ELUSIVE TANGIBLE BENEFITS
In addition to sentimental attachments and the management’s political consideration, tangible advantages for Vietnam from Putin’s go to are elusive. Bilateral commerce stood at US$3.6 billion in 2023, half of the 2021 determine and a mere fraction of Vietnam’s commerce with China (US$171 billion), the US (US$111 billion) and EU (US$72 billion).
In 2023, Russian vacationers, as soon as among the many prime 10 sources of international guests to Vietnam, dropped to solely 19 per cent of the 2019 (pre-COVID 19 pandemic) determine.
The prospects of furthering financial ties are dim, given the US tightening sanctions in opposition to Russia. The one exception could also be within the power sector, as Vietnam nonetheless pins its hopes on Russia’s continued participation in its hydrocarbon initiatives within the South China Sea amid China’s intensifying obstruction.
Moreover, Vietnamese investments in Russian oil and fuel reserves via Rusvietpetro – a three way partnership between state-owned Zarubezhneft and Petrovietnam – are reaping earnings with Russian tax concessions.
Within the arms commerce, the place Russia issues probably the most to Vietnam, Russia’s reliability as a defence associate is more and more in query as its defence business seems in direction of Chinese language, North Korean and Iranian assist to maintain its warfare machine in Ukraine.
Even earlier than the warfare in Ukraine, Vietnam had begun to diversify its arms provide, and this development is prone to speed up. Russian arms transfers to Vietnam have steadily decreased since peaking at round US$1 billion in 2014, plunging additional after Russia’s invasion of Ukraine to solely US$72 million in 2022.
