The visit to Russia by Vietnam’s newly-appointed Prime Minister Nguyen Xuan Phuc hardly drew world attention. Yet, for Hanoi and Moscow, his five-day trip, which started on May 16, assumes great significance.

Vietnamese Prime Minister Nguyen Xuan Phuc and Russian PM Dmitry Medvedev at the joint press conference in Moscow on May 16
Vietnamese Prime Minister Nguyen Xuan Phuc (L) and Russian PM Dmitry Medvedev at the joint press conference in Moscow

The Vietnam-Russia relationship has considerably strengthened in recent years with both sides exchanging high-profile visits. These include the trips to Hanoi by Russian President Vladimir Putin and Prime Minister Dmitri Medvedev in 2013 and 2015 respectively and the Russia tour by the leader of Vietnam’s ruling Communist Party Nguyen Phu Trong in 2014.

Just two weeks after his appointment as Vietnam’s Defense Minister, Ngo Xuan Lich too made his first visit abroad to Russia from April 23 to 29.

During his meeting with Medvedev on May 16, Phuc said Russia was chosen as the destination for his maiden official foreign visit as Haoi highly regards its relations with Moscow. In response, Medvedev expressed his appreciation of Phuc’s visit adding that Vietnam is one of Russia’s most important partners in the Asia-Pacific region.

Economic ties still weak

However, Vietnam-Russia economic cooperation remains relatively insignificant.

According to Vietnamese statistics in 2015, bilateral trade between Vietnam and Russia was about $4 billion, which is only a  fraction of Vietnam’s trade with its top five trading partners, namely China (over $66 billion), Association of Southeast Asian Nations-ASEAN- ($42.1 billion), US ($41.5 billion), EU ($41.2 billion) and South Korea ($36.7 billion).

With a total capital of $2 billion, Russia ranks 17th among countries and territories currently investing in Vietnam. Vietnamese companies have invested nearly $3 billion in Russia, mainly in the oil and gas industry.

A key objective of Phuc’s Moscow visit is to strengthen trade with Russia. During the first two days of his tour, Russia’s top oil and gas companies Gazprom and Rosneft signed a number of cooperation agreements and memoranda with Vietnam’s oil and gas corporation PetroVietnam.

Despite the relatively weak economic ties, the two countries have strong cultural and political links. Their  mutual friendship dates back to the Soviet era.

According to a Pew Research Center study in 2015, while only 30% of the people surveyed in 40 countries saw Russia favorably, 75% of Vietnamese people viewed Russia positively.

This positive sentiment toward Russia is probably even higher among the members of the ruling Communist Party. Moscow was (North) Vietnam’s main ideological, political, military and economic supporter during its two-decade war against the US and its conflict with China in the 1970s and 1980s. Many of the country’s current political and military elites, including the party leader Nguyen Phu Trong, studied in Russia during the Soviet time.

Moreover, unlike its conflict-ridden relationship with Washington over human rights issue and Beijing over long-standing territorial disputes, Hanoi’s interaction with Moscow is largely conflict-free. Russia’s authoritarian regime under Putin even appeals to the ruling elite in Hanoi.

These factors have played a key role in enhancing Vietnam-Russia relations. Russia became Vietnam’s first strategic partner in 2001 even before its major Asian neighbors like Japan (2006), India (2007) and China (2008). Alongside China, Russia is currently one of the two countries with which Vietnam has established a comprehensive strategic partnership.

Strategic considerations

Another key component in Vietnam’s relations with Russia is defense cooperation.

Russia is Vietnam’s biggest arms provider. In 2009, Vietnam signed a contract to buy six Kilo-class submarines from Russia worth about $2 billion. Five of them have already arrived at the Cam Ranh naval base in the central region.

Vietnam’s military modernization is closely linked to China’s growing aggressiveness in the South China Sea. In fact, China is a defining factor prompting Hanoi and Moscow to reinforce their defense ties.

