Vietnam can be credited for conducting its foreign and security policies with utmost alacrity; it is therefore not surprising that Hanoi is considered an attractive partner by most of the regional powers. Japan in particular has been most proactive and Prime Minister Yoshihide Suga, after taking over from his predecessor Shinzo Abe, chose Hanoi as the first destination for his official overseas tour. This choice is driven by a number of factors such as economic considerations, common security concerns, and Vietnam as an important and an influential Member State of the ASEAN. It is currently the 2020 Chair of the ASEAN, and in a few days from now will hand over the position to Brunei Darussalam.

Vietnam and Japan have built robust economic relations covering trade and investments. Japan is among the top four trading partners (along with China, the US and South Korea) and what merits attention is that both sides have maintained a healthy trade balance pegged at US$ 28.6 billion (till September 2020). Vietnam is also beneficiary of the Japanese overseas development aid (US$ 23 billion in 2019) and nearly a quarter of Vietnam's foreign loans are from Japan.

However, Vietnam’s manufacturing sector is highly dependent on China for most of its material and equipment needs which has resulted in US$31 billion trade deficit. In COVID-19 times, the Japanese government earmarked US$ 221 million in its 2020 supplementary budget to support Japanese companies’ that shifted their businesses to Southeast Asian nations and many of these have chosen Vietnam as the preferred destination for reinvestment after pulling out from China.

Although Vietnam has successfully managed its economic relations with Japan and China, but its closeness to Japan is borne out by the convergence of their strategic challenges. Both countries have maritime disputes with China and are embroiled in the South China Sea and the Senkaku Islands respectively. China’s non-adherence to the judgment on South China Sea filed by the Philippines before the international tribunal in The Hague and its announcement that Beijing remains unaffected by the ruling, aggressive posturing in the South China Sea , and rapid military buildup are the primary triggers for Vietnam to look to Japan for military capacity building. Japan has agreed to provide Vietnam US$ 350 million ODA loan for the Maritime Security and Safety Capacity Improvement Project under which it will supply six 79-meters patrol boats of the Aso-class which are also in the inventory of the Japanese Coast Guard. The total cost of this project will be US$ 400 million dollars and the vessels will be delivered by 2026. However the Japanese foreign ministry spokesman has observed that they will have to “make sure the equipment and technologies transferred to Vietnam (are) to be used in a peaceful manner and contribute to regional peace,”

In recent times, Vietnam has been approached by Australia, India, Japan and the US on Indo-Pacific, a new spatial formulation combining the Indian and the Pacific Oceans. Hanoi has patiently heard their rationale for promoting their respective strategy/vision of a ‘free and open’ Indo-Pacific. Japan’s Free and Open Indo Pacific (FOIP) builds around ‘two continents’ i.e. Asia and Africa, and ‘two oceans’ i.e. Pacific Ocean and Indian Ocean” an idea first alluded to by Prime Minister Shinzo Abe. Prime Minister Yoshihide Suga, after his meeting with Prime Minister Nguyen Xuan Phuc stated that “Japan, as an Indo-Pacific nation, will continue to contribute to the peace and stability in this region” and that “Vietnam is crucial to achieving our vision of ‘the Free and Open Indo-Pacific’, and our valuable partner”.  

But Vietnam must first immerse itself into the ASEAN Outlook on the Indo-Pacific (AOIP) which promotes “peace, security, stability and prosperity for the peoples in the Southeast Asia as well as in the wider Asia-Pacific and Indian Ocean regions or the Indo-Pacific”. AOIP builds on the existing platforms such as the EAS, and ASEAN Member States believe that these mechanisms are fully equipped to “better face challenges and seize opportunities arising from the current and future regional and global environments”. The AIOP appears flexible to the extent that in case the ASEAN seeks, where appropriate and while preserving their formats, to develop “cooperation with other regional and sub-regional mechanisms in the Asia-Pacific and Indian Ocean regions on specific areas of common interests to complement the relevant initiatives”. Japan has welcomed the AOIP and Japanese Prime Minister Suga Yoshihide has characterized Vietnam-ASEAN relations as highly credible and labeled it as “heart-to-heart” relationship.

The above narrative in the year 2020 is significant and is an indicator that while there has been a change in the political leadership in Japan with the arrival of Prime Minister Suga Yoshihide, the strong foundations for bilateral relations set by Prime Minster Shinzo Abe will continue to flourish in the coming times.

Dr Vijay Sakhuja is Consultant Kalinga International Foundation, New Delhi.