Vietnam’s International Integration and Engagements with India

National Day Special By H.E. Mr Ton Sinh Thanh Ambassador of Vietnam to India, Nepal and Bhutan

“Doi Moi has transformed Vietnam from one of the poorest countries in the world, with per capita income of less than $100, to a lower middle income country within a quarter of a century with per capita income of over $2,100 by 2015.”

The 2nd September, 1945, marked the birth of the Democratic Republic of Vietnam1, one of the biggest historical landmarks of Vietnam in modern times. For the first time in its history, Vietnam has emerged as a new-born, free and independent country after over 80 years under colonial rule. However, Vietnam was yet to experience the following 30 years of wars towards peace and national unification in 1975, then to respond to the long-lasting aftermaths of wars and other challenges during national reconstruction and development.

Vietnam: 71 years of Independence and 30 Years of ‘Doi Moi’ (Renewal)

Against this backdrop, thanks to ‘Doi Moi’ or Renewal process initiated since 1986, Vietnam has come a long way from a war-torn and centrally planned economy that was heavily dependent on subsidies and foreign aid to become a self-sufficient, export-oriented and one of the fastest growing economies in the region. ‘Doi Moi’ has transformed Vietnam from one of the poorest countries in the world, with per capita income of less than $100, to a lower middle income country within a quarter of a century with per capita income of over $2,100 by 2015. The country’s GDP recorded an average annual growth of nearly 8 percent during the decade from 2001 to 2010 and despite the global slowdown in 2015, it remained among the highest at 6.68 percent. Vietnam has achieved most, and in some cases surpassed a number of the Millennium Development Goals (MDGs), with impressive progress in poverty reduction, education and gender equality.

Vietnam’s Integration in the World Community

In the meantime, to ensure a stable and peaceful environment for national development, on the basis of a consistent foreign policy of independence, self-reliance, cooperation and development, multi-lateralisation and diversification of relations, active and proactive international integration, Vietnam seeks to become a friend, a reliable partner, and a responsible member of the international community, working for peace, independence, democracy and social progress. As of June 2016, Vietnam has diplomatic relations with 185 countries and territories, among which are 2 comprehensive strategic partners, 15 strategic partners (including India) and 10 comprehensive partners.

Furthermore, in a world characterised by increasingly mutual interdependence among countries, with the ‘active and proactive international integration’ approach, which has been widened from economic to all other areas including politics – diplomacy, security – defence, culture and social affairs, Vietnam constructively engaged in nearly all important regional and international arrangements, including the UN peacekeeping forces. Vietnam has become a trading partner of 230 countries and territories all over the world, participating in more than 70 international/regional arrangements, approximately 500 bilateral and multilateral agreements across many areas (including the recently concluded negotiations for Trans-Pacific Partnership (TPP) and on-going negotiations for the Regional Comprehensive Economic Partnership (RCEP).

However, Vietnam is yet to respond to many challenges, including its development gaps with other countries, added by many emerging traditional and non-traditional security issues. Particularly, given the growing challenges to security and stability in the South China Sea/the East Sea, Vietnam is looking forward to diversifying partners to ensure a strategic balance in the region while deepening ties with traditional partners such as India for development of its own capacity.

Vietnam and India: Further Engagements and Synergy in the New Context

Since the early years of our independence, Vietnam has always received support from the Indian people whole-heartedly. As long trusted friends, Vietnam and India share their history of struggling for national independence as well as many issues of interests at regional and global fora, and more than ever before. The time-honoured bonhomie between Indian and Vietnamese people now remains to work as a solid foundation for the ever growing strategic partnership between the two countries. As India and Vietnam move forward on the path of greater growth and development, particularly with stronger convergence of interests between Vietnam’s proactive international integration and India’s Act East Policy, huge potential could be realised to promote fruitful partnership between the two countries in the time to come.

