Australia/Israel Review

Asia Watch: Gathering pace

Aug 31, 2022 | Michael Shannon

Vietnamese President Nguyen Xuan Phuc (right) and former Israeli Prime Minister Ehud Barak at Presidential Palace, Hanoi (Image: Vietnam News Agency)
Vietnamese President Nguyen Xuan Phuc (right) and former Israeli Prime Minister Ehud Barak at Presidential Palace, Hanoi (Image: Vietnam News Agency)

Amidst Israel’s well-known difficulties in securing diplomatic relations with Indonesia and Malaysia, another relationship in the region, unburdened by religious and cultural baggage, has quietly grown in recent decades – that with Vietnam. The extent of these ties will be highlighted over the coming year as the two countries celebrate the 30th anniversary of the establishment of diplomatic ties. 

Vietnamese President Nguyen Xuan Phuc received a visit from former Israeli Prime Minister Ehud Barak in Hanoi on Aug. 17, in which the Vietnamese leader said Israel has become an important partner of Vietnam, citing the key areas of national defence and security, sci-tech and renewable energy, as reported by the state-run Vietnam News Agency.

Phuc suggested the two countries regularly maintain high-level visits and offer mutual support at international forums and organisations, and that the former Israeli PM use “his role and influence” to share Israel’s experience in “building startup support policies, develop sci-tech and innovation, nurture young talents and connect with experts and businesses in Israel and the world.”

For his part, Barak expressed optimism that the two countries are moving towards the signing of a free trade agreement and a labour cooperation deal. His visit followed on from a visit to Israel by Politburo member and Chairman of the Central Theory Council Nguyen Xuan Thang in May.

Israel is now Vietnam’s fifth largest trading partner, with two-way trade having grown rapidly in recent years. Despite the COVID-19 pandemic in 2020, two-way trade still rose by 36.4%. The figures for the first half of 2022 have reached US$1.14 billion (AU$1.64 billion), up 55% on the same period in 2021. A free trade deal could quickly lift the annual figure to US$3-4 billion, analysts say.

Vietnam’s major exports to Israel currently include mobile phones, computers and accessories, cashew nuts, apparel, footwear, coffee, machinery and equipment, natural rubber, plastic and wooden products, handicrafts and ceramics. Meanwhile, Israel’s main exports to Vietnam include fertiliser, technical, medical and electronic equipment, machinery, plastics, tools and miscellaneous chemical and pharmaceutical products. 

Owing to Vietnam’s slow economic and political emergence from a 30-year civil war, it was decades behind most other countries in establishing relations with the Jewish state in 1993 and did not secure an embassy in Israel until 2005. Prior to this, contact had been limited, although Israel permitted approximately 360 Vietnamese refugees to enter the country between 1977 to 1979, most notably in 1977, when an Israeli freighter ship headed to Taiwan encountered an ailing refugee vessel. Since then, many Vietnamese have gone to Israel to work and study.

Israeli technology and know-how are becoming increasingly important to the Vietnamese economy – now one of the strongest in the developing world – across several key areas.

Medical assistance provided by Israel was one of the first initiatives, beginning in 2006-07 when Israel sent a team of doctors and nurses to remote areas of Vietnam to give medical care, clothes, food, and also farm animals to those in need, thereby supporting the economic base. Moves like this remain a staple of the Israeli-Vietnamese relationship.

Agriculture makes up around 13% of Vietnam’s GDP and a third of its employment. Government officials from various ministries in Vietnam have visited Israel on study tours as well as for training in fields such as agriculture, aquaculture, livestock, dairy milk production and education, under the auspices of MASHAV, Israel’s official international development cooperation program. Vietnamese students have also been sent to Israel to learn these innovations and bring them back home. 

Needs in the defence sector have been a high priority for Vietnam. The first Israeli military mission to Vietnam was initiated in 2012 and in its wake, Israel Weapon Industries Ltd opened a light arms factory in Thanh Hóa, producing small arms for the Vietnam People’s Armed Forces – the only Israeli weapons manufacturing facility in Southeast Asia. The Vietnamese Government continues to express interest in further cooperation, and even joint military exercises.

In 2015, Vietnam purchased Rafael’s Spyder air-defence system for $600 million – the largest ever military deal between the two countries. Vietnam has since emerged as one of the main Asian buyers of Israeli weapons and surveillance systems alongside India and Azerbaijan. 

The Israeli daily Haaretz reports that a high-ranking delegation from Vietnam’s Defence Ministry is due to visit Israel in September as guests of Israel Aerospace Industries (IAI) to advance the US$500 million (AU$721 million) purchase of three of the defence firm’s Barak 8 missile defence systems, developed jointly by IAI and India. 

Such developments add weight to the warm words of officialdom during the reciprocal visits in the 30th Anniversary year.

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