US embassy cable - 05HANOI719

UNCLAS SECTION 01 OF 04 HANOI 000719 
 
SIPDIS 
 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: PREL, ETRD, PGOV, SOCI, RS, EZ, PL, HU, MG, VM 
SUBJECT:  Pragmatic Diplomacy:  Vietnam's Relations with 
Post-Communist Russia, Eastern Europe and Mongolia 
 
Summary and Comment 
------------------- 
 
1. (SBU) Vietnam's relations with post-Communist Russia, 
Eastern Europe and Mongolia have shown the GVN's willingness 
to move beyond ideology and politics to satisfy practical 
foreign policy, economic and security needs.  In the years 
following the collapse of the Soviet Union and the demise of 
Communism in Eastern Europe, Vietnam's "pragmatic diplomacy" 
led it to reach out to its formerly Communist, yet 
nonetheless traditional, "friends" to lessen its 
international isolation and for help as a counterbalance 
against China.  In more recent years, Vietnam's "strategic 
partnership" with Russia has yielded modest trade and 
investment gains, and Hanoi continues to look to Moscow to 
be its primary arms supplier and, perhaps unreasonably, a 
regional actor with the ability to play a balancing role 
against China. 
 
2. (SBU) Summary, cont'd:  Vietnam has recently viewed its 
relations with Eastern Europe, particularly with new EU 
member states Poland, Hungary and the Czech Republic, as a 
means to use its traditional friendships with these 
countries to gain "back door" access to the EU.  In the case 
of post-Communist Mongolia, a lack today of ideological and 
political ties, combined with little in the way of practical 
benefits, has led to a largely symbolic relationship based 
on the two countries' "traditional friendship."  While 
personal ties persist between the leaders and citizens of 
Vietnam and their counterparts in Russia and Eastern Europe, 
these are diminishing, making way for the rise of leaders 
and others with personal ties to countries outside of 
Vietnam's traditional orbit, including the United States. 
End Comment. 
 
Put Away Those Russian Grammars 
------------------------------- 
 
3. (SBU) The collapse of the Soviet Union and the demise of 
Communism in Eastern Europe were unexpected and painful 
shocks to Vietnam and its leadership.  In 1990, trade with 
the Soviet Union made up close to 70 percent of Vietnam's 
overall trade turnover, with the remainder covered by 
Vietnam's other Council for Mutual Economic Assistance 
(COMECON) partners.  Vietnam's commodities and military- 
related imports received favorable Soviet financing, and 
Hanoi relied on Soviet loans to cover its trade deficit. 
Following the USSR's collapse in 1991, the Soviet Union's 
economic and military support for Vietnam effectively dried 
up, and, in one year, trade between the two fell by more 
than half.  "At that time, many Vietnamese believed that 
Vietnam's economy would collapse as a result of what 
happened," Bui Huy Khoat, Director of the Institute for 
European Studies (IES), told us. 
 
4. (SBU) No less dramatic was the psychological impact of 
the events taking place in Eastern Europe and the Soviet 
Union.  The Soviet Union and its European satellites were 
the ideological and political models for Vietnam, and many 
of Vietnam's elites (including today's Communist Party 
Secretary General, State President and Prime Minister) were 
 
SIPDIS 
products of the Soviet education system.  Thousands of guest 
workers - Vietnamese labor exported to the Soviet Union and 
Eastern Europe to help to pay for imports - had started 
families and put down roots in these countries.  Russian 
language study had been a key part of most Vietnamese 
students' curricula.  Following the events of the early 
1990's, much of this changed.  Most guest workers were 
forced to return home, and Vietnam's Ministry of Education 
began to phase out the study of Russian.  According to one 
Vietnamese in her mid-30's, "We learned Russian until 1991, 
and then we started learning English.  Hardly anyone our age 
can speak Russian anymore." 
 
Pragmatism Rules 
---------------- 
 
5. (SBU) Between 1991 and 1994, relations between Vietnam 
and Russia and post-Communist Eastern Europe "did not 
progress smoothly," according to IES' Khoat.  Part of the 
reason was Vietnam's "inability to understand" what was 
happening within the borders of its former allies.  Two 
other reasons specific to Russia were "President Yeltsin's 
lack of goodwill towards Vietnam" and the "difficult time" 
Vietnam and Russia had in resolving the issue of Vietnam's 
debt to the former Soviet Union, Khoat continued.  (Note: 
In 2000, Russia announced that it would cut Vietnam's 
estimated USD 11 billion debt by 85 percent, with repayment 
restructured over the next 23 years at about USD 100 million 
per year.  End note.) 
 
