Vietnam: strategic balance in Southeast Asia

Robert Maloy, 02/2023

The reshuffling global order has instilled many global south countries with a greater degree of agency. States once viewed only in the periphery of global affairs have in recent decades have emerged as regional or transregional powers. While the pandemic has certainly battered many in the global south, this trend looks set to resume as the world recovers. Vietnam stands as a prime example of one global south state poised to have an increasingly important role in the 21st century. Once disregarded by strategists as a failed adventure in cold war politics, Vietnam has seen its status and future outlook change dramatically in recent decades. Vietnam’s economy has demonstrated a robust resilience to pandemic slowdowns, in contrast to its many global south counterparts. Vietnam has come within reach of a status as a middle power due to its strategic location and willingness to embrace reforms. Despite being a one-party state ruled by the Communist Party of Vietnam, the country has embraced market reforms, bolstered its economy as well as integrating the country into global value chains. Vietnam also possesses advantageous geography as well, possessing large coastline and proximity to large economic powers such as India and China. Vietnamese foreign policy has advocated for non-alignment and self determination, an important attribute in a region containing the aforementioned large powers. Southeast Asia is a region likely to see a large growth in relevance, and international strategists will need to develop diplomatic models which account for Vietnam’s continued prevalence in the region. During the late 20th century, Vietnam was thought of as an antiquated dictatorship doomed to economic and political backwardness. However, the early 21st century has proven this assessment false, and examining the history of how Vietnam broke this mold, where it stands to today and how strategists should interact with Vietnam in the future is an important contribution of to understanding the balance of power in Southeast Asia.

From Cold War relic to Global Player

 Following the 1975 collapse of South Vietnam and subsequent reunification, Vietnam became a sovereign and united entity for the first time since 1877. The jubilation of reunification was immediately dampened by the dire situation the country found itself in. Years of Japanese occupation, resistance against French colonial rule and a civil war featuring heavy American involvement had decimated Vietnamese industry and its people. These issues were exacerbated by the Communist government’s need to reunify the country, which involved a large program of re-education, wherein former South Vietnamese citizens of suspect loyalty were placed into labour camps to as to not threaten the stability of the central government in Hanoi. Vietnam’s territorial integrity was also not ensured following the end of the conflict. Neighboring Cambodia, then under the rule of the Khmer Rouge, antagonized Vietnam through a series of border raids and clashed, leading to Vietnam invading Cambodia in 1979. This invasion prompted a Chinese invasion from the North, and Vietnam found itself once again at war with another larger power for the third time in three decades. These conflicts battered an already economically weak Vietnam, who by the 1980s was almost entirely dependent on Moscow and other communist countries for economic aid due to diplomatic isolation following the end of the Vietnam war.

In the mid-1980s, beleaguered by an inefficient economy, politically isolated by the West and China, and suffering to recover from devastating conflicts, Vietnam adopted structural reforms to its economy and governance which have enabled its modern-day successes. In 1986, Vietnam implemented the program of Đổi Mới, which sought to create a socialist oriented market economy, similar to the Deng regime reforms in neighbouring China a decade earlier. These reforms entailed a liberalization of the communist system, wherein central planning was in large part abandoned and private enterprise on smaller scales was encouraged. This led to a period of large growth within Vietnam’s agricultural sector as well as the emergence of a strong industrial sector which would become an important staple in Vietnam’s economy. (Asia Pacific Foundation of Canada, 2022) This era of economic reform also coincided with changes in Vietnam’s foreign policy. The Communist Party’s 6th congress in 1986 adopted a policy of non-alignment for Vietnam, wherein national interest has been placed above ideological commitment (Hung, 2022). This realist approach broke with traditional conceptions of cold war power blocs and has been a significant reason behind Vietnam’s rise in global prominence.

