20 Years Of Vietnam-Russia Strategic Partnership | Vietcetera
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Economy

20 Years Of Vietnam-Russia Strategic Partnership

On March 1, 2001, Russia cemented a strategic partnership with Vietnam - the first country to upgrade its relationship with Vietnam to such.

20 Years Of Vietnam-Russia Strategic Partnership

As the two countries celebrate 20 good years of cooperation, what have they actually achieved? | Source: Shutterstock

No man is an island”, they say. When the Democratic Republic of Vietnam established diplomatic relations with The Russian Soviet Federative Socialist Republic in January 1950, the two territories laid the foundation for a strong friendship and paved the way for decades-long partnership.

After the Vietnam War in 1975 and Russia’s severe economic crisis in the 90s , the two countries remained standing side by side. On June 16, 1994, Vietnam and the Russian Federation signed an agreement on the fundamental principles of the friendship between the Socialist Republic of Viet Nam and the Russian Federation, creating a foundation and the legal basis for the Vietnam and the Russian Federation in the new development level.

By March 2001, when Russia was starting to reassert itself as a global superpower, the country cemented a bilateral strategic partnership with Vietnam -- the first country to upgrade its relationship with the Southeast Asian country to such.

Upon signing a strategic partnership, both Vietnam and Russia committed to helping each other in terms of defense and security, as well as in education, health, trade, investment and overall economic development.

As the two countries celebrate 20 good years of cooperation, what have they actually achieved?

Historic milestone

Russian Foreign Ministry Spokesperson Maria Zakharova said that the strategic partnership between Russia and Vietnam was a natural result of decades-long fruitful collaboration between the two countries.

“The declaration of the diplomatic relationship, which was signed in Hanoi on March 1, 2001, materialized the Russian and Vietnamese peoples’ wish to progressively strengthen their intergovernmental relations based on many years of friendship and mutually advantageous cooperation,” Zakharova said.

According to the report by Hanoitimes, the Russian spokesperson named the milestone as historic and marks the cooperation in a variety of fields. It also displayed the determination of both countries to expand the bilateral ties in the new historical conditions on the basis of their rich experience of interaction accumulated over the past two decades.

Meanwhile, inter-parliamentary and inter-party exchanges, as well as inter-regional contacts, have become more active.

“We have developed new cooperation mechanisms which enable more efficient interaction so as to find ways of solving pressing issues concerning bilateral affairs and close coordination on the international arena. It is indicative that our strategic partnership became comprehensive by mutual consent in 2012,” Zakharova stressed.

Increasing economic ties

Russia ranks 24th among 129 countries and territories investing in Vietnam, with 123 registered projects mainly in oil and gas, registering a total capital of at least $932 million, according to Vietnam Briefing. ROSTEC, Russia’s largest electronics company and Vietnam’s oldest Russian investor, has continually expanded its roots in the Southeast Asian nation, from initially providing military engineering and technology, the company is now a key player in the fields of healthcare, automotive and agriculture technology.

Russia is also Vietnam’s largest provider of military arms, equipment and technology, equipping the country with high-tech weapons for defense and security.

In turn, Vietnam’s main export to Russia includes electrical engineering products, mobile phones, textiles, food and beverage and coffee. Vietnam has 22 investment projects in Russia which are worth nearly US$3 billion. One of the biggest and most notable Vietnamese investments include TH Groups’ US$2.7 billion in dairy farms in the Primorye region.

In 2019, Vietnamese Foreign Minister, Anh Dung, stated that he wishes to see Vietnam-Russia bilateral trade hit the US$10 billion mark in 2020.

In a Vietnam Briefing report, Anh said, “In the field of trade, Vietnam needs to increase traditional products, such as agricultural, seafood, rubber, textiles, wood and wood products and expand the export of computers, electronics, and phones of all kinds. In turn, we are ready to import Russian raw materials, such as iron, steel, coal, fertilizers and so on.” He added that Vietnam also intends to attract Russian investment in areas where Russia has advantages, such as energy, mining, engineering and processing.

Access to ASEAN markets

In 2019, during the Far Eastern Economic Forum in Vladivostok, Vietnamese Deputy Prime Minister, Trinh Dinh Dung, said that EAEU-Vietnamese bilateral trade doubled in 2018, and that vehicle assembly operations involving autos and especially tractors from Belarus had performed well under the FTA.

The Vietnam-EAEU FTA also provides Russian companies access to ASEAN markets, which comprise major economies such as Indonesia, Malaysia, Philippines, Singapore, and Thailand along with smaller markets, such as Cambodia, Laos and Myanmar. Vietnam as a member of ASEAN allows for reduced tariffs with these nations, while ASEAN itself also has an FTA with China and India, according to a report by the Vietnam Briefing.

Establishing a Vietnamese subsidiary gives Russian owned businesses access to each of these markets – subject to local sourcing content controls. The country also has free trade and economic processing zones, which can allow additional production on imported Russian and ASEAN sourced components to be carried out free of duties and value-added tax (VAT), thus making Vietnam an attractive option for Russian businesses looking to sell products in Asia.

Through tough times

While the COVID-19 pandemic is defining the global health capabilities of each country, Russia and Vietnam have been offering each other the necessary consultative and methodological assistance. At the same time, having their specialized institutions engaged in a dialogue on a whole range of matters in fighting against COVID-19, constantly exchanging experience in combating this dangerous disease.

“Today, with everything that’s happening and based on the many years of experience of fruitful cooperation, the all-round strategic partnership between Russia and Vietnam remains an important part of Russian foreign policy in the Asia-Pacific region,” said Zakharova.