INTERNATIONAL ISSUES AND FOREIGN RELATIONS IN VIETNAM

FOREIGN RELATIONS IN VIETNAM

Vietnam has diplomatic relations with 160 countries. The first Western country to establish relations was Sweden in 1969. Vietnam normalized relations with China in 1991 and with Japan in 1993. Vietnam normalized relations with U.S. and the EU in 1995. ASEAN asked Vietnam to join in 1996. Hanoi has not yet contributed to United Nations missions but has expressed interest to do so.

Robert D. Kaplan wrote in The Atlantic, “Vietnamese are now prying their way into the developed world—for the sake of themselves and their families, obviously, but also to preserve their independence against an equally dynamic China. And as it has been since antiquity, Hanoi remains a city of nervous political calculations, the price of being a potential middle-level power—the 13th-most-populous nation in the world—with a long coastline at the crossroads of major maritime routes and close to immense offshore energy deposits. On my visit there last year, I found a country seized not only with the imperative of economic development but also with the challenge of finding a modus vivendi with its age-old neighbor and hegemon—a challenge that it increasingly looks to the United States, its onetime adversary, to help meet. [Source: Robert D. Kaplan, The Atlantic, May 21 2012 <*>]

There are only five Communist states left: China, Vietnam, Laos, North Korea and Cuba. Many of Vietnam's neighbors are suspicious of it intentions. Vietnam has good relations with both North and South Korea, which remain technically at war with each other since the 1950-53 Korean conflict ended in a truce, not a peace treaty.

During its incursion into Cambodia in 1978–89, Vietnam was isolated internationally. However, soon after the conflict was resolved in the Paris Agreement on Cambodia in October 1991, Vietnam established or reestablished diplomatic and economic relations with most of Western Europe, China, and other East Asian countries. Vietnam joined the Association of Southeast Asian Nations (ASEAN) in 1995 and the Asia-Pacific Economic Cooperation forum (APEC) in 1998. Vietnam’s foreign policy is aimed at developing good relations with a diversified mix of nations.Soon after the Paris Agreement on Cambodia resolved the conflict in October 1991, however, Vietnam established or reestablished diplomatic and economic relations with most of Western Europe, China, and other Asian countries. [Source: Library of Congress *]

Ideological affinities are driving improved relations with China, and trade between the nations soared to reach US$7.2 billion in 2004. But despite improved relations, Vietnam remains suspicious of China’s intentions. In January 2000, China and Vietnam signed a treaty defining a common land border. However, the countries both claim sovereignty over the Spratly and Paracel Islands in the South China Sea, and this dispute is a potential source of renewed tension. *

Russia’s predecessor state, the Soviet Union, was a longstanding ally and a major investor. Following the break-up of the Soviet Union, Russia reduced its investments in Vietnam. Trade also suffered as a result of a dispute over the large debt that Vietnam owed the Soviet Union. This debt has been restructured to Vietnam’s benefit so that Vietnam now must repay only 15 percent, with payments stretched over two decades. Part of the debt is repayable in commodities such as rice and coffee. *

Vietnam said it would begin participating in UN peacekeeping operations in 2014. [Source: Associated Press, February 25, 2013]

International Organizations and Treaties to Which Vietnam Belongs

Vietnam is a member of the Asian Development Bank, the Asia-Pacific Economic Cooperation forum, the International Monetary Fund, the United Nations, and the World Health Organization. Reflecting Vietnam’s recognition of its place in the global economy, in 1995 Vietnam joined the Association of Southeast Asian Nations (ASEAN). Vietnam became a member of the World Trade Organization (WTO) in 2006. [Source: Library of Congress *]

Other memberships include the Colombo Plan for Cooperative Economic and Social Development in Asia and the Pacific, Food and Agriculture Organization of the United Nations, International Atomic Energy Agency, International Bank for Reconstruction and Development (World Bank), International Civil Aviation Organization, International Development Association, International Fund for Agricultural Development, International Finance Corporation, International Federation of Red Cross and Red Crescent Societies, International Labor Organization, International Maritime Organization, Interpol, International Olympic Committee, International Telecommunication Union, Nonaligned Movement, Organization for the Prohibition of Chemical Weapons, United Nations Conference on Trade and Development, United Nations Educational, Scientific and Cultural Organization, United Nations Industrial Development Organization, World Confederation of Labor, World Customs Organization, World Federation of Trade Unions, and World Intellectual Property Organization. *