Since the implementation of Doi Moi reforms, Vietnam has witnessed an impressive period of economic growth and expansion of political influence. Throughout the 1990s and into the early 2000s, Vietnam followed the models of states like China and Thailand to use their large population and emerging industrial sector to create an export-oriented strategy which saw foreign capital welcomed and Vietnamese products adopt competitive policies globally (Riedel, 1997). The result of these economic reforms vastly improved the lives of Vietnamese citizens, as metrics such as those living in poverty and GDP per capita have consistently trended positively for Vietnam, with the exception of interruptions during following the covid-19 pandemic. The change in Vietnam’s foreign policy under Doi Moi also set up the country for a great deal of success in this period, with Vietnam normalizing relations with China in 1991 and the US in 1995, despite fresh hostilities with both (Vuving, 2023). Indeed, the 90s through to the 2000s witnessed a strange duality within Vietnam’s foreign policy, as chairman of Vietnam’s communist party Nguyễn Văn Linh sought to both shore up Vietnam as a self reliant and non-aligned state while also seeking to further integrate Vietnam into global supply chains and power structures. However strange this duality may seem to foreign observers, it can none the less be understood as a by-product of Vietnam’s history. The country witnessed an unimaginably violent 20th century and struggled to assert its autonomy and provide for its citizenry during this time. Forged through this struggle, Vietnam sought a place in the world wherein they could both strengthen their position politically, while providing for their population economically.

A Difficult Geo-Political Reality

Whatever may be said about the seemingly inconsistent guiding philosophy of Vietnam, one cannot argue with its results. The reforms implemented by the Vietnamese government have led to vast improvements in the quality of life of the Vietnamese people, as well as increasing their prominence regionally and globally. Since the early 2000s, Vietnam has dramatically reduced grown its GDP and GDP per capita, while lowering its poverty rate to 1.2% and its unemployment rate to 2.2% of its population in 2018 and 2021 respectively. These positive trends are inextricably linked to the reforms of Doi Moi which have allowed Vietnam to attract considerable foreign investment and trade. In 2022, Vietnam received $27 Billion USD in foreign direct investment, with considerable amounts coming from fellow Asian countries (Barnes, 2022). These economic policies have led to Vietnam’s economy performing significantly well regionally as well as globally, with the IMF predicting Vietnam will have the largest projected GDP growth of any developing Asian economies (IMF, 2022). However, some analysts have claimed Vietnam has perhaps an overreliance on exports and foreign investment within their economy. This reality has created certain economic concerns for Vietnam, as the state seeks to secure its economy against global economic shocks such as the Covid-19 pandemic and the looming strategic competition between the US and China (Hiep, 2020).

This economic strength has also enabled Vietnam to solidify its geopolitical position within Southeast Asia and globally. This position is characterized predominantly by Vietnam’s commitment to its non-aligned status, but also reflects Vietnam’s desire to court the friendship of other states globally. Vietnam has made numerous contributions to the United Nations and other multinational organizations, routinely professing a desire to promote equal globalized development as well as promoting peaceful resolution of conflicts (Do, 2022). This commitment to multilateralism is perhaps evident in Vietnam’s approach to former adversaries, wherein Vietnam has sought reconciliation with the United States and shares in francophone cultural organizations with their former colonial occupier France. This willingness to collaborate with liberal and western powers does not betray a liberal character to Vietnamese foreign policy, however. Vietnam itself contains a dire human rights record, quashing dissent, and imprisoning opponents to the Communist government. Accordingly, Vietnam has maintained relatively strong relations with illiberal states. Vietnam has sought to reconcile with regional rivals such as North Korea and China, with Vietnam engaging in diplomatic discussions about investment in North Korea (Vu, 2017) and Vietnam demonstrating diplomatic support for China’s Belt and Road Initiative (Hiep, 2018). Vietnam has also maintained a strong relationship with Russia, a relic of their former Cold War friendship. Vietnam recently abstained from both UN generally assembly votes on condemning Russia’s invasion of Ukraine and Russia’s illegal referendum on annexed territories. Vietnam’s mentality towards other illiberal states, while their own commitment to human rights is paltry to say the least, affirms that Vietnam may be a powerful actor but sits on the fence of global affairs and will not be easily swung one way or another.

