Russian President Vladimir Putin has praised Vietnam for its “balanced” stance on the Ukraine conflict and underscored the progress made in bilateral relations concerning payments, energy, and trade. These remarks were published in an opinion piece in Vietnam’s Communist Party newspaper, Nhan Dan, timed with Putin’s state visit to Vietnam.
In the piece, Putin acknowledged Vietnam’s support for “a pragmatic way to solve the crisis” in Ukraine. Vietnam, maintaining a neutral foreign policy, has abstained from condemning Russia’s actions in Ukraine, a position that has drawn criticism from Western countries for being too favorable to the Kremlin.
Putin is scheduled to arrive in Hanoi and meet with Vietnamese leaders on Thursday, following his visit to North Korea. This marks his first visit to Vietnam since 2017 when he attended the Asia-Pacific Economic Cooperation (APEC) summit. Putin emphasized that Russia and Vietnam share “similar assessments of the situation in the Asia-Pacific region.”
Energy and Strategic Cooperation
Putin highlighted the strategic importance of energy cooperation between Russia and Vietnam. He noted the joint ventures in fossil fuels in the South China Sea and northern Russia. Gazprom, Russia’s state-controlled gas company, operates gas fields in Vietnam, while Novatek plans to launch liquefied natural gas (LNG) projects in the country.
Furthermore, Putin mentioned an initiative to establish a Centre for Nuclear Science and Technology in Vietnam with the support of Rosatom, Russia’s state-owned nuclear energy company. Although Vietnam suspended plans for a nuclear power plant about a decade ago, the potential reconsideration of nuclear energy is significant, with countries like South Korea and Canada also proposing nuclear options to Vietnam.
Financial and Trade Relations
Putin also lauded the progress in financial and trade relations between the two countries. The Western sanctions on Russian banks have complicated payment settlements, but Vietnam and Russia have been working to address these challenges. According to Putin, transactions in rubles and Vietnamese dong accounted for 60% of bilateral trade payments in the first quarter of this year, up from over 40% last year. He credited the Vietnam-Russia Joint Venture Bank, established in Hanoi in 2006, for playing a crucial role in ensuring reliable financial transactions.
While bilateral trade between Vietnam and Russia has been increasing, it remains limited compared to Vietnam’s trade with its main partners, the United States and China. Nonetheless, Putin’s visit underscores the strengthening ties and potential for future collaboration between Russia and Vietnam.
Expanded Analysis
This visit and the continued emphasis on strategic economic sectors present opportunities for investors. The energy sector, particularly LNG and nuclear projects, could see significant growth and investment opportunities. The shift towards using local currencies for trade payments might also offer financial institutions and businesses new avenues for managing transactions amidst global sanctions and currency volatility.
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