Vietnam's Nuclear Deal with Russia Signals Disrupt with Europe

Russian President Vladimir Putin arrived in Hanoi at 1:45 am local time on June 20, 2024, to kick off his official visit to Vietnam following a visit to North Korea.

Five hours before landing, Nhan Dan, the official newspaper of the Vietnamese Communist Party, published a commentary by the Russian President. In the article, President Putin mentioned a new agreement between the two countries: forming a new nuclear research center in Vietnam with assistance from Russia’s state-owned nuclear corporation, Rosatom. Putin’s trip to Hanoi and the new nuclear plan tell us much about Russia’s diplomatic policy and Hanoi’s and how Vietnam sends a message to the European Union.

Hanoi’s Struggle for Energy Power

Vietnam is one of the fastest-developing countries in the world, yet it faces a tremendous problem: not having enough energy.

Vietnam’s economy highly depends on exports, especially manufactured products, from Nike trainers to Samsung Galaxies. Manufacturing plants require an incredible amount of energy to operate, making the energy problem a vital issue for the Vietnamese government.

Last year, Vietnam suffered greatly after a series of heatwaves caused major droughts, forcing the country’s hydropower plants to reduce capacity. This led to a severe energy shortage that ultimately affected hundreds of companies, even causing foreign chambers of commerce to protest against the government for not handling the energy crisis in a timely manner. Recently, many big global tech companies, most notably Intel, Nvidia, and Apple, have decided against investing in Vietnam due to concerns about an inadequate energy supply.

Traditionally, Vietnam has relied heavily on fossil fuels and hydropower for energy, with 53% and 26% of its electricity generated through those two methods. However, hydropower has proven to be less reliable as the impacts of climate change increase, as shown by the devastating outcomes of El Niño last year. With the global reduction of fossil fuels, nuclear energy has emerged as a viable option for Vietnam’s growing need for power.

Vietnam has also been unable to handle the energy equation alone. The Eighth National Power Development Plan, or PDP8, which was supposed to guide Vietnam’s energy policy in the next decade, faced serious delays and setbacks. This can also be attributed to the ongoing “Burning Furnace” anti-corruption campaign led by General Secretary Nguyen Phu Trong.

Putin’s commentary mentioned that Russia would cooperate with Vietnam in nuclear and renewable energy, most notably hydropower and wind power.

Although Vietnam hasn’t officially restarted its long-scrapped plans for nuclear power plants, setting up a nuclear research center to accommodate technology transfer from Russia would be a reasonable first step.

A Message to Europe

Putin’s trip to North Korea and Hanoi also sends a message: Russia might be blocked from the Western world, but many other countries embrace it.

Hanoi even postponed a meeting with the European envoy on Russian sanctions, which was originally scheduled to happen right before the Russian president visited the Southeast Asian country, fearing that the meeting would “spoil” President Putin’s visit.

It is also worth noting that Hanoi wants to assure Moscow that the Russo-Vietnamese relationship is always a top priority. At the end of the day, Russia is still Vietnam’s main defense supplier, and Hanoi does not want Moscow to feel left out after a hectic 2023 when Hanoi received leaders from both China and the U.S.

The energy problem has also become a major political conundrum, creating immense pressure on Vietnamese Prime Minister Pham Minh Chinh, who vowed at COP26 back in 2021 that Vietnam aimed to achieve carbon neutrality by 2050, a statement that many experts considered to lack clear planning and consultation with EVN, Vietnam’s state-owned electrical monopoly.

Prime Minister Chinh’s inability to pass a viable plan to ensure a sustainable flow of energy required for industrial production through renewable sources has forced Vietnam to reinvest in its multiple coal-fired power stations. This move stirred opposition from the European Union, the main investor behind various renewable energy projects in Vietnam.

Hanoi’s warm welcome of the globally outcast Russian president reflects a crucial point about Vietnam’s “bamboo diplomacy” and is an indication of the country’s foreign policy in the years to come: Vietnam can partner with the West, but relationships with traditional partners such as Russia and China are still its main priority, and Hanoi isn’t afraid of offending the Europeans, especially as a new class of leaders emerges in Hanoi, who are considered to be more hardline.

Vietnam’s new President To Lam, a former security officer much akin to President Putin, is widely speculated to be the next party general secretary. General Luong Cuong, the newly appointed head of the Secretariat or deputy general secretary, is also considered a candidate for other top leadership positions. Even Prime Minister Pham Minh Chinh, arguably the most technocratic among his peers, is a former intelligence officer.

Hanoi’s decision to reach out to Russia, a longtime ally, sends a clear message to the European Union: “If you don’t want to work with me, I’ll work with Russia.”