International organization participation: ADB, APEC, ARF, ASEAN, CICA, CP, EAS, FAO, G-77, IAEA, IBRD, ICAO, ICC (NGOs), ICRM, IDA, IFAD, IFC, IFRCS, ILO, IMF, IMO, IMSO, Interpol, IOC, IOM, IPU, ISO, ITSO, ITU, MIGA, NAM, OIF, OPCW, PCA, UN, UNCTAD, UNESCO, UNIDO, UNWTO, UPU, WCO, WFTU (NGOs), WHO, WIPO, WMO, WTO.

Major International Treaties: With the United States, Vietnam reached the following agreements: Normalization of Relations (1995), Bilateral Trade (2001), and Counternarcotics, Civil Aviation, and Textiles (2003). With China, Vietnam reached a Land Border Agreement (1999), an Agreement on Borders in the Gulf of Tonkin (2000), and a Declaration on the Conduct of Parties in the South China Sea (2002). With Russia, Vietnam agreed to a Strategic Partnership (2001). Aside from these bilateral agreements, Vietnam is a signatory to numerous international agreements on biological weapons, chemical weapons, civil aviation, counterterrorism, diplomatic immunity, nuclear nonproliferation, and war crimes. Notable agreements on the environment include the following: Convention on the Prohibition of Military or any other Hostile Use of Environmental Modification Techniques (1978), Convention on Early Notification of a Nuclear Accident (1986), Convention on Assistance in the Case of a Nuclear Accident or Radiological Emergency (1987), Convention for Protection of the Ozone Layer (1988), Montreal Protocol on Substances that Deplete the Ozone Layer (1989), and United Nations Framework Convention on Climate Change (1994).

Foreign Relations In the 1990s and 2000s

Relations with the U.S. have improved in recent years. In early 1994 the U.S. finally lifted its economic embargo, which had been in place since the 1960s. Full diplomatic relations with the U.S. have been restored and Bill Clinton became the first US president to visit northern Vietnam in 2000. George W Bush followed suit in 2006, as Vietnam was welcomed into the World Trade Organization (WTO). [Source: Lonely Planet =]

According to Lonely Planet: "Relations have also improved with the historic enemy China. Vietnam is still overshadowed by its northern neighbour and China still secretly thinks of Vietnam as a renegade province. But Vietnam’s economic boom has caught Beijing’s attention and it sees northern Vietnam as the fastest route from Yunnan and Sichuan to the South China Sea. Cooperation towards the future is more important than the conflict of the past. =

"Vietnam is an active member of ASEAN, an organization originally established as a bulwark against communism, and this is all adding up to a rosy economic picture. Vietnam’s economy is growing at more than 8 percent a year and tourists just can’t get enough of the place. The future is bright, but ultimate success depends on how well the Vietnamese can follow the Chinese road to development: economic liberalisation without political liberalisation. With only two million paid-up members of the Communist Party and 80 million Vietnamese, it is a road they must tread carefully. =

Vietnam’s Foreign Policy

Until the fall of the South Vietnamese government in 1975, the VCP considered foreign policy interests to be subordinate to the overriding issue of national liberation and reunification. Only with the end of the war did Hanoi turn its full attention to foreign policy concerns. Among the more pressing were its relations with Laos, Cambodia, China, the Soviet Union, the member nations of the Association of Southeast Asian Nations (ASEAN), and the West. Like domestic policy, foreign policy required the reconciliation of ideology and nationalism. [Source: Library of Congress *]

