Vietnam
As Cambodia (41st ASEAN Summit), Indonesia (G20 Summit), and Thailand (APEC Summit) gear up to host major world summits in November, the 55-year-old Association of Southeast Asian Nations is facing an existential crisis, owing to severe internal splits over in the wake of Russia’s invasion of Ukraine, Myanmar’s military coup, and other issues. The 2007 ASEAN Charter’s vision of deeper political, economic, security, and socio-cultural integration is no more. Salvaging what’s left will require accepting this reality and regrouping accordingly. The consequences of the intensified competition of the great powers in recent years are especially clear in Southeast Asia.
The launch of the Quadrennial Security Dialogue (QUAD) by Washington DC, Tokyo, Canberra and New Delhi as part of their national Indo-Pacific strategies raised the question of further expanding this format and its interaction with the states of the region. Taking into account the obvious anti-Chinese orientation of the group, Vietnam is viewed as a promising partner, as it progressively develops bilateral ties with all four countries.
Under Xi's leadership, China has resorted to island building in the Spratly Islands and the Paracel Islands region. Island building in the South China Sea primarily by Vietnam and the Philippines has been going on for decades; while China has come late to the island building game, its efforts have been on an unprecedented scale as it had from 2014 to 2016 constructed more new island surface than all other nations have constructed throughout history and as of 2016 placed military equipment on one of its artificial islands unlike the other claimants. China and Vietnam's island building campaign in the South China Sea similarly noted that the reason why Vietnam in contradistinction to China has been subject to little international criticism and even support was because of the slower speed and widely perceived defensive nature of its island-building project.
Interests of Vietnam and Quad in curbing the growth of the PRC's influence in Asia-Pacific does not inevitably lead to the joining of Vietnam to the Quartet. Hanoi's unwillingness to complicate the already uneasy relations with Beijing (joining the anti-Chinese bloc will obviously not benefit bilateral ties) stipulates "flexible" formats of interaction with QUAD on various topical regional issues. The old ASEAN is gone for good. The region will not be completely united through political-security, economic, and socio-cultural communities. But nor will the organization be disbanded. Instead, its like minded members should pursue a hard realignment, so that individual parties cannot paralyze the rest of the group. For now, the new ASEAN should center around the founding five members plus Vietnam.
At the same time, it appears that the Vietnamese course for the consistent strengthening of bilateral relations with the four mentioned states, including cooperation in the field of defense and security, will be continued. In March 2020, the Quad members held a meeting with representatives from New Zealand, South Korea and Vietnam to discuss their respective approaches to the ongoing coronavirus outbreak. When Vice President Kamala Harris’ visit Vietnam (alongside India, Singapore, August 2021) her agenda on bilateral issues included priority on trade cooperation and investment. Private industry in America has already lobbied Harris to push for Coronaviru vaccines for workers in Vietnam’s apparel, footwear, and travel goods industry.
This is because Vietnam is the largest exporter of these items to the US. Vice President Harris and Vietnam’s leaders will explore opportunities in developing Vietnam’s electronics industry to a higher standard to establish a secure supply chain to the American market for Vietnamese manufacturers, implicitly to gradually replace Chinese products in America. VP Harris raises the stability of supply chains linking Vietnam to the US. One important area, how the US can assist Vietnam in upgrading its capacity to manufacture semiconductor chips for sale in the US where there is a current shortage. Vietnam in particular plays an increasingly important role in many supply chains, as companies in recent years moved operations there from China.
The participation of Vietnam, the latter being the first country from Southeast Asia/ASEAN to join, was seen as another attempt to expand the importance of the QUAD as well as the growing threat China posed in the region. With participation by Vietnam asa Non-Permanent QUAD member, QUAD origins member have played a major role in purposefully redefining the "Asia-Pacific" as the "Indo-Pacific", to deepen trans-regional ties between the Indian and Pacific Ocean areas, and to, in their words, deal more effectively with the rise of China, the Middle East and Africa.The term "Indo-Pacific" gained traction in the political lexicon and strategic thinking of not only the Quad members, but as of recently also of ASEAN.
Vietnam - a country that strengthens ties with all four states and, at the same time, is involved in territorial disputes with China. Apart from ASEAN membership, Vietnam is of interest to Quad for other reasons. Vietnam is a welcome partner in the field of defense and security, also due to its advantageous geographic location (long coastline, natural deep-water bays, a common border with China). The Vietnamese People's Army is the 2nd strongest and biggest armed forces of the Southeast Asian countries (after Indonesia), equipped with modern means of controlling the sea area. In addition, Hanoi, which is interested in diversifying military-technical cooperation and has a solid (by the standards of the region) military budget, can be viewed as a promising market for military products. At the same time, Vietnam is an attractive partner in the trade and economic sphere, especially in the context of the course of Quad members to reduce trade dependence on China.
But Vietnam tries to be more independent for another global issue. Alongside Lao PDR, Vietnam consistent abstain in UNGA resolution between March 2nd and October 12th for Russia - Ukraine saga. Thailand actually voted “In Favor” on March 2nd, but in the latest UNGA (Oct 12th), Thailand changed the decision and voted “abstain”. Other ASEAN members voted “In Favor” on March 2nd and October 12th. India, a QUAD origin member, also abstained on UNGA resolution March 2nd and 12th October.
