Russia-Vietnam: How to Retain a Strategic Advantage?

During the next few years, it will be more difficult for Russia to keep Vietnam interested, although their military-technical cooperation will persist as the basis of firm political positions. But Russia should be ready to face a big challenge as Vietnam diversifies its foreign policy. Therefore it is important to start promoting contacts with Vietnamese colleagues right now in order to discuss regional security approaches and the security role envisaged for Russia. 

The Russian-Vietnamese political relationship is usually rated highly. Unlike relations with other Southeast Asian countries, it is characterized by an enviable density and level of interaction. Leaders of the two countries meet each year in one format or another. The official assessment of their economic relations is somewhat less positive, since the real level of bilateral trade is still rather low. Even though it has grown by 36 percent on the previous year topping $5 billion, it is still a sufficiently modest figure. That said, the task for the future is to double trade volumes to $10 billion by 2020, even though both Russia and Vietnam had to work for years to reach the current threshold.

However, trade and economic relations between Moscow and Hanoi are truly strategic in a number of areas, primarily oil and gas (Russia leads on the Vietnamese market) as well as several new ones, such as food exports (wheat, maize, meat, etc.).

An EAEU-Vietnam FTA was launched in late 2016, obviously contributing to the above-mentioned upswing, although it is rather difficult to gauge the economic effects of any FTA. However, it did have an information effect, with business communities in both EAEU countries and Vietnam ending up better informed about export opportunities. This was the result of an intense political effort to promote bilateral successes, Russian policies, and Eurasian integration ideas in Southeast Asia.

Military-technical cooperation between the two countries is looming large in the security sphere. Given Vietnam’s policy to diversify its foreign policy contacts and strengthen relations with the United States at a fast rate, Russia still dominates its market as an arms supplier and this situation is unlikely to change any time soon. The kind of weapons supplied enables Vietnam to contain some of its restless neighbors in the region. Currently, Vietnam’s arms orders in Russia are estimated at $1 billion. The biggest recent deals include the purchase of Varshavyanka submarines and the delivery of T-90S and T-90SK tanks. The sale of S-400 system is under discussion.

Cybersecurity is an important new focal point in bilateral relations, with an intergovernmental agreement on information security cooperation being signed during General Secretary of the Communist Party of Vietnam Nguyen Phu Trong’s recent visit to Russia. This is a highly important step, since both countries are characterized by similar approaches to this matter, while Russia has technologies and R&D it can share with Vietnam.

Although Russian-Vietnamese relations started developing at a higher basic level, their dynamism is inferior to that of Vietnam’s relations with the US, Japan or India. In this sense, Russia risks losing its competitive advantage in the strategic security area within the next 15 years. Developments involving Vietnam move fast, given the growth of rivalry for cooperation with Hanoi. There are various “Indo-Pacific initiatives” and strategies and discussions on quadrilateral consultations between the US, India, Japan and Australia are being resumed. In this context, Vietnam is often mentioned as their main partner from among the ASEAN countries. Contacts with Vietnamese exporters clearly show that there are vast differences between Russian and Vietnamese approaches to, for example, the US role in the region, as well as divergent attitudes to various regional megaprojects.

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This has much to do with the fact that of all the Southeast Asian countries, Vietnam is perhaps most resolutely determined to defend its interests vis-a-vis China. Vietnamese scholars with a close affinity to official circles often emphasize the priority of maritime security, implying the defense of Vietnamese interests in the South China Sea. Thereby they actually invite India, the US, Japan and Australia to be more active in the region. For the time being, Vietnam-Russia relations are isolated, in a positive way, from regional squabbles, but the emergence of problems in the future is practically inevitable and therefore a start should be made in discussing them right now.

The US sanctions against Russia could also cloud its relations with Vietnam. The first difficulties are already in evidence. For example, Russia’s Silovye Mashiny company working on the Long Phu 1 thermal power plant project has lost contractors due to sanctions and is faced with payments problems.

Within the next few years, it will be more difficult for Russia to keep Vietnam interested, although their military-technical cooperation will persist as the basis for other policies, provided both countries find a format for interaction in a sanctions environment. But Russia should be ready to face a big challenge as Vietnam diversifies its foreign policy course. Therefore, it is important to start promoting contacts with Vietnamese colleagues right now in order to discuss regional security approaches and the security role envisaged for Russia.

 

Views expressed are of individual Members and Contributors, rather than the Club's, unless explicitly stated otherwise.