India - Vietnam ties are transformative, not transactional (Part 2)


India - Vietnam ties are transformative, not transactional (Part 2)

(Part 1)

Ash Narain Roy*

Vietnam’s rising profile

But there is another country whose footprint is growing steadily, that is Vietnam. It is busting with optimism about its future. Vietnam’s dramatic transformation from an agrarian society to a modern state has been the result of hard work and right policies. Vietnam’s rise is not just an economic phenomenon, it has geopolitical implications. Geopolitical sages have  paid too much attention to China, perhaps in the process missing out the geopolitical relevance of the rise of the rest and the growth of parallel centres of prosperity.

Vietnam is a major emerging market and an attractive investment destination. The country is fast emerging as a middle ranking power in its own right. No wonder, India, Japan, US and China are competing for influence.According to the World Bank report, “Vietnam’s economy is strong as a result of strong momentum of its fundamental growth drivers—domestic demand and export-oriented manufacturing”.

Brookings report rightly says that, “Vietnam has not only socialized quickly into the Southeast Asian community, but it has also proven capable of taking a more central role…Twenty years after joining ASEAN, Vietnam is arguably the most active player in the region in terms of foreign policy.” Vietnam’s most valuable asset is its “golden population”—half of the population is under 30. No less important is its geographical location. Vietnam has more than 3,000 km coastline which places it at the centre of trade and maritime activities.

Southeast Asia is a strategically important region. It is sitting on key Sea Lines of Communications between the Middle East and North Asia. It is also resource-rich. In recent years Vietnam’s strategic significance has increased dramatically owing to huge transformations in its economic performance and foreign policy orientation. Reinvigorated by two decades of rapid economic growth and a broad-based opening to the outside world ,Vietnam is now an emerging player in regional economic and security affairs.

An agricultural miracle has transformed a country of 90 million people who were mired in poverty. Vietnam is a new tiger and it is roaring. It has created right institutions for its economic success.Vietnam has become the region’s Silicon valley thanks to successful education, government support and an environment of entrepreneurship. Vietnamese high school students now regularly outperform their peers from wealthy Western countries. Indian students have been doing that for decades.

For long Vietnam was the production centre for Korean and Japanese manufacturers like Samsung, L G Electronics, Panasonic and Toshiba. Now it is  transforming from being a top producer of electronic components to becoming a centre of research, innovation and development.

 Growing congruence and synergy

The new dynamism, historical and civilisational bonds and convergence of economic and strategic interests  have created new synergy in India-Vietnam relations. Vietnam has its own reasons to cultivate India, a country which in recent years has become the flavor of the world. If India’s ‘Act East’ policy is driven by both geostrategic and geo-economic factors, Vietnam too is moving close to India to advance its strategic goals.

Given India’s huge market and growth potential, Japan, South Korea and Taiwan are all looking at India positively. Both Japan and South Korea have realized that there is very little room to expand their already well-developed relations with China and the US. Hence Japan’s ‘southward advance’ and South Korea’s ‘new Southern policy’. Vietnam is strengthening ties with India given India’s game changing capabilities.

Strategic imperatives

One of the biggest geopolitical challenges for Asian countries is how best to deal with China’s rise. China’s coercive behavior and aggressive stance have created a sense of unease among Southeast countries. China is using templates of the past to assert its claim to Asian hegemony. The Permanent Court of Arbitration has rejected China’s claims to 80 percent of the South China Sea as invalid under international law. Several countries called on China to follow India’s example of resolving its maritime boundary with Bangladesh.

The potential militarization of the South China Sea threatens the stability and prosperity of the Southeast Asian nations.

Given its unique geopolitical and geostrategic position, Vietnam exerts influence on both continental and the maritime sub-regions in Southeast Asia. Its dominant power status emanates from its current strength and future potential. It is the 14th most populous country in the world with a very young population and  dynamic economy. Its middle power status and geostrategic position makes Vietnam  an important strategic player in the region. Vietnam has the critical strategic weight and potential to shape the region’s security environment as also to  deal with external powers involved in the region.

Is India the x factor?       

Vietnam is fast integrating into the international political economy. Through its deep economic engagement and diplomatic outreach, Vietnam is following a policy of strategic diversity in its partnerships. It is cultivating as many diverse relationships as possible. After all, Vietnam  doesn’t want to be seen as a bulwark against the containment of China. On the other hand, Hanoi is working to reinforce its position by strengthening its security cooperation with US, Russia and India. Vietnam’s strategic hedging behavior has been a familiar trait of its foreign policy since the end of the Cold War. Vietnam’s foreign policy has been geared towards ensuring its national development by “being a friend-to-all”. The concept of comprehensive security has guided its foreign policy approach.