From an ideological standpoint, the Vietnamese saw themselves as fulfilling their international socialist duty by defeating a major "imperialist" enemy and by carrying out a revolution that could be a model for the Third World. Communist ideology in turn served Vietnamese nationalism by providing a justification for the pursuit of its nationalist goals. A Marxist-Leninist historical view, for example, justified creating an alliance of the three Indochinese countries because such an alliance was instrumental in the struggle against imperialism. By the same reasoning, Hanoi's decision in 1978 to overthrow the Pol Pot regime in Cambodia was defensible on the grounds that a new government more closely dedicated to Marxist-Leninist principles was required in Cambodia in order to reestablish an effective alliance against imperialism. Ideological and nationalist goals thus were often interchangeable, and Vietnamese foreign policy could be construed as serving national interests and international communism at the same time. In the final analysis, however, nationalism and national security remained the primary foreign policy concerns. *

Current issues affecting Vietnam: 1) Southeast Asian states have enhanced border surveillance to check the spread of avian flu. 2) Cambodia and Laos protest Vietnamese squatters and armed encroachments along border. 3) Cambodia accuses Vietnam of a wide variety of illicit cross-border activities. 4) Progress on a joint development area with Cambodia is hampered by an unresolved dispute over sovereignty of offshore islands. 5) An estimated 300,000 Vietnamese refugees reside in China. 6) Establishment of a maritime boundary with Cambodia is hampered by unresolved dispute over the sovereignty of offshore islands. 7) Vietnam is minor producer of opium poppy; probable minor transit point for Southeast Asian heroin. [Source: CIA World Factbook **]

Issues involving the Spratly Islands and the South China Sea: 1) The decade-long demarcation of the China-Vietnam land boundary was completed in 2009. 2) China occupies the Paracel Islands also claimed by Vietnam and Taiwan; 3) the 2002 "Declaration on the Conduct of Parties in the South China Sea" has eased tensions but falls short of a legally binding "code of conduct" desired by several of the disputants. 4) Vietnam continues to expand construction of facilities in the Spratly Islands. 5) in March 2005, the national oil companies of China, the Philippines, and Vietnam signed a joint accord to conduct marine seismic activities in the Spratly Islands. 6) Economic Exclusion Zone negotiations with Indonesia are ongoing, and the two countries in Fall 2011 agreed to work together to reduce illegal fishing along their maritime boundary. 7) Brunei claims a maritime boundary extending beyond as far as a median with Vietnam, thus asserting an implicit claim to Lousia Reef. **

APEC Summit in Hanoi in 2006

Vietnam hosted the APEC summit in November 2006. On the even of the meeting, Tran Thi Minh Ha of AFP wrote: “Vietnam is moving into high gear to beautify and secure its nearly 1,000-year-old capital ahead of an APEC summit this month, the communist country's largest ever international conference. An army of painters, builders, gardeners and police have worked for months to prepare Hanoi for the meeting that will bring 21 leaders including US President George W Bush, Russia's Vladimir Putin and China's Hu Jintao. Anti-terrorism squads, firefighters and paramedics have conducted drills, and food inspectors have checked hotel and restaurant kitchens to prevent stomach upsets among the Asia-Pacific guests. To welcome the heads of state, artists have prepared gem-studded portraits of the leaders, while top designer Minh Hanh has tailored traditional silk shirts and dresses, called 'ao the' and 'ao dai', decorated with lotus flowers. [Source: Tran Thi Minh Ha - Agence France Presse, November 5, 2006 <<>>]

“Miss Vietnam Mai Phuong Thuy has been recruited to appear in an ao dai, among lotus flowers and conical hats, in an opening ceremony film showcasing all the member countries. The APEC Vietnam logo will appear on a 10,000-square-metre (107,600-square-foot) flag made from one tonne of parachute fabric that organizers say is the largest ever made, beating a 7,000-square metre Brazilian flag. Vietnam's borders, visa rules and airport security have been tightened, scores of bomb sniffer dogs trained, and Hanoi's 15,000-strong police force placed on duty for the duration of the event. <<>>

“Olive-uniformed police cruising Hanoi in white vans with loudspeakers have already stepped up their social order campaign in recent weeks, chasing away streetside vendors and enforcing midnight bar curfews. "The police have been so tough recently, for some kind of meeting I think," said Nguyen Thi Huong, 69, who runs a modest streetside business with a portable electronic scale. "I really hope that meeting will end soon." In all, more than 14,000 delegates, staff and journalists are expected to flood into the ancient city for the Asia-Pacific Economic Cooperation meeting. <<>>

