opened new markets, it failed to grow them.

Renewed Friendship With Vietnam

Vietnam was the country with which Russia really sought to re-develop relations in Southeast Asia, building on historical ties to the Vietnam Communist Party and support for the anti-colonial revolution. Hanoi and Moscow signed a strategic partnership agreement in 2001, after a decade of limited engagement. In March 2021, Putin’s national security advisor visited Hanoi, which remains Russia’s largest trading partner in the region, by far.

Russia still trains some Vietnamese military and intelligence personnel. A handful of Vietnamese military personnel also study each year in Russian satellite states, such as Belarus.

Vietnam is one of the largest purchasers of Russian weaponry. These include the T-90 main battle tank, six Kilo-class submarines, six Gephard-class frigates, Su-27s, and MiG-30s.

It is Russian missilery that Vietnam employs to make Chinese defense planners think twice. Vietnam now fields Russian-made cruise missiles as well as two Iskander Bastion anti-ship missile batteries, and several batteries and three different variants of long-range S-300 SAMs, including PMU-2s in 2012. Vietnam has also purchased 50 3M-54E Klub supersonic cruise missiles for its submarines. Although most are anti-ship variants, they also include land-based variants, which carry 450 kg warheads and give Vietnam the ability to hit targets in China.

What made Russia such an attractive defense supplier for a country like Vietnam, which was rapidly modernizing its military, was that Russia has allowed for licensed production of certain equipment. Vietnam has built 10 Molniya-class fast missile attack ships (after purchasing two from Russia), and a range of older generation anti-aircraft and anti-ship missiles, such as the Kh-35UE anti-ship missile, the Uran (SS-N-25 “Switchblade”) and the S-125-2TM “Pechora-2TM” (C12-2TM) fixed SAM system.

It is important to note that Vietnam continues to field an enormous array of Soviet-era military equipment and still relies on Russia for spare parts. To that end, Hanoi also retains close ties with defense producers in Ukraine and Belarus.

From 2000-2016, Vietnam accounted for 5.6 percent of all Russian military exports, but in 2010-2016 that figure rose to 10 percent. Vietnam imported more weaponry than any other country in Southeast Asia from 2016 to 2020. For Russia, Vietnam accounted for 78 percent of all sales to Southeast Asia from 2000-2017. But Vietnam is clearly moving to diversify its sources of armaments, and in the past few years Israel has become the most important partner for small arms manufacturing, drone technology, and advanced surface-to-air missiles.

Despite deep cooperation in arms sales and licensing, Russia has occasionally overplayed its hand. In 2015, Russian TU-95 “Bear” bombers flying out of Cam Ranh Bay buzzed by U.S. military facilitates in Guam during a regional visit. This came at a time when the Vietnam People’s Army was actively courting a closer relationship with the United States in light of Chinese aggression in the South China Sea. Putting Vietnam in a hard spot, the U.S. Department of State acknowledged: “We have urged Vietnamese officials to ensure that Russia is not able to use its access to Cam Ranh Bay to conduct activities that could raise tensions in the region.” Russia has not done anything as provocative from Vietnamese territory since then.

While military-to-military cooperation between Russia and Vietnam remains deep, it is not without friction. Russia continues to sell advanced weaponry to China, much of which China reverse engineers, expanding the strategic divide between Beijing and Hanoi. Russia also participated in bilateral military exercises with China in the South China Sea in 2016, angering Vietnam. Finally, Hanoi is frustrated that Beijing has been able to successfully lobby Moscow to block the export of BrahMos hypersonic anti-ship cruise missiles, co-developed by Russia and India, to Vietnam.

Opportunity Knocks

Russia has also opportunistically reached out to the two U.S. treaty allies in the region, Thailand and the Philippines, taking advantage of their authoritarian turns and subsequent breakdown in ties with the United States.

