Long term partnership

Party General Secretary and State President Nguyen Phu Trong (R) receives Japanese Prime Minister Suga Yoshihide during the latter’s visit to Vietnam in October 2020. (Photo: VNA)

Suga Yoshihide, who is also President of the ruling Liberal Democratic Party of Japan, made the statement during phone talks on March 22 with Nguyen Phu Trong, General Secretary of the Communist Party of Vietnam and State President.

He expressed his desire to work closely with top Vietnamese leaders to bring the Japan-Vietnam relations to new heights in the lead up to the 50th anniversary of the establishment of diplomatic relations between the two countries in 2023.

He also said Japan will cooperate closely with Vietnam in COVID-19 prevention and control in the context of the pandemic evolving in a complex manner globally.

On behalf of the Liberal Democratic Party and the Japanese Government, Suga Yoshihide congratulated the Communist Party of Vietnam on its recent successful organization of its 13th national congress, and Nguyen Phu Trong himself on his re-election as the General Secretary of the Party for the 2021-2026 tenure.

He said he believes that under the leadership of the Communist Party of Vietnam led by Trong, Vietnam will obtain greater achievements in its ongoing Doi Moi (Renewal) process.

For his part, Party General Secretary and State president Nguyen Phu Trong stressed that the 13th national congress is a great political event of the Party, State and people of Vietnam, which has set out development directions and goals for Vietnam in the next five years with a vision to 2030 and 2045.

Vietnam pursues its foreign policy of independence, self-reliance, peace, friendship, cooperation and development, as well as diversification and multilaterlisation of foreign relations, while proactively integrating into the world, said Trong.

Vietnam is a reliable partner and an active and responsible member of the international community, he noted.

Speaking highly of the positive development of the Vietnam-Japan relationship and the close bond between the Vietnamese Communist Party and the Liberal Democratic Party of Japan over the years, Trong affirmed Vietnam consistently considers Japan to be the most important, long-term and highly reliable strategic partner.

He proposed that the two sides strengthen exchanges and contact at all levels to further promote bilateral cooperation. He also expressed his wish that Japan will continue to support Vietnam in successfully implementing its socio-economic development strategies and plans endorsed at the recently-concluded national Party congress, while strengthening the connectivity between the two economies.

The two leaders also exchanged views on regional and international issues of mutual interest.

JOURNALIST: – Sir, do you think the USA will return to renegotiate the terms for the CPTPP deal with other countries?

Dr. VO DAI LUOC: – The question of whether the USA will return to the CPTPP deal or not is a matter of great concern, not only for countries that are members of the CPTPP but also for other ally countries of America. I think that although the US President Joe Biden wants to rejoin the CPTPP right now, there is also an overwhelming leaning towards multilateral Free Trade Agreements (FTAs). So in the short term, the US may not be able to renegotiate to rejoin the CPTPP. The reason is that the more Free Trade Agreements develop, the less are the chances of the US once again rejoining the CPTPP.

For instance, at present many countries are benefiting much more from FTAs because of more capital flow, and better markets, labor, and technology. However, voters in developed countries, like the US, believe that they are at a disadvantage because large corporations will lean towards the developing countries to take advantage of cheaper labor, growing markets, and preferential tax policies.

Former President Donald Trump launched the concept of fair and free trade, which is also how he sympathized with voters and had the support of his voter base. However, that which is fair is also not easy to do. Hence, although President Joe Biden wants to renegotiate the CPTPP for benefits to the US, it is unlikely he can do it at this time. The US still has many unresolved domestic issues that need to be tackled before thinking of rejoining the CPTPP, such as consent of congress on issues related to businesses and labor.

– Sir, will China be able to rejoin the CPTPP, given that its leaders have repeatedly expressed their will to do so?

– China has officially declared that they want to rejoin the CPTPP, but it is still a far cry from wanting and actually realizing. First of all, there are terms in the CPTPP that can be considered progressive, but also binding. If China wants to participate, they will have to reform very strongly, especially in their policy towards current state-owned enterprises (SOEs). The Chinese SOE block is too strong, and the Chinese SOE support and protection policy is also too huge. Therefore, the question arises if China will reform this policy to conform to the terms of the CPTPP. Besides this, there are also intellectual property rights and labor issues to upgrade.

