Path to strategic partnership
[b][i]Ambassador Extraordinary and Plenipotentiary of the Republic of Belarus to the Socialist Republic of Vietnam, Valery Sadokho, analyses successful promotion of Belarus’ interests in South-East Asia [/b][/i]
Dear Mr. Ambassador, recent top-level visits — such as that of Vietnamese PM Nguyễn Tấn Dũng — demonstrate that our two states are enjoying a new standard of liaisons. Vietnam is not just friendly towards Belarus (as in Soviet times) but is an important strategic partner. Do you consider strengthening co-operation with this Asian-Pacific state to be a major focus for Belarus’ foreign policy? What advantages may result?
Belarus is known for its multi-vector foreign political and economic policy. Developing co-operation with countries in the ‘far arc’ is among its priorities; the progressive advancement of relations with Vietnam is a key element in realising this policy, since Vietnam offers a foothold for promoting Belarusian interests in South-East Asia. As you know, the country is a member of ASEAN: among the world’s largest blocks. It has a population of 600 million, GDP of $2.1tr, over $2tr of foreign trade annually and sustainable economic growth.
Belarus’ economic interests in this region are evident, so it’s to our advantage to nurture good relations with Vietnam. Gaining prominence in South-East Asia, this nation is one of Belarus’ major partners in the region. We are delighted that, after 20 years of diplomatic relations, our states continue to build upon their friendly and allied relations — based on trust, mutual support and respect. Happily, Belarusian-Vietnamese relations are developing dynamically. We conduct regular top-level political talks, while rendering significant assistance to each other within the international arena. Our turnover is also growing each year.
With this in mind, strengthening Belarusian-Vietnamese co-operation is an important achievement of Belarusian foreign policy. The Vietnamese PM’s visit to our country in May, and the character of talks, confirmed once more that our two states’ heads are keen to promote strategic partnership.
2014 should see a free trade agreement signed between Customs Union members (Belarus, Kazakhstan and Russia). Why has such a ‘young’ integration union invited Vietnam to co-operate? What prospects does this ‘global international project’ open — as Mikhail Myasnikovich has named the hypothetic free trade zone of the Customs Union and Vietnam?
Economic globalisation necessitates free trade, to avoid protectionism. Vietnam is a member of the WTO and ASEAN, actively promoting foreign trade liberalisation. Hanoi is already conducting talks on free trade agreements with the EU (three rounds have taken place so far) and with the Customs Union (one round).
Belarus enjoys a positive foreign trade balance with Vietnam and ASEAN but many Belarusian exporters would like to see trade with Vietnam and other South-East Asian states simplified. They believe that Chinese rivals have significant advantages within this market, as a result of ACFTA (a free trade zone between China and ASEAN), which was established in 2010. For instance, Belshina JSC pays a fee of 20-40 percent when selling in South-East Asia. Meanwhile, Chinese, Korean and Indian manufacturers export their tyre products without duties, as part of the free trade agreement with ASEAN. A similar situation is observed for exported Belarusian machinery.
After a detailed study of the feasibility of a free trade agreement between the Customs Union and Vietnam, the heads of Belarus, Kazakhstan and Russia decided to launch talks in late 2012. In March 2013, Hanoi hosted the first round of these talks, run in a friendly and constructive atmosphere. The next round is to take place in Moscow this summer and Minsk will probably host the third round in September, with Vietnam organising the fourth in December.
The establishment of a free trade zone between the Customs Union and Vietnam should inspire serious growth for Belarusian exports across South-East Asia. The advantages will include free movement of goods, simplified technical regulations and sanitary controls, modern labour regulation, investment co-operation and the chance of bidding for state project tenders. In signing a free trade agreement with Vietnam, Belarus will be able to integrate into ASEAN: the largest economic block worldwide. Vietnam can, in turn, expand into the Custom’s Union. Belarusian PM Mikhail Myasnikovich’s comment on the strategic significance of this ‘global international project’ is certainly appropriate.
During the Vietnamese PM’s visit to Belarus, various trade-economic co-operative issues were tackled. Which are most important and promising?
Trade and economics were the focus of those talks, as we have issues to discuss. Over the past five years, our turnover has almost tripled, reaching around $185m in 2012. Steady growth in mutual trade is, in my view, the result of our Belarusian and Vietnamese economies being complementary. In particular, Belarus is interested in expanding sales of potash fertilisers, trucks, quarry vehicles, large sized tyres, engines, metals, high-tech products and food to Vietnam. All these products have already gained a reputation there. Meanwhile, Belarus is keen to import such Vietnamese items as seafood products, rice, nuts, medicines, tobacco, coffee, spices, vegetables, tropical fruits and caoutchouc (Indian rubber).