“Vietnam has built a 250-million-dollar conference center for the event on the southwestern outskirts of Hanoi, a venue with six hectares of floor space, 1,000 parking spaces and a helipad, designed by a German architect. Kilometers (miles) of optical cables for phone, fax and Internet connections have been laid for delegates and 2,000 journalists registered to cover the summit. Organizers have readied one million bottles of drinking water, 10,000 bottles of wine, 10,000 ballpoint pens and 20,000 T-shirts and other garments, said Nguyen Huu Thanh, director general of the Hanoi Trade Corporation. Up to eight tonnes of coffee, provided by Vinacafe Bien Hoa company, will help keep officials awake, said the company. "Three hundred boxes of ginseng coffee, the most luxurious coffee of Vietnam, will be given to heads of state as special presents," it said. Workers have planted flower fields, some of which spell out APEC welcoming messages, on streets leading to the venue. "We have spent about one billion dong (60,000 dollars) to decorate Hanoi with fresh and artificial flowers," said Nguyen Xuan Hung, whose Green Tree and Park Company has employed over 500 staff for the past month. <<>>

“To avoid traffic gridlock as scores of motorcades with 1,700 cars criss-cross the city, new traffic lights and signs have been installed, and most buses and trucks will be banned from the inner city between 6am to 10pm. Heads of state, ministers and their staff will stay in over 2,000 rooms booked in eight five-star hotels. Other guests, including business leaders attending a parallel CEO summit, will be put up in 8,000 more hotel rooms. A lavish APEC gala dinner will be hosted by President Nguyen Minh Triet, with more than 1,000 guests. <<>>

Development and Aid in Vietnam

Visitors used to say that Ho Chi Minh City is 30 years behind Taiwan and Thailand and Hanoi is 30 years behind Ho Chi Minh City. A Paris-educated communist official told National Geographic in the 1990s, "Vietnamese leaders are trying to build a market economy on a socialist infrastructure with capitalist management...Impossible! But since those days Vietnam has made a lot of progress. Arguably foreign investment has been more helpful than foreign aid.

Vietnam's economy has been rapidly expanding over the past decade as the communist government has supported free market policies, but development has tended to cluster around the country's urban centers and port cities. Some Asian Development Bank and World Bank projects have the goal of bringing more benefits to rural areas.

Countries regarded as North Vietnam’s enemy during the Vietnam War—the United States, Japan, South Korea, Australia, Thailand—are now key providers of economic assistance and investment

The World Bank’s assistance program for Vietnam has three objectives: to support Vietnam’s transition to a market economy, to enhance equitable and sustainable development, and to promote good governance. From 1993 through 2004, Vietnam received pledges of US$29 billion of official development assistance (ODA), of which about US$14 billion, or 49 percent, actually has been disbursed. In 2004 international donors pledged ODA of US$2.25 billion, of which US$1.65 billion actually was disbursed. Three donors accounted for 80 percent of disbursements in 2004: Japan, the World Bank, and the Asian Development Bank. During the period 2006–10, Vietnam hopes to receive US$14 billion–US$15 billion of ODA.

Vietnam’s Relations with France

During the period of European expansionism, Western nations sought to carve out colonies in Asia and other parts of the non-Western world. Between 1858 and 1873, the French conquered Vietnam, dividing it into three parts--Cochinchina, Annam, and Tonkin--roughly corresponding to the areas referred to bt the Vietnamese as Nam Bo (southern Vietnam), Trung Bo (central Vietnam), and Bac Bo (northern Vietnam). To the Vietnamese, however, these were geographical terms, and the use of them to imply a political division of their homeland was as odious as the loss of their independence. [Source: Library of Congress *]

French colonial rule was, for the most part, politically repressive and economically exploitative. French Indochina was to be the beneficiary of France’s "mission civilisatrice"—or "civilizing mission"—but the upheaval before and during World War I, however, helped foment different aspirations among different segments of the population in French Southeast Asia. One of the key French strategies in the region was janissemnt (or "yellowing")—trying to turn over local administration and security duties to the local population, keeping French interests in mind. The American employed the same strategy— "Vietnamization"—unsuccessfully in the Vietnam War.