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Like North Korea, Vietnam started opening its economy while allowing little to no private ownership. However, after three decades, Vietnam – like many developing countries – is not immune to the detrimental effects of extractive elites. There is evidence of powerful private companies’ undue influence over domestic policies. According to a commentary in People’s Daily by former Vietnamese President Trương Tấn Sang, corruption is worse now than at any other time in the Communist Party of Vietnam’s history. “There is collaboration between those in power and rent-seekers to abuse state policies,” he wrote. “They arrange business deals that benefit some individuals and groups greatly, but cause immeasurable damage to the state budget and disrupt the economy.”
After its “Doi Moi” (Renovation) reforms in the late 1980s, communist Vietnam became a “socialist-oriented market economy,” a member of the Association of Southeast Asian Nations, and a welcoming destination for American tourists. Clearly, even terrible memories can fade with time. Nonetheless, Vietnam’s hybrid model of socialist governance and market economics has been widely touted as an example. Between 2007 and 2017, Vietnam’s wealth grew by 210%, and according to the real-estate consultancy Knight Frank, more than 200 Vietnamese have investable assets of at least $30 million. Having expanded by 320% between 2000 and 2016, Vietnam’s “super-rich” class is growing faster than that of India (290%) and China (281%). And if current trends continue, it will have grown by another 170% – from 14,300 to 38,600 millionaires – by 2026.
A significant share of these nouveaux riches have acquired their wealth by taking advantage of loopholes in the governance system. Such cronyism has thrived in the absence of clear regulations governing property ownership and conflicts of interest on the part of public officials. One obvious reason is that government employees typically receive exceedingly low salaries; even the prime minister earns only around $750 per month.
Against this backdrop, the CPV launched its unprecedented anti-corruption campaign, while publicizing its efforts to fight “interest groups” and thwart state capture. So far, the prosecution of some former high-ranking officials has alleviated public discontent. And the Hanoi summit years ago, together with Former President Trump’s trade war against China, seems to have driven more foreign direct investment into Vietnam, thereby relieving some pressure on the economy, and thus on the government. But in the long run, the Party cannot rely on such windfalls.
Over the past three years, the CPV’s top thinkers have held a public discussion about introducing more checks and balances into the system. Apart from the anti-corruption trials, there are plans both to reduce the number of people on the state payroll and to raise the salaries of those who remain.
In crafting its new development plan, the CPV seems to have been inspired by Singapore and the Nordic countries. Its goal is to move from a model based on cheap labor and capital-intensive, high-pollution, industrial-based investment to one based on advanced technologies and services, which would ensure more sustainable and equitable growth.
Judging from public statements, the Party’s leaders seem to have recognized that flagrant corruption and rapidly rising inequality pose a threat to their legitimacy. Yet it remains to be seen if the current enforcement efforts will actually lead to meaningful political reforms, stronger safeguards against corruption, and clearer regulations for property ownership, so that the rich no longer have to rely on insiders to accumulate and protect their wealth.
Much of the CPV’s rhetoric has focused on the need for “morality and ethics” on the part of government officials. But it would be better to accept that self-interest is a powerful and inescapable human trait. By simply enjoining government officials to behave honestly out of a sense of public duty, the Party risks missing the opportunity to establish stronger and more rational corruption-monitoring mechanisms.
As for the Party’s attempts to transform the economy, it is worth noting that in the run-up to the Trump-Kim summit years ago, Vietnamese Prime Minister Nguyễn Xuân Phúc went to unprecedented lengths to bolster his country’s public image by personally selecting some Vietnamese dishes for foreign journalists. In the past, the Party has always regarded the foreign press as a threat to be avoided, owing to past criticisms of Vietnam’s track record on human rights. But now, the goal is to boost the tourism industry by establishing Vietnam as a top travel destination.
When Kim Jong-un was in Hanoi to meet Trump, many Vietnamese cheered, not because they missed the closed economic policies of the 1980s, but because the scene was reminiscent of Vietnam’s own negotiations to normalize relations with the US in 1993-1994. That diplomatic success paved the way for a significant share of the Vietnamese population to be lifted out of poverty.
But while most Vietnamese have enjoyed years of rising living standards, the economic model of the past three decades must be transformed. Vietnam is once again at a crossroads. Although Kim Jong-un and Former President U.S. Trump couldn’t reach an agreement on ending US sanctions in Vietnam years ago, and this October alone, North Korea sent missiles at least 5 times toYellow Sea and Pacific Ocean. If Kim Jong-un is serious about emulating Vietnam’s hybrid model of socialist governance and market economics, he will have to be mindful of the risks.
The likelihood of building the aforementioned "Asian NATO" is another cause for concern. Regardless of the official rhetoric of the four countries, supporting the central role of ASEAN in regional affairs, the very creation of a military-political group in the Asia-Pacific region with the implanting of bloc thinking into the region erodes ASEAN centrality.