Cambodia
- Russia’s outreach to Cambodia is part of a larger strategy to increase
influence in Southeast Asia.
Russia’s
outreach to Cambodia is part of a larger strategy to increase influence in
Southeast Asia.
On May
17, 2016, Cambodian Prime Minister Hun Sen held bilateral talks with Russian
Prime Minister Dmitry Medvedev to strengthen economic linkages between Moscow
and Phnom Penh. These talks resulted in the two countries signing a landmark
agreement to cooperate on peaceful nuclear energy development.
At the
Association of Southeast Asian Nations (ASEAN) summit in Sochi that followed,
Russia and Cambodia announced cooperation in numerous economic sectors and took
major steps toward the establishment of a durable economic partnership.
Russia’s
strengthening of ties with Cambodia is a key component of President Vladimir
Putin’s broader goal of expanding Russian influence within the ASEAN bloc.
Medvedev’s historic trip to Phnom Penh in November 2015 further underscored the
importance of Cambodia to Putin’s Southeast Asian strategy. Medvedev’s trip was
first official visit of any Russian leader to Cambodia since Soviet Foreign
Minister Eduard Shevardnadze traveled to Phnom Penh in 1987.
These
diplomatic overtures are a major step toward resolving strains between Russia
and Cambodia that have lingered throughout the post-1991 period. Despite this
progress, the transition towards a genuinely fruitful Russia-Cambodia
partnership is still fraught with obstacles stemming from inefficiencies in
Cambodia’s economic system, and negative historical legacies.
Changing Patterns of Economic Cooperation
In stark
contrast to the current cordial relationship, economic cooperation between
Phnom Penh and Moscow was almost non-existent in the years immediately
following the Soviet Union’s collapse in 1991. Russia’s alliance with Vietnam
damaged ties with Phnom Penh, as Cambodian nationalists disdained the memory of
being a de facto Vietnamese puppet state from 1979-1989.
While
bilateral agreements like the 1995 Intergovernmental Agreement on Trade and
Economic Relations and the 1997 establishment of the Intergovernmental
Commission on Trade, Economic, Scientific, and Technological Cooperation
formalized economic relations between Russia and Cambodia, trade volumes only
began to appreciably increase during the mid-2000s. Russian ambassador to
Cambodia Dmitry Tsvetkov noted in a 2014 statement that bilateral trade
linkages had expanded from $10.8 million in 2006 to $133.2 million in 2013.
As
Russia-Cambodia trade linkages have expanded, the drivers of economic cooperation
have shifted from business-level to inter-governmental connections. This
transition has been particularly striking in agriculture. Cambodia has
historically exported milled rice to Russia and Eastern Europe through private
companies like Mekong Oryza. But the May bilateral summit formalized a path for
the Cambodian government to oversee the export of agricultural products.
Cambodian rice producers hailed this development as a major step forward for
the Phnom Penh-Moscow relationship.
Trade
expansion in the agricultural sector has provided a powerful precedent for
deepened Russian investment in Cambodia’s energy facilities, mining equipment,
and telecommunications industry. Hun Sen praised this diversification in a May
20 statement, arguing that Russian private sector investment could play a vital
role in Cambodia’s economic development process.
Russian
Deputy Foreign Minister Igor Morgulov responded to Hun Sen’s statement by
suggesting that Cambodia, Singapore, Indonesia and Thailand could create a Southeast
Asian free trade zone linked to the Russian-led Eurasian Economic Union (EEU).
This trade agreement, if realized, would substantially elevate Russia’s
position as an economic competitor with China and the United States in
Southeast Asia.
Potential Obstacles to Durable Russia-Cambodia
Economic Cooperation
Despite
numerous signs of progress toward a lasting Russia-Cambodia economic
partnership, three obstacles could slow down or ultimately prevent this
alliance from coming to fruition. The first problem lies with the regulatory
and planning bodies of the Cambodian economy. Mekong Oryza managing director
Hun Lak recently expressed concern that Cambodia’s approach to cooperation with
Russia has focused on developing state and private sector cooperation
independently, rather than as part of a joint process.
Also,
even though the Cambodian government has implemented initiatives to lower
electricity prices, cut taxes, and streamline the bureaucracy; Cambodia’s rice
industry still incurs higher production costs than its Southeast Asian
neighbors. These excess costs could eventually cause Russia to divert its
investments toward Vietnam, Thailand, and Laos, and cause Cambodia to miss out
on much-needed foreign capital.
Second,
Russia’s and Cambodia’s comparative advantages and sources of economic strength
do not readily complement each other. This lack of synergy became evident in
2015, when the volume of trade between Phnom Penh and Moscow fell by 16
percent. Both countries have attempted to rectify this problem by expanding the
range of sectors for economic cooperation and making these new deals binding
until 2020. But regional business leaders like Stephen Higgins of Mekong
Strategic Partners contend that trade with Russia will not significantly
bolster Cambodia’s economic development, as Russia’s economic strength lies in
cheap fossil fuel exports.
Third,
Cambodia needs to be cautious to ensure that closer ties with Russia do not
jeopardize or dilute its long-standing alliance with China. Phnom Penh has
maintained close ties with China since the rise of the Khmer Rouge regime in
1975 and has historically viewed a close relationship with Beijing as a bulwark
against Vietnamese hegemonic ambitions.
Despite
this long-standing partnership, Cambodia has been careful to demonstrate to the
international community that it has foreign policy independence and is not
completely beholden to China. Hun Sen’s critics regarded Cambodia’s pro-Chinese
position on the South China Sea dispute at the recent ASEAN summit as proof of
Phnom Penh’s dependency on China. Pivoting in a limited way toward Russia could
be effective in demonstrating that Cambodia is not merely a compliant satellite
in Beijing’s sphere.
Russia’s
close ties with Vietnam also remain source of friction between Moscow and Phnom
Penh. A senior Cambodian diplomat recently told Russia Beyond the Headlines
(RBTH) that Cambodians still fear Vietnamese aggression, even though Vietnam’s
military modernization is primarily aimed at confronting China.
Putin can
counter skepticism of Moscow’s intentions and credibility as a strategic
partner by strengthening Russia’s cultural linkages with Cambodia. In
particular, Russia-Cambodia ties could strengthen greatly if Putin actively
promotes Russia’s already robust tourism linkages and showcases the quality of
Moscow’s university student exchange programs. Cambodia’s liberal visa laws
allow 131,000 Russians seeking a warm winter vacation spot to visit every year.
Closer economic ties and the Russian government’s increased attention to
Cambodia should expedite the growth of tourism further.
In
addition, Cambodia has 8,000 students studying in Russian universities, and a
history of student exchanges that date back to the Soviet era. These
educational linkages will help ease distrust of Russian intentions amongst the
younger generation of Cambodians. It also will impact long-term policy
decisions, as Cambodians educated in Russian academies are disproportionately
represented in senior government positions.
Russia’s
diplomatic overtures toward Cambodia are a crucial step towards establishing
Moscow as a major player in the ASEAN trade bloc. Ultimately though, the
success of Russia’s outreach will depend on Putin’s ability to overcome
Cambodian disdain for Moscow’s alliance with Vietnam and Cambodia’s willingness
to make sweeping economic reforms that will bolster its viability as a trade
partner.
Samuel
Ramani
Samuel Ramani is an MPhil student in Russian
and East European Studies at St. Antony’s College, University of Oxford,
specializing in post-1991 Russian foreign policy. He is also a journalist who
contributes regularly to the Washington Post, Huffington Post and Kyiv Post
amongst others. He can be followed on Facebook at Samuel Ramani and on Twitter
at samramani2.
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