The society of Vietnam was transformed in the nineteenth century by the imposition of French rule, the introduction of Western education, the beginnings of industrialization and urbanization, and the growth of commercial agriculture. The establishment of a new, French-dominated governing class led to a rapid decline in the power and prestige of the emperor and the mandarins, whose functions were substantially reduced. The French were engaged in a large number of public work's projects such as ports, railways, improved dikes, irrigation systems and roads in Vietnam. In 1910 the French completed a railroad from Vietnam to Kunming in the Yunnan province of southern China so they could sell French products to the Chinese and buy thing like silk, minerals, furs and precious stones. Until fairly recently is was easier to get goods to Kunming via Hanoi that Shanghai.

The French period also produced a new group of Vietnamese absentee landowners who possessed riches far in excess of the wealth anyone in the older society had enjoyed. This new group came into existence as a result of the French development of vast new tracts of land in Cochinchina. A few of these large holdings were retained by French companies or citizens, but most were held by enterprising, Western-oriented, urban Vietnamese from Annam and Tonkin who lived mainly in Hanoi and Hue. In urban centers the demand of both the expanding French government bureaucracy and the private sector for secretaries, clerks, cashiers, interpreters, minor officials, and labor foremen created a new Vietnamese white-collar group. The development of mining and industry between 1890 and 1919 also introduced a new class of workers. Because most of the natural resources as well as a large labor pool were located in the North, industrial development was concentrated there, and Hanoi and Haiphong became the country's leading industrial centers.

Despite the large role that France played in modernizing Vietnam it has relatively little clout in Vietnam today. There are lots of French tourists and some French businessmen in Vietnam. Many of them are upset that their cultural influence on Vietnam has disappeared so quickly they have to speak English in restaurants. French culture lives on, particularly in Hanoi, where people enjoy baguettes and snails and some old men still wear berets. There is a large Vietnamese expatriate community in France. They are involved in the cultural and economic life of Vietnam. Vietnamese communism has its roots in France. Ho Chi Minh first became involved in socialism during his stay in France in when he was in his 20s.

Vietnam’s Relations with the Soviet Union

Since the earliest days of the Vietnamese Communist Party (VCP), when the party's primary mentor was the Comintern, the Soviet Union has played a complex role in VCP affairs. Many of Vietnam's leaders had trained in the Soviet Union and had formed personal ties with their Soviet contemporaries. Historically, however, the relationship between the two nations has been characterized by strain, particularly on the Vietnamese side, and the record suggests several instances of Soviet neglect or betrayal of Vietnamese interests. These included Moscow's indifference to the founding of the VCP in 1930; failure to support materially or otherwise the Vietnamese resistance war against the French in the 1930s and early 1940s; failure to recognize North Vietnam until five years after its founding; failure to support Vietnam's application for membership in the UN in 1948 and 1951; support for the partitioning of Vietnam at the Geneva Conference in 1954; and sponsorship of a proposal to admit both North and South Vietnam to the UN in 1956. These examples of Soviet policy reminded the Vietnamese of the peril inherent in placing too much trust in a foreign ally. [Source: Library of Congress *]

The Sino-Soviet split in the late 1950s favorably altered the Soviet attitude toward Vietnam. Beginning in 1965, the Soviets initiated a program of military assistance to Hanoi that proved invaluable in carrying on the Second Indochina War. Hanoi, however, continued to suspect Soviet motives and perceived that Soviet aid, when offered, was insufficient and given only grudgingly after repeated appeals. *

Vietnam’s Relations with the Soviet Union After the Vietnam War

Following the conquest of South Vietnam in 1975, Hanoi sought to retain the equilibrium of its wartime relations with both China and the Soviet Union, but mounting tensions with Beijing, culminating in the loss of Chinese aid in 1978, compelled Hanoi to look increasingly to Moscow for economic and military assistance. The Soviet Union established a base at Cam Ranh Bay. It began flying regular patrols between there and Vladivostok, sometimes buzzing U.S. warships on the way.

