Vietnam Defence and Security Report Q1 2013
- ID: 2373005
- January 2013
- Region: Vietnam
- 64 pages
- Business Monitor International
The Vietnam Defence and Security Report for Q1 2013 examines the country's strategic position in South East Asia and the wider world. It provides an overview of the contemporary geopolitical challenges facing the country, and the challenges it may face in the future.
The report examines the trends occurring in the country's current and future defence procurement, and the order of battle across its armed forces. The intention is to provide a clear and concise discussion of these issues. The report's general conclusion is that Vietnam faces two main security challenges as it heads into 2013: the first is the risk of instability stemming from the economic crisis facing the country; the second is the risk of conflict with China over territorial disputes in the South China Sea.
Vietnam's economic problems are discussed in the report. As well as posing a domestic security challenge, as growth slows and unemployment rises, Hanoi may struggle to fund some of the ambitious defence procurement programmes that it has initiated. Procurement activity certainly appears to have tailed off in recent months, perhaps as a consequence of the uncertain economic outlook. Instead, Hanoi has been concentrating on forging new defence industry partnerships, with Italy, Sweden and the UK among the countries it has been holding discussions with. The prospect of the US ending its arms embargo on Vietnam could also open up an important new avenue of military equipment, although it is questionable whether Hanoi will be able to afford US equipment while its economy continues to struggle.
The provision of used US equipment is not unrealistic, however.
Tensions between China and ASEAN, and between China and Vietnam specifically, also remained serious throughout 2012. The prospect of a solution to the problem being found under the auspices of ASEAN are now remote, with members of the group variously adopting pro- or anti-China positions.
Eventually the four South East Asian countries that claim disputed territories in the South China Sea -
Brunei, Malaysia, the Philippines and Vietnam - resolved to hold talks in Manila in December, in an initiative that may prove more fruitful than discussions that involved ASEAN members with no direct stake in the South China Sea sovereignty disputes. Energy exploration in disputed areas remains a potential flashpoint issue between China and Vietnam, with PetroVietnam alleging in early December that Chinese boats had cut cables being laid by one of its survey ships in an area that Hanoi considers to be its territorial waters. Hanoi also warned China in Q4 against resorting to economic warfare during the course of its disputes.
Meanwhile, Hanoi continues to pursue an ambivalent approach to relations in China. On the one hand its leaders have pursued diplomatic initiatives and publicly stressed the importance of good relations with Beijing. On the other hand, Vietnamese society remains deeply suspicious of China's intentions, and the government has not shied away from taking actions that risk provoking Beijing.
Over the last quarter BMI has revised the following forecasts/views:
- The situation in the South China Sea is fully updated to cover the most recent developments.
These include Vietnamese accusations in early December that Chinese boats have cut cables being laid by Vietnamese survey ships, in what could be a repeat of an 2011 incident that seriously damaged relations between Beijing and Hanoi. This followed on from Hanoi's decision to pass a new Maritime Law codifying its claim to the Paracel and Spratly islands, a move which angered the Chinese. They retaliated by upgrading the political status of a Chinese town in the Paracels, and also by outlining oil exploration plans in what many neutral observers would regard as Vietnam's EEZ.
- The crisis within ASEAN is also discussed, following the acrimonious ASEAN Foreign Ministers Meeting held in Phnom Penh in July, at which the 10 Association members appeared divided into pro- and anti-China camps. This state of affairs persisted at a subsequent East Asia Summit, also in Phnom Penh, at which the Cambodian prime minister that ASEAN had reached a consensus on South China Sea issues, only for the President of the Philippines to deny that such a consensus existed. Vietnam generally shares Manila's outlook on these issues.
Meanwhile, ASEAN attempts to draw up a new Code of Conduct governing behaviour in the South China Sea appear to have stalled.
- Amid economic uncertainty Vietnam has focused on acquiring new naval platforms from domestic shipbuilders, and is seeking foreign partnerships to help develop its indigenous defence industry. However, the country's defence budget remains low by regional standards, and there is a risk that Vietnam could fall further behind in terms of defence modernisation if the government does not implement reforms to stabilise the economy, and then follows this up by investing in the defence sector. SHOW LESS READ MORE >
Executive Summary 5
SWOT Analysis 7
Vietnam Security SWOT 7
Vietnam Defence Industry SWOT 8
Vietnam Political SWOT 9
Vietnam Economic SWOT 10
Vietnam Business Environment SWOT 11
Global Political Outlook 12
South East Asia Security Overview 17
The Strategic Outlook For The 2010s 17
Challenges And Threats To Stability And Security 17
Main Islamist Militant Groups In South East Asia 20
Other Regional Threats 24
Sino-US Rivalry In South East Asia 26
The Outlook For South East Asia 27
Security Risk Analysis 28
Asia Pacific Risk Ratings 28
Table: Asia Pacific Regional Security Ratings 28
Table: Asia Pacific State Vulnerability To Terrorism Index 29
Vietnam's Security Risk 29
Political Outlook 30
Domestic Politics 30
Long-Term Political Outlook 31
Security Overview 34
Internal Security Situation 34
Piracy And Maritime Security 35
Border Security 36
External Security Situation 37
The South China Sea 38
Bilateral Relations 43
Armed Forces And Government Spending 47
Armed Forces 47
Weapons Of Mass Destruction 50
Market Overview 51
Industry Trends And Developments 52
Arms Trade Overview 52
Procurement Trends And Developments 53
Industry Forecast Scenario 54
Armed Forces 54
Table: Vietnam's Armed Forces, 2001-2008 ('000 personnel, unless otherwise stated) 54
Table: Vietnam's Manpower Available For Military Services, 2010-2017 (aged 16-49, unless otherwise stated) 54
Government Expenditure 54
Table: Vietnam's Defence Expenditure, 2010-2017 55
Table: Vietnam's Defence Expenditure Scenario - Changing % Of GDP, 2010-2017 (US$mn) 56
Defence Trade 57
Table: Vietnam's Defence Exports, 2010-2017 (US$mn) 57
Table: Vietnam's Defence Imports, 2010-2017 (US$mn) 58
Table: Vietnam's Defence Trade Balance, 2010-2017 (US$mn) 58
Macroeconomic Forecast 59
Table: Vietnam - Economic Activity, 2009-2016 61
BMI Methodology 62
How We Generate Our Industry Forecasts 62
Defence Industry 62