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Gamechanger: How the Ukraine Crisis Reshapes the South China Sea Disputes

Mar 24, 2022

Southeast Asia is often seen as a theater of geopolitical competition between the United States and China, with Japan still maintaining significant economic influence in the region. In more recent years, key European powers like Britain, France and Germany, and the European Union (EU) more broadly, have also indicated their commitment to expanding strategic cooperation with an economic footprint in the region. 

What’s often overlooked by mainstream media and analysts, however, is Russia’s quiet yet substantial role in Southeast Asia. Over the past two decades, the Eurasian power has emerged as the largest arms exporter to the region, while Russian President Vladimir Putin has been a role model for countless strongmen in Southeast Asia. 

Although not a ‘resident’ power, and lacking any direct maritime or territorial claims in the region, Russia has been a major player in the South China Sea disputes. Moscow has been supplying state-of-the-art submarines and fighter jets to leading claimant states such as Vietnam, while offering massive arms deals to other key Southeast Asian states such as Indonesia. 

Meanwhile, Russia’s state-owned energy companies have actively aided efforts by Southeast Asian states such as Vietnam and Indonesia to develop energy resources across the greater South China Sea basin and beyond. But a new barrage of international sanctions following the invasion of Ukraine, and Russia’s growing dependence on China, is set to dramatically change the strategic alignments in the region. 

By all indications, Moscow may struggle to maintain a significant and strategic presence in the area amid its growing international economic and diplomatic isolation. This leaves China and the U.S. as the predominant powers in the region, as key South China Sea claimant states, especially Vietnam and the Philippines, struggle to maintain robust defense and strategic ties with alternative powers such as Russia. 

A Third Force 

Russia’s role in Asia has undergone a boom-and-bust cycle throughout the past century. It began as a marginal player in the early-20th century, wracked by domestic revolts and European wars, and became a major force in Asian geopolitics in the latter half of the century. 

Under Joseph Stalin’s watch, Moscow played a vital role in the emergence of powerful Moscow-friendly regimes from Pyongyang to Beijing and, shortly after his death, Hanoi. At the height of the Cold War, the Soviet Union served as the main strategic patron of North Vietnamese forces, who simultaneously took on the U.S. as well as Maoist China. 

But Vietnam was left dangerously vulnerable following the Soviet Union’s strategic retrenchment in the 1980s. One major implication of this development in the twilight decade of the Cold War was an uptick in Sino-Vietnamese disputes in the South China Sea, especially as Beijing began to consolidate its claims from the Paracel Islands in the north all the way to the Spratly Islands in the central regions of the vital seascape. 

In 1988, China and Vietnam came to blows, culminating in the bloody skirmishes over the Johnson South Reef in the Spratlys. Henceforth, China steadily strengthened its position across the disputed areas at the expense of Vietnam and other claimant states, especially the Philippines, which was also left dangerously exposed following the exit of American bases from the Southeast Asian country in 1992. During the 1995 Mischief Reef standoff between China and the Philippines, Washington refused to come to the rescue of its treaty ally. 

By now, both Vietnam and the Philippines were constitutionally committed to shunning any foreign bases on their soil. But while the Philippines maintained its treaty alliance with Washington, Vietnam is bound by a strict “the three no’s” doctrine, which ensures the country is committed to “no military alliances, no aligning with one country against another, and no foreign military bases on Vietnamese soil.” 

Nevertheless, Vietnam served as an anchor of Moscow’s gradual return to the region, which began in earnest following the 2012 Asia-Pacific Economic Cooperation Summit in Vladivostok and, a year after, President Vladimir Putin’s “march to the East” command during the St. Petersburg International Economic Forum

Arming Rivals 

From the mid-1990s up until 2019, Russia gave $10.7 billion in defense equipment to Southeast Asian partners, far larger than any major external power. The biggest beneficiary was Vietnam, which procured kilo-class submarines and modern fighter jets worth $7.4 billion. But Russia’s defense diplomacy isn’t only confined to traditional allies in the region. 

Other South China Sea claimant states, including Malaysia, which operates a squadron of Russian-built Sukhoi Su-30MKM Flanker-H jets capable of deploying U.S.-made bombs, as well as the Philippines, which has explored purchase of Russian submarines, multirole fighter jets, attack helicopters, and rifles, have followed suit. 

Indonesia, which also has maritime disputes with China, has also eyed several squadrons of Russian-built SU-35 fighter jets to build up its defensive capabilities. Russia’s strategic thrust has also extended into the realm of energy exploration across the broader South China Sea basin and beyond. 

For instance, Russian energy companies, namely Rosneft and Gazpromhave actively assisted Vietnam’s offshore oil and gas exploration projects in the South China Sea, including in areas such as Vanguard Bank, which is also claimed by China. Moscow has also welcomed the invitation of Philippine President Rodrigo Duterte for Russian energy giants such as Rosnef to invest in the Southeast Asian country, including in the country’s exclusive economic zone in the South China Sea. 

Although Indonesia is not a direct claimant in the South China Sea, its waters off the coast of the energy-rich Natuna Islands overlaps with the southernmost tip of China’s nine-dashed-line areas of claim. In fact, China claims ‘traditional rights over fisheries resources in the vast maritime area, which Indonesia calls the “North Natuna Sea.” In recent years, Indonesia has also welcomed Russian energy investments, particularly by Russian state oil company Zarubezhneft, to press ahead with energy exploration in the contested areas. 

Strategic Retreat 

Russia’s invasion of Ukraine, however, could dramatically reset the strategic realignments in the region. To begin with, Moscow is facing diplomatic stigma in a region, where the vast majority of nations backed the United Nations General Assembly resolution, which condemned military intervention against a sovereign state. 

Vietnam and Laos were the only two Southeast Asian countries that abstained from the UN resolution in order to preserve their intimate strategic ties with Russia. But Hanoi is now struggling to maintain even normal trade and investment ties with Moscow, which is facing a new barrage of international sanctions from both the West as well as major Asian economies such as Japan, South Korea and even Singapore. 

With key Russian financials booted out of the SWIFT international banking system, Vietnam is scrambling to save joint investment ventures with Moscow, including in the energy sector. As Russian energy companies face growing international restrictions, both their ongoing and planned mega-investments in offshore projects across the South China Sea could suffer accordingly. 

New rounds of Western sanctions could also dramatically undercut Russian arms exports to South China Sea claimant states. As the U.S. tightens its sanctions on Russia’s military industry, under the Countering America's Adversaries Through Sanctions Act (CAATSA), treaty allies such as the Philippines may have to rethink any major defense deals with the Eurasian power. Earlier this year, Indonesia canceled a major arms deal with Russia partly due to concerns over incurring U.S. sanctions.

More broadly, Russia’s new isolation could not only mean strategic retrenchment in Southeast Asia, but also increased dependence on China. After all, top Russian officials have openly admitted that Beijing is their ultimate fallback option amid an increasingly comprehensive Western boycott of Russian markets and products. As a result, Moscow, now dealing with weaker hands, may be forced to reconsider arming and supporting China’s rivals across adjacent waters in order to keep Beijing on its side in these challenging times. 

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