Publication: Monitor Volume: 7 Issue: 44

Russian President Vladimir Putin wound up a two-day visit to Vietnam last week which officials from both sides hailed as a major step toward rebuilding the close ties Moscow and Hanoi had during the Cold War. Putin signed a “strategic partnership” agreement with President Tran Duc Luong on March 1 and oversaw negotiations which will reportedly give a big boost to trade and economic relations between the two countries. Indeed, a number of Russian news sources emphasized the importance of the economic dealings Putin pursued both in Vietnam and during a visit to South Korea which preceded his stop in Hanoi (see the Monitor, March 1-2). They suggested that Putin’s two-country Asian tour had not only helped to reestablish Russia’s diplomatic presence in the region, but also represented a breakthrough of sorts in what will apparently be a new goal of Putin’s Kremlin: to use presidential diplomacy in an effort to expand business opportunities for Russian companies, including those of them dealing in military hardware.

The apparent success of Putin’s visit to Hanoi was abetted by the obvious enthusiasm of Vietnam’s communist leadership, which rolled out the red carpet for the former KGB spy and used the state-controlled media to publicize his arrival. The lingering importance of Soviet-era Russian-Vietnamese friendship to at least portions of the country’s governing elite was especially evident on March 2, when Putin was given a rousing send-off by some 10,000 Vietnamese–including the country’s current political leadership–who had studied in the former Soviet Union. The reception reportedly delighted the Russian president, who in a speech carried on Vietnamese television called for citizens of the two countries “to try not to lose or betray our cooperation in the cultural sphere.” Putin is the first Soviet or Russian political leader to visit Hanoi, despite the close ties between the two countries prior to the Soviet Union’s dissolution.

If Hanoi’s aging communist leadership and the 50,000 or so Vietnamese who are believed to have studied in the Soviet Union continue to wax nostalgic about Cold War era ties between the two countries, however, the same seems not to be true of Vietnam’s population in general. Western news agencies reported only tepid interest among average Vietnamese in Putin’s arrival. They also observed that U.S. President Bill Clinton’s visit to Vietnam last November generated considerably more public interest and enthusiasm than did Putin’s, despite the fact that Clinton was not accorded the same sort of official public welcome as Putin.

For all of that, Putin’s Hanoi visit appeared to mark what may be the start of a substantive partnership between the two Cold War era allies, and contrasted greatly in that regard to a trip Putin made last December to Cuba, another former Soviet client state. The “strategic partnership” agreement which Putin and the Vietnamese president signed contained pledges for defense and increased economic and trade cooperation. It also included affirmations of Vietnamese support for such broader Russian international security positions as opposition to both deployment of a U.S. theater missile defense system in Asia and to efforts by the international community to legitimize the notion of “humanitarian intervention.”

But economics and trade issues appeared to be at the heart of the agreements the Russians and Vietnamese signed last week. Russian sources suggested that the way had been opened to greater cooperation in these areas by two recent developments: a deal signed in Moscow last September by which Hanoi’s Soviet-era to Russia was reduced from US$11 to US$1.7 billion, and Russia’s improved economic performance over the past year. The September debt deal ended years of squabbling between the two countries and cleared the way for a final debt agreement last week which reportedly reduced the amount that Vietnam must pay Russia even further–to US$1.5 billion–and which requires payment of that amount over a 23-year period.

Furthermore, if Russian sources are to be believed, Russia’s improved economic performance has put the country in the position for the first time in many years to itself invest in ventures overseas. They noted that Putin expressed Russia’s readiness during his visit to Seoul to “invest hundreds of millions of dollars” in railroad construction in North Korea (as part of a major project which would connect the South and North Korean railroad systems to Russia’s own). Putin likewise reportedly committed Russia to investing US$100 million each in two Vietnamese projects–the construction of an oil refinery and a hydropower plant. In addition, the two countries agreed during Putin’s visit that Vietsovpetro, the joint Russian-Vietnamese venture which taps most of Vietnam’s crude oil, will explore a 37.5 square mile block of Vietnam’s southern coast (New York Times, Reuters, March 2; China Daily, BBC, March 1-2; Nezavisimaya gazeta, Vedomosti, March 2).

Although military cooperation between Russia and Vietnam appeared to be a significant element in the strategic partnership agreement signed last week, there were no announcements of any concrete agreements. Putin did say at a news conference, however, that “Vietnam needs not only to maintain its existing weapons bought from the Soviet Union but also to acquire modern weapons.” He offered no specifics as to any prospective deals which might have been discussed during his visit to Hanoi (New York Times, March 2; Russian agencies, March 1-2).

The two countries appear also to have sidestepped what might be–now that the debt is resolved–the most contentious and important issue facing them: the fate of Russia’s presence at the sprawling Cam Ranh Bay naval base built by the United States in South Vietnam. Moscow maintains about 600 personnel there on the basis of a rent-free agreement signed in 1979. That agreement expires in 2004, however, and the two sides have so far conducted two years of unsuccessful negotiations to determine on what basis Moscow might continue to use the facility. Reports have suggested that Vietnam may now be asking US$200 million or more per year for use of the facility–a price, ironically, said to be based on what Moscow is paying for use of the Lourdes base in Cuba–while Russia is said to be offering only US$40 million.

Russian officials had suggested prior to Putin’s arrival in Hanoi that they expected to engage in extremely difficult talks over Cam Ranh Bay, but reports during the visit suggested the issue had hardly been addressed. Whether or not that is true, the problem cannot be finessed indefinitely. The facility is said to be central to Russian naval planning, because it enables Russian ships to sail to the Indian Ocean and Persian Gulf. At the same time, the issue is one of broader regional significance: Both China and the United States are reportedly eyeing the facility for both its strategic and its commercial significance. Neither, moreover is believed to be enthusiastic about a continued Russian presence there (Vremya Novostei; AFP, February 27; Reuters, February 27, March 2; Izvestia, China Daily, March 1).