John Boudreau, Bloomberg News
13 March 2015
Vietnam's military is going shopping.
Anxious about a more assertive China on its doorstep and frictions over territory in the South China Sea, officials in Hanoi recently hosted a group of foreign defense contractors looking to sell the Communist nation everything from radar systems to night vision technology and aircraft.
The military's top officers were not present because of the sensitivity of hobnobbing with U.S. defense companies eight days before celebrations for the 40th anniversary of the defeat of America and its allies. But the meeting shows how Vietnam's leaders are looking past ideology to practical realities.
"There are no permanent friends or enemies, only permanent interests," Alexander Vuving, a security analyst at the Asia-Pacific Center for Security Studies in Hawaii, said by phone.
Squeezed by slower U.S. military spending, defense firms are looking to Southeast Asian nations for new markets, capitalizing on their concerns about China's outlays on long-range planes, ships and submarines. The April roadshow, organized by the U.S. embassy, follows Washington's easing of curbs on sales of nonlethal defense systems to Vietnam last October.
"In the coming months there will be more conversations, meetings and trips back-and-forth between American companies and their potential Vietnamese clients," said Vu Tu Thanh, chief Vietnam representative of the U.S.-Asean Business Council, who attended the day-long symposium. "There is a surge of interest among American defense contractors."
More than a dozen defense companies, including Boeing Co., BAE Systems Plc, Lockheed Martin Corp. and Honeywell International Inc. were invited to the April 22 event, according to the agenda for the meeting. "The symposium sought to promote U.S. firms in Vietnam," U.S. embassy spokeswoman Lisa Wishman said in an e-mail.
Vietnam's procurement of defense equipment is in line with its policy of pursuing "peace and self-defense," Le Hai Binh, foreign ministry spokesman, said in an e-mail.
"This activity reflects a truly normal development of the comprehensive partnership between the two countries," Binh said. "It's not contrary to international laws nor harms peace and stability in the region."
Companies made pitches using PowerPoint presentations and slides of helicopters, boats and communications systems, Thanh said.
"Any defense related sales to Vietnam will follow development of U.S. government policy on Vietnam," Boeing spokesman Jay Krishnan said in an e-mail. "We believe Boeing has capabilities in mobility and intelligence surveillance and reconnaissance platforms that may meet Vietnam's modernization needs."
The meeting was attended by "multiple top-ten defense companies," Karen Adams, director of international business development at Exelis Inc., which provides night-vision technology, said in an e-mail. "New markets only occasionally open up," Adams said. "There was obvious interest from both the U.S. and Vietnamese side."
Vietnam's military will be eager to buy spare parts for U.S. military aircraft left behind after the war, Tuong Vu, an associate professor of political science at the University of Oregon, said by phone. Vietnam will spend one or two years reviewing what the U.S. has to offer and what fits with the country's current systems, Tuong said.
"They got the ban lifted and they have started shopping for weapons," he said. "The military is especially happy about that."
Vietnam's military spending has risen 128 percent since 2005, reflecting its territorial tensions with China, according to an April report by the Stockholm International Peace Research Institute. Its defense budget jumped 9.6% in 2014 to $4.3 billion, it said.
The U.S. is providing Vietnam with six patrol boats, part of an $18 million military aid package.
Vietnam is expected to continue its pace of military spending, Siemon Wezeman, a senior Sipri researcher, said by phone. "Its economy is not in a crisis and there are security issues," he said. "They are increasing."
China placed an oil rig in the South China Sea last May near the Paracel islands claimed by both countries, triggering a diplomatic row. Its work to create artificial islands in the region, with satellite photos showing dredgers reclaiming land in seven areas, has drawn criticism from Vietnam and other countries.
Still, Vietnam, which has long relied on Russia for weapons, is unlikely to become a major U.S. client, Collin Koh, an associate research fellow at the S. Rajaratnam School of International Studies in Singapore, said by phone. Russia supplies Vietnam with planes and submarines - the third of six kilo-class submarines was delivered in January - and is helping build a nuclear-power station.
"Russia has always been willing to get them whatever they required," Koh said. "Vietnam is not going to want to jeopardize that relationship."
Vietnam is interested in U.S. technology such as advanced surveillance systems, he said.
"The Vietnamese do have short-range surveillance systems on its coast," Koh said. "They may be able to spot a huge target, but they have no idea what it is. It could be an aircraft carrier or a large tanker."
The U.S. places conditions on weapons sales which could hinder efforts to sell systems to Vietnam, whose human rights record has been criticized by members of the U.S. Congress, Wezeman said. More than 150 dissidents are detained in Vietnam, according to Human Rights Watch.
Vietnam faces a steep learning curve on how to navigate the complex process of purchasing U.S. military equipment, Murray Hiebert, a Washington-based senior fellow at the Center for Strategic and International Studies, said in an e-mail.
The Hanoi symposium provided U.S. companies with an understanding of Vietnam's procurement process, Thanh said. There were one-on-one huddles between company representatives and officials from the defense ministry, though no deals were announced, Thanh said.
"It was very businesslike," he said. "The Americans were excited. One of the Americans stood up and asked, 'Can you tell us the annual defense budget?' The general at the podium said, 'I know it, but I can't tell you.'"