Beginning in late 1975, a number of significant agreements were signed between the two countries. One coordinated the national economic development plans of the two countries, and another called for the Soviet Union to underwrite Vietnam's first post-reunification Five-Year Plan. The first formal alliance was achieved in June 1978 when Vietnam joined Comecon. That organization, which facilitated the economic integration of the Soviet Union, six East European countries, Cuba, and Mongolia, was able to offer economic assistance for some of the projects abandoned by China. [Source: Library of Congress *]

Vietnam's decision to invade Cambodia, which the leadership apparently made shortly after joining Comecon, required more than economic assistance from the Soviets. The possibility of a formal alliance between Hanoi and Moscow had apparently been discussed since 1975, but the Vietnamese had rejected the idea in order to protect their relationship with China. In 1978 that relationship had deteriorated to the point where protecting it was no longer a consideration, and circumstances in Cambodia confirmed the need for Vietnamese-Soviet military cooperation. In spite of Vietnam's needs, it is likely that the November 1978 Treaty of Friendship and Cooperation was imposed by the Soviets as a condition for military assistance. As a result of the treaty, the Vietnamese granted the Soviets access to the facilities at Da Nang and Cam Ranh Bay. Use of the bases represented a substantial regional strategic gain for Moscow, whose naval bases in the Pacific Ocean, until then, had been limited to the Soviet Far East. *

Soviet support sustained Vietnamese operations in Cambodia. Military aid in 1978 approached US$800 million annually, but after the Vietnamese invasion of Cambodia and the Chinese attack on Vietnam in February 1979, the figure rose to almost US$1.4 billion. The sharp increase, reflecting the Soviet effort to replace quickly Vietnamese equipment losses on the SinoVietnamese border, was subsequently reduced to between US$800 and 900 million in 1980 and between US$900 million and 1 billion in 1981. Military aid increased to 1.7 billion annually in the 1982- 85 period, and decreased to an estimated US$1.5 billion in 1985. Reported Soviet dissatisfaction with Hanoi's handling of Cambodia, stemming from the stalemated battlefield situation and its high costs, did not appear to affect Moscow's decision to continue to provide assistance for the war. At the end of 1987, there was no indication that the Soviets were pressing Vietnam to resolve the conflict. *

In addition to its role as Vietnam's exclusive donor of military aid, the Soviet Union in 1987 was also Vietnam's largest contributor of economic aid and its biggest trade partner. During the Third Five-Year Plan (1981-85), the Soviets provided some US$5.4 billion in balance-of-payments aid, project assistance, and oil price subsidies. Total economic aid for 1986 was an estimated US$1.8 billion. The Soviets also have been a major supplier of food and commodity aid on a mostly grant-aid or softcurrency basis. By 1983 they were supplying 90 percent of Vietnam's petroleum, iron and steel, fertilizer, and cotton imports and 70 percent of its grain imports. *

Soviet-Vietnamese ties in the mid-1980s were sound, although troubled by some underlying strain. The Vietnamese distrusted Soviet intentions and resented Hanoi's dependent role; the Soviets in turn distrusted the Vietnamese for not confiding in them. Reportedly, on a number of occasions Moscow learned of major Vietnamese policy plans and changes only after the fact. According to some foreign observers, the Soviets were not entirely prepared for the sudden deterioration in Sino-Vietnamese relations in 1978, and they may not have been aware of the full extent of Vietnamese plans in Cambodia. Others believe the Soviet Union was aware of the deterioration and was allowing Vietnam to play the role of proxy in Moscow's own dispute with Beijing. *

Friction was particularly evident in economic relations. The Soviets resented the enormous burden of their aid program to Vietnam and felt that much of it was wasted because of Vietnamese inefficiency. In turn, the Vietnamese were offended by Moscow's 1980 decision to reduce aid in the face of severe economic hardships in Vietnam. In the mid-1980s, aid continued at a reduced rate although Vietnam's economic situation had worsened. *