Thailand began purchasing Mi-17V-5 transport helicopters in 2008, rather than the expected Sikorsky UH-60 Black Hawks, an initial purchase of three, in a deal worth over $27 million. While Thailand justified the purchase on the basis of price and carrying capacity, the deal followed the 2006 coup, which triggered a host of U.S. sanctions and diplomatic isolation. Thailand purchased two more Mi-17V-5s in 2014 and two in 2017. In 2021, it inked a deal to buy three, bringing the total number to 10.

Russia quickly offered an array of other weapons systems, including main battle tanks, armored personnel carriers, and anti-tank weapons, though to date, no large deals have been reached.

Following the Royal Thai Army’s 2014 coup, Russia stepped in when the EU and the United States distanced themselves from the Thai junta. Russia offered arms sales and began to export oil to Thailand. During Prime Minister Dmitry Medvedev’s 2015 visit to Thailand, coup leader General Prayut Chan-o-cha said, “We are interested in purchasing your [Russian] weapons. Military and technical cooperation is a very important sphere of our relations.”

In 2016, Thai Deputy Minister and Minister of Defense Prawit Wongwusan traveled to Moscow, where he forged an agreement on personnel exchanges. Although no arms purchase agreement was reached, he left the door open. In 2017 Moscow offered Kamov Ka-52 and Mi-35M attack helicopters.

Thailand considered buying Russian Y-90 main battle tanks to replace their aging U.S.-made tanks, though Bangkok ultimately went with the Chinese VT-4. In 2019, Bangkok and Moscow were in talks to open a regional parts manufacturing plant for Russian Helicopters, a major defense firm, to service clients across Southeast Asia. Russia and Thailand also signed an intergovernmental agreement in September 2019 on military and technical cooperation.

Russia has pierced the Thai arms market, but less has been achieved than was hyped, especially following the 2014 coup. This should also be seen in terms of the overall context in which Thailand has shifted its arms procurement away from the United States toward China, which now is supplying Thailand with submarines, naval vessels, as well as armored personnel carriers and tanks.

One of the key reasons that Russo-Thai relations have not gone so far is Russian mistrust of the Thai security services’ continued ties to the United States. At the core of this was the 2008 arrest of the Russian arms merchant Victor Bout in a U.S. Drug Enforcement Agency sting operation in Bangkok. Despite intense Russian lobbying, Thailand extradited Bout to the United States in 2010, where he was tried and convicted for arms smuggling. The lobbying effort included large consignments of small arms, AK-47 variants as well as Baikal shotguns, that were gifted to the Thai Queen, who transferred them to Buddhist militias in the restive Deep South, where a Muslim Malay insurgency has flared since 2004. The relationship has never fully recovered from Bout’s extradition.

In another case not directly tied to Moscow, but an incident that would raise suspicion there, Thai authorities seized an Ilyushin Il-76 transport plane when it landed to refuel in 2009. The plane was carrying 35 tons of North Korean explosives, rocket-propelled grenades, and components for surface-to-air missiles and other armaments for an unknown client. Thai authorities detained four Kazakh and one Belorusian crew members. While military-to-military ties between Thailand and the United States have taken a hit due to the former’s two coups since 2006, intelligence and law enforcement cooperation remain fairly strong.

Putin Never Met an Anti-American Populist That He Didn’t Like

In the Philippines, a long-time U.S. ally, Russia held little sway. But Moscow reached out to strongman President Rodrigo Duterte following his 2016 election win. Duterte quickly announced his intention to scrap the alliance with the United States, which has transferred nearly $1 billion in defense equipment and provided over $2 billion in overall assistance since 2000.

Following a U.S. Senate hold on the export of 26,000 M4 assault rifles due to the Philippines’ cratering human rights record and the national police’s role in extrajudicial killings, Duterte traveled to Moscow and requested a soft loan to purchase arms. The two sides signed a defense cooperation agreement.

In the aftermath of the siege of Marawi city by pro-Islamic State militants, a Russian cruiser made a rare port visit to Manila. During the visit, Russia donated some 5,000 Kalashnikov rifles, and a million rounds of ammunition, 5,000 steel helmets, and 20 army trucks in a ceremony attended by Duterte. During the visit, two defense pacts were signed, though there were few details.