Vietnam’s geography has influenced Vietnam’s foreign policy in both defensive and optimistic ways. Vietnam enjoys a large coastline in one of the worlds largest trading regions in the southern pacific. Being located on the South China sea, Vietnam can export to Asia or abroad with relative ease. However, Vietnam must also share this region with powerful actors such as China and India, somewhat constraining their growth. China and Vietnam have numerous maritime disputes, souring the potential of peaceful cohabitation. India meanwhile views Vietnam as a key component of their access to the South China sea and has attempted to court Vietnam’s favour to this end. However, Vietnam’s commitment to non-alliance and self determination may see this as a point of contention, as Hanoi may wish to avoid being used as a geopolitical pawn of India against China. Warm relations with India may risk a provocation of China as well, as Vietnam’s geographical proximity to China may cause alarm in Beijing should India expand their influence into the region.

Interacting with a Vietnamese Middle Power

Vietnam is certainly not the hegemonic power in the region. Rather, it belongs to a collection of middle powers increasingly emerging in the region. Despite this, Vietnam represents perhaps the most significant middle power in the region, owing to its strategic geography, promising economic forecast, and willingness to participate in multi-national institutions. International strategists attempting to create policy for Southeast Asia will need to content with a reality wherein Vietnam is state that must be considered and where possible, won over. However, foreign policy makers will need to tread lightly. Vietnam has adamantly defended its position as a non-aligned state and has routinely separated its national interests from moral and ideological considerations. States seeking to engage with Vietnam, and factor it into their geopolitical ambitions, must accept this reality, and both work with and balance against it.

One keyway for western strategists to utilize Vietnam in international strategy is to play to their desire for continued economic growth. Vietnam, like many other developing industrializing states, requires continued exports to maintain and expand their economic growth. Consumer economies in the west provide an ideal market for Vietnamese exports, while western investors weary of continued investment in China, may find a potential substitute in Vietnam. Indeed, Vietnam is predicted to be a focal point of the anticipated competition between the west and China. Vietnam has routinely expressed concerns about the influence of China given the complicated history between the two states. This reality may translate into opportunities for deepening security cooperation with Vietnam, where joint defence cooperation and the trade of vehicles and weapons could be used in exchange for increased access to Vietnamese maritime areas and territory. Such a strategy would mirror the efforts of other nations such as India, which has shown diplomatic success in deepening positive relations between the two. Ultimately, Vietnam has shown a strong desire to protect its autonomy and continue its economic growth. If Western strategists wish to have Vietnam work towards their interests, efforts must be put into helping Vietnam assert its sovereignty and continue its upward economic trend. While not a sure-fire way to win over Vietnam, it may at the very least prevent the state from trading with and enabling potentially hostile states.

However, western nations must not confuse the pragmatism of cooperation with Vietnam with cooperation with an ideologically aligned nation. Vietnam’s commitment to autonomy has often led to the nation breaking ranks with international norms. Vietnam possesses a lackluster record on human rights, have supported regional efforts at Chinese hegemony such as belt and road, and have shown support for hostile actions of cooperative states such as Russia. This does not stem from ideological convictions, but rather a desire of Vietnam to ensure the continued survival of their autonomy. For a nation which struggled as long for independence as Vietnam, there is a strong desire to preserve their right to act in their own interest without regard for international considerations. As such, foreign policymakers must be prepared to balance against Vietnam just as much as they must be prepared to balance with Vietnam. While every effort should be made at diplomacy and cooperation with Vietnam, it also cannot be ignored that an increasingly significant middle power in the region is equally prepared to work with nations such as China and Russia as they are with Western nations. As such, Western nations must be prepared to counteract and engage with Vietnam should they become important parts grand strategy for Russia and China.

Vietnam will be an important component of foreign policy involving Southeast Asia for western countries, especially so as the balance of international power endures further changes. While this importance is assured, the nature of its significance remains undetermined. Vietnam has broken the mold of a backwards dictatorship, showing a willingness to practice open markets and cooperate within the international system within mutually beneficial initiatives. However, these positive trends are countered by Vietnam’s commitment to autonomy. Ideological convictions and international standards of behaviour have taken a secondary role in Vietnam, who have prioritized national growth and sovereignty above all. As such, western nations must be cautious in engaging with Vietnam. While every effort must be made to make diplomatic inroads with Vietnam, the west must also understand they are not dealing with a willing ally but rather a state seeking a mutually beneficial arrangement. The west must therefore play a delicate balancing game of attempting to win over a middle power, while not allowing themselves to be played against larger powers for the benefit of Vietnam alone.


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