Travel to Russia
Question: How is Thailand positioned in the eyes of Russia? What does Thailand mean to Russia?
Answer: Russians believe that Thailand is a paradise on earth. A fairytale. A dream come true. This is not a fantasy but the conclusion that hundreds of thousands of my compatriots made basing on their first-hand experience. For the last six years, the average number of Russian tourists annually visiting Thailand was 1.3 million. It means that since Thailand became one of the favorite destinations for travelers from Russia millions of them enjoyed your hospitality. I am sure there will be even more Russian visitors in the future. It’s “a life-long romance”.
At the same time for Russia Thailand is a friend. Traditions of close friendship and alliance go back to late 19th century when the Russian Empire stretched out its helping hand to the Kingdom of Siam risking to lose its independence.
In the recent years, Thailand and Russia are discovering each other as economic partners, as like-minded countries sharing same values and identical views on many issues. Russians begin to realize that Thailand is not only a “Land of Smiles” but also a strong economy, an industrial giant with advanced level of technology and a large service sector, not to mention a powerful agricultural sector.
For Moscow, which is shifting the focus of its foreign and economic policies to the Asia Pacific region, Bangkok is an important partner, an influential player, a key ASEAN member state and participant of all major regional groupings – East Asia Summits, APEC, Asia Cooperation Dialogue, to name a few.
Question: How has Russian-Thai relationship changed over the past 120 years?
Answer: In their relations, our countries have come a long way. Along this path, there have been ups and downs, good times and bad times, but we have never been adversaries. Cordial friendship has always been a trademark of our relations. Although much has changed over the past 120 years, this “trademark” remained.
120 years back the relations between the two nations were mainly concentrated on the durable bonds between the two monarchs and the two royal families. Now our bilateral relations engage political leaders, governments, business communities, cultural circles and people at large. Just imagine: today hundreds of thousands of Russians and Thais travel between Moscow and Bangkok every year for business purposes and to spend holidays. Twelve Russian cities are connected to Thailand with over 80 regular and charter flights per week performed by a dozen Russian and Thai air companies, both state-owned and private. Hundreds of officials and businessmen are involved in mutual interaction.
Question: Among many aspects of relationship, which aspect is now the most prominent in the Russian-Thai relationship?
Answer: All aspects are equally important.
Our leaders maintain an intensive political dialogue exchanging visits and messages. Over the last two years, this dialog has intensified: in April 2015 Russian Prime Minister Mr. Dmitry Medvedev paid an official visit to Thailand and in May 2016 Thai Prime Minister General Prayut Chan-o-cha was on an official visit in Russia where he met President Vladimir Putin.
Trade and economic cooperation is gaining momentum. The Russian-Thai Joint Commission on Bilateral Cooperation convened its 6th Meeting in July 2015 and its 7th Meeting is to be held this year. Under the umbrella of the Joint Commission, there are two Sub-Commissions – on trade and on agriculture (both plan their regular sessions shortly) and four Working Groups – on Energy, on Peaceful Use of Nuclear Energy, on Financial and Banking Cooperation and on Tourism. Entrepreneurs of Russia and Thailand promote economic interaction through their business associations – Russian-Thai Business Council, Thai-Russian Business Council and Thai-Russian Chamber of Commerce that are doing a great job.
Investment cooperation is on the rise. CP Group topped the list of private investors from the ASEAN region to the Russian economy. Russian big companies are actively studying the opportunities opening on the Thai market too while some joint ventures have already successfully work in Thailand in such areas as food production, real estate, jewelry and hospitality business.
Cultural exchanges are thriving. To celebrate 120-th anniversary of the establishment of diplomatic relations between our countries in 2017 the two sides elaborated multi-faceted programs of activities, which include dozens of projects from ballet and dance performances to art and photo exhibitions to academic conferences.
The importance of cooperation in education has been recognized by both sides. Over the last 10 years more than 1000 Thai students have been trained in Russia, more than 200 students are doing their studies in my country now. Every year 30 to 40 talented young Thai boys and girls receive Russian Government scholarships.
Foreign policy coordination is based on the Plan of Consultations for 2016-2018 signed by our Foreign Ministers in July 2015. It includes a regular dialogue on such issues as UN and other international organizations, disarmament and non-proliferation of WMD, Asia Pacific, Middle East, public relations etc.
That said it is not surprising that in May 2016 our leaders agreed to strive for building strategic partnership between Russia and Thailand in the future.
Question: What is your projection of the trade and investment between Russia and Thailand in the next 5 and in the next 10 years?
Answer: To answer this question we need to assess the current situation – where we are, what we want and what we can do – and to understand the existing trends.
According to the Russian statistical data, the Russian-Thai trade turnover in 2016 was USD 1.8 billion. Thai statistics gives USD 1.9 billion. Unfortunately, the trade volume was shrinking for two consecutive years in 2016 and 2016. Let me remind you that in 2014 Russian-Thai trade turnover reached record-high USD 4.9 billion. We know the reasons why this happened. Most of them are related to the global economic recession, sharp drop of the oil prices in 2015 and devaluation of Russian ruble that followed. We are also aware of the fact that the physical volume of the export and import operations remained largely the same. But we have to admit that the figures are not impressive at all.
However, economic activity between our countries is increasing. The major trends in the Russian-Thai economic cooperation include growing mutual investments and emergence of new start-ups, enhancing collaboration between banks and establishing effective payment mechanisms, exploring new areas of cooperation with a particular emphasis on IT and innovations.
Two years ago the Prime Ministers of Russia and Thailand set the goal – to bring the trade volume to the level of USD 10 billion by 2020. This will not be an easy task. But given the political will of the two Governments, the mechanisms of G-to-G cooperation that we are building and the growing interest of the Russian and Thai business communities towards each other, achieving this goal is feasible.
