Vietnam Defence and Security Report Q3 2011
Includes 3 FREE quarterly updates
Vietnam has accused China of raising political tensions in the region following a territorial dispute in the South China Sea in May. Ministry of Foreign Affairs spokeswoman Nguyen Phuong Nga issued a statement saying that the Vietnamese navy will do everything necessary to firmly protect the independence, sovereignty and territorial integrity of the country. Hanoi aimed the warning directly at Beijing after claiming three Chinese patrol boats entered its territorial waters on May 26 2011 and intentionally cut a subsea cable before making threatening gestures toward the Vietnamese ships. We believe that Hanoi's hard-line approach to the dispute could serve as an effective deterrence against China's assertiveness in the South China Sea. However, we warn that this could come at the risk of undermining bilateral relations over the coming years.
In what we see as an aggressive move to stem public unrest, the Vietnamese government ordered a military crackdown on Hmong demonstrations in the north west province of Dien Bien on May 5. Around 5,000-7,000 protesters – mainly consisting of members from the ethnic Hmong population – took part in the demonstrations, demanding for democratic reforms and religious freedom. Although we acknowledge public unrest remains a threat to political stability in Vietnam, we see limited evidence to suggest a largescale political uprising could occur in the short to medium term.
Hanoi is under increasing pressure from international human rights organisations to release detained religious leaders and pro-democracy dissidents or risk further political pressure from the US, including possible economic sanctions. International rights groups including Human Rights Watch, Freedom House and Amnesty International are calling for Vietnam to be reinstated on the US government's Countries of Particular Concern list in 2011. This would classify Vietnam among a list of countries, including China, Myanmar, Eritrea, Iran, North Korea, Saudi Arabia, Sudan and Uzbekistan, that are deemed responsible for committing severe violations of religious freedom and human rights under the International Religious Freedom Act. We believe such a scenario would severely undermine Vietnam's credentials in assuming a leadership role within the Association of South East Asian Nations (ASEAN), and threaten its ambition to extend political influence in the region over the coming years.
Latest economic figures published by the General Statistics Office suggest a shift in the Vietnamese government's focus from driving economic growth towards fighting inflation and addressing macroeconomic imbalances is beginning to have a cooling effect on the economy. Vietnam's real GDP growth came in at a relatively subdued 5.4% year-on-year (y-o-y) in Q111, compared with 7.2% in Q410. We expect economic activity to moderate over the coming months as the full impact of fiscal and monetary tightening continues to feed through the economy. This is in line with our forecast that economic growth will slow from 6.8% in 2010 to 6.3% in 2011. From our perspective, attempts by the government to cool the overheating economy are a positive move that will help facilitate a more stable growth trajectory for Vietnam over the longer term.
Vietnam has accused China of raising political tensions in the region following a territorial dispute in the South China Sea in May. Ministry of Foreign Affairs spokeswoman Nguyen Phuong Nga issued a statement saying that the Vietnamese navy will do everything necessary to firmly protect the independence, sovereignty and territorial integrity of the country. Hanoi aimed the warning directly at Beijing after claiming three Chinese patrol boats entered its territorial waters on May 26 2011 and intentionally cut a subsea cable before making threatening gestures toward the Vietnamese ships. We believe that Hanoi's hard-line approach to the dispute could serve as an effective deterrence against China's assertiveness in the South China Sea. However, we warn that this could come at the risk of undermining bilateral relations over the coming years.
In what we see as an aggressive move to stem public unrest, the Vietnamese government ordered a military crackdown on Hmong demonstrations in the north west province of Dien Bien on May 5. Around 5,000-7,000 protesters – mainly consisting of members from the ethnic Hmong population – took part in the demonstrations, demanding for democratic reforms and religious freedom. Although we acknowledge public unrest remains a threat to political stability in Vietnam, we see limited evidence to suggest a largescale political uprising could occur in the short to medium term.
