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RR RUEHCHI RUEHDT RUEHHM
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FM AMEMBASSY HANOI
TO RUEHC/SECSTATE WASHDC 0943
INFO RUEHHM/AMCONSUL HO CHI MINH CITY 0610
RUEHZS/ASEAN REGIONAL FORUM COLLECTIVE
RUEKJCS/SECDEF WASHDC
RUEAIIA/CIA WASHDC
RHHMUNA/CDR USPACOM HONOLULU HI//FPA//

UNCLAS SECTION 01 OF 03 HANOI 000453 
 
SIPDIS 
 
SIPDIS 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: PREL RU VM
SUBJECT: RUSSIA AND VIETNAM KEEP UP THE ILLUSION OF A 
STRATEGIC PARTNERSHIP 
 
HANOI 00000453  001.2 OF 003 
 
 
¶1. (SBU) Summary: Russian Prime Minister Mikhail Ephimovich 
Fradkov was Vietnam's first high-ranking foreign visitor 
since Tet, the Vietnamese New Year.  The February 16-17 
visit was the third by a Russian Prime Minister to Vietnam 
since 1997.  The primary purposes of this visit were to 
strengthen cooperation with the GVN in such forums as APEC, 
the EAS and ASEAN; to meet with GVN leaders ahead of 
Vietnam's APEC chairmanship; and, to prepare for President 
Putin's trip to Vietnam for the 14th APEC Summit.  Fradkov 
also discussed economic and energy cooperation.  Through 
this visit, the two countries' leaders once again reaffirmed 
their "strategic partnership for mutual interest."  However, 
according to Russia watchers in Vietnam, this visit had more 
to do with Russia's general "Looking East" foreign policy 
than it did specifically with Vietnam.  End Summary. 
 
--------------------------- 
PM Fradkov with GVN Leaders 
--------------------------- 
 
Prime Minister Phan Van Khai 
 
¶2. (SBU) The meeting between the two PMs on February 16 
concluded with the largely substance-free decision to 
"continue their strategic partnership for mutual interest." 
During the talks, PM Khai acknowledged that past cooperation 
with Russia has made major contributions to the 
industrialization and modernization process in Vietnam.  PM 
Fradkov officially agreed, and affirmed that Russia will 
continue to be a "strategic partner" and promote their 
traditional friendship and cooperation for "common benefits 
and sustainable development." 
¶3. (SBU) Beyond the two countries' existing cooperation, 
especially in oil and gas exploration and exploitation, PM 
Fradkov said Russia is also interested in Vietnam's Son La 
hydroelectric power project (the biggest in Southeast Asia), 
and that Russian companies are willing to participate in 
projects on exploiting and processing bauxite and iron ores, 
and to expand cooperation in automobile assembly and 
electronic equipment manufacture. 
¶4. (SBU) The two leaders agreed to maintain regular high- 
level political dialogues; intensify bilateral cooperative 
ties in traditional areas such as oil and gas, electric 
energy, science and technology, and education and training, 
especially in economic cooperation; and, expand cooperation 
to other fields, including transport, tourism, technology 
and the use of nuclear energy for peaceful purposes. 
Concerning tourism, PM Fradkov acknowledged that Russians 
have gravitated towards Thailand and Malaysia since these 
countries allow visa-free travel while Vietnam does not. 
 
Communist Party General Secretary Nong Duc Manh 
 
¶5. (SBU) This was a "handshake" meeting, according to MFA 
and think tank sources.  Party General Secretary Nong Duc 
Manh recited the usual script about Vietnam attaching 
importance to intensifying the traditional friendship and 
strategic partnership with Russia and wishing to further 
boost cooperative ties in areas of significant potential. 
¶6. (SBU) In response, PM Fradkov affirmed that Russia 
considers Vietnam a strategic partner and expressed his 
determination to consolidate and enhance the traditional 
friendship and comprehensive cooperation between the two 
countries, particularly in the areas of economic 
cooperation, commerce, culture, science and technology.  The 
meeting was important more for its symbolic value than 
anything else; a meeting with the General Secretary is 
reserved for visits to which the Vietnamese assign the 
highest protocol value. 
 
National Assembly Chairman Nguyen Van An 
 
¶7. (SBU) In another relatively ceremonial meeting, An said 
that the visit was a significant step forward in bilateral 
relations.  According to An, the Vietnamese National 
Assembly would do its best to implement agreements signed 
between the two countries.  In return, the Russian PM said 
he agreed with the Chairman's ideas and affirmed Russia's 
agreement with Vietnam's international and regional 
positions. 
 
President Tran Duc Luong 
 
¶8. (SBU) In addition to the regular diplomatic rhetoric, 
President Luong said during his meeting with PM Fradkov that 
he considers this visit an important step of development in 
the implementation process of the two countries' framework 
 
HANOI 00000453  002.2 OF 003 
 
 
for relations reached during President Putin's 2001 visit to 
Vietnam. 
 
------------ 
Deliverables 
------------ 
 
¶9. (SBU) During PM Fradkov's visit, Vietnam and Russia 
signed agreements on personnel training and drug control. 
The documents were a protocol on the amendment of the 
agreement on training Vietnamese citizens at Russian 
training establishments and universities, and an agreement 
on cooperation between the Vietnamese Ministry of Public 
Security and Russian Federal Agency for Drug Control in 
fighting the production, stockpiling, trafficking and 
trading of drugs and additive substances.  The GVN declined 
to make the texts of either agreement available to us. 
 
