Thayer Consultancy

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Background Brief:
Vietnam and Russia: A Comprehensive Strategic Partnership Carlyle A. Thayer December 8, 2012

[client name deleted] We request your assessment of the current Vietnam-Russia relationship and the South China Sea issue. Vietnam and Russia are nurturing a very close relationship in oil and gas sector. Vietnam's national oil company, PetroVietnam, is the only oil company in the world to be authorized by Russian government to explore and produce oil in Russia's strategic areas through joint ventures with Russian majors. Meanwhile, many Russian oil and gas companies have been operating in Vietnam. The top leaders of the two governments all call for further strengthening the bilateral ties in oil and gas sector, particularly in upstream operations. With regard to the South China Sea dispute and more, could you please give us some comments through the questions below: 1) Is Vietnam getting close to Russia so it has an ally in its fight against China on the South China Sea? ANSWER: Russia provides modern military equipment and platforms (ships and aircraft) to both China and Vietnam. Russia has the option of cutting off supplies of armament and spare parts in the event of a Sino-Vietnamese conflict. Vietnams relations with Russia have slowly evolved since 2001 when they announced Vietnams first strategic partnership. I do not think the Vietnamese leadership expects Russia to take their side in a clash in the South China Sea. And Vietnam is not trying to enlist Russia as an ally. Russia and Vietnam are important defence partners of each other. Russia is Vietnams main supplier, while Vietnam is among Russian export markets. The China factor cannot be ignored because of Chinas rapid military modernisation and transformation. Vietnam is motivated to acquire the capability to offset Chinas military strength. But just as important, Vietnam seeks to modernise its armed forces to keep up with its regional neighbours. 2) How are the Vietnamese-Russian relations going to impact the tensions in the South China Sea?

2 ANSWER: Russia has considerably equity in Vietnams energy sector oil, gas, hydropower and nuclear. CNOOCs recent tender for oil blocks in Vietnams Exclusive Economic Zone overlapped with a concession given to GAZPROM. Russia has an interest in preventing South China Sea issues from impacting negatively on its commercial relations with Vietnam. So far, however, Russia has supported the status quo. The joint statement issued by their two presidents in reiterated 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. This is a standard boilerplate declaration. Both presidents also agreed to include regional security on the agenda of the East Asia Summit (EAS). The term regional security is sufficiently ambiguous to include the South China Sea without antagonizing China that wanted no discussion of this dispute at the EAS. Vietnam can expect Russia to provide general diplomatic and political support for the peaceful handling of territorial disputes in the South China Sea. Russia, after all, is a permanent member of the United Nations Security Council, the ASEAN Regional Forum, the ASEAN Defence Ministers Meeting Plus process and the East Asian Summit. 3) What is Vietnams strategy in getting close to Russia what is Vietnam gaining? ANSWER: Vietnam seeks to multilaterize and diversity its foreign relations while at the same time cultivating strategic partners among those states deemed most influential globally and regionally. Vietnam seeks to maintain and develop its broad and deep relations with Russia across the board: economically and commercially including trade and investment; military technology, weapons sales and professional training; soft loans for energy sector development; cooperation in science and technology; general education and training; and culture and tourism. Close all-round relations with Russia are designed to create a stable long-term relationship to assist Vietnam in its development. This was recognized in 2012 when Vietnam and Russia raised their bilateral relations from strategic partners to comprehensive strategic partners. Relations with Russia assist Vietnam from being isolated, marginalized and made dependent in its relations with China.

Suggested citation: Carlyle A. Thayer, Vietnam and Russia: A Comprehensive Strategic Partnership, Thayer Consultancy Background Brief, December 8, 2012.