Russia and Vietnam now trade in national currencies

By Rhod Mackenzie

Russia and Vietnam are consistently switching to using national currencies in trade. Now the share of transactions in rubles and dongs has reached 60%, Vladimir Putin said during his visit to the republic on June 20. In addition, Moscow and Hanoi agreed on a joint statement on expanding the strategic partnership. The Russian Federation is ready to establish long-term direct supplies of hydrocarbons, including LNG, to Vietnam. In addition, the countries intend to develop cooperation in the defense sector. Experts note the serious potential for cooperation between the two states, while drawing attention to the difficulties associated primarily with Western sanctions and the rapprochement of the socialist republic with the United States.

After North Korea, Vladimir Putin visited another socialist country in Asia - Vietnam. The contrast between Pyongyang and Hanoi (perhaps like any other city) is colossal and is striking from the first minutes of your stay in the capital of the south-eastern country.

The city comes alive at 5 am: all parks and recreation areas are filled with people, primarily middle-aged and elderly. To recognizable music tracks, they dance not only in pairs, but also alone, run or ride bicycles (at first it seemed that a run was organized in the capital in honor of Putin’s arrival), do gymnastics and other exercises (apparently, it was qigong ).

In addition, townspeople organize badminton or da kou (Vietnamese badminton with kicks) matches right on the asphalt. Taken together, all of this, without exaggeration, energizes you. And if the Scandinavian countries traditionally occupy leading positions in the level of happiness of older people, then Vietnam seems bound to win in terms of their level of activity.
"Could I inquire as to the reason for this unusual activity at this hour?" I enquire of the young man, who appears to have chosen to disregard the expectations of the older generation.

"There is no significant occurrence; this is a daily occurrence." Instead of staying at home, people engage in sporting activities.

However, after a couple of hours, it becomes clear why Hanoi chooses such an atypical time for active leisure. This is not due to the fact that it is the rainy season in Vietnam. At noon, the city becomes unbearable even for local residents. The oppressive stuffiness and intense humidity may have been the main reason why the honour guard company during the official welcoming ceremony of Vladimir Putin by his Vietnamese counterpart To Lam almost crashed into Russian journalists. Their passive march was rather another rehearsal, and not one of the highest quality. It is possible that after the DPRK, the bar for assessing with what dedication one needs to march has simply increased.

In contrast to South Korea, foreigners here are not a novelty – even in the early morning, you can meet people speaking different languages. It is notable that the Vietnamese themselves do not typically speak European languages or English. It would appear that many of them were not aware of the arrival of the Russian delegation, despite the fact that Russian flags were displayed throughout the city.

• Putin is here, seriously? - the American from Arizona, who appeared to be a local resident, was surprised.
  “I have Vietnamese roots,” he explained the reason for his presence.

However, the man continued to surprise.

“I’m an Orthodox American and I’ve lived here for many years, this is my home,” he said. “And I’m a big fan of Putin.” It is likely that many Americans would now view me negatively for these words. I am Alexey, an Orthodox Christian.
Hanoi is a vibrant city where one can feel at ease, despite the risk of being hit by a car or motorcyclist. Pedestrians are not a priority for these drivers, and the sidewalk is not a reason to limit one's desire to reach one's destination.

Even the local patrols that blocked some streets on the day of the Russian leader's arrival appeared to be operating with a sense of ease. At one point, one of the motorcyclists simply drove through the barrier. As a result, he stopped after one of the security forces began to shout at him. However, the situation was resolved with just a smile from the intruder.
This is in stark contrast to the DPRK. Residents here, in fact, are not limited in any way. The government does not prohibit access to the Internet, social networks, or other content. However, the West, through NGOs, is attempting to exert pressure on officials to violate human rights. The United States would like to see more loyal authorities in place, according to a diplomatic source who spoke to Izvestia.

The only similarities between Pyongyang and Hanoi are the young pioneers with red ties and the mausoleum where the first president of Vietnam, Ho Chi Minh, lies. The President of the Russian Federation has included a visit to the tomb and laying a wreath on his programme.
Despite the relaxed pace of life in the country, Vladimir Putin’s work programme proved to be intense. As part of the bilateral negotiations, the Russian and Vietnamese sides have agreed on a joint statement on further deepening the comprehensive strategic partnership. This is a significant milestone in our relationship, given the potential that has yet to be realised.