------------------------------------------ 
Trade, Investment and Economic Cooperation 
------------------------------------------ 
 
¶10. (SBU) After plunging in the aftermath of the collapse of 
the Soviet Union, two-way trade between Russia and Vietnam 
has steadily increased over the past years, with 2005 volume 
passing the 1 billion USD mark for the first time.  Russia 
experts say the trade is about 60 percent barter and 40 
percent cash, and Vietnam incurs a deficit.  Vietnam's main 
exports include rice, textiles, footwear, rubber, seafood, 
fruits and vegetables, cashew nuts and tea while its imports 
are fertilizer, steel and petroleum products.  (Note: Our 
GVN interlocutors somehow forgot to mention the hundreds of 
millions of dollars in arms transfers from Russia to 
Vietnam; most of Vietnam's arms purchases are from Russia. 
End Note.) 
 
¶11. (SBU) Russia has so far invested USD 278 million in 47 
projects in Vietnam, while Vietnam has 11 projects 
capitalized at USD 38 million in Russia, making Russia 
Vietnam's second largest investment market after Laos.  PM 
Fradkov did not travel with a retinue of businessmen, which 
disappointed the Vietnamese slightly, because there was no 
concrete trade or investment benefit from the visit.  This, 
according to local Russia experts, makes sense because "the 
Russians are practical; they only do things when they see 
immediate benefits."  Our GVN interlocutors noted that in 
the old days, a Russian delegation would have resulted in 
"quite a lot" of trade and commercial projects. 
 
¶12. (SBU) Russian Industry and Energy Minister V. B. 
Khristenko, who accompanied the PM, said Russia will 
increase cooperation in automobile assembly, hi-tech 
development and construction of a metallurgy plant with 
Vietnam, but provided no specifics for this cooperation. 
His Vietnamese counterpart said the visit helped boost 
economic and commercial relations between the two countries, 
and contributed some quick facts about Russo-Vietnamese 
industrial cooperation, such as the fact that VietSovPetro 
has pumped 150 million tons of crude oil in 25 years, 
helping recover its investment capital of USD 1.5 billion 
and turn a regular profit.  (Note: VietSovPetro is one of 
the world's most profitable oil companies and provides a 
substantial percentage of Vietnam's official foreign 
exchange earnings.)  During the visit there was no 
discussion of Vietnam's remaining debt to Russia, which 
stands at around USD 10 billion. 
 
 
---------------------------------- 
Russia Watchers in Vietnam Comment 
---------------------------------- 
 
¶13. (SBU) Russia expert Nguyen Quang Thuan, Director of the 
Europe Studies Institute, said that the two agreements 
signed, and the relatively non-substantive meetings with the 
GVN leaders, were not sufficient reasons to compel a visit 
by the Russian head of government.  Instead, he said, the 
visit is related to Russia's "Looking East" foreign policy. 
Under this policy, according to Thuan, Russia has recently 
enhanced its activities in the region through the East Asia 
Summit, the Russia-ASEAN Meeting, and other multilateral 
forums, such as the upcoming APEC meeting.  Influencing 
Vietnam is certainly very important in Russia's strategy to 
"move east," Thuan opined.  Bilateral relations between 
Vietnam and Russia are maintained, he said, because "the two 
countries need to keep good relations, not necessarily 
because they now have things to do together, but because 
 
HANOI 00000453  003.2 OF 003 
 
 
they are hopeful for breakthroughs in their relations." 
 
¶14. (SBU) Dr. Nguyen Vu Tung, Head, Vietnamese Foreign 
Policy Section, Department of World Politics and Vietnamese 
Diplomacy, Institute of International Relations, conceded to 
Poloff that the "strategic relationship" was more about 
intention and attitude than it was about existing common 
strategic goals, and that Vietnam and Russia had a 
"strategic history" that makes them "strategic partners" 
today. 
 
----------- 
Our Comment 
----------- 
 
¶15. (SBU) Comment: Russia and Vietnam are like old friends 
getting reacquainted after falling out of touch.  Russia's 
economic and military pullback in the early 1990s was 
traumatic for Vietnam's economy and security policy, due 
largely to the fact that Russia started requiring cash and 
hard loans to pay for crucial arms and commodity imports 
that previously had been paid for with soft loans or (pre- 
1979) given free.  After a chilly couple of years in the 
early 1990s when Vietnam routinely vented its bitterness at 
Russia's abandonment of Communism and lack of engagement in 
Southeast Asia, Vietnam and Russia restored good relations. 
Vietnam still sees Russia as a friendly state and a 
"traditional ally" in the international arena. 
 
¶16. (SBU) Comment continued: Russia and Vietnam are good 
partners in international forums.  They have common views on 
terrorism; disarmament; sovereignty and territorial 
integrity of states; the role of the UN; maintaining 
Southeast Asia as a nuclear weapons-free zone; opposition to 
the wars in Yugoslavia and Iraq; and, denuclearization of 
the Korean peninsula.  In addition, Vietnam is Russia's 
formal link to ASEAN.  In the absence of a Russian 
capability or interest in maintaining a strong presence in 
Southeast Asia, it has been more and more difficult for the 
two foreign ministries to come up with substantive areas of 
cooperation.  Now, however, Russia appears to be taking a 
greater interest in Southeast Asia, especially in Asian 
security and economic forums such as ARF, APEC, EAS and 
ASEAN, and Vietnam is happy to escort its old friend back to 
the party. End Comment. 
 
MARINE