6. (SBU) However, in 1993-1994, Vietnam "came to the 
conclusion" that it needed to reach out to its former allies 
to "rebuild the traditional friendships" it had previously 
enjoyed with the new Russia and newly post-Communist Eastern 
Europe, Nguyen Thai Yen Huong of the MFA's Institute for 
International Relations (IIR) told us.  This was based on 
Vietnam's "conscious and pragmatic decision to diversify its 
foreign relations and not to allow ideology become an 
obstacle in its ties with Russia and Eastern Europe," Huong 
continued.  Most pragmatic of all was Vietnam's attempt to 
renew ties with Russia and the nations of Eastern Europe as 
a way to lessen Vietnam's isolation (only partially 
diminished by its withdrawal from Cambodia) and as a 
counterbalance against China.  Vietnamese Government and 
Party leaders' personal ties to Russia and the Eastern bloc 
also spurred on and helped to facilitate a renewal of 
relations, Huong added. 
 
Russia: "Strategic Partner," with Constraints 
--------------------------------------------- 
 
7. (SBU) With the exchange of several high-level visits 
(including Russian President Putin's to Vietnam in 2001 and 
Communist Party of Vietnam General Secretary Nong Duc Manh's 
to Russia in 2004), frequent Ministerial-level contacts and 
growing trade and investment ties, Vietnam-Russia relations 
"have returned to normal," Deputy Director General Nguyen 
Ngoc Binh of the MFA's Europe 1 (Russia and Eastern Europe) 
Department told us.  Where once Vietnam and Russia were 
"strategic allies," they are now "strategic partners." 
According to DDG Binh, this "partnership" includes bilateral 
cooperation in multilateral forums, Russian arms sales to 
Vietnam (including advanced fighters and air defense 
systems) and "significant" Russian investments in Vietnam's 
oil and gas sectors and power industry.  Vietnam also counts 
on Russia to be a "balancing force" in the Asia-Pacific 
region, Binh said.  "They straddle two continents and aim to 
regain their superpower status and global influence; they 
too are seeking to check China," he noted. 
 
8. (SBU) However, there are limits to the Vietnam-Russia 
partnership.  According to IIR's Huong, trade and investment 
levels are "not living up to their potential and growing 
slowly" because the economies of both countries are "in 
transition."  "Perhaps after Russia and Vietnam accede to 
the World Trade Organization (WTO), things will get better," 
he opined.  (Note:  Both Russia and Vietnam are looking to 
accede to the WTO by the end of 2005.  End Note.)  In terms 
of arms sales, while true that Russia is the major supplier 
of arms and spare parts to Vietnam, "the Russians still sell 
their more advanced equipment to China," IES' Khoat ruefully 
observed.  Finally, according to Russian Embassy Political 
Counselor Sergey Tolchenov, "We recognize that Vietnam looks 
to us for big things in this part of the world, namely with 
respect to China.  But we cannot always live up to their 
expectations." 
 
Eastern Europe:  Vietnam's Back Door into Europe? 
--------------------------------------------- ---- 
 
9. (SBU) Compared to Vietnam's relationship with Russia, its 
ties with the nations of Eastern Europe improved relatively 
more quickly "because they had less far to fall," Khoat 
said.  Freed of ideology and based largely on "mutual 
interest," Vietnam's relations with Poland, the Czech 
Republic and Hungary moved forward rapidly, and now Vietnam 
enjoys good ties with them in many areas, including trade, 
technology transfers, modest arms sales and educational and 
cultural relations.  With many Vietnamese businesses and 
traders active in Eastern Europe "for decades," they are 
well positioned to take advantage of the EU entry of the 
Czech Republic, Poland and Hungary to expand Vietnamese 
exports to the EU as a whole, IIR's Huong predicted. 
 
10. (SBU) Problems persist, however.  Although Vietnamese 
items exported to Poland and Hungary are of "high quality 
and could be sold" anywhere in Europe, EU rules governing 
the value of imports and tariff rates have raised the prices 
of Vietnamese goods, making them less competitive, IES' 
Khoat said.  Another problem that has emerged is that the 
EU's expansion has diminished Vietnam's share of EU 
investment, with new money being directed towards the new 
member economies.  Finally, according to Czech Republic 
Embassy Political Counselor Michaela Fejfarova, "The 
Vietnamese think that, with EU expansion, their companies 
doing business in Prague can now just as easily do business 
in Paris.  It doesn't work that way, and many will be in for 
a disappointment." 
 
