The two presidents issued a joint statement on raising their relations to a comprehensive strategic partnership.
This development raises a number of questions for strategic analysts. Why are Vietnam and Russia seeking a closer relationship at this time? Russia became Vietnam’s first strategic partner in 2001. Their bilateral relations developed gradually and picked up pace with Russia’s economic recovery. The elevation of relations to the level of comprehensive strategic partner is a natural development. But this factor alone is not a sufficient explanation. Since 2001, Vietnam developed strategic partnerships with seven other countries, namely Japan, India, China, South Korea, Spain, the United Kingdom and Germany. Only one of these strategic partnerships has been raised to the next level — in 2009 Vietnam and China became comprehensive strategic partners.
Putin has been proactive in pushing forward Russia’s return to Asia. A comprehensive strategic partnership with Vietnam serves this objective. Vietnam’s negotiations with the United States on a strategic partnership have stalled. Vietnam, which seeks to multilateralise and diversify its external relations, responded to the opportunity offered by Putin. US companies will now have to calculate whether they risk missing out on commercial opportunities in Vietnam.
But, more concretely, what does each seek to gain from this relationship? There are four long-standing major components of the strategic partnership: oil and gas cooperation, energy cooperation for hydro and nuclear power, military equipment and technology, and trade and investment. These are accompanied by three other areas of importance: science and technology, education and training, as well as culture and tourism.
Regarding oil, gas and energy cooperation, Vietnam and Russia formed Vietsovpetro, an oil and gas joint venture, in 1981. The company has been active on Vietnam’s continental shelf and more recently in Russia as well. This has been Russia’s most profitable enterprise and the joint venture has been extended to 2030. Further, Vietnam and Russia agreed to facilitate the operations of other joint ventures such as Rusvietpetro, Gazpromviet and Vietgazprom to expand oil and gas exploration and exploitation activities to third countries. Russia has also agreed to give Vietnam a soft loan of US$10.5 billion to build its first nuclear power plant, Ninh Thuan 1.
Russia is Vietnam’s largest provider of military weapons, equipment and technology. Vietnam and Russia will co-produce anti-ship cruise missiles and Vietnam is expected to order more Sukhoi Su-30 multirole jet fighters. In August, Russia launched the first of six Kilo-class conventional submarines due for delivery to Vietnam over the next five years. Part of the sales package includes provision for Russia to build a maintenance and service facility at Cam Ranh Bay and training for Vietnamese submariners. Vietnam will open its commercial facilities to all countries, but Russia will be granted special access as a strategic partner.
Trade and investment are both growing but the overall figures are modest. Bilateral trade reached US$2 billion in 2011, although hopes are that this will grow to US$5 billion in 2015 and US$10 billion in 2020. Russia ranks 23rd on the table of countries and territories investing in Vietnam.
Beyond boosting the long-standing components of the strategic partnership, could Vietnam and Russia be seeking to balance a third party, China, in Vietnam’s case, and the United States in Russia’s case? Vietnam prefers a multipolar world as it seeks to develop relations with all the major powers. Improving relations with Russia is part of this larger strategy. Russia does not seek to balance against the United States so much as re-establish itself as a major player in the Asia Pacific. How will this new alignment impact Asia Pacific geopolitics and the South China Sea in particular? Russia is a major supplier of military weaponry to both China and Vietnam. Russia has the option of withholding or cancelling these supplies at a time of crisis. As for the South China Sea, Russian military assistance will improve Vietnam’s capacity for defence and enable it to develop its own version of anti-access/area-denial in the Nansha Islands, also known as the Spratly Islands.
The joint statement issued by the two presidents upheld the status quo by reiterating that territorial disputes should be resolved by peaceful means — without the use of force or the threat to use force — based on international law, including the UN Convention on the Law of the Sea. Both also agreed to include regional security on the agenda of the East Asia Summit. In sum, the Vietnam–Russia comprehensive strategic partnership is overwhelmingly focused on bilateral relations for mutual benefit. It will have a marginal impact on the geopolitics of the Asia Pacific region. It is important to note that Vietnam has promoted the concept of strategic partnership to signify a bilateral relationship that has breadth and depth.
Carlyle A. Thayer is Emeritus Professor at the University of New South Wales, Australian Defence Force Academy, Canberra.
A version of this article was first published here in the Global Times.