Thursday, November 10, 2011

India - Vietnam: Revival of old ties

Halong Bay in Vietnam - UNESCO World Heritage Site

Recent agreements between India and Vietnam already generated much attention for all the wrong reasons. China feels threatened that India in collusion with Vietnam is working against their core interests. The relationship is getting evaluated in Indian media circles as a reply for Chinese support of Pakistan. But how far all these allegations and counter allegations are true? Lets look at the India - Vietnam relations in general and the new agreements in particular.

What can be the attractions of a relationship between a nation laying on the shores of South China Sea and another one laying on Indian ocean? Is it only because of a common big neighbour, with her rapidly expanding economic and defence power, includes the areas close to the borders of both nations in her core interest list? I beg to differ, I can't swallow the simplistic interpretation that mutual defence interests is the only relationship between India and Vietnam, security partnerships can be one of the objectives - an important one - but the relationship much more than that.

In these days of global village phenomenon, a country will lose more on declaring enmity or acting in that way with another one - which too is an active part of global economic village. If anybody believes that the relation between Vietnam and China are like the one between India and Pakistan they are viewing the relations through a narrow prism. The problems in South China Sea and the Islands in it may play a spoil sport but its not so bad.

In the same way, there is no reason for Chinese or Indian press to believe that each move by New Delhi in ASEAN is solely aimed against China. Yes, as a strategy every nation will play a balancing of power to feel more safer in the presence of a strong nation - even if it's a friendly one. So it's quite natural that South East Asian nations may like an active engagement with India just like the one with US, although in a lower level.

We are yet to touch the main question, defence pacts solely defines the relation? The answer is no, its is also economical. For example, economies needs new customers and new sources of revenue, just like cows needs fresh grazing grounds. To offset the losses in one market or to reduce the heavy dependency on one market, economies needs to expand to new regions. After all no one wants to put all their eggs in one basket.

Indian Premier Dr. Manmohan Singh
Let us come back to the question of India - Vietnam relations. These relations didn't sprang up suddenly, it evolved over a period of time. Historically Indic kingdom 'Cham Pa' had an impact on Vietnamese art and architecture, India was one of the countries strongly condemned US action during the Vietnam war. If we are considering the economic relations India granted the Most Favoured Nation status to Vietnam in 1975, signed bilateral trade agreement in 1978 etc. Both nations are part of Ganga-Mekong cooperation.

Indian Oil exploration activity in Vietnamese waters, which China objects, itself had an history of more than two decades. According to the press releases by ONGC Videsh the agreement signed by PetroVietnam and ONGC Videsh limited (OVL) is intended for

"...developing long term cooperation in oil and gas industry and shall be in force and effect for three years. Some of the key areas in which both the companies are desirous to cooperate are related to the exchange of information on the petroleum industry, exchange of working visits of authorities and specialists in various domains of the petroleum industry, new investments, expansion and operations of oil and gas exploration and production including refining, transportation and supply in Vietnam, India, and third countries according to the laws and regulations of their countries..."
The relationship itself dates back to 1980's when Hydro Carbon India limited (later renamed as ONGC Videsh Ltd) signed a Production Sharing Contract with PetroVietnam (PV) on 1988 for Block 06.1. Later, during the 2006 regular bidding process Block 127 and Block 128 in Phu Kanh basin were awarded to ONGC Videsh Ltd. In offshore Block 06.1 operated by British Petroleum, ONGC Videsh holds 45% share. Company decided to relinquish Block 127 -offshore deep water water block- to Petro Vietnam as it is unable to find any Hydrocarbon there and the drilling is differed to 2012 in Block 128. These data essentially indicates that the Indian exploration for Oil and Gas in Vietnamese waters have a long history. The new agreement talks about the expansion of that activities and more interactions in Petroleum sector, its not a declaration of an axis or nexus against any entity.

It is essential for India to increase the interactions with Vietnam as it will enable us to get a strong foothold in ASEAN. This should be followed by rapid expansion in trade (bilateral trade between the two nations is only $2.7bn) links with Vietnam in particular and ASEAN in general. Both India and Vietnam clocks impressive growth rates (Vietnam registers a growth rate of 6%+ from 1990-2005, eventhough it declined during the economic crisis (6.8% in 2010). To sustain these rates and bring more people out of poverty both nations need to expand bilateral and multilateral trade. Allowing more visas to Vietnamese to visits the Budhist sites in India, providing scholarships to students, joint Naval excercises and regular port vists are some of the ways to expand the ties.

This relation is about continuation of old political, cultural ties and expanding the baskets of cooperation to security, trade, development etc. Even though the situation in Indo-Sino border, South China Sea remains as a major irritant in the relations of India- China and Vietnam - China respectively, there is little possibility for the problems from getting out of control unless the strategists in China starts reading too much in between the lines and misunderstanding them.


Photo Courtesy - Wikipedia

1 comment:

  1. India should focus more on china and pakistan.I think we should focus more on countries who are nearby to our own.