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US-Vietnam economic relations: The China factor

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While addressing a joint Press Conference at Hanoi, after his summit, with North Korean Leader Kim Jong Un, US President, Donald Trump spoke not just about the Summit, but also the current state of US-China relations.  Trump criticized his predecessors, for not doing enough to address the trade imbalance with China, while also making the point,  that he was all for China’s economic progress and growth, but not at the cost of the US.

If one were to look beyond the Summit in terms of the US-Vietnam economic relations, top US companies – Boeing and GE electric sealed some important deals.

Given the focus of Trump’s visit (which was the Summit with North Korean leader) perhaps these deals did not draw the attention they ought to have. The fact is that the US has begun to recognise Vietnam’s economic potential, as well as geo-political significance in Asia. This paper will give a backgrounder to Vietnam’s economic growth story in recent years, some of it’s key strategic relationships and then examine the nature of the China-US-Vietnam economic triangle.

Vietnam’s growth story: The key reasons

There is absolutely no denying the fact, that Vietnam has emerged as an important engine of economic growth within Association of South East Asian Nations (ASEAN) region in general, and has been able to emerge as a top performer within Cambodia, Myanmar, Laos, Vietnam (CMLV) bloc in particular Economic reforms (doimoi) began over three decades ago in 1986. In recent years, some of the key factors which have driven Vietnam’s growth story, especially its success in drawing FDI are;  a large labour force (57.5 million), lower wages for workers (there are varying estimates, but the wages of production workers are estimated at around 216 USD, monthly, and this is half of what labour would charge in China). Electricity too is way cheaper in Vietnam than other competitors in the ASEAN region. As of June 2018, Vietnam charged 7 U.S. cents per kilowatt hour, while the cost of electricity in Indonesia was 10 U.S. Cents, and Phillipines charged nearly thrice the amount — 19 U.S. Cents.

If one were to look at the growth and FDI figures, they are a clear reflection of Vietnam’s success. In 2018, Vietnam’s growth rate was estimated at a little over 7% (7.08) this was the highest in 11 years. Disbursed FDI into Vietnam was estimated at19.1 Billion for the year 2018 (disbursed FDI for three years was estimated at well over 50 Billion USD). Total FDI for the year 2018 was estimated at 35 Billion USD. Japan with over 8 Billion USD was the single largest investor in 2018. Other countries which have a strong presence in Vietnam are South Korea and Singapore. China is the 7th largest investor in Vietnam. One of the major attractions apart from the economic potential is the country’s location (it is easier to expand to other countries like Myanmar, Laos and Cambodia)

As a result of growing consumer demand and increased tourism, revenues from Retail Sales and Consumer Services and Travel and Tourism also witnessed a significant increase in 2018. Revenue from retail services was estimated at over 190 Billion USD, while from travel and tourism was nearly 2 Billion USD. The increased revenue from travel and tourism it is driven by the rise in tourism in 2018 (almost 20 percent)

Vietnam has close trade relations with both China (Vietnam is China’s largest trade partner in ASEAN) and US. Bilateral trade between both countries for the period January-November 2018 was estimated at 97 Billion USD, though this was heavily skewed in favour of Beijing (the total trade deficit was over 20 Billion USD). In the case of US-Vietnam trade, it is heavily skewed in favour of Vietnam (US runs a trade deficit of over 25 Billion USD).

Strategic Importance

Vietnam’s strategic importance is also increasing. Even before the recent Trump-Kim Jong UN Summit, Vietnam has hosted a number of important events in recent years such as the Asia Pacific Economic Cooperation meeting in 2008 (in Hanoi) and in 2017 (in Danang), the high-powered World Economic Forum in 2018, and frequent ASEAN summits.

It is strengthening defense and security ties with Japan, US and India in recent years. One of the key reasons for this pro-active strategic outreach is the China factor.