If we speak about a longer period, I would not be surprised if in 10 years Thailand which is now the second biggest trade partner for Russia among ASEAN countries will become our number one trade partner. Especially if Thailand signs a Free Trade Agreement with the Eurasian Economic Union. The Thai side filed an official application in September 2016 and now the parties are discussing a draft Memorandum of Understanding between the Royal Thai Government and the Eurasian Economic Commission.
Question: How will the FTA between Thailand, ASEAN, Russia and the Eurasian Economic Union change the face of the global economic landscape?
Answer: In January 2015, the Eurasian Economic Union was launched – a far-reaching integration project initiated by Russia, Kazakhstan, Belarus and later joined by Armenia and Kyrgyzstan. In December 2015 Mr. Vladimir Putin, President of Russia, came up with a new initiative to shape Comprehensive Eurasian Economic partnership between EAEU, SCO and ASEAN member states, or “Larger Eurasia”.
Of course, implementation of this megaproject will take time. However, we are ready to patiently work with each partner, to create conducive environment for a deeper integration of our economies. For example, with Vietnam the EAEU already signed a Free Trade Agreement. Next on the list are Iran, Egypt and Serbia. With India, Israel and Singapore we are setting up working groups to do feasibility studies. Russia has kicked off negotiations with China on draft Economic and Trade Agreement meanwhile harmonizing our “Larger Eurasia” project with the Chinese “One Road, One Belt” initiative.
If our efforts succeed, the trade barriers within the broad landmass of the Eurasian continent will be removed thus enormously facilitating trade between the participants of the new partnership. This will be a new economic reality with a stronger physical connectivity and harmonized legislation. Such development will bring about unprecedented dynamism to the social and economic development of a wide spectrum of countries of Eurasia – from Russia in the North and Indonesia in the South, from Belarus in the West and China in the East. Thailand as a committed advocate of trade liberalization will be one of the clear beneficiaries.
Question: Thailand’s trade deficit to Russia is still huge. What are your suggestions to improve the balance? What cooperation in the near future can help?
Answer: We are of a different view. The Russian Customs believes that it is Russia, which is running a deficit in its trade with Thailand. The reason for discrepancy in data is the difference in statistical methods used by our respective Customs Offices.
In fact, the Thai statistics may be more accurate because in its evaluation of export it takes into consideration the country of origin of goods. Nevertheless, even if it were so I would not say that Thailand has a huge deficit in its trade with Russia. The real deficit is not more than 10 % of the total volume of the bilateral trade. Moreover, the deficit is decreasing. Our analysis is that in 2015 and 2016 our mutual trade became more balanced than before.
To expand its export to Russia, Thailand should promote those commodities that are of high quality and are on high demand. Among them may be automobiles, auto parts and microelectronic items as well as products of agriculture, fishery and aquaculture – special sorts of Thai rice, cooked chicken meat, natural rubber, tropical fruit, fish, seafood, etc. Given the tough competition on our market these days, Thai partners should promote their products in a more aggressive way and scrupulously learn how to do business in Russia.
Question: Could you please describe the Russian-Thai military and security relationship at the moment?
Answer: Russia and Thailand can be proud of excellent military relationship – the best since the time when Prince Chakrabongse, the son of King Rama V, graduated from the General Staff Academy of the Russian Imperial Army in Saint Petersburg. Based on the deep historic roots and strong state-to-state relations free from political problems our military ties are rapidly advancing.
In May 2016 during the visit of General Prayut to Russia, intergovernmental Agreement on Military Cooperation was signed. Deputy Prime Minister, Minister of Defence of Thailand General Prawit Wongsuwon visited Russia in February and in April 2016. In mid-March 2017, The Royal Thai Army received Colonel-General Oleg Salyukov, Commander-in-Chief of the Russian Land Forces. Russian Navy warships made friendly visits to Thailand in 2015 and 2016. Russian military medical team, a hospital ship and rescue helicopters took part in the ADMM Plus AmHex-2016 military exercises in Thailand. Russia helped to establish ASEAN Center for Military Medicine in Bangkok and will continue to provide assistance in order to improve its performance.
In February 2016 in the framework of the visit of Mr. Nikolai Patrushev, Secretary of the Security Council the Russian Federation to Bangkok the 2nd meeting of the Russian-Thai Working Group on Security Cooperation was held. The Royal Thai Army is demonstrating interest in continuing procurement of Russia-produced armaments and military equipment.
It is easy to see that nowadays Russian-Thai military cooperation has become an important factor of enhanced regional security and stability in Asia and the Pacific.
Question: What are the problems still needed to be addressed and solved in the Russian-Thai relationship?
Answer: We definitely need to know each other better. We need more contacts and more cooperation. In my view, the biggest problem is the lack of knowledge of each other and the lack of mutual understanding.
While the inflow of Russian tourists is showing a record high score, the number of Thai tourists visiting my country is still too small. We hope that more Thai people will travel to Russia using the advantage of a 30-days visa-free regime and a good exchange rate of Thai baht and Russian ruble. Next year my country will host the FIFA World Cup, and we expect to welcome many Thai football fans in Russia in summer 2018.
Our business communities need to develop a habit of cooperation with each other. Alongside a better access to market information, mutual understanding and mutual trust are very important. I wish Thai business people could have more confidence in Russia and the success of its economic rise.
This year Russia and Thailand celebrate 120th anniversary of the establishment of diplomatic relations. It is my strong belief and sincere hope that the series of commemoration and cultural events planned by both sides will substantially raise the awareness of the Russian and Thai people of the glorious heritage of our historic ties and of vast opportunities that our relations can provide.