October 2017 saw the first ever visit by a Russian defense minister to the Philippines. That year, the two countries announced their first arms agreement: a $7.48 million deal for 750 RPG-7B rocket propelled grenade launchers.

The 2017 port visit augured deepened ties, at a time when Duterte was actively undermining the alliance with the United States. Putin offered additional arm sales, including a Kilo-class submarine, and other naval vessels. Currently the Philippines is negotiating with India and Russia to import BrahMos hypersonic anti-ship cruise missiles, though China is likely to lobby Russia to oppose the sale.

In 2019, Russia announced intentions to establish a Kalashnikov small arms manufacturing facility in the Philippines. The Russian ambassador was clear that “no conditions” would be imposed: “We want to build a long-term strategic cooperation [with the Philippines]. We want to be a reliable partner for many, many years.” It offered to train Philippine military personnel, and in September 2019 opened their first defense attaché’s office in Manila since the Soviet Union collapsed.

In 2020, the Philippines announced its intention to buy 16 Russian Mi-17 helicopters, though only 12 were actually purchased.

The day after Duterte announced his decisions to scrap the Visiting Forces Agreement with the United States, in February 2020, Russia announced that additional agreements to facilitate further arms sales and co-production were being negotiated.

An Airfield in Laos?

In tiny landlocked Laos, the Russians have renewed their historical ties with the communist government. A military cooperation agreement was signed in 1997.

Russia transferred a dozen secondhand Mi-17 helicopters to Laos. In 2018, Laos ordered 10 Yak-130 trainers, four of which have been delivered. Russia sold 20 T-72B1 main battle tanks to Laos, as well as trucks and artillery. But for the most part, Russia has been providing spare parts for the Lao military, whose arsenal is still mainly comprised of Soviet-era weaponry. Some reports suggest that Laos has given Russian firms mining concessions in return for the sales and that other barter agreements may be in the works.

The Russians are currently co-developing an airport in northwestern Laos. The dual use facility, according to Russian military sources, will be utilized by Lao and Russian forces. Russia is currently assisting in demining in some 500 hectares and site work for the airport. In addition Russia continues to provide arms to Laos and train a small number of military officers.

A Junta in Need Is a Friend Indeed

It is in Myanmar where we are really seeing the Russians flex. There were high-level talks involving top military officials and the Russian Defense Minister Sergei Shoigu weeks ahead of the February 1, 2021 coup, prompting questions of whether the Russians knew of the Myanmar military’s plan to seize power ahead of time. During his January 2021 visit, Shoigu agreed to sell Pantsir-S1 surface-to-air missile systems, Orlan-10E surveillance drones, and radar equipment, in an estimated $15 million deal.

Russia’s first major arms deal with Myanmar was the sale of four MiG-29s in 2001, and 10 more in 2002. Myanmar now has 30 MiG-29s. The Myanmar military, known as the Tatmadaw, went on to purchase at least nine Mi-35 Hind helicopter gunships, as well as 12 Mi-17 transport helicopters. In 2016 an arms agreement was signed, paving the way for more sales that have included 12 Yak-130 jet trainers, 10 Mi-24 and Mi-35P helicopters, and eight Pechora-2M anti-aircraft missiles. Myanmar also signed a contract in 2019 to purchase six Su-30 warplanes. The junta has repeatedly used its air force to bomb civilian targets since the coup.

The two countries have a joint venture to provide maintenance for the equipment. Russia trains more members of the Myanmar military than officers from any other country in Southeast Asia, including Vietnam.

Since the February 1 coup, Russia has provided diplomatic cover for Myanmar’s generals at the United Nations, and threatened to veto any U.N. Security Council-imposed sanctions. “A course towards threats and pressure including the use of sanctions against the current Myanmar authorities has no future and is extremely dangerous,” a Russian Foreign Ministry spokesperson said in April. Such policies would “push the Burmese towards a full-blown civil conflict.”