Despite our growing bilateral trade, volumes remain modest: far less than our potential. Accordingly, new mechanisms of co-operation were discussed during the visit. Joint projects and industrial collaboration might be the way forward. In particular, the expansion of MAZ truck assembly in Vietnam was high on the agenda: Belarusian engines, tractors and agricultural machinery could all be assembled in Vietnam, while joint facilities for the production of dairy goods and complex fertilisers could be set up (using Belarusian raw materials and technologies). We could also see joint military-technical projects.
Joint facilities for processing traditional Vietnamese products in Belarus could become a key avenue of co-operation: producing coffee, seafood, or sewn goods. Discussed during the PM’s visit, alongside possible joint mining of mineral deposits in Vietnam and third countries, this would help realise some untapped potential. Light industry also holds many opportunities. Vietnam has been using the latest clothes sewing technologies to make its mark on the global market. Over the past 10-15 years, its clothes production has reached a whole new level regarding quality. Over 2,000 sewing factories operate, alongside a host of smaller workshops, mostly exporting their produce. In 2012, the country sold almost $24bn of textiles, footwear and haberdashery abroad.
The USA was the largest buyer, accounting for almost 50 percent of all Vietnamese light industry exports last year. Among its other major importers are the EU (buying over 25 percent), Japan (around 10 percent), Korea,
Canada, Russia and Australia.
Vietnam is host to the factories of several famous clothing companies — from Germany, Canada, Italy and other states: Adidas, Nike, Gucci, Valentino, Hugo Boss, Calvin Klein, Parkson, Benetton and Mango. Various Western states place their sewing orders in Vietnam, knowing that they’ll receive high quality clothes, which can be sold in Europe at high prices.
In fact, this year, Vietnamese capital has now opened a sewing enterprise in the Vitebsk Region; next year, it should be ready to export its produce to third states. Vietnamese technologies may soon be used widely by Belarusian sewing factories to enhance competitiveness and raise export volumes.
Vietnam’s economic potential is huge. Each year, it assembles around 100,000 cars, 5 million motorcycles and 10,000 tractors. In 2012, it exported over $20bn of electronic products, mobile phones and telecommunication equipment — including sales worth over $1.2bn to Russia.
Export growth via the establishment of assembly facilities, representations and trading houses abroad is an important element of Belarus’ economic strategy. How is the Belarusian Embassy to Hanoi tackling the task of diversifying export sales and re-orientation to non-traditional markets across South-East Asia? Is this region an alternative to Belarus’ usual global markets?
Export diversification and the mastering of new sales markets should be a top priority for Belarusian exporters — even where traditional sales markets are healthy. With this in mind, our Embassy is rendering all possible assistance to Belarusian exporters in solving this goal. As I’ve noted, we are working hard to expand existing assembly facilities and to open new ones, alongside new sales outlets. Since 2012, MAZ JSC has operated a dealership in Hanoi, in addition to a stand within the Belarus-Vietnam Trading House. Belgorkhimprom JSC and the Meat-Milk Company JSC may soon also open representations.
As part of our efforts to support export diversification, in 2012, we raised the number of different export goods to Vietnam to 79 (up from 62). Delivery of 33 new products was launched, including milk whey, medicines, children’s foods and meat products. Last year, our exports to Vietnam were worth $156.1m; Belarus enjoyed a positive trade balance of $127.6m. Since 2007, Belarusian sales to this country have more than tripled.
Since 2011 (when our Embassy was accredited to Vietnam’s neighbouring states of Cambodia, Laos, Myanmar and Thailand), we’ve significantly enhanced the dynamics of our dialogue. The heads of these states have confirmed their interest in establishing and developing constructive co-operation along a wide range of issues. Already, results are evident. In 2012, our sales to Cambodia, Laos and Thailand rose: $77.2m of Belarusian produce was exported to Thailand, $11.1m to Laos, and $1.8m to Cambodia. Belarusian exporters aim to gain a strong foothold on these rapidly expanding markets.
Belarus’ number one priority now is to ensure innovative development for its economy. Is Vietnam interesting in this respect? Meanwhile, are the Vietnamese interested in Belarus’ sci-tech potential?
