Last week, the Vietnamese People’s Army (VPA) organized its first-ever Vietnam International Defense Expo, to promote international cooperation in defense, build trust between Vietnam and other countries, and introduce Vietnam’s nascent defense industry to the world. More importantly, the VPA wants to diversify its sources of weapons and defense equipment, get updated on recent global trends in defense technology, and explore opportunities to export its domestically manufactured defense products.
The latter objectives are especially noteworthy, given the serious impacts that the war in Ukraine has had on Russia, Vietnam’s biggest arms supplier. The expo reflects the determination of the Vietnamese armed forces to reduce their heavy reliance on Russian arms. However, the exigencies of military modernization in the context of the South China Sea dispute, a growing economy with a developing technological and industrial base, and an ambition to develop a domestic defense industry are also factors that are encouraging the Vietnamese military to seek to alter its procurement strategy.
Dependence on Russian Weapons
Approximately 60-70 percent of Vietnam’s military assets are of Soviet or Russian origin. For historical, political, and institutional reasons, Russian weapons are very appealing to the military, compared to those of other countries. Vietnam has operated Soviet-styled military systems since the beginning of the Cold War. The dependence of the Vietnamese military on these systems has shaped the country’s defense institutions and determined many of their characteristics. The entire defense establishment has been set up to accommodate Soviet-style military technology, in terms of training, maintenance, and operation.
Decades of continuous use of these systems has reduced the operational and maintenance cost significantly, which in turn has made Russian weapons extremely attractive. Moreover, procurement agencies created to receive military assistance in wartime have since been transformed into military-dominated businesses with vested interests, bureaucratic cultures, and opaque procurement procedures that are not compatible with Western standards. That is not to mention the inherent strategic distrust the military has shown towards Western defense suppliers, given that ideological differences (i.e., human rights) are often cited as a potential cause for the disruption of future military transfers. A reverse away from Russian arms would incur a huge cost, and the military probably understands that.
There have been various endeavors to diversify gradually away from too heavy a reliance on Russian military systems, with mixed results. The earliest example was Vietnam’s aborted attempt to purchase Mirage-2000 jet fighters from France in the 1990s, which failed due to the U.S. arms embargo that was in place at the time. The motivation behind the attempt was to modernize the armed forces, which in the years since reunification had become archaic and technologically outdated. The failed Mirage-2000 purchase was also notable because China started modernizing its air force by purchasing its first batch of Su-27 jets from Russia in 1992. More importantly, the VPA (rightly) acknowledged that purchasing the same military hardware as your potential enemy from the same (and increasingly pragmatic) supplier would carry a lot of tactical risks.
Furthermore, interaction with Russia was not always without its problems. The experience with Russia in shipbuilding has been particularly painful, as illustrated by two memorable episodes. The rise of the Chinese navy in the late 1990s and early 2000s motivated Vietnam to actively seek Russian cooperation in building its own warships. Two projects were laid out: a 500-ton fast attack craft (FAC) equipped with Kh-35 anti-ship missiles (i.e., the BPS-500), and a 2,000-ton multipurpose frigate (i.e., the KBO-2000). Both were designed in Vietnam with the help of the Russian Severnoye Design Bureau.
Shortly after the first prototype of the BPS-500 was launched, the rest of the Vietnamese early naval shipbuilding project was shut down. There were several reasons for this, the most serious of which was probably the fact that the design of the FAC had not met the navy’s expectations, and adjustments were considered time-consuming and costly. This led to the breakdown of cooperation with the Russian Bureau, and the beginning of a more modest and less expensive effort by the Vietnamese navy to start designing its own gunboat.
The second episode took place at the beginning of the 2010s when Vietnam decided to purchase several Gegard-class frigates from Russia. The initial plan was to procure between six and eight frigates, with the first two to be built in Russia and the rest built by Vietnamese shipbuilding companies through a technological transfer. The ships’ engines were supposed to be provided by the Ukrainians. This part of the deal broke down when Russia annexed Crimea in 2014, thus compelling Vietnam to negotiate with Ukraine itself to get the critical parts.
Vietnam’s Defense Procurement Strategy
After the 12th Congress of the Vietnamese Communist Party (VCP) in 2016, Vietnam’s military policy stressed the “gradual” modernization of several critical services, with the navy and the air force at the forefront. The South China Sea dispute accelerated the pace of the reforms at the 13th Congress in 2021, after which “gradual” was replaced by “immediate” as the guiding principle of modernization.
Two events played an important role here. The lifting of the U.S. arms embargo in 2016 gave Vietnam greater leeway in expanding its current pool of defense partners. The military would have the chance to officially interact with Western defense contractors without the fear of being pushed back by any embargo. Technological transfer, or the buying of spare parts, no longer faced the risks of being compromised by the legacies of the past. Also, for the first time, at the 12th National Congress, the VCP laid out policy to develop a dual-use defense industry, with a strong defense-industrial complex at its core. “Dual-use” is a term with two implications: the future of greater participation of the private sector in the defense-industrial complex; and efforts to find a market for the nascent industry, both domestic and international.
The Vietnamese military is now applying a three-pronged procurement strategy to satisfy its modernization needs. Elements of this strategy could be found in the decade before 2016, but the country’s new industrial policies and the uncertainties regarding the Russia-Ukraine war have lent these approaches a new life and urgency.
First, it is trying to diversify its source of advanced military platforms. Israel has been playing an essential role in this effort, as the two countries have a strong defense relationship dating back to the 1990s. Also high on the list are India (with a possible purchase of the Brahmos missile) and several eastern European countries such as Czechia (with the purchase of L-39NG in 2021) and Bulgaria (small arms and light weapons), with whom Vietnam has good relations dating back to the Cold War. The most high-profile defense contract negotiated between Vietnam and a non-Russian country would be the $600 million purchase of the Spyder air-defense system from the Israeli company Rafael in 2015. South Korea and Japan, even Turkey, are being viewed as potential future suppliers.
Second, the military has been trying to prolong the service life of its old weapons through various modernization projects. The most notable of these is the effort to upgrade its T-54/55 main battle tanks with a little help from Israel. This is considered a temporary approach, as old weapon systems, even upgraded and modernized, are still unreliable and ineffective in some circumstances given the fast-paced evolution in military technology.
Third, with an ambitious plan to develop an advanced military-industrial complex, the military has been trying to make its own weapons, ranging from small arms to what it views as high-tech weapons. The country’s fledgling defense industry is already producing armed vehicles and light weapons such as anti-tank rockets, grenade launchers, and machine guns.
Vietnam is also starting to step into the high-tech area, with the drones, radars and anti-ship cruise missiles now on the list, which are all spearheaded by Viettel Group. This approach has been years in the making, and further encouraged and strengthened after the lifting of the U.S. arms embargo. For example, Israel Weapon Industries has founded in Vietnam a production facility to support its supply of Galil 31/32 ACE assault rifles to the army in 2014. Also in 2014, Damen Group, a Dutch defense, shipbuilding, and engineering conglomerate opened a new joint-venture shipyard in Vietnam from which it has increased its cooperation with the country’s many military-owned shipyards. Many vessels built by Damen are now serving in the Vietnam Coast Guard – a possible foreshadowing of the more diverse Vietnamese military that may emerge in future.