Russia has pledged to “deepen” relations with Myanmar, taking advantage of its diplomatic isolation, and to continue to sell it weapons. Russia’s Deputy Defense Minister Alexander Fomin was the first high-profile foreign visitor after the coup, and attended the Tatmadaw’s Army Day celebrations on the same day that 114 civilians were killed by security forces. The coup leaders have heaped praise on Russia, expressing “profound gratitude” for their support. As in Syria, Russia seems happy to back a regime that is willing to decimate its society and kill its civilians over a long civil war just to hold onto power.

A high level military delegation led by the head of the Myanmar Air Force, Maung Maung Kyaw, traveled to Moscow in May 2021. The delegation included U Tay Za, a tycoon under U.S. sanctions, believed to be a key middleman in the country’s arms acquisitions. In late June, junta leader Senior General Min Aung Hlaing traveled to Moscow to attend the Moscow Conference on International Security. During the visit, Min Aung Hlaing met with the head of the Russian Security Council, Nikolai Patrushev. The two countries "reaffirmed their desire to further strengthen bilateral cooperation.” Min Aung Hlaing did not, however, score a meeting with Putin.

From 2000-2016, Myanmar accounted for 1.4 percent of total Russian arms sales. According to SIPRI, of the Tamadaw’s $2.4 billion in weapons imports from 2010-19, $807 million was imported from Russia. Between 2014-2019, Russia accounted for 16 percent of the Tatmadaw’s imported weaponry; roughly the same as India, but well below China (48 percent). None of these suppliers is likely to heed any U.N. calls for an arms embargo following the February 1 2021 coup d’etat.

As two Russian analysts recently put it, “Viewing itself as a global great power, Russia has a stake in maintaining a strategic presence in Myanmar, a geopolitically important country in the Indo-Pacific. To retain and expand Russia’s links with Myanmar, the Kremlin has banked on the generals.”

In the Absence of Soft Power Instruments, a Push for Vaccine Diplomacy

Russia does not have a lot to offer the region other than arm sales and limited training for military and intelligence personnel; it has little in the way of soft power.

Through its Russian Direct Investment Fund, Moscow is both marketing and donating its Sputnik V vaccine to states and allowing for local production in countries that have nascent bio-pharmaceutical capabilities (such as Cambodia). There are only a limited number of takers.

Russia offered advanced access to Indonesia for the vaccine as well as co-production, yet nothing had been finalized as of June. Indonesian officials indicated that they will authorize the Russian vaccine for use in their private-sector-led rollout. In Laos, phase three trials are currently underway; Russia has offered 2 million doses.

In the Philippines, the vaccine underwent phase three trials. The Russian manufacturer applied for emergency use authorization on January 8, and it was granted in March. Although 480,000 doses were scheduled for delivery by April 30, by the end of May, Russia had only delivered 30,000 doses. Still, Russia pledged to provide 3 million doses in the second quarter of 2021 and 11 million doses in the third quarter.

In Vietnam, a purchase agreement has been concluded for the import of 50 to 150 million doses. Vietnamese regulators approved the Sputnik V vaccine for use on March 23. In Malaysia, Russia is allowing 6.4 million doses to be produced locally under license by Duopharma. Myanmar also granted Sputnik V emergency use authorization.

Gamaleya, the manufacturer of the Sputnik vaccine announced that a booster shot will be needed to cope with the Delta and future variants; it is unclear how that will impact Russian vaccine aid and assistance programs.

A Weak Economic Foundation

What is fascinating about the Russian return to Southeast Asia is just how devoid it is of commercial relations. Bilateral trade between Russia and the economically dynamic region of over a half billion people is negligible. Despite hosting the APEC summit in Vladivostok in 2012, and a host of policies, including the December 2015 national security strategy, to increase trade and investment in the region, Moscow has little to show for its efforts.