The prospect of an improvement in the state of Sino-Soviet relations in the mid-1980s did not appear to threaten the Soviet Union's ties with Vietnam. Although China demanded that Moscow ensure Vietnam's withdrawal from Cambodia as a condition to normalizing the Sino-Soviet relationship, Vietnamese leaders proceeded as if they were sure their existing policy in Cambodia would not be threatened. The Soviets even went so far as to promote improved relations between Hanoi and Beijing. At Vietnam's Sixth Party Congress in December 1986, the senior member of the Soviet delegation suggested that the normalization of relations between Vietnam and China would improve the situation in Asia and the world as a whole. The Vietnamese agreed with this premise but were unwilling to seek improved ties at the expense of weakening their position in Cambodia. *

Vietnam and the Collapse of the Soviet Union

The collapse of the Soviet Union and the Eastern Bloc in 1989- 1991 and the reforms that took place before it had a profound effect on Vietnam. The Glasnost (openness) and perestroika (restructuring) policies of President Mikhael Gorbachev, who came to power in 1985, reverberated in Vietnam. In 1986, the reform-minded Nguyen Van Linh was chosen to lead the Vietnamese Communist Party. Doi moi (economic reform) was experimented with in Cambodia and introduced to Vietnam. [Source: Lonely Planet =]

The dramatic changes that occurred after the Berlin Wall came down in 1989 and the Soviet Union dissolved in 1991 were not viewed favorably in Hanoi. The Vietnamese Communist Party denounced the participation of noncommunists in Eastern Bloc governments, calling the democratic revolutions "a counterattack from imperialist circles" against socialism. On top of this the cash-strapped Russian government that materialized after the Soviet break up cut off funding to it former Soviet satellites and Vietnam was hit hard by the drying up funds from its former benefactor. In 1989, Vietnam withdrew from Cambodia in part because it could no longer afford to stay there any more.

Vietnam’s Relations with Russia

Following the break-up of the Soviet Union, Russia reduced its investments in Vietnam. Trade also suffered as a result of a dispute over the large debt that Vietnam owed the Soviet Union. This debt has been restructured to Vietnam’s benefit so that Vietnam now must repay only 15 percent, with payments stretched over two decades. Part of the debt is repayable in commodities such as rice and coffee. *

After the Vietnam War Russian was briefly the most popular foreign language in Vietnam. Most tourists to Vietnam were Russians or eastern Europeans. After the collapse of communism, some Vietnamese in the former Eastern didn't want to return home. In Russia, some Vietnamese worked under slave-labor-like conditions in Siberia and elsewhere. In the early 2000s the cash-strapped Russian military closed its bases in Vietnam. It lease on the port at Cam Rahn Bay, a key Soviet base during the Vietnam War and the Cold War, ended in 2004. Some 70s- and 80s- era Soviet-made military jeeps, trucks and black Volga sedans, can still be seen in Hanoi

Trade volume between Russia and Vietnam rose by around $1 billion in 2012 to reach around $4 billion dollars. Bilateral trade turnover between the two countries rose three-fold between 2006 and 2012. According to an estimate given by the Russian Ministry for Economic Development trade volume between Russia and Vietnam could reach $5 billion by 2015. [Source: Xinhua, July 30, 2012]

Russia, Vietnam Sign 17 Deals During Putin's Visit

In November 2013, the Wall Street Journal reported: “Vietnam and Russia signed 17 agreements aimed at boosting political, military and trade ties while increasing cooperation in the energy sector. The agreements, timed to coincide with Russian President Vladimir Putin's visit here, help offset China's enormous economic influence in Vietnam and come as Beijing and Hanoi struggle with overlapping sovereignty claims to the South China Sea—Vietnam calls the body of water the East Sea—and the oil and gas reserves that lie beneath the seabed. The energy deals include one that could see Vietnam's state oil firm PetroVietnam exploring for oil and gas in Russia's offshore Arctic region. [Source: Wall Street Journal, November 12, 2013 <<<]