 During former Vietnam President, Truong Tan Sang’s Japan visit, both sides issued a joint statement which referred to the need for upgrading the bilateral relationship to an “Extensive Strategic Partnership for Peace and Prosperity in Asia’. The joint statement made references to closer security cooperation, the joint statement made mention of Japanese assistance for capacity building of it’s maritime enforcement agencies. Both sides also reiterated their shared opinion on the South China Sea Issue as well as denuclearization in North Korea. In July 2018, Japan and Vietnam held the 6th Defence Policy Dialogue (this was co-chaired by Deputy Defense Ministers of both countries.   In September 2018,a Japanese Maritime Self-Defense Force (JMSDF) submarine Kuroshio docked at Cam Ranh International Port in Kham Hoa on September 17. While security cooperation has been increasing in recent years, this development emphasized the increasing convergence of both sides on important geo-political issues. Japan has also been batting for greater Japan-Vietnam cooperation in the context of the Indo-Pacific. The Japanese PM, in an interview, in February 2019 reiterated the need for a stronger Japan-Vietnam partnership for pushing forward the idea of a ‘Free and Fair’ and ‘Open’ Indo-Pacific.

Vietnam has also been bolstering strategic ties with the US. In July 2017, Washington and Hanoi conducted the 8th Naval Engagement Activity. The United States is also providing support for Vietnam’s participation in UN peacekeeping operations. In 2018, more than four decades after the end of the Vietnam war, US Navy aircraft carrier USS Carl Vinson arrived in the city of Danang a key battle ground during the war. This was an important step in the context of strategic cooperation between both countries,  but to send a message to China that the latter’s militarization and aggression over the South China Sea issue will not be taken lying down.

Vietnam is also enhancing security ties with Japan and India. During his visit to Vietnam in 2016, Indian PM Narendra Modi had offered a credit line of 500 Million for defense cooperation. During Vietnamese President Tran Dai Quang both sides resolved to work jointly for a ‘free and prosperous’ Indo-Pacific.

While Vietnam has been strengthening it’s strategic ties with the above countries, it has been a tad cautious with regard to the Indo-Pacific narrative and has said that  was against any military alliance as this would have an adverse impact on security in the region.

US-Vietnam relations

If one were to look at the trajectory of US-Vietnam relations (which were influenced by the baggage of the war) have steadily increased over the past two decades. Both sides have made efforts to put behind the acrimony arising out of the Vietnam war – though this is extremely tough given the fact that was amongst the bloodiest conflicts of the 20th century.  Some important steps were taken in the 1990’s during the Presidency of Bill Clinton. In 1994, US lifted the trade embargo against Vietnam. A bilateral trade agreement between both countries came into being in 2001 after it was approved by the US Congress as well as the Vietnamese National Assembly.

 During the Obama Presidency again crucial steps were taken to strengthen the economic relationship. The Trans Pacific Partnership (TPP) signed in 2015 for which Obama pushed would have benefited Vietnam immensely as the South East Asian Country would have gained preferential access to US market.

President Trump did make the massive trade deficit with Vietnam an election issue, and US exit from TPP was a setback but a number of important developments have taken place in the context of US-Vietnam bilateral ties. In May 2017, during the Vietnam President’s, Nguyen Xuan Phuc visit to the US, deals worth 8 Billion USD (two major US companies were Caterpillar and General Electric) were signed between both sides. Trump mentioned the US’ trade deficit and hoped to balance that over a period of time.

While addressing the APEC Summit in November 2017, the US President had a word of praise for Vietnam’s economic progress:

….’ Vietnamese economy is one of the fastest-growing economies on Earth. It has already increased more than 30 times over, and the Vietnamese students rank among the best students in the world..’

China-US-Vietnam triangle

After the China-US trade wars many argued, that Vietnam could be the biggest beneficiary. So far, Vietnam has benefitted (export orders to certain sectors have witnessed a rise) but not in a dramatic way (some companies are likely to relocate from China with Vietnam being a possible choice, but current evidence suggests that this has not happened on a large scale.

Deals signed during Trump’s Vietnam visit: How China has sensed an opportunity

As mentioned earlier, during the US President’s Vietnam visit a number of significant deals were signed. Viet Jet will buy 100 Boeing 737-Max jets and 215 GE/CFM joint venture engines, Bamboo Airways (a start up owned by Hanoi-based conglomerate FLC Group) is buying 10 Boeing 787-9 jets.

U.S.-based aviation technology company Sabre also inked a deal with the flag carrier Vietnam Airlines. The deal estimated at 300 Million USD is supposed to help Vietnam Airlines in upgrading its digital abilities, and to achieve its aim of becoming a digital airline by 2020. Total deals signed during Trump’s visit were estimated at 20 Billion USD.

