Vietnam is the best example of how economic reforms made drastic change. Accurate diplomacy policy, a good hold on the economy, a good strategic policy made a huge impact on Vietnam’s economy. According to the World Bank, ‘Vietnam’s shift from centrally planned economy to the market economy, has transformed Vietnam from the poorest country in the world to the lower middle income country. Vietnam is one of the most dynamic emerging countries in East Asia.’ If you remember in 1991, Hon. Dr. Manmohan Singh threw light on how India needs to be shifted to Market Economy. That LPG (Liberalisation, Privatization, Globalisation) Policy made a gigantic difference in our economy. Still yet we haven’t looked seriously to update our reforms. But we are slowly moving towards updating. Current Privatization and Disinvestment are parts of updating. So it was the comparison between Vietnam’s policy and Indian policy. Moving back to Vietnam’s history, the most important point I want to share is, Vietnam defeated China in the 1979 war. It was a border issue between them and China attacked Vietnam with around 3,00,000 military troops, with a strong backup of Chinese Navy and Air Force. But the magical part is Vietnam defeated China with Guerrilla warfare strategy. Study showed around 25,000 chinese soldiers were killed and 37,000 were wounded severely. Whereas China claimed only 6,000 chinese personnel were killed. As a result, Vietnam claimed victory over China.
Moving to the present, let’s look how Vietnam’s Foreign Policy shaped?
Vietnam suffered a lot from the China invasion and US bombing. But still Vietnam is a major exporter now. Domestically, since the start of its Doi Moi Policy, Vietnam started a new Economic and Political renewal campaign. While earlier Vietnam was a major importer of agricultural products, it is now a major exporter. Vietnam also normalised its relation with the US, which was its opponent earlier. We will look into reasons for their success later.
In 2018, Indian President Hon. Ramnath Kovind visited Vietnam. He visited ‘My Son’ a world heritage site which was earlier attacked by US bombs. Temples at this site are dedicated to worship Lord Shiva, known under various local names. The most important name is Bhadreshwara. Following the talks between President Kovind and President Nguyen Phu Trong, four MoUs were signed between two nations, majorly focused on Telecommunication, Foreign trade, Higher education, Industry. The one major issue remaining is operationalizing the $500 million Line of Credit in defence. Line of Credit is actually a present borrowing limit that can be used at any time. The borrower can take money out as needed until the limit is reached. We can say it as free money in lame language. But Vietnam didn't respond as expected. Why? Who doesn't want free cash? But here again wise foreign policy came in picture. India offered this credit in the defense sector, and if Vietnam agrees on such a huge amount, China would get upset. Vietnam is trying to be present themselves as untilted country. However, in 2020 Vietnam agreed and accepted Line of Credit of $100 million in the defence sector, offered by India. This Line of Credit is for 12 high-speed guard boats for Vietnam.
Again coming to the geographical region, Vietnam has a huge coastline of South China sea. As usual, China claims that the whole South China sea belongs to China. But with full cooperation Vietnam and India are searching for new hydrocarbon sources. India's State owned Oil and Natural Gas Corporation has been searching for oil along with Vietnam's support in disputed waters of Vietnam, though China objected to this.
India has about 278 projects in Vietnam with total invested capital of USD 887 million, according to Vietnam's Foreign Investment Agency.
India's investments in Vietnam are in the sectors of energy, mineral exploration, agro-processing, sugar, tea, coffee manufacturing, agrochemicals, IT and auto-components.
Vietnamese investments in India is to the tune of USD 28.55 million primarily in areas of pharmaceuticals, IT, chemicals and construction materials.
Another point is infrastructure development. Vietnam is important for India from the connectivity angle. As Myanmar got a government elected by the public, it would give ample opportunities for India to extend trade routes to Vietnam via Myanmar. Situation of the Myanmar government is not good yet but in future it will be fine. The trilateral India-Myanmar-Thailand trilateral highway will allow Indian goods to reach Southeast Asia with ease and vice versa. In the future, the India-Myanmar-Thailand trilateral highway could link up with already existing roads like the one linking Thailand with the Vietnamese port of Da Nang. Secondly, though both countries have been negotiating the sale of BrahMos missiles (jointly produced by India and Russia), no decision was taken yet. India is also set to train Vietnamese Fighter pilots to fly Sukhoi-30 Fighter jets.
