Suthichai Yoon (via interpreter): What are the main outcomes of your visit to Thailand?
Dmitry Medvedev: The visit was a success.
I first met with Thailand’s Prime Minister Prayut Chan-o-cha at the East Asia Summit in Myanmar. Back then, I reminded him that our countries have established friendly relations 118 years ago. He even mentioned this fact in a recent interview. Now we must create a platform that would pave the way to another 118 years of friendship. It is for this reason that we organised this visit, during which over 10 important agreements were signed. This is not just about signing documents. Business-to-business and people-to-people contacts are also vitally important.
I have just met with representatives of the Thai business community. They are quite positive and are looking forward to exporting to Russia. They are ready to undertake investment projects, and Russian businesses are also ready to invest in Thailand. And this doesn’t even include important areas of cooperation like tourism. This is why I’m optimistic about the future.
Suthichai Yoon: Could this be a new chapter in the relations between Russia and Thailand?
Dmitry Medvedev: Yes, you can say so, at least symbolically. But I think that this is not so much about a new chapter as it is about not losing any of our recent achievements. To be honest with you, Thailand is Russia’s biggest ASEAN partner. Trade between our countries has already reached $4 billion, according to our estimates, and $5 billion dollars, according to Thailand. The 5 billion figure is also correct, since it includes trade via third countries. It seems like a lot, but at the same time it’s not, once you compare it with our trade with countries like China. Russia’s trade with China is almost $100 billion. So there is definitely room to grow.
Second, we have reached important results in various areas. There are great opportunities in agriculture and agricultural exports to Russia. As you know, our market is currently closed for a number of European countries, while remaining open to our partners in the Asia-Pacific. Moreover, some of your exports to Russia cannot be produced in our country, including some types of seafood, etc. This means that we will always welcome imports. There are some ideas regarding joint projects. I have just discussed this with the head of CP Group with respect to investment in Russia’s livestock breeding.
There are a number of ideas regarding transport, railways, high technology and medicine. So I think that in this respect everything is going well. But we must move forward.
Finally, today I made a proposal to my counterpart on the creation of a free trade zone with the Eurasian Economic Union along the same lines as we are about to do with Vietnam. Let me remind you that by May the Eurasian Economic Union will have five member countries with a total of 180 million people. Consequently, gaining a foothold in one country means entering all five markets. This is a great opportunity. Our colleagues should give it some thought, given Thailand’s advanced relations within ASEAN. You may be interested in such an opportunity, and we are ready to discuss it.
Suthichai Yoon: As far as I understand, the free trade area agreement will be the next big step in relations between the two countries?
Dmitry Medvedev: It all depends on Thailand.
Suthichai Yoon: Right, I think that Thailand is also interested in this. How quickly can it be done?
Dmitry Medvedev: It’s a process, of course. For example, the negotiations with Vietnam lasted for quite a long time, but we were still able to agree almost everything. And we faced perhaps even more challenges with Vietnam than Thailand. Of course, it will require some time. If you are interested, we are ready to consider this possibility.
There is another interesting possibility. As you may be aware, we are developing our Far Eastern regions with their vast territories and scarce population. We have come up with a legal construct which we refer to as “priority development area.” In fact, these are preferential zones with special taxation arrangements, simplified customs regulations and expedited land transfer procedures. Our Thai partners might be interested in this, and they are welcome to participate.
Suthichai Yoon: What about the Russian economy? I see that the rouble has stabilised a little in the first quarter. Everything is not as bad as it seems from the outside.
Dmitry Medvedev: We’ve had better times in Russia. The going got really tough last year. There are two contributing factors: the dramatic decline of oil prices, which our economy greatly depends on, and the hostile stance adopted by several countries which have imposed financial and other sanctions on Russia. Of course, that hasn’t helped us, either. However, nothing really major is happening. True, there have been some changes on the currency market: the rouble weakened and devalued, but the trend was halted, and now the rouble is gaining strength. The entire financial sphere has somewhat stabilised as well.
