«Opportunities for large projects»: what caused Russia’s interest in ASEAN summit

«Opportunities for large projects»: what caused the interest of Russia to the summit Aseankorea link
09:19

Vladimir Agoev
On Saturday, 2 November, in Thailand, the start of the summit of the Association of Southeast Asian Nations (ASEAN). In recent years, Moscow actively exports to ASEAN countries its energy resources, technology and agricultural products. With the recent creation of a free trade zone with Singapore will allow Russian companies to actively penetrate the markets of the region. What is the reason for the growing interest of Russia to ASEAN at RT.

  • RIA Novosti
  • © Anton Novoderezhkin

The 35 th ASEAN summit will be held from 2 to 4 November in Bangkok. In the Thai capital, the heads of state and government of the Association will discuss the development of trade, economic and political relations with the Asia-Pacific region.

ASEAN was formed in 1967, it includes ten countries: Brunei, Vietnam, Thailand, Singapore, Myanmar, Indonesia, Laos, Cambodia, Malaysia and the Philippines. The total GDP of the Association is estimated at nearly $3 trillion.

As expected, the Central event will be the meeting of the East Asia summit (EAS). We are talking about the negotiations between ASEAN member States and partner countries, which includes Russia, China, India, USA, Japan, South Korea, Australia and New Zealand.

Russia at the summit will present Prime Minister Dmitry Medvedev. This is stated in the press service of the government.

«The meeting participants will exchange views on the promotion of cooperation in the framework of EAS in priority areas, including sustainable development and economic interconnectedness, digital technology, responding to new challenges and threats», — the TASS the press service of the Cabinet.

In addition, Dmitry Medvedev is scheduled to speak at a Business investment ASEAN summit and hold several bilateral meetings.

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Moscow conducts a dialogue with ASEAN for 23 years. In 2018, Russia’s trade with the countries of the bloc has increased by 7% and amounted to almost $20 billion. this was previously stated by the head of the Ministry Maxim Oreshkin. According to the FCS, the share of States of the Association accounts for about 3% of Russian trade turnover. Thus the key trade partners of Moscow in ASEAN remain Vietnam (with a share of 0.9%) and Singapore (0.5 percent).

«The ASEAN countries is primarily growing and emerging markets, and relatively free where you can occupy certain niches. In Russia there are opportunities for major infrastructure projects, such as the development of nuclear energy and the construction of Railways,» — said RT’s chief strategist «UNIVER Capital» Dmitry Alexandrov.

According to the expert, today the main share of Russian export in ASEAN countries accounts for the energy commodities (mainly oil and oil products), transport vehicles and chemical products. In recent years, also increasing the export of technology. About this RT said the head of the School of Oriental studies of the HSE Alexey Maslov.

«We have now started to deliver to the ASEAN countries technology and maintenance of these technologies. We already have contracts for the repair of aircraft, for the supply of equipment for the construction and maintenance of Railways, and parts for steel structures and metal products,» — said Maslov.

In addition, Russia actively exports to ASEAN countries its agricultural products. As noted in an interview with RT the head of the Department investiga «BCS» Narek Avakian, in 2014 the export of Russian agricultural products in the state Association is growing annually by 20-25%.

It is noteworthy that at the moment Russia has signed agreements on free trade area (FTA) with the States of ASEAN. So, in 2015, the Russian Federation signed the agreement on the FTA with Vietnam. As a result, from 2016 to 2018, Russian-Vietnamese trade turnover increased by almost 60% to us $6,08 billion this is evidenced by the FCS. As previously stated the Deputy head of the Vietnamese foreign Ministry That Anh dung, by 2020, the volume of mutual trade between the two countries could reach $10 billion.

October 1, 2019 Russia signed a similar agreement with Singapore. In 2018 Russia-Singapore trade volume amounted to $3.66 billion, According to the assessment Narek Avakian, after the establishment of the FTA for several years the rate may also be increased to $10 billion.

«In General, Russia is now trying to expand its geopolitical presence in South-East Asia. This policy will allow us to capitalize on opportunities in the energy sector, military-technical cooperation, tourism, environment, ecology and space exploration. Moreover, the partnership with ASEAN countries will lead to economic growth in the regions of the Far East and Siberia,» — said in a conversation with RT expert of «international financial center» Gaydar Hasanov.

Free zone

    

Expected RT interviewed experts, on the sidelines of the summit, participants will discuss the signing of full regional economic partnership (VREP). We are talking about the creation of a single Asian free trade area among ASEAN countries and six other countries in the region — China, India, Japan, South Korea, Australia and New Zealand.

«If ASEAN and its six partners will sign a VREP, the negotiations which are conducted since 2012, will be the world’s largest free trade area. Already, the GDP of the countries — potential participants of VREP up to $49.5 per trillion, or 39% of the world economy. According to forecasts, by 2050 this figure could grow to $250 trillion,» — said Dmitry Alexandrov.

As noted by Alexey Maslov, the creation of VREP will reduce trade barriers and facilitate the transportation of goods between the countries of Asia. As a result, prices for products within the region could fall by 10-15%. According to the expert, Russia will benefit from the possible conclusion of the VREP. We are talking about building up an active trade with Asian countries through Singapore.

«It is for this purpose we have signed a FTA agreement with Singapore. For the past ten years, the country remains an area to house our high-tech enterprises. As a participant of VREP, Singapore can be a springboard for Russian producers in the region. Our products will be easier to penetrate on the territory of other countries of Asia, and easier for the companies to place their businesses in the region», — said Maslov.

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