From Vietnam’s perspective as a military power, Russia fits well into its foreign policy diversification and multi-lateralization of international relations, as Hanoi seeks to develop ties with all major powers. A closer partnership with Moscow enables it to strengthen its leverage vis-à-vis Beijing.

Vietnamese leadership is facing the challenge of how to get Moscow’s support on the South China Sea issue. Despite China’s increasing footprint in the South China Sea, Moscow is opposed to internationalization of the sea disputes. Moscow wants such issues to be resolved through bilateral talks between the disputed parties. This is essentially Beijing’s preferred stance too.

But Vietnam and other disputed countries do not favour Moscow’s view because, given China’s huge economic and military superiority,  bilateral negotiations means China’s might makes everything it does right.

Because of its huge size and power, China is much more important to Russia than Vietnam and it is unlikely Moscow will back Hanoi if conflicts arise between the two communist neighbors. In 2014, when China placed its huge oil rig deep inside Vietnam’s exclusive economic zone, Moscow did not back Vietnam. Worse for Hanoi, during the oil rig crisis, Russia signed a 30-year gas deal worth $400 billion with China.

However, this does not mean Russia undervalues its relations with Vietnam and other regional countries. While Moscow aligns with Beijing to restrict the American influence globally, it is not willing to be China’s junior partner in Asia.

Russia launched its own ‘pivot to the East’ mainly because it wants to become an influential player on its own right in East Asia. To achieve that, it cannot be subordinate to Beijing and, consequently, needs to contain China’s growing regional dominance.

Against this backdrop, it is vital for Moscow to forge deeper ties with other regional countries which are concerned about China’s regional hegemony.

Moreover, as the Sino-Soviet rivalry during the Cold War shows, when the two powers compete for regional dominance and influence, it is not always easy for them to cooperate peacefully with each other.

Based on their past schism and current ambitions and strategies, as it is argued elsewhere, underneath the Sino-Russian amity is a hidden rivalry. In a way, like Vietnam and other regional countries, Russia is pursuing a hedging strategy vis-à-vis China in Asia.

Russia-ASEAN ties

For Russia, furthering its partnership with Vietnam leads to enhanced cooperation with countries in the region, notably ASEAN.

It is, hence, right to argue that not only does Vietnam serve as a bridge for Russia to ASEAN, its successful partnership with Moscow can encourage other ASEAN countries to follow suit.

Phuc’s visit to Russia is also to attend a commemorative summit marking the 20th anniversary of the dialogue between ASEAN and Russia in Sochi on May 19-20.

Though it has been ASEAN’s partner since 1996 and became a member in two key ASEAN-led forums, namely East Asia Summit and ASEAN Defense Ministers’ Meetings + 8 in 2010, Russia’s economic, political and military cooperation with ASEAN members remains very much underdeveloped.

Russia is only the 13th largest trading partner of the 10 ASEAN members, with two-way trade worth $22.5 billion in 2014 – trailing far behind intra-ASEAN trade ($608.2 billion), ASEAN’s trade with China ($366.5 billion), EU ($248.3 billion), Japan ($229 billion), US ($212.4 billion), South Korea ($131.4 billion), Taiwan ($108.3 billion), Hong Kong ($99.4 billion), Australia ($70.4 billion), India ($67.8 billion), United Arab Emirates ($56.7 billion) and Saudi Arabia ($44.9 billion).

Russia cannot enhance its place in the Asia-Pacific region in general if it is unable to deepen its ties with ASEAN as a whole and its members at all levels. This is because even though it lacks coherence and is materially weaker than many regional powers like the US and China, ASEAN remains central to Asia Pacific’s economic, political and security architecture.

Xuan Loc Doan is a research fellow at the Global Policy Institute. He completed a PhD in International Relations at Aston University, UK in 2013. His areas of interest and research include Vietnam’s domestic and foreign policy, ASEAN’s relations with major powers, and international politics in the Asia-Pacific region.

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