Thailand’s business opportunities amid Russia-Ukraine crisis

Russia’s trade minister said the West’s economic boycott would prompt his country to expand markets in Asia and give Thailand the opportunity to bag a bigger share in Russia.

The Nation

The Nation



Russia’s trade minister said the crisis brought on by the West’s economic boycott would prompt his country to expand markets in Asia and also give Thailand the opportunity to bag a bigger market share in Russia.

May 26, 2022

BANGKOK – What effect do the western sanctions have on Russia and globally?

Maxim Reshetnikov – First of all, thank you so much for the opportunity to answer questions and convey our position to the people of Thailand. Relations between Russia and Thailand have a long history; this year we are celebrating the 125th anniversary of the establishment of diplomatic relations between the countries. They have not only a wonderful history but also great opportunities for development. I’m sure they have a bright future. Regarding the sanctions, Russia has been living under sanctions for a long time, back in 2014 the first package of sanctions was adopted. As a result, we were able to take advantage of the external pressure to strengthen our economy, we significantly increased both our agro-industrial sector and our automotive industry, and used this time to diversify our exports, including fuel and energy. At the same time, the wave of sanctions in recent months is certainly unprecedented. They covered more than 10 thousand Russian legal entities and individuals, and affected many sectors of the economy. Moreover, they went far beyond the legal framework that was established in the world. I am talking about the seizure of gold and currency reserves as well as the seizure of property of the Russian legal entities and citizens in Europe. Now we can already say that Russia withstood this sanctions pressure. Nowadays our financial markets have stabilized, our ruble has strengthened, inflation is declining, processes of structural restructuring of the economy have been launched, and a reorientation from the western markets and the western value chains to the East, primarily to Asian markets, is underway.

And, as in all such situations, sanctions pose problems on the one hand, but at the same time, they open opportunities. Opportunities for the Thai economy to enter the Russian market and fill empty sectors of the economy, that have formed. Opportunities for the Russian enterprises, which are now actively looking for new markets and reorienting their products: fuel and energy resources, oil, oil products, gas, fertilizers, food products, engineering and machine goods. We are here to discuss how to make the most profit from the opportunities that are now opening up.

Russian economy’s sectors that Thailand can make investments

Maxim Reshetnikov – The first thing I would like to say is that we have a successful example of Thailand’s investments in the Russian economy – this is the CP Foods company, which has invested more than 2 billion US dollars in the Russian agriculture and is generally developing effectively. It is a notable player in the Russian market, which develops export projects. Possible areas of investment are fuel and energy resources. What also we care about now is that we are facing a major restructuring, including in the automotive industry. Considering that Thailand has a serious industry related to the production of automotive components, this area may also be promising. Both the Russian and Thai economies are very diversified and complement each other quite well. One of the issues that the Thai government is interested in is mineral fertilizers. We care about it as well, because we are reliable exporters of these fertilizers. Frankly, we have a lot of spheres.


Maxim Reshetnikov: We understood that such risks would be possible, therefore, in recent years, Russia has been developing its own financial messaging system. Inside, all-Russian banks are connected to this financial system, so there are no problems with the money transaction within the country. We also have our own system of bank cards “MIR”. We also propose to introduce it in Thailand. Moreover, many foreign banks connect to the mentioned system of financial messages, and this provides us with independence in making payments. We welcome the connection of our banks to the Chinese CIPS system, which we also use to service export and import operations.

The decision of Western countries to cut off from the Russian fuel, what are the long-term consequences?

Maxim Reshetnikov: We assume that Russia is a very large supplier of resources. It is difficult to replace it with anything else. Moreover, there will be a reorientation of resources: it is obvious that Europe will take oil and oil products from the American continent or from Asia, while Russia will offer and promote its oil to the Asian market. But this will require a fairly significant change in logistics and, unfortunately, for the consumer, this will result in an increase in the cost of petroleum products. First of all, European consumers will have to pay for this, because the cost of fuel will increase there, while Asian consumers, in our point of view, will benefit from it, because competition in Asian markets will increase in this regard.

How long the current situation in the world will continue?

Maxim Reshetnikov: We assume that this is a fairly long-term trend. Accelerating the reorientation to the eastern markets is a strategic direction for us, and we will make every effort to be integrated into value chains together with the Asian countries, Arab countries, and South America. The world is becoming less monocentric and current events will push the dollar-based monetary system away from the world. There will be more diverse technological development. The world will become a larger number of independent economic centres.

About walkout of several countries during the meeting.

Maxim Reshetnikov: It is better to ask for comments from those countries that came out. The Thai side did a gigantic job in preparation for the event, during the conduction of the event, in negotiating the texts of the joint statement, trying to reconcile very different positions and come out in a positive way. I understand what huge efforts were made. It seems to me that it is very important that discussions move beyond words, the desire to achieve results and eventually reach a constructive conclusion. And such kinds of demarches that you mentioned are not conducive to reaching such agreements.

The visit of President Putin to the APEC Summit.

Maxim Reshetnikov: This question should be addressed to the Ministry of Foreign Affairs of Russia.

What problems in the economy make President Putin worry mostly?

Maxim Reshetnikov: The subject of the President’s attention in the economic sphere is, first of all, the incomes of Russian citizens, therefore our entire economic policy is built on two ultimate goals: the reduction of unemployment and the growth of wages and incomes, including social benefits of citizens. These issues are being discussed and our efforts are focused on them.

Published : May 25, 2022

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