“Russia and Vietnam engage in frequent top-level exchanges. In May 2013, Vietnamese Prime Minister Nguyen Tan Dung visited Moscow, following up on a trip to Hanoi in 2012 by Russian Prime Minister Dmitry Medvedev. "Vietnam has been a long-term, trustworthy partner for Russia…and political dialogue between the two countries is at a high level," Mr. Putin said at a press briefing after a meeting Tuesday with his Vietnamese counterpart, Truong Tan Sang. <<<

“Russia's exports to Vietnam are dominated by oil products, machinery and weapons. Among the latter are fighter planes and six Kilo-class, cruise missile-equipped submarines, the first of which is due to be delivered to the Vietnamese navy in 2014 under a $2 billion deal signed in 2009. Two more of the Kilo-Class submarines will be delivered in 2014, Vietnamese state media has reported. Mr. Putin said the deal signed Tuesday between the countries' respective defense ministries will help expand the supply of Russian military products to Vietnam and training of Vietnam's military personnel. <<<

“Russia has also provided significant support for Vietnam's civil nuclear energy program. It has agreed to lend $8 billion to Hanoi to help pay for the country's first reactors, which nuclear energy company Rosatom will build. The first of these, in the central province of Ninh Thuan, is due to be operational in 2023 followed a year later by a second one. "Our cooperation in nuclear power is not limited at the construction of Vietnam's first nuclear power plant, but also includes training human resources and building a nuclear technology training center in Vietnam," Mr. Putin said. <<<

“Russia and Vietnam also have close ties in oil production, with PetroVietnam and Russian oil companies involved in several joint-venture projects. Among these is Vietsovpetro, which has produced more than 206 million metric tons of crude oil from fields offshore Vietnam since it was established in 1981. It is the operator of Vietnam's largest oil field, Bach Ho, and is 49 percent owned by PetroVietnam and 51 percent by Russia's Zarubezhneft. <<<

“Among the deals signed in November 2013, Russia's Rosneft, will join PetroVietnam in exploring for oil and gas at block 15-1/05 offshore Vietnam while Gazprom Neft, the oil arm of state-controlled gas giant Gazprom OAO, will invest in Vietnam's sole refinery, Dung Quat, and distribute products produced there. In September, Vietnam said Gazprom may join the project to increase Dung Quat's capacity to 200,000 barrels a day from 130,000 barrels a day. Russia will also ship liquefied natural gas to Vietnam to help the country meet rapidly rising energy demand, In October, Gazprom said it hoped to have a framework deal in place by the end of the year to ship gas to Vietnam from its planned Vladivostok LNG project. <<<

Vietnam's main exports to Russia are farm produce, seafood, clothing and electronics. The pair plans to increase bilateral trade to $7 billion in 2015, up from an estimated $4 billion in 2013. Still, Vietnam-China trade is substantially larger: In the first half of 2013 bilateral trade totaled $23.1 billion, up 20 percent from a year earlier. "We welcome Russia's strategy to see Vietnam as its strategic partner in the [Southeast Asian] region, and Vietnam's determination is to see Russia as Vietnam's leading partner," Vietnamese President Truong Tan Sang said. In March they launched free-trade negotiations, which if completed would deepen commercial links further. Vietnamese and Russian leaders also witnessed the signing of a credit agreement between the Bank for Investment and Development of Vietnam and Russia's International Investment Bank. The two countries also signed deals regarding cooperation in education, science, health care and the environment. <<<

Image Sources:

Text Sources: New York Times, Washington Post, Los Angeles Times, Times of London, Lonely Planet Guides, Library of Congress, Vietnamtourism. com, Vietnam National Administration of Tourism, CIA World Factbook, Compton’s Encyclopedia, The Guardian, National Geographic, Smithsonian magazine, The New Yorker, Time, Newsweek, Reuters, AP, AFP, Wall Street Journal, The Atlantic Monthly, The Economist, Global Viewpoint (Christian Science Monitor), Foreign Policy, Wikipedia, BBC, CNN, Fox News and various websites, books and other publications identified in the text.

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© 2008 Jeffrey Hays

Last updated May 2014

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