Vietnam - Introduction

Vietnam remains a poor agrarian country controlled by a communist government, but after 20 years of renovation, it is determined to become an industrial country by 2020. The National Assembly leadership ushered in a tough anti-graft President and a young Prime Minister with a close pulse on the exploding economy this month, as part of the Communist Party's effort to tackle the country's serious high-level corruption problem. Challenges still lie ahead: avian influenza has not yet been eradicated from Vietnam, although new cases of infected poultry and humans have dwindled over the past five months. Vietnam's location and economy remain strategically important to the region as it continues to solidify its strategic bilateral relationships with regional neighbors and global allies. Economically, Vietnam's signing of a bilateral agreement with the U.S. brings them closer to WTO accession, potentially providing them with an opportunity to rise as an economic powerhouse in Asia.

The victory of communist forces in Vietnam in April 1975 ranks as one of the most politically significant occurrences of the post-World War II era in Asia. The speed with which the North finally seized the South, and the almost simultaneous communist victories in Laos and Cambodia, were stunning achievements. The collapse of the three Indochinese noncommunist governments brought under communist control a region that, over the course of four decades of war, had become the focus of United States policy for the containment of communism in Asia. The achievement was even more phenomenal for having been accomplished in the face of determined United States opposition and for having called into question the very policy of containing communism.

The events of April 1975 prepared the way for the official reunification of North and South in 1976, some three decades after Ho Chi Minh first proclaimed Vietnam's independence under one government in September 1945 and more than a century after France divided Vietnam in order to rule its regions separately. The departure of defeated Japanese troops, who had occupied Vietnam during World War II, had created the opportunity for Vietnamese communists to seize power in August 1945, before French authorities were able to return to reclaim control of the government. Communist rule was cut short, however, by nationalist Chinese and British occupation forces whose presence tended to support the Communist Party's political opponents. Between 1945 and 1975, the generation of communists responsible for victory in the South pursued a lengthy war for independence from the French, acquiesced temporarily to division of the country into a communist North and noncommunist South, and engaged in a subsequent war for control of the South against a southern regime supported by the United States. Reunification and independence, however, were goals that predated the communists. They were the long-established objectives of Ho Chi Minh's nationalist and anticolonialist predecessors, who had resisted Chinese rule for 1,000 years and French domination for a century.

Indeed, Vietnam's unrelenting resistance to foreign intervention remains a dominant Vietnamese historical theme, manifested in the repeated waging of dau tranh, or struggle to gain a long-term objective through total effort, and motivated by chinh nghia, or just cause. Vietnam's communist leaders claim that every Vietnamese has been a soldier in this struggle. Paradoxically, Vietnam's fierce determination to remain free of foreign domination has often been combined with an equally strong willingness to accept foreign influence. Historically, the pattern has been to adopt foreign ideas to indigenous conditions whenever they applied.

Foreign Relations

During its incursion into Cambodia in 1978-89, Vietnam was isolated internationally. However, soon after the conflict was resolved in the Paris Agreement on Cambodia in October 1991, Vietnam established or reestablished diplomatic and economic relations with most of Western Europe, China, and other East Asian countries. Vietnam joined the Association of Southeast Asian Nations (ASEAN) in 1995 and the Asia-Pacific Economic Cooperation forum (APEC) in 1998. Vietnam's foreign policy is aimed at developing good relations with a diversified mix of nations.

In February 1994, the United States lifted its economic embargo against Vietnam, and in June 1995 the United States and Vietnam normalized relations. However, these relations remain somewhat volatile. Full implementation of a bilateral trade agreement, which came into effect in December 2001, is being held up by a dispute over catfish exports. In July 2003, the International Trade Commission decided in favor of the United States in the catfish dispute. Vietnam's government is also upset with a bill introduced in the U.S. Congress in July 2004 to link non-humanitarian aid to Vietnam's human rights record. In June 2005, a high-level Vietnamese delegation, led by Prime Minister Phan Van Khai, visited the United States and met with their U.S. counterparts, including President George W. Bush. This was the first such visit in 30 years. The leaders engaged in far-reaching discussions, including lingering issues from the Second Indochina War, but the United States did not endorse Vietnam's bid to join the World Trade Organization (WTO) during the visit.

Ideological affinities are driving improved relations with China, and trade between the nations soared to reach US$7.2 billion in 2004. But despite improved relations, Vietnam remains suspicious of China's intentions. In January 2000, China and Vietnam signed a treaty defining a common land border. However, the countries both claim sovereignty over the Spratly and Paracel Islands in the South China Sea, and this dispute is a potential source of renewed tension.

Vietnam enjoys a good political and economic relationship with Japan, and the two countries are partnering to exploit the disputed offshore oil fields in the South China Sea. At a meeting in Hanoi in July 2004, foreign ministers from the two nations pledged to strengthen the partnership. Already a major trading partner and investor, Japan promised to boost direct investment in Vietnam. Japan also offered support for Vietnam’s bid to join the WTO. In December 2004, Japan announced a grant of US$19 million to fight poverty in Vietnam.

Russia’s predecessor state, the Soviet Union, was a longstanding ally and a major investor. Following the break-up of the Soviet Union, Russia reduced its investments in Vietnam. Trade also suffered as a result of a dispute over the large debt that Vietnam owed the Soviet Union. This debt has been restructured to Vietnam’s benefit so that Vietnam now must repay only 15 percent, with payments stretched over two decades. Part of the debt is repayable in commodities such as rice and coffee.

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