Such reforms in China are not easily implemented, especially the policy of economic development, for which the Chinese prefer a very nationalistic approach. Therefore, in my opinion, both China and the US will not be able to participate in the CPTPP in coming time.

– Sir, there is also an opinion that the Regional Comprehensive Economic Partnership (RCEP) plays a key role in China, so they will put pressure on the US to return to the CPTPP soonest. What is your opinion on this?

– RCEP associates have long-term strategic interests with China and neighboring countries. This is also believed to be a factor that motivates the US under the leadership of President Joe Biden to rejoin the CPTPP. Besides, this agreement is the best tool for the US to deepen economic relations with the region. In fact, the US can still maintain flexibility in that it seek a narrower agreement with CPTPP member countries on topics such as digital trade, the environment, and climate change, or on the sale and purchase of medical equipment and other essential products. Such an agreement will help build trust and serve as a starting point for the US to rejoin the CPTPP.

– Sir, what are the trends in US trade policy under President Joe Biden?

– I think that the trade policies will still serve the long-term strategies of the US. It will be a reassertion of their position as a world leading power, and show control over emerging nations that threaten America’s superpower status, of which China is number one. The US trade policy under President Joe Biden may be both competitive and controlling, though it must also clearly define a restructuring of relationship on the basis of mutual benefits.

On a broader scale, the US wants to reestablish its own set of rules, rather than reestablish new global governance, including in trade. Although this global governance model is in context of a current multilateral world, the US still maintains its superpower status across the world, as well as over its core interests. The problem is how the new rules will be introduced by President Biden, which are still unclear, and only time will tell.

– Thank you very much.

Luu Thuy (interviewer)

>>> Winners of Australia’s innovation partnership grants awarded

The activity is a continuation of the success of the first round in 2019, which granted a sponsorship package worth more than AUD1.63 million to three projects: on water treatment technology and monitoring systems, on hormone production technology which helps raise sea cucumber farming’s productivity, and on breast cancer diagnosis.

Under the theme of “Replicating Vietnam-Australia Innovation Partnerships”, grants ranging from AUD100,000 to AUD1 million will be awarded to projects on a competitive scoring basis. Accordingly, innovation initiatives need to be tested and are ready to be replicated, with cooperation between a Vietnamese organisation and an Australian organization.

The projects should have the potential to bring about impacts in the innovation ecosystem. The winners of Aus4Innovation grants will have a maximum of 12 months to carry out their proposed activities.

“The second round of the Aus4Innovation Partnership Grants demonstrates our commitment to continue working with the Government of Vietnam to further promote the improvement of the innovation ecosystem. Just like in the first round, we look for initiatives in various fields that have the potential of being widely applied and bring long-term socio-economic impacts, thus helping to strengthen Vietnam’s innovation ecosystem,” said Robyn Mudie, Australian Ambassador to Vietnam.

According to Vietnamese Deputy Minister of Science and Technology Bui The Duy, the programmes such as Aus4Innovation will help Vietnam’s innovative ecosystem to be more complete, widely connected and efficient.

Vietnamese organisations who are interested must register no later than March 17. Details about the registration process will be available at the website: https://research.csiro.au/aus4innovation/.

The Innovation Partnership Grants are an important part of the AUD11 million Aus4Innovation programme being carried out over four years (2018-2020), aiming to help strengthen Vietnam’s innovation system and prepare for the country’s economic and digital future.

By Anh Duc

A joint statement on the results of General Secretary Nguyen Phu Trong’s official visit to Russia affirmed the consistent policy of Vietnam in strengthening the comprehensive strategic partnership between Vietnam and Russia, in order to meet the long-term interests of their peoples, and affirmed the importance of maintaining joint efforts to promote cooperation in all areas.

Taking place ahead of big events of the two countries, including the 25th anniversary of a treaty on the basic principles for bilateral friendship in 2019 and the 70th anniversary of the diplomatic relationship between Vietnam and Russia in 2020, General Secretary Nguyen Phu Trong’s visit to Russia is a special event that holds important historical significance for both Vietnam and Russia. The leaders’ agreement on consolidating, expanding and deepening the comprehensive strategic partnership between Vietnam and Russia showed a deep strategic vision, meeting the long-term interests of their peoples in the new period.

