Thailand, Vietnam, Myanmar deepen Russia ties to blunt economic woes

NikkeiSoutheast Asia nations seen giving Moscow breathing room on sanctions

Oil tanks at a petroleum depot in the port of Vladivostok, Russia. Myanmar starts importing Russian fuel oil as early as September.   © Reuters

YOHEI MURAMATSU and TOMOYA ONISHI, Nikkei staff writers

September 6, 2022 04:22 JST

BANGKOK/HANOI — From wooing more Russian tourists to boosting trade, Southeast Asian nations are bolstering economic ties with Russia in hopes of curbing inflation and spurring their recovery from the COVID-19 pandemic.

The U.S. and European countries have imposed sweeping sanctions on Russia in response to its invasion of Ukraine. But these efforts could be hindered by emerging nations as they prioritize addressing their own economic headwinds.

Thailand has said Russian flag carrier Aeroflot will resume regular service between Moscow and Phuket at the end of October. Phuket is a popular destination among Russian tourists, but the route was suspended after the war in Ukraine began.

The resumption will benefit Thai tourism, said Yuthasak Supasorn, governor of the Tourism Authority of Thailand.

With China continuing tight travel restrictions under its “zero COVID” strategy, Russia accounted for the most foreign tourists to Thailand in January and February, before the invasion. Thailand aims to attract 1 million Russian tourists this year, even as the European Union raises hurdles for such visitors.

Thailand and Russia also agreed to expand bilateral trade in a May meeting, looking to hit $10 billion in 2023 — nearly four times as much as in 2021. Thailand, which chairs the Asia-Pacific Economic Cooperation summit this year, exports cars and food to Russia while importing crude oil and fertilizer.

From left, Vietnam’s Bui Thanh Son, Russia’s Sergey Lavrov and Cambodia’s Prak Sokhonn attend the ASEAN foreign ministers meeting in Cambodia during August.   © Reuters

Meanwhile, Vietnam and Russia held talks Aug. 18 on expanding wheat exports, Russian authorities said. Russian shipments to Vietnam plunged below 190,000 metric tons in 2021 from 2.6 million metric tons in 2018 after potentially invasive thistle seeds were found in the wheat.

Russia intends to ship a trial batch of thistle-free wheat to Vietnam as early as September. Wheat prices are surging as the war disrupts shipments from Ukraine, a leading producer alongside Russia. The grain is used widely in Vietnam to make bread and noodles, and Hanoi likely hopes to curb prices in the country by increasing imports from Russia.

The former Soviet Union sided with communist North Vietnam during the Vietnam War, and Moscow and Hanoi maintain close relations to this day. Russian Foreign Minister Sergey Lavrov visited Vietnam in July and agreed to bolster bilateral ties on a wide range of fields during a meeting with Vietnamese counterpart Bui Thanh Son.

“Developing bilateral relations is always a top priority for the Vietnamese Communist Party and government,” Son said.

Thailand and Vietnam are part of the Association of Southeast Asian Nations, which holds neutrality as a core tenet. The communique from the ASEAN foreign ministers meeting in August refrained from criticizing Russia by name for its invasion of Ukraine, and Singapore is the only member of the 10-nation group to impose sanctions on Moscow.

Myanmar, whose military took control of the government in February 2021, has grown especially close to Russia in recent months. The country starts importing Russian fuel oil as early as September under a deal discussed when Myanmar military leader Min Aung Hlaing visited Russia in July, a military spokesperson said.

Min Aung Hlaing arrived in Vladivostok on Sunday to attend the Eastern Economic Forum, his third trip to Russia since taking power. He will meet with Russian officials to further bolster bilateral cooperation on the economy and other areas, Myanmar state media report.

Gasoline prices have more than tripled in Myanmar since the military takeover, due to the depreciation of the local kyat combined with surging crude prices. The military wants to curb inflation, which is only expected to exacerbate public resistance to its control.

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