Hanoi is under increasing pressure from international human rights organisations to release detained religious leaders and pro-democracy dissidents or risk further political pressure from the US, including possible economic sanctions. International rights groups including Human Rights Watch, Freedom House and Amnesty International are calling for Vietnam to be reinstated on the US government's Countries of Particular Concern list in 2011. This would classify Vietnam among a list of countries, including China, Myanmar, Eritrea, Iran, North Korea, Saudi Arabia, Sudan and Uzbekistan, that are deemed responsible for committing severe violations of religious freedom and human rights under the International Religious Freedom Act. We believe such a scenario would severely undermine Vietnam's credentials in assuming a leadership role within the Association of South East Asian Nations (ASEAN), and threaten its ambition to extend political influence in the region over the coming years.
Latest economic figures published by the General Statistics Office suggest a shift in the Vietnamese government's focus from driving economic growth towards fighting inflation and addressing macroeconomic imbalances is beginning to have a cooling effect on the economy. Vietnam's real GDP growth came in at a relatively subdued 5.4% year-on-year (y-o-y) in Q111, compared with 7.2% in Q410. We expect economic activity to moderate over the coming months as the full impact of fiscal and monetary tightening continues to feed through the economy. This is in line with our forecast that economic growth will slow from 6.8% in 2010 to 6.3% in 2011. From our perspective, attempts by the government to cool the overheating economy are a positive move that will help facilitate a more stable growth trajectory for Vietnam over the longer term.
Contents
SWOT AnalysisVietnam Security SWOT
Vietnam Defence Industry SWOT
Vietnam Political SWOT
Vietnam Economic SWOT
Vietnam Business Environment SWOT
Global Political Outlook
Japan After The Quake
Global Hotspots: Libya, Iran, Afghanistan, Korea
Wild Cards To Watch
South East Asia Security Overview
South East Asia In A Global Context
Challenges And Threats To Stability And Security
Sino-US Rivalry In South East Asia
The Outlook For South East Asia
Security Risk Ratings
BMI’s Security Ratings
Table: Asia Pacific Regional Security Ratings
Table: Asia Pacific State Vulnerability To Terrorism Index
Vietnam’s Security Risk
City Terrorism Rating
Table: BMI’s Asia City Terrorism Index
Political Outlook
Foreign Policy
Domestic Politics
Long-Term Political Outlook
Security Overview
Internal Security Situation
Governance
Religion
Piracy And Maritime Security
Border Security
External Security Situation
Geopolitical Importance Of The South China Sea
Bilateral Relations
Armed Forces And Government Spending
Armed Forces
Weapons Of Mass Destruction
Market Overview
Industry Trends And Developments
Arms Trade Overview
Procurement Trends And Developments
Industry Forecast Scenario
Armed Forces
Table: Vietnam’s Armed Forces, 2000-2008 (‘000 personnel, unless otherwise stated)
Table: Manpower Available For Military Services, 2008-2015 (aged 16-49, unless otherwise stated)
Government Expenditure
Table: Vietnam’s Defence Expenditure, 2008-2015
Table: Vietnam’s Defence Expenditure Scenario – Changing % Of GDP, 2008-2015 (US$mn)
Defence Trade
Table: Vietnam’s Defence Exports, 2008-2015 (US$mn)
Table: Vietnam’s Defence Imports, 2008-2015 (US$mn)
Table: Vietnam’s Defence Trade Balance, 2008-2015 (US$mn)
Macroeconomic Forecast
Table: Vietnam – Economic Activity, 2008-2015
Country Snapshot: Vietnam Demographic Data
Section 1: Population
Table: Demographic Indicators, 2005-2030
Table: Rural/Urban Breakdown, 2005-2030
Section 2: Education And Healthcare
Table: Education, 2002-2005
Table: Vital Statistics, 2005-2030
Section 3: Labour Market And Spending Power
Table: Employment Indicators, 1999-2004
Table: Consumer Expenditure, 2000-2012 (US$)
BMI Methodology
How We Generate Our Industry Forecasts
Defence Industry
City Terrorism Rating
Table: Methodology
Sources 64 Skip to top