Market Report, "Vietnam Defence & Security Report Q1 2011", published

Feb. 3, 2011 - PRLog -- On August 17 2010, Vietnam and the US held defence talks for the first time. Vietnam's deputy defence minister Nguyen Chi Vinh met with US Deputy Assistant Secretary of Defence for South and Southeast Asia Robert Scher. Scher later said that they discussed marine security, international peacekeeping, search and rescue operations, humanitarian and disaster relief operations, and language training. Additionally, they talked about unexploded ordnance and herbicides left over from the Vietnam War, as well as servicemen listed as missing-in-action. Both sides stated that although the dispute with China regarding the South China Sea was not the main subject of the dialogue, the dispute had to be peacefully negotiated to sustain regional stability.

At the ASEAN Regional Forum (ARF) in July 2010, the US had already made it clear that it would negotiate on a multi-lateral basis to mediate in disputes in South East Asia. This is obviously an effort to counter China's ambitions to dominate the South China Sea, over much of which it claims sovereignty. In the short-to-medium term, though, access to water from the Mekong river, which reaches the sea in southern Vietnam, will be a key foreign relations issue for Vietnam.

Vietnam faces the challenge of modernising its large armed forces, but without the resources that are available to its richer neighbours. For the time being, Russia remains the main source of equipment and materiel. However, as a part of its policies to develop relations with countries in Southeast Asia, India has also emerged as a significant supplier of parts for the ships in Vietnam's navy. In November 2010, the government of Vietnam made it clear that foreign navies may avail themselves of the facilities at the base at Cam Ranh Bay. The base was used by the US Navy during the Vietnam War, and subsequently by the Soviet Navy. It remains to be seen whether the base can become a significant source of revenue for the Vietnamese.

Vietnam recorded an impressive real GDP growth of 6.3% y-o-y in Q210, as the economy headed towards the government's growth target of 6.5% for 2010. Economic indicators in July also reinforced the government's aggressive target, after industrial production came in at a better-than-expected 16.0% y-o-y in July. To a certain extent, the encouraging numbers helped to alleviate concerns that weakening external demand from the US and EU would be a drag on the economy. Industrial production accelerated after slowing down for three consecutive months.

However, we expect loan growth to remain weak on a historical basis in H210 due to the threat of higher inflation. Therefore, we do not see business investments continuing to contribute significantly to industrial production growth. Instead, we see private consumption and government-supported infrastructure investment as the main drivers of economic growth in H210.

Regardless of the ongoing disagreements with China, in the longer term, our core political scenario is for the Communist Party of Vietnam (CPV) to shift increasingly towards a technocratic form of government, aimed at maintaining high economic growth levels and an acceptable distribution of wealth across the population. We thus foresee a continuation of economic reforms despite criticism from more traditionally-minded party members. However, intermittent periods of harsh repression against prodemocracy activists and other government critics are a strong indication that political liberalisation is not in the offing.

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Partial Table of Contents:

Executive Summary
SWOT Analysis
- Vietnam Security SWOT
- Vietnam Defence Industry SWOT
- Vietnam Political SWOT
- Vietnam Economic SWOT
- Vietnam Business Environment SWOT
Global Political Outlook
- Global Hotspots
- Table: Global Election Timetable, 2010 And 2011
- Latin America: More Of The Same
- Western Europe
- Central Europe
- South Eastern Europe
- Russia And The Former Soviet Union
- Middle East: Mostly The Same Old Challenges
- Sub-Saharan Africa: Definitive Elections Pending
- Asia: Accommodating A More Powerful China
- Wild Cards
Global Security Outlook
South East Asia Security Overview
- South East Asia In A Global Context
- Challenges And Threats To Stability And Security
- Main Islamist Militant Groups In South East Asia
- Piracy In The Malacca Strait
- The South China Sea/Spratly Islands
- Other Regional Threats
- The Future Of Myanmar
- 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 Overview
- Domestic Politics
- Foreign Relations
- Long-Term Political Outlook
Security Overview
- Internal Security Situation
- Governance
- Tenth Party Congress
- The Central Highlands
- Religion
- Piracy And Maritime Security
- Border Security
- Illegal Trafficking
- External Security Situation
- The 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
- Table: Vietnam's Armed Forces, 2008-2008 ('000 personnel)
- Table: Vietnam's Defence Personnel - Manpower Available For Military Services, 2008-2015 (aged 16-49)
- Government Expenditure On Defence Industry
- Table: Vietnam's Defence Expenditure, 2008-2015
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Fast Market Research is an online aggregator and distributor of market research and business information. We represent the world's top research publishers and analysts and provide quick and easy access to the best competitive intelligence available.