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Reuters
Former Minister of public security, the bearer of the military rank of General of the army, member of the Politburo of the Communist party and President of Vietnam Tran Quang Dan was adopted on Thursday in the Kremlin. Vladimir Putin welcomed a colleague, as a mother. “We have good plans, there are major projects. Very happy to see you,” — said Putin.
Quang was restrained, as befits a General and Politburo member. The Vietnamese leader for the second day in Moscow and at all meetings, including with Prime Minister Dmitry Medvedev throws a solid compliments. Putin, he announced that Russia is developing well despite the sanctions and “maintain political stability”. And confirmed the invitation for the Russian leader to visit Hanoi and the APEC summit. Vietnam is chairing the summit this year.
Putin did not object. Seem to consent to the visit of the Russian leader was easy. The highest rating abroad, Putin just in Vietnam (79%), according to the international research center Pew Research Center. In Russia, his rating is only 2 percentage points higher (according to VTSIOM).
In the political sphere between the countries of relative prosperity. Quang said earlier^ he is pleased that between the two countries “are particularly trust-based political relations”. Except that they complicate Russia’s desire to draw closer to China. Vietnam and China meanwhile are in a permanent political conflict over the construction of China’s artificial Islands in the waters of the South China sea.
In fact, the two countries have accumulated a lot of problems, and the Foundation of the relationship rests on inertia. Realizing this, Mr. Quang said that during the meeting with the Russian President “has spent audit of operating investment projects and we discussed the possibilities of implementation of the new”.
Putin again agreed and declared that the Russian-Vietnamese investment Fund plans to invest $500 mn in non-oil projects, primarily in pharmacology and agriculture. “Agreed more than 20 major joint investment programs (Russia and Vietnam) amounting to about $10 billion.”
Quang believes that it is possible to “make a breakthrough” in the growth of trade between countries with free trade zone and to achieve a turnover of $10 billion.
All the past 10 years the trade turnover between Russia and Vietnam grew, but last year fell 1.5% to $3.8 billion including exports plummeted by 25.5%, while imports of Vietnamese goods increased by 20%. In October last year entered into force an agreement on free trade zone between the Eurasian Union and Vietnam.
Free trade area involves the abolition of customs duties and removal of quantitative restrictions on the circulation of goods and services. Thus between the member countries of the FTA saved the customs border and the opportunity to determine the trade regime with third countries.
This year the trade turnover grew by almost 17% in January-April (S1,4 billion). But exports continued to decline – minus 4.5% ($400 million). While imports continued to grow – by almost a third in January-April.
“The decrease in turnover is falling in cash terms, which is associated with lower prices for fuel and metals. And delivery volumes are about the same,” — says Petr Pushkarev, chief analyst GK “Teletrade”.
The main articles of Russian exports of machinery and equipment, they make up almost half of total exports. In addition, raw mineral material (18%), metals (12%). The basis of imports from Vietnam – machines and equipment (57%), textiles (21%), food and agricultural raw materials (15%).
The decline in exports is partly happening because of climate change, drought in the Mekong Delta was, for example, 2014-2015 years respectively, and then the Vietnamese had Russian fertilizers and agricultural products, and now is not required in the previous volumes.
Over the export of machinery, equipment and vehicles — the peak of these deliveries occurred in 2015, since the demand for these product groups was partially satisfied, adds Pushkarev .
Despite the problems with trade turnover of Russia is among the major investors who invested in the economy of the socialist Republic of $1.1 billion (according to the Vietnamese Midpeninsula). Now sold almost 120 projects. The traditional business of the partnership – exploration and production of oil and gas. On the continental shelf of Vietnam and work “Gazprom” and “Rosneft”. Two years ago we formed a joint venture for the production in Vietnam natural gas fuel.
Although the partnership is a powerful fuel and energy complex of Russia, Vietnamese businesses have been quicker. From the side of Vietnamese companies in the Russian economy is invested in two and a half times more investment than Russia — $2.4 billion.
Quang believes, however, that Hanoi and Moscow should more effectively use the opportunities that gives the agreement on free trade zone between Vietnam and the Eurasian economic Union to facilitate trade in goods and services.
In 2013, when Putin was on a visit in Hanoi, and agreed there on Vietnam’s accession to the Eurasian Union through a free trade zone, Russia ranked 19th place among 100 countries and territories investing in Vietnam. There have been 92 Russian investment projects worth $1.9 billion.
The Kremlin has expressed hope that the FTA agreement between Vietnam and Russia will give a new impetus to the relationship.
Then it was stated that the accession to the FTA will enable Russia to triple by 2020, the trade turnover to $10 billion In 2012 bilateral trade turnover, according to estimates of the Russian side amounted to $3.6 billion According to the Vietnamese government, the turnover in 2012 exceeded $2.4 billion.
For comparison, the trade turnover between Vietnam and e.g. China then was $13 billion.
Difficult for Russia to compete in the Vietnamese market is firmly occupied by Japan, South Korea, the same China and the United States, the two largest economies in the world, said in an interview with “Газетой.Ru” the expert of the Center for strategic research Anton Colors.
For comparison, the level of the Vietnam-us trade relations in the times higher. Last year the export of Vietnamese goods in the US was $38.1 billion, and imports US $8.7 billion.
According to the results of the recent visit of the trade delegation of Vietnam to the United States between the parties was signed multibillion dollar investment deals. American President Donald trump said that the agreement will create new jobs in the United States. While in Vietnam expressed regret when trump’s administration refused to join the TRANS-Pacific partnership agreement, which would facilitate the removal of barriers to trade in the region.
“Inertia of the Soviet-Vietnamese relationship allows us to have a dominant position only in the arms market and energy,” adds Flowers.
And even in the nuclear industry Russia has not been able to gain a foothold in the country. At the end of last year Vietnam decided to revise its energy strategy, resulting in the construction of the plant was postponed.