During his trip, the Vietnamese Party leader held talks with President Vladimir Putin and met Prime Minister Dmitry Medvedev, Chairman of the State Duma of Russia Vyacheslav Volodin, and Deputy Speaker of the Federation Council of Russia Andrey Turchak. He laid wreaths at the Tomb of the Unknown Soldier, the Vladimir Ilyich Lenin Mausoleum, and the Statue of President Ho Chi Minh in Moscow. He also attended a ceremony to celebrate the 60th founding anniversary of the Russia-Vietnam Friendship Association as well as meetings with Russian veterans and experts who have worked in Vietnam, and visited Kaluga province. During the talks and meetings, leaders of the two countries discussed how to further develop the Vietnam-Russia friendship and all-round cooperation, as well as international and regional issues of their common concern. General Secretary Nguyen Phu Trong and the high-ranking delegation of Vietnamese officials received a warm reception, gracious hospitality and genuine friendship from Russian leaders and people. President Vladimir Putin affirmed that Russia has always held Vietnam in high regard as a leading partner in the Asia-Pacific region, expressing his confidence that General Secretary Nguyen Phu Trong’s visit would create an important milestone and be a new driving force for the bilateral comprehensive strategic partnership.

The two leaders expressed their pleasure at the comprehensive development in bilateral relations, with many fields, from political, diplomatic, economic, financial, security and defense cooperation to cultural cooperation, health care, science, education and training, industry, electricity, mining and mining, agriculture, information and telecommunications, urban transport infrastructure, tourism, cooperation between localities. The leaders of the two countries discussed measures to further develop the Vietnam-Russia friendship and all-round cooperation, as well as international and regional issues of their common concern. General Secretary Nguyen Phu Trong and Russian leaders expressed their resolve to strengthen the bilateral economic, trade and investment cooperation, to match their political ties, culture and the shared potential of the two countries.

The leaders stressed the need for radical efforts to boost economic and trade cooperation, and the effective implementation of the Free Trade Agreement between Vietnam and the Eurasian Economic Union as well as its member nations. They highly valued the important role played by the Vietnam-Russia Intergovernmental Committee for Economic, Commercial, Scientific and Technological Cooperation. The two sides highlighted the need to improve the effectiveness of activities of the Vietnam-Russia Senior Working Group on priority investment projects in order to develop and implement projects in the fields of industry and electrical energy; mining and mineral processing; agriculture; information and telecommunications; and urban and transport infrastructure in localities all over Vietnam.

Talking about cooperation in energy, oil and gas, a strategic sector for bilateral ties for years to come, the leaders agreed to create favourable conditions for Vietnamese and Russian firms to effectively carry out their existing projects. They said there will be more new projects with the participation of national oil and gas companies from both sides. They agreed to facilitate the operation of priority investment projects in both nations.

During the talks, the leaders of the two countries agreed that border and territorial disputes and other disputes in the Asia-Pacific region should be addressed through peaceful means, while not using or threatening to use violence on the basis of international law, to ensure peace, stability, and security in the region. They affirmed that the two countries support the full and effective implementation of the 2002 Declaration on the Conduct of Parties in the East Sea and welcome the relevant parties’ efforts to soon adopt a Code of Conduct in the East Sea.

The two leaders expressed their pleasure at the comprehensive development in bilateral relations between the Communist Party of Vietnam and the United Russia party that contribute to tightening the foundations of traditional friendly relations and to political trust between the two parties, the two governments and the people of the two countries while promoting cooperation and exchanges on the Party channel regarding important issues of mutual concern.

The important results achieved during the official visit to Russia by General Secretary Nguyen Phu Trong create a solid basis to consolidate and deepen the comprehensive strategic partnership between the two countries, affirming the two sides’ determination on strongly promoting the relations between Vietnam and Russia in all fields, commensurate with the aspirations of the two peoples, for the benefit of the two peoples and the prosperity of the region and the world.

The first year of a term usually sets the tone for the entire tenure, and the government began the 14th term in a challenging situation.

GDP growth in 2016 was only 6.21 percent against the targeted 6.7 percent, exports too fell short of the 10 percent growth target and public debt had increased to 53.2 percent of GDP, prompting the government to ask the National Assembly to raise the debt ceiling for the 2016-20 period.