You faced a similar situation in Thailand in 1997, if memory serves, when you adopted a floating exchange rate for the baht. This may not always be a pleasant thing to do, because people usually feel the pinch. On the other hand, in that case pricing becomes truly market-based, and currency speculators or foreign influences don’t affect the national currency as much. We did the same thing. So, now we don’t have any currency bands for the rouble, which is now traded freely.
Suthichai Yoon: So it’s a managed float? You didn’t let it float completely free?
Dmitry Medvedev: If that’s the decision the Central Bank makes, but it hasn’t done so lately… The Central Bank can indeed sell a certain amount of hard currency on the market, but there’s no reason to, even though we still have substantial international reserves. We need the rouble to reach a balanced state. I am confident that it is going to strengthen as the economy recovers. On the other hand, as you know, it’s not good for a currency to grow too strong, because it weakens exports. There is always a choice to be made between stabilising the domestic market and supporting exports. Overall, I think the situation is normal, stable and under control. The difficulties that emerged last year will probably linger into 2015, at least to some extent, but we expect economic growth to resume and the currency to stabilise soon enough, possibly next year. On the other hand, there are other important indicators that we always take into account – such as the debt to GDP ratio. It is extremely low in Russia, no more than 10% of GDP. Unemployment remains low as well; this is something we value, and we’ll make further efforts to keep it down.
Suthichai Yoon: Is there anything Thailand could do to help? We could supply foodstuffs. Maybe economic cooperation could help you recover faster. We are a small country, I know, but as a friendly nation, we have to ask.
Dmitry Medvedev: Don’t be modest – Thailand is not such a small country. It is actually quite big by European standards, with 69 million people. That’s the first thing. Second, the best way to grow is through joint investment. I think this would be the best way forward for our bilateral relations – Thai investment in Russia and Russian investment in Thailand. This is what will help us overcome the kinds of problems that every economy faces eventually.
Suthichai Yoon: Does this mean that we can help you with this? The depreciation of the rouble has had a direct effect on Thailand, because the number of Russian tourists has decreased. Can we reverse this trend?
Dmitry Medvedev: It’s not that dramatic, although the number of tourists has indeed decreased from 2014. We put the decline at somewhere in the range of 25 to 30 percent. But first of all, this is not the end of the story, and some parameters may improve before the year is over as the rouble appreciates; and second, last year you had an unprecedented number of Russian tourists. The situation can change from year to year. But, even though we are promoting domestic tourism – you know, Russia is a very large and interesting country – Thailand will not lose its appeal for our people. Russians love Thailand, they love to vacation here, and often come back. On the other hand, there are things we can do to more quickly overcome the current problems. As I told our business partners today: “Colleagues, you could look for cheaper products you can offer at this moment. And later the situation will improve; I have no doubt about that.”
Suthichai Yoon: The next time you come to Thailand, go to Pattaya. It has really become a Russian city. There’s a joke which you might want to take back to Russia with you: If a referendum were held in Pattaya, it might vote to become a Russian city, to join Russia.
Dmitry Medvedev: No, we’d like Pattaya to remain a Thai city, as long as our people can keep going there on vacation. We will certainly continue to promote domestic tourism, because there are interesting destinations in Russia, but there are also warm countries, and you can’t escape that fact. Many people want a bit of warmth in winter, and so they come here. This is normal and will continue.
Suthichai Yoon: How has the recent coup in Thailand influenced bilateral relations? Has it changed your attitude to Thailand? The EU and the United States have denounced it, while China has shown understanding. Other ASEAN countries have expressed sympathy. What does Russia think about the change of regime in Thailand and about the new government?
Dmitry Medvedev: You know, we try to be civilised in all circumstances. Regarding the ongoing events in Thailand, they are your country’s internal affairs. We approach them with understanding and respect.
On the other hand, some countries get really worked up about events in countries across the globe. I think the concern is excessive, and the lecturing is unnecessary. Sovereign countries must deal with their problems independently. Both Russia and Thailand can deal with our problems ourselves – we with our friends and partners in the West, and you with your partners in ASEAN and in the West. I think we should get back to the foundational principles of international law – excuse the legalese, but I was trained as a lawyer, after all – and this will be the best formula to follow in international affairs.
