Executive Summary
Russia’s ambitious decision to ‘rebalance’ its strategic orientation towards Asia is going relatively unnoticed, yet has the potential to generate significant regional effects. It is engaging in a large-scale military modernisation project with the intention of projecting power into Asia. Its relationship with China seems to have deepened considerably. And it is looking to consolidate new and existing partnerships in Australia’s regional area of interest in the Indo-Pacific. At the same time, Russia is seeking to tap its considerable energy and resource reserves in the Far East to become a major Asian energy supplier.

This recent boldness stems from Russia’s fear of its future weakness. Moscow has no wish to become China’s raw materials supplier, but nor does it want to be a subordinate partner of the West. Instead, it seeks a degree of independence through Putin’s great power vision of Russia as a Euro-Pacific actor. Russia will by necessity have to follow through with its pivot to Asia, and this will mean an increased commitment to make gains in energy, in trade, and in military presence. Australia will need to respond to an enhanced Russian regional presence, as well as take a proactive stance to ensure competition from Moscow does not adversely affect Australian energy security. But there will also be some small incremental opportunities for Australia to re-engage with Russia, in spite of the ongoing friction in the relationship caused by the downing of Malaysia Airlines Flight 17 and Russia’s actions in Ukraine.

After years of focusing heavily on Europe and the broader West, Russia’s strategic posture is currently undergoing a fundamental reorientation towards Asia. In terms of Moscow’s stated intentions, this is not a new phenomenon. In fact, Russia has announced plans to ‘turn East’ on a number of previous occasions. In each past instance a combination of weak capacity, internal obstacles, and international events have thwarted such a move. With that in mind, it is tempting to dismiss as another unworkable grand promise President Vladimir Putin’s declaration that pivoting East would be Russia’s main nation-building task of the twenty-first century.

On this occasion, however, the circumstances are different. First, an Asian pivot has become an imperative for Russia rather than a choice. Just as the US Department of Defense announced in 2012 that it would “of necessity” rebalance to the Asia-Pacific Russia sees the need to do so as central to its future power, prosperity, and prestige. Second, Russia is clearly calculating that the twenty-first century will be Asian in character, with a centre of gravity located around Beijing. Third, even a rudimentary strategic projection reveals that Moscow has only a relatively brief window of opportunity to cement itself as a major regional player.

Failure to achieve a successful Russian rebalance will lead to serious weakness, if not outright marginalisation. Within the next 20 to 30 years, if Russia is unable to extend its energy footprint eastwards, if it is incapable of matching new trade deals with an enhanced military presence, and if it fails to embed itself at least partially in a Sino-centric multilateral order, then it will lack the economic, strategic, and institutional basis to advance its interests. Even so, it will face stiff competition for European oil and gas markets from the United States, which is turning itself into an energy behemoth. Its behaviour over Ukraine and Crimea will ensure that it remains excluded from European security architecture. And in the absence of profound internal political change, a wariness of Russian realpolitik will make Western states hesitant about creating networks with Moscow that are based on anything other than expediency. Russia’s future, therefore, will be largely dictated by how successful it is in its new Asian tilt.

This Analysis argues that Asian and Australian policymakers should take Russia’s pivot seriously. First, it examines the strategic rationales behind Russia’s rebalance and assesses the geopolitical, economic, and regional effects of Russia’s pivot. It also looks at the internal and external obstacles facing Russia, and explores the implications of Russia’s rebalance for Australia as well as potential responses.