Amid isolation, Russia seeks traditional ally, bolsters economic opportunities in Vietnam

HANOI: Russia is turning to traditional ally Vietnam to shore up diplomatic ties and bolster economic opportunities as Moscow faces increasing isolation following its invasion of Ukraine. 

Russian Deputy Prime Minister Dmitry Chernyshenko concluded his two-day official visit to Hanoi on Friday (Apr 7), during which he sought to open more doors for Russian products in the Southeast Asian market. 

“A key priority is to find proper legal solutions to resolve obstacles in payment between companies of the two countries,” Chernyshenko told reporters in Hanoi.

“The Russian central bank has already offered solutions, it’s possible to say the path to the Vietnam market is wide open to us,” he said. 

Chernyshenko and his Vietnamese counterpart Tran Hong Ha agreed on Thursday to strengthen cooperation for trade, economic and science links between the two countries.

"(Russian President Vladimir) Putin considers strengthening the comprehensive strategic partnership with Vietnam as one of Russia's priorities in its foreign policies for the region,” Chernyshenko told Vietnamese Deputy Prime Minister Ha. 

Vietnam and Russia signed two agreements during Chernyshenko’s visit.

The first would establish a Russian artificial intelligence centre in Hanoi, with an ambition to make it a hub for the Southeast Asia region. The other agreement strengthens cooperation between the two countries’ academies of social sciences. 

CLOSE ALLIES

The meeting in Hanoi is a first between the two countries’ inter-governmental committee on bilateral ties since the start of the war in Ukraine, and comes amid international sanctions imposed on Russia and on Mr Chernyshenko himself. 

Vietnam is among Russia’s closest allies in the world.

While Hanoi has emphasised dialogues and peaceful measures to resolve differences, the nation has taken a neutral stance on the conflict in Ukraine.

The country has abstained multiple times from United Nations resolutions condemning the Russian invasion. 

“Our relationship has been through so many challenges, and is filled with loyalty and gratitude. Vietnam will never ever forget the support of the Russian people,” Deputy Prime Minister Ha told Chernyshenko during their bilateral meeting.

He also highlighted the assistance that Russia and the former Soviet Union have given for over seven decades, especially when Vietnam was fighting its wars. 

BUSINESS TIES

Russian businesses told CNA they are turning to Vietnam to expand their export markets in times of economic challenges. 

For many Vietnamese firms, Russia is also emerging as an alternative to boost their exports amid decline due to weak global demand.

Vietnam’s economic growth on a quarterly basis slowed to a 12-year record low in the first three months of this year. 

“Because of international sanctions on Russia, many shipping firms stopped their routes to Russia. So there’s market demand for us to explore,” said Nguyen Thanh Thuy, business development manager of freight forwarding firm Gatelink Vietnam.

“Vietnamese businesses have the need to import goods from Russia such as meat, milk, fertiliser, wheat,” Thuy said, “Russians also want to expand businesses to partners in Vietnam.”

Among Russian companies that participated in a business forum organised as part of Mr Chernyshenko‘s visit was top Russian meat producer Miratorg. The firm told CNA that Vietnam has become a more important market in the past year. 

BOOSTING TRADE

While Russian firms dodged questions on how sanctions have affected their businesses, many were eager to make further inroads on boosting trade and cooperation, particularly in setting up new energy projects and opening new logistic links between the two countries.

“We increased our vessel capacity for the Russia-Vietnam shipping route three times since we set up our base in Vietnam one year ago,” said Mr Priskoka Aleksandr, deputy commercial director for Asian development at Fesco Transportation Group, one of Russia's largest transport and logistics companies.

Vietnam's statistics showed Vietnam-Russia trade reached US$3.5 billion in 2022, a 35.4 percent decline from the previous year.

“(Vietnam) is a very attractive destination to invest in Asia. We have many years of good friendship. Russia has always been a supportive, cooperative and equal partner in relations with Vietnam. With that, we can develop new projects between the two countries,” Mr Chernyshenko said as he addressed the forum. 

"I want to affirm with Vietnamese firms and partners that Russia will continue to be open and supportive in delivering all responsibilities on our end", he added. 

PUTIN’S "PHYSITAL" GAMES

During his time in Hanoi, Mr Chernyshenko also promoted Russia’s Games of the Future 2024, an international sports competition hosted by the city of Kazan in September next year. 

A brainchild of Russian President Putin, Russia has touted the "physical" tournament as a combination of physical and digital sports.

Amid rising calls to ban Russia from the Paris 2024 Olympic Games, Chernyshenko invited Vietnam to send athletes to compete in Russia’s games with costs that could be covered by Moscow’s budget. 

Experts say Mr Chernyshenko’s visit to Hanoi is also part of Vietnam’s strategy to balance its ties with major powers amid intensifying geopolitic rivalries in the world.

Editor's note: This article has been updated to correct the volume of trade between Russia and Vietnam.