Suthichai Yoon: I’ve noticed that your Government is active in Asia, especially South Asia. Do this represent some kind of an effort to counter US influence in the region?
Dmitry Medvedev: Unlike a number of other countries, Russia has had friendly relations with these countries for almost 120 years. We have advanced relations with Asia Pacific countries. After all, we’re neighbours! Thailand is a little farther from Russia compared to China, with which we share a long border. Russia has maintained friendly ties with a number of other countries as well… The same goes for the Soviet era, although back then cooperation was based on ideology: if you start building socialism, then we’ll provide assistance. That’s not what we want. Every country should be free to establish a system chosen by its people.
By the way, I think that the advantage of your country and the reason why many people love it is, to some extent, based on the fact that Thailand was never under colonial rule. You were able to maintain your identity and culture, which can be seen everywhere. When you go to a standardised country, where the signs are not in the native language and all the restaurants and museums are the same as everywhere else, it’s not interesting. Your country is very distinctive and true to its roots. I think the fact that you’ve been able to preserve this identity is very valuable and important. For this reason, while it is true that Russia is proactively developing relations with Southeast Asia and ASEAN countries, we are not copying anyone or acting to spite anyone, neither the Americans, nor the Europeans. We have always acted this way, and will continue to, even more so moving forward. We have taken a number of very important decisions in this respect, including, for instance, to develop cooperation with Southeast Asia in energy and transport. We have signed major contracts on the delivery of our oil and gas to China, and we can also supply our energy resources to other countries in Southeast Asia. An agreement on road junctions and transport links has been signed. We are ready to discuss such major projects as the construction of nuclear power stations, which we build across the globe. I came here from Vietnam, where we discussed this matter with our Vietnamese colleagues. If Thailand decides at a certain point to develop nuclear energy, we are ready to help. And there are many more examples.
Suthichai Yoon: Does that mean you’re interested in helping Thailand build a nuclear power station?
Dmitry Medvedev: It is a decision, a choice to be made. Obviously, nuclear energy requires utmost attention. It’s an issue that is taken very seriously after Fukushima. I’ll tell you, first, that it’s viewed very seriously in Russia, especially in the aftermath of the 1986 accident in Chernobyl. Second, the reactors we currently use are based on different principles. And third, this is perhaps the least expensive energy source, no matter how you look at it.
Suthichai Yoon: You also have state-of-the-art weapons. Are you prepared to discuss, for example, the purchase of agricultural products from Thailand and the sale of helicopters, tanks, and submarines to it?
Dmitry Medvedev: Of course. If needed, we’ll supply tanks and other types of equipment. As you know, Russia is a major arms exporter. We have no misgivings about it, because states will have armies regardless. No one is willing to disarm just for the sake of disarming. In any event, to be respected, you must have sufficient armed forces. Therefore, if you take these decisions, we’ll be pleased to supply the equipment, even taking into account the fact that Thailand traditionally has been oriented to Western suppliers. Our weapons are no worse than theirs.
Remark: Yes, I know, and they are cheaper.
Dmitry Medvedev: Some types are certainly cheaper.
Suthichai Yoon: The big question is how things will end in Ukraine? Is a peaceful solution possible?
Dmitry Medvedev: A peaceful and negotiated end is possible. For us, it’s a very difficult and painful subject, because we have a close affinity with the people of Ukraine. Regrettably, the nation is divided, and events have occurred in Ukraine that we cannot support for various reasons. But they must restore their country on their own. By themselves. The Kiev authorities and Ukraine must do all they can to keep the country united and encourage the regions that have, in effect, seceded from the central government to return. But the necessary conditions must be created for that, and it ought to be explained to them why they will be better off as part of a united Ukraine. Only the authorities in Kiev can do this. Naturally, we’ll seek to help this process along, but we won’t interfere. At the same time, we can’t be indifferent when we see that people are hungry and lack medicine there. This is why we are sending humanitarian convoys to the southeast of Ukraine. But this is about all we can do in this situation.
Yoon: Thank you very much,
Mr Prime Minister.