What do Russia and Vietnam want from each other?

Russian Prime Minister Mikhail Kasyanov continues his tour of Asian countries. After visiting Mongolia, he set off for Vietnam on March 26. Both states used to be Moscow’s close allies in the Soviet era. Mongolia was even called “the sixteenth Soviet republic." When Leonid Brezhnev was at the head of the Soviet government, a project for addition of Mongolia to the Soviet Union was developed. The project was about to be implemented, but at the very last moment, it was decided to give it up.

The Soviet Union managed to establish close contacts with Vietnam during the war between the South Asian state and the USA. Soviet weapons helped Vietnam acheive victory. When the war was over, the relations between the two states were still close.

After the breakup of the USSR, political and economic relations with Vietnam and Mongolia have practically come to naught. As a result, the economies of both states, which were very dependent on the Soviet Union, faced a severe crisis. They had to start reforms in the economic sphere, and, first of all, they had to re-oriented themselves towards commercial partners from other countries.

Russia and these two Asian states have increased their contacts within two last years. Last year’s visits of President Vladimir Putin to Mongolia and Vietnam have considerably contributed to these new relations. Russia wrote off a great part of Mongolian and Vietnamese debts to the USSR, which is said to be the main result of the visits. Vietnam’s debt to the Soviet Union made up $11 billion, and the majority of it was written off during Vladimir Putin’s visit to the country. In fact, Hanoi will have to pay only a quarter of the sum in the next twenty years. The majority of the payments will be done in consumer goods.

Until recently, the Soviet Union, and later Russia, have been renting Vietnam’s Navy base in Cam Ranh. However, the base has been practically idle over the last ten years. Finally, the lease was surrendered in October of 2001. The lack of financing for the base management was mentioned as the main reason to give it up. At once, information appeared that the base may be held on lease by the USA. Vietnamese authorities rejected the idea at once and said the base would not be given on lease at all.

No official date for withdrawal of the Russian staff from the base in Cam Ranh had been announced before Mikhail Kasyanov’s visit to Vietnam. On the visit’s eve, head of the Russian Navy central headquarters Admiral Viktor Kravchenko said that Russia would hand the base over to Vietnam by July 1, 2002.

Russian arms supplies to Vietnam are another important subject to be discussed during the coming talks. Russian politicians always touch upon the subject during their visits to the Asian countries. It is quite natural, as the Asiatic market is the most attractive for Russia. One more question arises here: how is Vietnam going to pay for the arms supplies? Several ways can be suggested. It would be possible to expand cooperation between the countries in the spheres of power and oil-and-gas industries. Cooperation in these spheres was also discussed during Mikhail Kasyanov’s visit to Mongolia. Russia is ready to discuss the construction of an oil pipeline via Mongolia’s territory to China. If the project is a success, all participants will greatly benefit.

Despite the fact that many projects in the oil-and-gas sphere were created in Vietnam, no oil refinery has been constructed yet. The explanation is easy: lack of financing. Mikhail Kasyanov’s visit to Mongolia is believed to have solved the problem.

Thus, the key spheres for Russian-Vietnamese cooperation are the following: the oil-and-gas industry, arms supplies to Vietnam, and consumer goods from Vietnam to Russia. Commercial relations between the two countries will not concern only the mentioned spheres, as several joint enterprises in the spheres of chemical industry, construction, etc. have already been created. Russia and Vietnam have considerable potentia to be actively developed. Special attention will be paid to development of economic and not political contacts. Such is the requirement of the time.

Oleg Artyukov PRAVDA.Ru

Translated by Maria Gousseva

Read the original in Russian: http://www.pravda.ru/main/2002/03/26/38815.html