The house obliged, increasing it to 54 percent.

The sluggish growth was attributed to several factors like the decline of the mining industry and agriculture being hit by natural disasters and a slump in global commodity prices.

There was a case of environmental pollution that causing fisheries output to decline by an eye-watering 20 percent.

In 2016, one of the biggest environmental disasters to hit Vietnam was caused by a unit of a Taiwanese conglomerate leaking toxic waste into the sea.

Within weeks, more than 200 km (125 miles) of coast had been sullied by the accidental release of chemicals including cyanide, phenols and iron hydroxide.

More than 40,000 jobs were directly affected in four provinces dependent on fishing and tourism. Across the country, a quarter of a million workers felt the impact, according to the Ministry of Labor, Invalids, and Social Affairs.

Role of the private sector

But the next three years were another story, especially with respect to growth. The second year saw the economy grow by 6.81 percent, exceeding the target set by the NA.

In 2018 and 2019, the rate surpassed 7 percent for the first time in a decade. Export growth was also high as the trade balance moved into positive territory, and inflation was below 4 percent.

Public debt decreased from about 64.5 percent of GDP at the beginning of the term to 55.3 percent. The debt structure was changed to make it more sustainable and safe.

Before becoming a bright spot in the economy, the private sector used to be a concern for economists. In a 2016 interview Tran Dinh Thien, former director of the Vietnam Institute of Economics, said: “The private sector, even if it is considered ‘primitive,’ contributes 60-70 percent of economic growth.

“A typically strong private sector will have the lion’s share of 80-90 percent. In Vietnam, the rate is a mere 8 percent even after 30 years of successful transformation toward a free market.”

In 2017, for the first time the Communist Party Central Comittee issued a resolution solely on the private sector, Resolution 10, titled ‘Develop the private economic sector into an important driver of a socialist-oriented market economy.’

Under the resolutions, policies for the sector such as relaxed regulations and supportive policies for startups, minimized administrative procedures and licensing, and e-governance have been mapped out.

As a result, the private sector began to grow rapidly. Analysts believe the private economy has become the key growth driver in the medium period.

The most apparent indicator is the record number of newly established businesses every year. In the first four years of the government’s term more than 500,000 were set up.

The handling of foreign affairs was also a highlight, both on the economic and diplomatic fronts. In early 2016, former U.S. president Barack Obama paid a visit to Vietnam. In 2019, Vietnam was the venue for the U.S.-North Korea Summit and the memorable meeting between former U.S. President Donald Trump and North Korean leader Kim Jong-un.

In early 2019 , Vietnam became the seventh country to ratify the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). The trade deal had 11 founding members, Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, Singapore, New Zealand, Peru, and Vietnam.

In June 2019, Vietnam and the EU signed a free trade agreement (EVFTA) and an investment protection agreement (IPA) in Hanoi after nine years of negotiations.

Rampant Covid-19

Considering the successes of 2016-19 the government and analysts expected 2020 to be a promising year. But then came Covid-19 and pushed the targets for the five years hopelessly out of reach.

The pandemic dragged Vietnam’s 2016-20 average economy down to around 5.9 percent, the lowest rate in a long time, and as against a target of 6.5-7 percent.

However, Vietnam’s was one of the few economies in the world not to shrink in 2020 thanks to its successful fight against the pandemic.

Besides the achievements, which Prime Minister Nguyen Xuan Phuc described as a ship’s thrilling journey through storms, the economic development is still hindered by bottlenecks.

The economy depends largely on manufacturing for growth, but the sector is dominated by foreign enterprises. They also dominate imports and exports, meaning they determine the balance of trade.

Chief Economist from the Vietnam Institute for Economic and Policy Research (VEPR) Pham The Anh said in recent years growth has depended a great deal on the use of bank credit. The annual credit growth rate (12-14 percent) is more than double the GDP growth rate, which indicates inflation and asset price bubble risks.

Revenues from foreign-invested enterprises are also low due to tax and other incentives, shifting the pressure to domestic businesses.

Public investment was the savior of the economy in 2020. But in previous years public projects were not too efficient.

The performance of state-owned enterprises and a new growth model are also topics the new government needs to focus on, he added.