Interestingly, Vietnam has signed comprehensive strategic partnership” with Russia and China. However, the joint drills by China and Russia in the South China Sea and the deployment by China of Russian made Su-35 fighter jets in its combat mission in the South China Sea has annoyed Vietnam and underlines the limitations of this partnership.

The growing strategic partnership between India and Vietnam has given Hanoi the comfort factor. Both India and Vietnam value their partnership as a way to check China’s aggressive behavior. As far as India is concerned, Vietnam is a pivotal state as a strategic partner. The high-level engagement between the two countries suits both. Vietnam’s comprehensive strategic partnership with India has given it levers of diplomacy, economic relations and military ties to help maintain its strategic autonomy.

Vietnam has consciously followed a hedging strategy in its foreign relations and walked a fine line in its policy towards US, China and Russia. In recent years Vietnam has been forging deeper relations with several countries. During his visit to Vietnam, Japanese Prime Minister Shinzo Abe promised patrol boats to Vietnam. Abe said, Japan will “strongly support Vietnam’s enhancing its maritime law enforcement capability”.

Vietnam and Australia have moved from “comprehensive partnership” in 2009 to ‘enhanced partnership” in 2015 and now to “strategic partnership”. In March this year, Australia, Vietnam sign new strategic partnership in an apparent move to counter China's growing assertiveness in the Asia-Pacific region. Even South Korea has shown interest in building more muscular ties with Vietnam.

In a bid to counter China's growing assertiveness, several countries in the Indo-Pacific region are stepping up cooperation. This comes at a time when regional influence of the U.S. under President Donald Trump has weakened considerably.

India-Vietnam ties are a knight in shining armour. There is a growing convergence of strategic assessment. Their common economic interests are buttressed by shared political values and security interests. The two countries has grasped their utility for advancing their economic, security and foreign policy goals.

Trade ties are strategic too

Trade too is a strategic concern. Trade is more than an economic concept. Strategic trade at a time of strategic ties makes sense. Strategic trade is one way in which countries can build their influence and power regionally and globally. Trade is also a substitute in part for military muscles.

In the Trumpian age, even trade wars aren’t about trade alone. Trade is an instrument in strategic competition. Today the importance of trade has risen to a strategic level. Countries gain competitive advantage through innovation.—not just new tools of trade but also new ways of doing things. Both India and Vietnam need to anticipate trade opportunities. Information plays a key role in the process of innovation—information that is either not available to competitors or they don’t seek. It comes from investment in research. More often, it comes from openness and from looking in the right place.

India continues to be among Vietnam’s top ten largest trading partners as the bilateral trade turnover has increased 16% per annum on average in the past decade. A large number of major Indian firms have established and expanded their footprints in Vietnam. Obviously, bilateral trade and economic engagement are below par. The challenge before the two countries is to use their proximity to integrate geography and economic potentials into a strategic construct. Trade ties need to be scaled up. In our multi-faceted relations, if trade content remains thin, as is the case now, strategic partnership will remain more aspirational than real.

Old friend, better than two new ones

India and Vietnam have many things in common. Both are gradually moving from being a balancing power on the regional and global scene to becoming leading players. Both have adapted their foreign policy and strategic relations to ‘variable geometry’ of international relations.

Given the new geopolitical and geo-economic realities, Vietnam is going to be even more relevant to the Indian scheme of things than it has ever been. The security and defence collaboration continues to be a major pillar of India-Vietnam relations. The essence of strategic convergence between India and Vietnam  is choosing not just what to do but also what not to do.

Churchill’s words are quite instructive. He says, “however beautiful the strategy, you should occasionally look at the results”. At a time a trade confrontation between China and the US is heating up, India and Vietnam can create mechanisms and instruments to take trade and investment ties to the new height. The task of the two governments should be to make India-Vietnam ties transformative. Both the countries have many challenges to surmount. They will have to play their role in the competitive international strategic environment.

The geographic importance of the Indo-Pacific region is increasing. India is seen as one of the anchor countries for greater connectivity and trade. The coercive behavior of China, trade war between US and China and American unilateralism provide new opportunity for India and Vietnam  to take their ties to newer heights. Today their ties are still some distance away from acquiring game changing capabilities.

* Director, Institute of Social Sciences, Delhi

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