To promote exchange and international use of knowledge, Belarusian and Vietnamese scientific organisations have signed corresponding agreements. One relates to scientific co-operation between Belarus’ National Academy of Sciences and Vietnam’s Academy of Science and Technology (VAST), creating a joint centre to develop industrial technologies in the spheres of machine and tool building, energy and chemical production. Another agreement covers co-operation between the Belarusian NAS Republican Centre for Technology Transfer and Innovation and the VAST Centre for Training, Consulting and Technology Transfer. The VAST Energy Institute and the Belarusian National Technological University have signed an agreement and there are many more. The aim is to ensure that the latest innovations find real commercial application.
Mr. Ambassador, have you ever come across Vietnamese heads who have studied in the Soviet Union — including in Minsk? Does this play a role in promoting economic contacts with Vietnam or is it a level playing field between Belarusian companies and Western rivals?
I’ve met and spoken to those who were educated in the USSR. The younger generation prefers to study in the more highly developed Asian states or in the West but many of today’s top managers received their education at Soviet universities — including those in Belarus. Until recently, three Vietnamese ministers were alumni of Belarusian universities. Not long ago, two retired but Cao Duc Phat, the Minister of Agriculture and Rural Development, studied in our country. He spoke warmly of Belarus, being thankful to our country for providing him with such knowledge, which enabled him to achieve much professional success. He always helps promote Vietnamese-Belarusian collaboration.
Attracting Vietnamese students to Belarusian universities is significant on many levels since alumni eventually tend to connect their professional or business activity with Belarus. We have plenty of examples of businessmen having studied in Belarus or in the former USSR, being able to speak Russian. Accordingly, it’s extremely important to encourage Vietnamese students into the Belarusian educational system.
As regards competition, historically, our states enjoy close and friendly ties, which is an indisputable advantage in promoting Belarusian economic interests in Vietnam. Meanwhile, Vietnam is a member of the WTO, ASEAN and other integration associations; to some extent, it is dependent on foreign financial aid and investments from donor-states, so it is pragmatic in its trade-economic relations with foreign partners. Belarusian produce faces serious competition in gaining a foothold on the Vietnamese market, so we must diversify sales to be able to rival exporters from China, Japan and Korea. This is possible if Belarusian exporters apply new approaches. An aggressive, well-planned foreign trade policy is needed to secure a long-term niche on this market.
What role does ‘folk diplomacy’ play and how does Vietnam’s historical experience influence its modern international liaisons? The country experienced one of the largest military conflicts of the late 20th century, in which we shared the same side ‘of the barricades’…
Vietnam is a special example in South-East Asia of the potential for ‘folk diplomacy’ since so many Vietnamese people formerly studied in the USSR and Belarus. Each city and enterprise has people who studied in the USSR and they all express gratitude to the former Soviet republics — including Belarus. Vietnamese people also value the help rendered by the USSR in the fight against American aggression. Vietnam’s Defence Ministry invites Belarusian, Russian and Ukrainian veterans who served in Vietnam twice annually, when they are welcomed by the President, the Defence Minister and members of the Government. They tour modern Vietnam and always spend time recuperating at Vietnam’s best sea resorts.
It might seem strange but the Vietnamese have translated the best Soviet cartoon songs into their language. Melodies familiar to all of us are regularly broadcast on local TV and radio and are performed at festivals.
At present, many of those who attended Soviet universities — including those in Belarus — hold key positions relating to trade, aiding our economic co-operation. ‘Folk diplomacy’ is based on these elements.
Belarusian tourist companies have been inviting our citizens to travel to Vietnam. What surprises await us?
In 2012, around 7 million tourists visited Vietnam; in the first four months of 2013 alone, the country welcomed just under 2.5 million tourists. Every year, the number of holidaymakers grows. People are attracted by the perpetual warmth of the sea and the country’s endless beaches; Vietnam’s coast extends over 3,000km. There are modern tourist complexes, good quality services, fresh and diverse seafood products, exotic fruits and Vietnamese cuisine (able to satisfy all tastes). Importantly, local prices are affordable.
Last year, a huge number of Russians visited Vietnam: over 170,000 (up 71.5 percent on 2011), thanks to direct flights from Moscow, Khabarovsk and Vladivostok to Hanoi, Ho Chi Minh, Nha Trang and Da Nang. The number of Belarusian tourists is growing as well — through Russian and domestic tour operators.
The Vietnamese are a friendly nation, welcoming citizens from former Soviet states warmly. The country has a low level of crime and lacks terrorist threats or natural disasters. Vietnam has opened its doors broadly to Belarus and we plan to use every opportunity to promote our economic, political and cultural co-operation, while strengthening our traditional, friendly, interpersonal contacts.