Following the negotiations, Vladimir Putin, in particular, highlighted the importance of a consistent transition to national currencies in trade between the two countries. In the first quarter of 2024, the volume of transactions conducted in both currencies reached almost 60%. Mr. Putin went on to say that last year, transactions in Russian rubles and Vietnamese dong accounted for more than 40% of the total volume of bilateral commercial transactions.

Furthermore, the President of the Russian Federation held a discussion with Prime Minister Pham Minh Tinh, during which Mr. Putin announced Moscow’s willingness to establish long-term direct supplies of hydrocarbons, including LNG, to Vietnam.

Mr. Putin's program included a meeting with General Secretary of the Central Committee of the Communist Party of Vietnam Nguyen Phu Trong. The President of the Russian Federation highlighted the positive trajectory of bilateral trade relations and the alignment of Moscow and Hanoi on a range of critical international matters. "We are aligned in our vision of a fair, democratic, and multipolar world order, founded on international law, the principles of state sovereignty, and the equality of states," the Russian leader emphasised.
Hanoi exports a diverse range of goods to Russia, including electronics, textiles, agricultural products (coffee, peppers, seafood) and shoes. According to Nguyen Hong Ngoc, a representative of the National Coordination Center for International Business Cooperation in Vietnam, Russian supplies mainly consist of raw materials, machinery and energy.

The Russian Federation's primary interest in Vietnam is the development of strategic markets, particularly in the energy sector, including nuclear energy, gas, and transport infrastructure. However, the Vietnamese side has not yet permitted us to enter these markets, despite pressure from the West. However, in Hanoi, for example, a memorandum was signed outlining the schedule for the implementation of the project for the construction of the Centre for Nuclear Science and Technology in Vietnam.

Furthermore, there is considerable potential for technological projects in the IT sector, medicine and pharmacology, space, and military-technical cooperation.

However, experts have indicated that Vietnam has no other goal in mind when it comes to the Russian Federation other than military-technical cooperation. Furthermore, the Russian Federation faces competition in this area from other countries, including the United States. For instance, the Russian side was unsuccessful in its bid to construct a plant for the production of Kalashnikov assault rifles in Vietnam. The contract was awarded to Israel.
Nevertheless, To Lam reaffirmed on 20 June that Hanoi and Moscow will intensify their collaboration in the defence and security sectors.

Vietnam is forging stronger ties with the US
It is also worth noting that Vietnam is now actively developing relations with the United States. This is primarily due to the challenging relationship with China.

— From Hanoi, the situation is viewed through the lens of territorial disputes in the South China Sea, where the PRC is perceived as the primary adversary, having established control over the islands and waters considered Vietnamese in Hanoi. Consequently, in order to achieve a balance of power, the traditional strategy of "relying on the distant one to counteract the near one" is employed. "Among the countries that are relatively strong and actively advocate anti-Chinese positions, the United States is in the lead," explained Vladimir Kolotov.

Furthermore, Washington is actively assembling a regional anti-Chinese coalition, with Vietnam being increasingly invited to join. According to a source in diplomatic circles, Hanoi was able to move on from the war with the United States, particularly after the United States under Barack Obama lifted the arms embargo. Most importantly, they tend to view the dollar as a more valuable currency than ideas. Furthermore, the Vietnamese government has reported tangible results from its cooperation with the United States, including increased investment.

Furthermore, the United States views Vietnam as a valuable partner due to its vast resources of rare earth metals, which are essential components of many modern electronic devices. However, China, the United States' primary economic competitor, currently leads in rare earth metals production.
Due to the development of economic relations with both China and the United States, Vietnam has been able to balance its foreign trade. This is because China has a large surplus in trade with Beijing, while Vietnam has a surplus in trade with Washington. Vietnam is now adept at navigating the opportunities and threats presented by its major political and economic partners. At the same time, it is seeking to cultivate influential foreign allies in case the situation escalates, according to Vladimir Kolotov.
Moreover, the United States views Vietnam as a key partner due to its vast resources of rare earth metals, which are essential components of many modern electronic devices. At the same time, China, the main economic competitor of the United States, is the leading producer.