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Thailand boosts ties with Russia

Interview: Gabriel DomínguezApril 8, 2015

Criticized by the West, Thailand's ruling junta seems to be turning eastward for political and economic support, as Russian PM Dmitry Medvedev's recent visit to the country shows, says analyst Zachary Abuza.

Thailand Russland Staatsbesuch Medvedev
Image: Reuters/A. Perawongmetha

Russian Prime Minister Dmitry Medvedev is on two-day visit to Thailand, the first by a Russian PM in 25 years aimed at boosting trade and tourism and strengthening bilateral ties. During the trip, which began on April 7, Medvedev and his Thai counterpart General Prayuth Chan-ocha have signed bilateral agreements to combat drug trafficking, increase investment and develop the Thai energy sector. The goal is to double bilateral trade to $10 billion by 2016.

Medvedev's trip comes just a week after Thailand's ruling military junta, known as the National Council for Peace and Order (NCPO), was criticized by the United Nations, rights groups and some Western countries for lifting martial law only to replace it with sweeping security powers for the military.

Thailand has been under the rule of a junta ever since a military coup last May. PM Prayuth, the man behind the coup, has argued that the military takeover was necessary to avoid further bloodshed following months of political turmoil in the country pitting anti-government demonstrators against supporters of the administration of former PM Yingluck Shinawatra.

In a DW interview, Zachary Abuza, an independent researcher on Southeast Asian security, talks about how the reluctance of some Western countries to do business with the military government is prompting Bangkok to look eastwards, and how both Russia and China are benefiting from this change in tack.

Thailand Koh Phanghan Anantara Rasananda Resort
Abuza: 'Thailand wants to see Russian tourism increase to make up for the decline in Western tourists'Image: Getty Images

DW: Why did the military junta seem to be keen on this visit by Russian PM Dmitry Medvedev?

The visit was larger on symbolism than on substance. Thailand is always looking to expand international trade and tourism, but the real goal for the NCPO is international legitimacy, as it has become even more isolated from the West following its replacement of martial law with rule under Article 44, which gives completely unaccountable power to the junta.

PM Prayuth Chan-ocha, who has bristled at Western "interference" and lack of understanding of Thailand's political system, certainly sees Russia as a political model; with its restrictions on the media, civil-society, and strongman rule. He certainly embraces Russian President Vladimir Putin's assertion that there is a third way to development based on a strong state.

What were the key issues on the agenda?

Thailand and Russia announced that they aim to increase their annual bilateral trade in 2016 to $10 billion. Bilateral trade was only $4.7 billion in 2013, according to UN data. The balance of trade clearly favors Russia, whose $3.5 billion in exports dwarf their $1.2 billion in imports from Thailand.

The Thais would also like to find new markets for rubber, rice, food, and fisheries. They have spoken in generalities about Russian investment in the energy sector. Russian tourism, which had been rising steadily in the past decade, fell by 8.6 percent to 1.7 million in 2014 with the devaluation of the ruble, caused by economic sanctions following the intervention and annexation of Crimea.

Nationaler Reformrat in Bangkok, Thailand 21.10.201
Thailand's military government seeks 'international legitimacy' from Medvedev's visit, says AbuzaImage: Pornchai Kittiwongsakul/AFP/Getty Images

This has hurt Thailand's tourism industry, already reeling from the May 2014 coup, political instability and the murder of two British tourists. Clearly, the Thai government wants to see Russian tourism - seven percent of the total - increase to make up for the decline in Western tourists.

In all, five separate trade and investment, education, counter-narcotics, and cultural agreements were set to be signed during Medvedev's visit.

Worried about the suspension of democracy and curtailment of some human rights, the US and other Western countries have somewhat distanced themselves from the junta. Is Bangkok now increasingly turning to Russia and China for support?

While there is little history between the two countries, ties are growing. This is being driven largely by Thailand's recent isolation and the appeal that Russia offers as an alternative to liberal democracy. Bangkok is very clearly signaling to Washington, its treaty ally, that it has alternatives.

In the case of China, bilateral military ties are also growing. Thailand's defense minister is holding his third meeting with his Chinese counterpart since the fall, at a time when senior-level engagement with the US is on ice.

Moreover, Thailand is considering purchasing Chinese submarines and has increased joint air and marine exercises. China has also purportedly sought access to Thailand's Sattahip naval base, offering funds for refurbishment.

How much support does the Thai government need from Russia and China for its economy to grow?

The Thai economy continues to flatline. Thai GDP grew by only 0.7 percent in 2014, and already forecasts for 2015 have been downgraded. Thailand's economic growth is anemic compared to its neighbors. And many investors from the West and Japan are turning to Vietnam, the Philippines and Indonesia.

Russia is a fairly insignificant trading partner and investor in Thailand, but the junta is looking for any potential growth. In 2013, according to UN data, Russia was Thailand's 18th largest source of imports and 30th largest destination for exports with total trade worth $4.7 billion.

China, however, is a different story. China and Thailand signed a free trade agreement in 2003, and since then China has become the Southeast Asian nation's largest trading partner. In 2013, bilateral trade was $65.6 billion, roughly 14 times Thailand's trade with Russia.

China is also the largest export market for Thailand, while it is the second largest source of imports. And both China and Thailand are significant investors in each other's economy. Thailand has also joined China's Maritime Silk Road initiative and the Asian Infrastructure Investment Bank (AIIB).

The Russian PM's trip to Thailand follows a visit to Vietnam. What role is Russia seeking to play in Southeast Asia?

After closing its naval base in Vietnam's Cam Ranh Bay (CRB) in 1991, Russia had maintained limited ties with the region, especially through arms sales with Vietnam. But now, after an absence of many years, Russia is starting to make a presence in Southeast Asia. In 2014, its military began using the airfield at CRB to refuel long range bombers that were patrolling near US territory of Guam. Russian naval vessels also sailed through the South China Sea.

Moreover, Russia clearly needs new export markets and is currently seeking trade that can be conducted through barter or in rubles due to Western sanctions. According to the Thai Customs Bureau, 68 percent of Russia's trade with Thailand is crude oil and natural gas.

Wladmir Putin Portrait Moskau Kreml
'Thai PM Prayuth embraces Putin's assertion that there is a third way to development based on a strong state'Image: Getty Images/AFP/A.Nikolsky

Moscow's goal is to send a signal to Washington that Russia is a global power with global interests, even in regions that the US has long considered friendly and with shared development and security interests.

As much as US-Vietnamese military ties have improved, in recent years, Russia is not going to allow them to come at its expense. Likewise, Moscow enjoys being embraced by Thailand, a long-standing US ally.

Zachary Abuza is an independent researcher on Southeast Asian security and the author of "The Conspiracy of Silence: The Insurgency in Southern Thailand," published by the United States Institute of Peace.