Putin in Hanoi: What does Vietnam hope to gain?

Russian President Vladimir Putin arrived in Vietnam to a rather muted welcome, a contrast to his lavish visit to North Korea earlier this week. At the airport, he was greeted by lower-ranking Vietnamese ministers. But things picked up quickly enough — Putin met with Nguyen Phu Trong, Vietnam's communist party chief, the new state president, To Lam, and signed over a dozen accords on bilateral cooperation, including education, medicine, fossil fuels, and a nuclear science and technology center in Vietnam.

None of the documents that have been made public are linked to defense, but Vietnamese President Lam said there were other deals that will remain secret.

The visit has already prompted condemnation from Washington, with the US saying it was normalizing Moscow's "blatant violations of international law," referring to Russia's full-scale invasion of Ukraine.

Secret dealings?

As part of its neutral foreign policy, Hanoi is eager to make clear that it isn't an ally of the United States, nor a vassal state of China. It has consistently abstained from all UN resolutions condemning Russia's war in Ukraine, claiming neutrality over the conflict, and was one of four Southeast Asian states that refused to attend last weekend's Summit on Peace in Ukraine in the Swiss town of Bürgenstock. Russia was not invited to the summit.

"We are grateful to our Vietnamese friends for their balanced position on the Ukraine crisis and their desire to facilitate the search for practical ways to settle it peacefully. All of this is fully in line with the spirit and nature of our relations," Putin said on Thursday, according to Russian state media.

Russia's new defense chief Andrey Belousov accompanied Putin to Vietnam. Analysts agree that security issues were the paramount reason for his visit, even with Russian and Vietnamese media focusing mainly on the economy.

"Due to the sensitive nature of this issue," Le Hong Hiep, a senior fellow at the ISEAS — Yusof Ishak Institute in Singapore, told DW, "Vietnam may choose not to publicly disclose any information about potential deals in order to avoid causing concerns in the West."

Paying under the table

Up until 2022, Russia was the largest provider of weapons to Vietnam. By that year, it accounted for approximately 60% of all Vietnam's military purchases over the previous two decades, according to the Stockholm International Peace Research Institute.

The imports have tanked since Russia's invasion of Ukraine. Buying arms from Russia could lead to major repercussions from the West and put Vietnam at risk of incurring US sanctions, especially under the US Countering America's Adversaries Through Sanctions Act (CAATSA).

However, a leaked document from the Vietnamese finance ministry, dated March 2023, indicated that Hanoi plans to modernize its military by secretly paying for arms purchases from Russia via payments to the joint Vietnamese and Russian oil venture Rusvietpetro, which has oil and natural gas operations in Siberia.

"Vietnam really needs to get the 2023 secret agreement and an alternative funding mechanism for defense acquisition going," Zachary Abuza, a professor at the National War College in Washington, told DW.

"This was to allow for big-ticket items that would blow through their annual defense budget, while at the same time avoiding the use of US dollars that could run it afoul of CAATSA sanctions," Abuza added.

US and Vietnamese authorities declined to comment on the document. Last year, the New York Times quoted a Vietnamese official saying that the secret arms agreement with Russia would be worth $8 billion ($7.5 billion) over the next two decades.

Rumors suggest that Hanoi is trying to purchase fighter aircraft and BrahMos anti-ship missiles — supersonic cruise missiles designed by a joint Russian and Indian venture — from Russia.

Russian systems would also be easy to integrate into the Vietnamese military without extra training, as the Vietnamese forces have decades-long experience using, and maintaining, Russian weapons.

What happens as Moscow moves closer to Beijing?

But Vietnam is also wary of provoking China, with whom it is locked in a long-standing naval dispute in the South China Sea.

Perhaps one reason for Putin's visit is that the Vietnamese government wants assurances from Moscow "that it will not compromise Vietnam's interests in exchange for China's support, as Russia grows increasingly close to China following the invasion of Ukraine," Nguyen Khac Giang, also a fellow at the ISEAS-Yusof Ishak Institute, told DW.

Since its full-scale invasion of Ukraine in February 2022, Russia has become far more economically and geostrategically dependent on China. Indeed, it has long been suspected that Beijing has pressured Russia not to sell BrahMos missiles to Vietnam.

There are now concerns that losing Russian support would leave Vietnam with fewer strategic options.

What's Western trade worth to Vietnam?

The West may not be too eager to rock the boat and openly pressure Vietnam as it geopolitical weight grows in Asia. However, it could use economic ties to try and steer Hanoi away from Moscow.

Vietnam has minimal trade with Russia, worth about $3.63 billion last year, a stark contrast compared to Vietnam's trade links with the United States and the European Union, which were worth $124 billion and $63 billion, respectively.

Before Putin's arrival, a spokesperson for the US Embassy in Hanoi told the Reuters news agency that "no country should give Putin a platform to promote his war of aggression and otherwise allow him to normalize his atrocities."

Edited by: Darko Janjevic

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