Russian Federation Ambassador in Indonesia commented on cooperation between the two countries.

The Asia Pacific has not historically ranked high in Russia’s foreign policy reach. That is now changing, Russian ambassador to Indonesia Alexander A. Ivanov tells GobeAsia. A visit to Bali's Kuta Beach today inevitably comes with a Russian accent. In recent years, Russian tourists have become commonplace on Bali’s beaches, and in bars and restaurants. Relative newcomers to the global tourism industry, the Russians are fast becoming major players, especially in the Far East.

Following closely behind the Russian tourists are Russian companies looking for opportunities in Indonesia’s rapidly expanding natural resources and energy sectors. While the growing business ties may be new, Russia and Indonesia enjoy a long history of cooperation, with the two countries recently marking their 60th anniversary of establishing diplomatic relations.

Russia’s Look East policy began in earnest in the late 1990s, says Alexander A. Ivanov, ambassador of the Russian Federation to Indonesia. When former Russian President Vladimir Putin - now the prime minister - visited Indonesia in 2007, it was the first visit by a Russian head of state to Indonesia for more than half a century.“It was a very important step in the promotion of our diplomatic relations,” says Ivanov. Putin’s visit was a follow-up to President Susilo Bambang Yudhoyono’s visit to Moscow in 2006. “These visits were a milestone in improving our cooperation in various fields.”

Closer diplomatic ties have indeed led to growing trade ties. In 2008, total bilateral trade between Indonesia and Russia totaled $1.6 billion “but the potential is much greater,” says the ambassador. “I think it should be at least $10 billion but the financial crisis has prevented us from moving faster.”

More is starting to happen as more Russian private companies seek business opportunities in Indonesia, especially in the energy sector. One Russian company, Power Machines, is for example negotiating with state utility PT PLN to build two 660 MW power plants in Indramayu in West Java. The investment will be worth $1.5 billion and, if successful, will mark the first time Russian companies have been involved in Indonesia’s power sector.

“A few years back, Russian private businesses were not present in Indonesia,” notes the ambassador. “Now we have the Russian Business Cooperation with Indonesia and Kadin (Indonesian Chamber of Commerce and Industry) has a similar body. The creation of the business body was a breakthrough for business relations.”

Russia is also cooperating with Indonesia to launch the Telcom 3 satellite as well as to help Pertamina maximize aging oil fields with equipment provided by Petros, the Russian oil company. “The launch of the Telkom 3 satellite will give Indonesian space scientists a unique opportunity to learn about building a satellite,” adds Ivanov.

Beyond the economic realm, Ivanov believes the two nations have a lot in common, especially in developing a new architecture in the Asia-Pacific region. He admits that immediately following the dissolution of the former Soviet Union, Russia looked West to rebuild its relations with Western powers.

Over the past decade, however, it has begun to pay more attention to its eastern neighbors, especially rising China and Southeast Asia. The rise of China, he says, provides nations in the Asia-Pacific with a window of opportunity as a new growth engine.

“I don’t see any threat or challenge from China’s rise,” notes Ivanov. “It is promoting a very constructive balance to world affairs.” Unlike Europe, Asia does not have an all-embracing organization, which means it requires a multi-lateral approach to managing affairs in the region. “Because of that, we should develop network diplomacy in the region,” he says. “Within that all existing multilateral organizations must establish ties and cooperate so as not to duplicate efforts and create a common Asian house where all countries feel comfortable.”

On the security front, Ivanov says all bilateral military alliances play some role in ensuring security in the region. The credo of such alliances must be multi-lateral as bilateral military alliances always raise the question “of against whom” the alliances are aimed.

Despite the peace and prosperity in the region, he says flash points remain such as terrorism and a growing arms race. Asked if a war could break out between Asian nations, he notes that the region has reached a point of no return in terms of military conflict. “Countries in this region have accumulated great experience in multi-lateral dialogue which provides us with a safety net against military conflict,” notes Ivanov. “I don’t foresee any military conflict in the region in the near future as long as we continue to develop the multi-lateral framework.”

As the Russian ambassador to Indonesia, Ivanov now spends a considerable amount of his time helping Russian companies look for reliable local business partners. The emphasis on business, he says, reflects future trends as economic ties become paramount.

“This is a good sign and I think it is irreversible,” he notes. Russian companies may lag behind their American, Japanese and European counterparts in establishing deep ties in the region, but they are moving fast to catch up.  GA