Russia's new Vietnamese
courtship By Federico Bordonaro
Russian-Vietnamese trade, energy and
security ties are on the upswing, underscoring
Moscow's latest bid to re-energize its strategic
relationship with Hanoi and re-establish itself as
a major Southeast Asian player at a time the
United States, the European Union and China are
likewise competing for regional influence.
Vietnamese Vice President Truong My Hoa
said after meeting with Russian Prime Minister
Mikhail Fradkov in Moscow on September 20 that
"all-around cooperation between Vietnam and Russia
should be further developed" and that "Vietnam
wants
Russia to invest not only in
its oil-and-gas industry, but also in
atomic-energy and hydroelectric-power projects".
Fradkov diplomatically praised Vietnam's economic
"renewal process" and indicated Russia's keen
interest in responding to Hanoi's calls for closer
ties.
Former Cold War allies, and later
post-Cold War antagonists, nowadays there is
plenty of economic and strategic incentive for the
two sides to forge stronger bilateral ties. Hanoi
and Moscow frequently refer to their bilateral
relationship as a "strategic partnership".
President Vladimir Putin used the term back in
February 2001, when bilateral relations first got
back on track, and mutual ties have since
significantly strengthened.
It's a
partnership of mutual convenience. Vietnam
desperately needs to enhance its energy security
and upgrade its dilapidated armed forces, while
Moscow is seeking to expand its influence in
Asia's energy sector, mainly through its giant
energy concern Gazprom, and increase big-ticket
military-related exports.
Significantly,
Russia's new strategic push into not only Vietnam
but Southeast Asia is predicated and somewhat
restrained by Moscow's bigger concern of
maintaining stable relations with China. Russia
walks a thin line by helping Vietnam to improve
its defensive capabilities, which for geographical
and historic reasons are largely aimed at
counterbalancing China.
Moscow's apparent
deference to Beijing's wishes helps to explain why
Putin agreed in 2001 to decommission Russia's
naval base at Vietnam's Cam Ranh Bay three years
before its lease expired - though subsequent US
overtures to establish some sort of a military
presence at the deepwater port have irked China.
That's why Russian and Vietnamese
officials have concentrated their new strategic
embrace more on business than war games. At the
11th session of the Vietnam-Russia
Intergovernmental Committee for Economic, Trade
and Scientific-Technical Cooperation, the two
sides declared that bilateral trade would likely
exceed US$1 billion in 2006.
They also
announced plans for the establishment of a new
joint-venture bank to be established between the
Bank for Investment and Development of Vietnam and
Russia's Vneshtorbank, which will likely be
officially opened for business when Putin visits
Hanoi during this November's Asia-Pacific Economic
Cooperation (APEC) summit.
Fueling new
ties Energy security, now as in the past,
remains at the forefront of the bilateral
relationship. As Vietnam's economy surges, its
domestic energy sources are fast diminishing.
Russia sits on huge fossil-fuel resources at home,
and has the technical know-how to improve
Vietnam's current exploitation and management
techniques, industry experts say.
Top
Gazprom and Petrovietnam executives met on
September 20 to discuss a new bilateral agreement
where the two sides drew up new guidelines for
joint operating in oil production and processing
and sketched a general scheme to develop Vietnam's
nascent natural-gas industry. An official
statement issued by Gazprom after the meeting
announced that it plans to start new drilling in
the Gulf of Tonkin by November.
The
announcement could mark an important new direction
for Vietnam's energy sector - though once again
heavily reliant on Russian expertise and
investment. Russia's hugely profitable Gazprom,
which currently provides nearly all the gas needs
of the former Soviet Union and Central and Eastern
Europe and is ranked as the world's third-largest
corporation, is set to replace Zarubezhneft as
Moscow's main energy representative to Vietnam.
The beleaguered Zarubezhneft has for
decades led the Vietsovpetro oil-and-gas joint
venture, where contentious negotiations over how
best to wind down the expiring venture have
strained bilateral relations in recent years.
Similarly, Petrovietnam has replaced Vietsovpetro
and has emerged as Vietnam's new energy
heavyweight.
The two sides are expected
jointly to explore plenty of new potential
drilling sites: recent geological analysis
highlights the underdeveloped state of many of
Vietnam's land-based wells, which apparently hold
much deeper reserves than the country's
fast-expiring offshore wells.
More
significant, perhaps, Moscow is expected to sell
and share its nuclear-power expertise with
Vietnam's energy planners. Hanoi announced this
year that it aims to generate 11% of its total
electricity through nuclear means by 2025 and
increase that level to 30% by 2040.
Vuong
Huu Tan, director of Vietnam's Nuclear Energy
Institute, said in February that he expected six
reactors to be "operating at a potential of 1,000
megawatts each" by 2025. Assuming, as expected,
that Russia will play a key role in helping Hanoi
realize its ambitious nuclear designs, Moscow will
assert strong influence over Vietnam's energy
direction for the foreseeable future.
As
bilateral trade and energy relations deepen,
Russia will increasingly find itself between a
rock and hard place on improving bilateral
security relations, which Hanoi will no doubt
pursue more actively than Moscow is - for now at
least - willing to accommodate. Vietnam remains
particularly sensitive to China's rising military
might and is quietly seeking ways to
counterbalance the perceived threat.
Long-simmering territorial disputes with
Beijing over the Spratly and Paracel islands, from
Hanoi's perspective, remain a significant security
issue, although regional security analysts doubt
the contested, reportedly resource-rich islands
will be a major source of conflict over the short
term.
As a holdover from the Cold War,
Russia remains Vietnam's main weapons supplier.
Since the dissolution of the Soviet Union, Russia
has sold Vietnam 12 Svetlyak patrol vessels, 12
S-300PMU1 surface-to-air missile systems, and 4
Su-30 MKK fighter aircraft, as well as artillery.
Furthermore, Russia has agreed to upgrade all
weapon systems Vietnam has already purchased.
A renewed Russo-Vietnam strategic
partnership will inevitably be complicated by
sticky military-technology transfer issues. As
Russia attempts to re-establish its influence in
Southeast Asia while at the same time maintaining
close ties with China, it will often bump up
against US interests, including in Vietnam.
Vietnam has taken a decidedly pro-American stance
in its bid to hedge China's emerging strategic
hegemony over the region.
Security experts
contend that it is highly unlikely that Russia
would support Vietnam in any possible crisis or
conflict with China over contested territory in
the South China Sea. So far, they say, Russia's
supply of weapons to Vietnam is being driven more
by market forces and profits than any desire to
recalibrate the region's power balance.
Still, Russia appears eager to expand its
all-around strategic cooperation with Vietnam, and
enhanced business ties will inevitably lead to
stronger political and strategic ties. Russia is
back in Southeast Asia, and judging by Moscow's
aggressive moves in Vietnam, similar developments
with other regional countries may also soon get
under way.
Federico Bordonaro is
senior analyst with the Power and Interest News
Report (www.pinr.com).
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