Vietnam and India have intensified regular exchange of visits at both leaders and people levels long before they established full diplomatic relations in 1972. Particularly, since its establishment in 2007, the bilateral strategic partnership has been strengthened on the five pillars of politics, security – defence, economy, science-technology, culture – education and people–to-people ties. The long-standing and ever growing ties in defence and security are among the most critical areas of the strategic partnership between the two countries recently, with the focus on training, repairs and maintenance support, exchanges of information and visits under both bilateral and multilateral mechanisms including the UN’s peacekeeping force.

Meanwhile, with the bilateral trade volume growing from over $1 billion in 2006 to nearly $5.13 billion in 20152, India is among the top ten trading partners of Vietnam while Vietnam is ranked as the 24th trading partner of India. Moreover, Vietnam has emerged as an increasingly attractive investment destination for Indian companies. Following ONGC Videsh Ltd. (OVL), which has been investing in the oil and gas sector in Vietnam’s Economic Zone since 1988 and TATA Power with an on-going $1.8 billion thermal power project in Soc Trang Province (the largest Indian investment project in Vietnam so far), more Indian companies are planning to invest in Vietnam to capitalise on this highly potential market and beyond to its FTAs partners that now include the biggest markets of the world3.

With development partnership being another area of fruitful cooperation between the two countries, over the years, India has offered several concessional LoCs to support Vietnam’s capacity development. Furthermore, Vietnam has been one of the largest recipients of training scholarships under Indian Technical and Economic Cooperation (ITEC) and other programs. In addition to the recently-opened Centre for Indian Studies in Vietnam (in Sept 2014) and a project for conservation and restoration at the heritage site of the Hindu Cham civilisation in My Son Sanctuary of Vietnam, more and more exchange programs and events have been organised to further strengthen cultural and people-to-people linkages between the two countries.

Besides the bilateral mechanisms of strategic dialogues and exchanges, Vietnam has proactively engaged with India in different global, regional and sub-regional fora and arrangements including UN, NAM, ASEM, WTO, ASEAN, ARF, ASEAN+6, ADMM+8, ASEAN – India Summit, East Asia Summit, Expanded ASEAN Maritime Security Forum, among others. Vietnam always supports India’s efforts to join Asia-Pacific Economic Cooperation (APEC) and to become a permanent member of the United Nation Security Council (UNSC). The two countries support each other's candidature for non-permanent membership of the UNSC, with Vietnam for the term 2020-21 and India for the term 2021-22. India is supporting Vietnam to develop its peacekeeping forces to join UN’s operations. Vietnam shows strong support for India’s Act East Policy and further engagement to ensure security and a strategic balance of power in the region while India maintains its consistent position to ensure peace, stability, security and freedom of navigation and over flight, supporting settlement of the East Sea disputes by peaceful means, in accordance with international laws including United Nations Convention on the Law of the Sea (UNCLOS) 1982. Taking its role as India’s country coordinator with Association of Southeast Asian Nations (ASEAN) for the period of 2015-2018, Vietnam seeks to facilitate stronger physical, institutional, cultural and people-to-people connectivity between India and ASEAN.

Given the traditional bonds with long-standing historical, cultural and economic linkages (including Buddhism), a specially high trust and strong mutual support since colonial time, sharing of many strategic views and on-going security concerns, Vietnam and India have become increasingly significant partners in the wider context of the region and the world at large. However, more is yet to be done to narrow the gaps between expectations, potentials and reality and to boost the economic ties for more comprehensive benefits of cooperation in the new context. With the forthcoming visit by Indian Prime Minister Narendra Modi to Vietnam and next year (2017) being the landmark year for the two countries to celebrate the 45th anniversary of diplomatic relations and 10th anniversary of strategic partnership, Vietnam is expecting to further boost its partnership with India towards a new high in the days ahead.

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1 Renamed the Socialist Republic of Vietnam since 1976.

2 According to Vietnam’s data.

3 According to Vietnam’s data, as of June, 2016, India is ranked as the 28th largest investor in Vietnam with 128 projects and with the registered capital of $586.8 million while Vietnam has three investment projects in India with total investment of $23.6 million. Indian companies are investing in oil and gas exploration, mineral exploration and processing, agro-chemicals, IT, and agricultural processing.

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