Moving to exports of Vietnam
In 2010, Vietnam's total export was $72.2 billion, and India's export was $220.4 billion. And in just 9 years, in 2019, Vietnam's total export was $318.3 billion and India's export was $323.3 billion. You can clearly see, Vietnam is touching India's export numbers. You can imagine how fastly they have developed.
In 2021 also, economic growth of Vietnam is expected to be 6.5% during a crucial pandemic!!! I would like to mention that the growth rate of Vietnam before the pandemic was 7% and in pandemic 6.5%. No heavy recession is observed in Vietnam, while all the world is suffering from a crisis.
As I mentioned earlier, what are the reasons?
First, Vietnam has more than 80% market value exports by large enterprises. While India has 80% of small enterprises. Secondly, Industrial accumulation is based on accessibility to ports. In Vietnam, it takes 0.3 days for consignment to reach a port. In Bangladesh it takes 1 day. In India it takes 7-8 days.
Thirdly, Vietnam had signed a 'Free Trade Agreement' with European Union. Which means tariffs from most goods either be cut or eliminated totally if manufactured in Vietnam and being exported to European Union Nations.
Fourth, Vietnam is a One party state. The Communist Party of Vietnam is the founding and ruling party of Socialist Republic of Vietnam. Hence economic policy doesn't get changed frequently as in India does.
Fifth and last, Vietnam has a good number of skilled and educated working force, India also has a number of employment seeker youth, but in my opinion Indian youth is little bit out of its track.
This arises a major teaching for Indian Policy makers. Yes, I know there are bugs and stubbornness. But we have to identify and eliminate them. I am not saying that India also should have One Party Nation, I am just trying to compare how little countries like Vietnam evolved much and started touching numbers of India. They are not even equal to Maharashtra, if population is considered. India and Vietnam relations are good enough. But we are hoping for the best relationship. As Indian I believe in our policy makers, whatever they will do it will be best for our motherland. Moving to conclusion, Vietnam's progress is very nice and is on a positive track. Vietnam is now aiming to become a manufacturing hub, and looking at their past records and progress, Vietnam will achieve the title of 'Manufacture Hub' if China won't play any bad game. And commenting on India, We have potential to become the next superpower and all the world has accepted this. But the condition is, our traditional reforms and policies should be reanalyzed and reconstructed.
Good wishes to Vietnam.
Long live India-Vietnamese relations.
And HAPPY MOTHER'S DAY TO MY BELOVED MOTHERLAND, INDIA.
Jai Hind
-Aditya More
References-
1) Ministry of External Affairs, India
2) The Diplomat- 'Why India and Vietnam Need Each Other'
https://thediplomat.com/2016/09/why-india-and-vietnam-need-each-other/
3) Embassy of India, Hanoi- Vietnam
https://www.indembassyhanoi.gov.in/page/india-vietnam-relations/
4) The Economic Times- 'Vietnam important for India's Indo-Pacific Ocean's Initiative: Senior diplomat'
https://m.economictimes.com/news/defence/vietnam-important-for-indias-indo-pacific-oceans-initiative-senior-diplomat/articleshow/78770772.cms
5) The World Bank
https://www.worldbank.org/en/country/vietnam
6) China's 1979 War with Vietnam: A Reassessment
-Xiaoming Zhang
http://www.jstor.org/stable/20192542
7) The Times of India- 'India, Vietnam fail to operationalize $500 million credit line during Prez Kovind's visit'
https://m.timesofindia.com/india/india-vietnam-fail-to-operationalize-500-million-credit-line-during-prez-kovinds-visit/articleshow/66741175.cms
8) Buisness Today- 'India-Vietnam virtual summit: $100-million defence line of credit, new opportunities on agenda'
https://m.businesstoday.in/lite/story/india-vietnam-virtual-summit-100-million-defence-line-of-credit-new-opportunities-on-agenda/1/425542.html
Much informative
ReplyDeleteThank you 😊
DeleteNice study of topic... So much informative!
ReplyDeleteThank you 😊
DeleteNice informative and well studied writeup👌
ReplyDeleteGood information
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