Vietnam and Mongolia:  Friendship, but not much more 
--------------------------------------------- ------- 
 
11. (SBU) Mongolia's transition to democracy in the early 
1990's was another jolt to one of Vietnam's traditional 
friendships.  Although Vietnam's decision to "move beyond 
ideology" helped eventually to get Vietnam-Mongolia 
relations back on track, "we really don't have that much to 
talk about," Mongolia's Ambassador to Vietnam Baasanjav 
Ganbold told us.  Bilateral trade is quite modest (the two 
sides recently agreed to try to raise two-way trade to USD 
10 million by 2010) and transportation links are limited. 
"Our political systems are moving in different directions 
and, without much else upon which to base our relations, we 
rely on our traditional ties," Ganbold said. 
 
Personal Ties Persist, but are Diminishing 
------------------------------------------ 
 
13. (SBU) The personal ties between the leadership and 
citizens of Vietnam and Russia and post-Communist Eastern 
Europe persist, aided by the language and educational 
experiences of many Vietnamese.  For example, during 
President Putin's 2001 visit to Vietnam, he was able to 
conduct many of his official meetings virtually entirely in 
Russian.  "Many Government and Party leaders speak Polish, 
and it is very easy for me to pick up the phone and make an 
appointment or get information," Polish Embassy Counselor 
Zbigniew Polanczyk told us.  To shore up these personal 
ties, both Vietnam and its traditional friends continue to 
make efforts to promote educational and cultural exchanges, 
such as through the annual Russian scholarships for 250 
Vietnamese students, MFA's Binh said. 
 
14. (SBU) However, Russia and Eastern Europe, while still 
attractive as sources of scientific and technological 
expertise, are increasingly less popular destinations for 
Vietnamese students and researchers.  According to Nguyen 
Khoa Son, Vice President of the Vietnamese Academy of 
Science and Technology, "Our scientists prefer to go to the 
United States, Japan and Germany; these are the real cradles 
of high technology.  It also increasingly difficult for our 
researchers to find guest positions at Russian institutes 
and universities."  There is also the perception that Russia 
is "not a safe place" following the murders of several 
Vietnamese students in Moscow, MFA's Binh told us.  Of 
potentially longer term impact, however, is the perception 
that Russia and Eastern Europe "represent Vietnam's past, 
and the United States represents Vietnam's future," IES' 
Khoat said.  "When President Putin visited, he joined a 
gathering of Russian university alumni.  Everyone was over 
50.  The relationship with Russia is tied to the past and 
based on emotion and nostalgia.  However, when President 
Clinton visited that same year (2001), he met with Hanoi 
National University students.  The image, in contrast to 
Putin's audience, was one of youth and dynamism," Khoat 
observed. 
 
Comment 
------- 
 
15. (SBU) Over the past 15 years, Vietnam has had to change 
the basis of its relationship with Russia and the countries 
of the former Eastern bloc from an ideological partnership 
to interests-based one, a change that it has executed mostly 
successfully.  Still, many policymakers in Vietnam want to 
believe in the potency of Russia's global reach and the 
importance of its role in the region.  They see a Vietnam- 
Russia strategic partnership as one potential pole in a 
multipolar world and as a hedge against growing Chinese 
influence in the region.  However, some academics and even 
our Russian colleague quoted above have expressed skepticism 
about Vietnam's expectations. 
 
16. (SBU) Longer term, while personal ties persist between 
the leaders and citizens of Vietnam and its traditional 
friends in Russia and Eastern Europe, they are diminishing. 
This is making way for the rise of leaders and others with 
personal ties to countries outside of Vietnam's traditional 
orbit, including the United States.  This transition is 
already apparent in the Mission's applicant pool for 
Humphrey and Fulbright scholarships and International 
Visitors Programs.  Many applicants whose resumes share a 
common motif of Russian study and travel in the 1980's are 
now demonstrating a readiness to study, do research and 
travel to the United States.  Furthermore, we are beginning 
to see Government and Communist Party leadership with U.S. 
academic credentials:  Vietnam's Minister of Agriculture and 
State Bank Governor are Harvard alumni and a rising star in 
the Party's External Relations Commission is a SAIS 
graduate.  End Comment. 
 
MARINE