The China-US-Vietnam triangle is interesting not just from a historical context, but also an economic dimension. What is significant is that while there is talk of US-China trade wars and the likely benefit for Vietnam, Beijing kept a close eye not just on Trump’s statements with regard to North Korea, but also the deals signed during his Vietnam visit.

An article in Global Times makes a mention of how China can be part of the global production chain through a “completion and delivery center” in Zhoushan, East China’s Zhejiang Province. Interior work of over 700 planes can be completed in this centre.

The focus of the Trump visit was North Korea, the deals signed will give a boost not just to economic ties between Vietnam and US, and are a clear illustration of how much importance Trump gives to big ticket business deals. It is interesting to see the approach of China towards these deals, while keeping a close watch on the outcomes of the summit with Kim Jong Un, China also closely watched the economic outcomes of the visit and analysed how it could benefit from the same.

The conclusion of the article is especially interesting:

‘China has no reason to be jealous of Trump’s economic gain in Vietnam. In contrast, we hope the US can increase economic interaction with enterprises in Southeast Asian countries. Hopefully, everyone can learn that economic engagement is not a zero-sum game’.

Conclusion

The China-US-Vietnam triangle is important, not just in the strategic context especially with regard to the South China Sea Issue as well as the aim of achieving a ‘Free and Fair Indo-Pacific’. As for the economic context, both Trump and the Chinese are equally transactionalist and it is interesting to see Beijing de-hyphenate US’ strategic ties with Vietnam from the economic relationship.

Tridivesh Singh Maini is a New Delhi based Policy Analyst associated with The Jindal School of International Affairs, OP Jindal Global University, Sonipat, India

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Southeast Asia

Indo-Pacific region and elections in New Caledonia

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The results of the May 12, 2019 parliamentary elections in New Caledonia reflect a lingering political split in this French territory, comprising dozens of islands in the South Pacific. French loyalists won 28 seats in the 54-strong local legislature, just two seats more than the advocates of the region’s greater autonomy and even complete independence from Paris.

The local society is divided along political and geographical lines. The indigenous Melanesians (Kanaks) have been in the minority since 1969, and currently account for 39 percent of the islands’ population. They make up a 70-percent majority in two of the three provinces of the archipelago (the Northern Province and the Province of Loiote), and a 26-percent minority in the Southern Province, where pro-French sentiment is strong.

Elections in New Caledonia are more than just a local development and are a source of serious concern for both France and Australia.

France’s position. New Caledonia is France’s most faraway colony (17,000 km). The New Caledonians may hold two more referendums on independence before 2022 in keeping with the terms of the Noumea  agreement of 1998, which allows a second vote if the first one leaves the proponents of independence in a minority. During the first plebiscite held on November 4, 2018, 57 percent of New Caledonians voted in favor of preserving the archipelago’s status as an overseas French territory.
If New Caledonia gains broad autonomy, let alone independence, from France, this would change the strategic security pattern in the region, giving a boost to secessionist sentiments in US and European overseas territories  (French Polynesia, Reunion, Wallis and Futuna with an exclusive economic zone of 226,000 sq. km.), and seriously impairing Paris’ influence in the region. 

The Indo-Pacific region (IPR) is viewed by France as the Paris-New Delhi-Canberra-Noumea axis. (Noumea is the capital of New Caledonia).

By maintaining its sway over New Caledonia, France will retain its membership of the club of world powers, its continued role in the IPR and participation in theQuadrilateral Security Dialogue (Quad) between the United States, Japan, Australia and India, designed to check China’s attempts to secure for itself a place in the Indo-Pacific region.

Paris fears that an autonomous or fully independent New Caledonia would seek financial assistance from Beijing in exchange for allowing Chinese companies access to the archipelago.

New Caledonia is also a mainstay of French military presence in the Pacific, a platform for scientific research and a source of strategic resources, such as   chromium, cobalt, manganese, gold, copper, lead, and nickel. The archipelago boasts the world’s fifth largest reserves of nickel, whose exports are projected to reach 4 million tons in 2021.

Therefore, Paris is trying, first and foremost, to minimize the consequences of the current divisions within the local pro-French political parties – Calédonie Ensemble, Le Repubilcans Calédoniens, etc. And with good reason too, because even despite their defeat in the May 12 vote, the secessionist forces have been gaining strength increasing their presence in the local parliament from 18 to 25 seats in the decade between 2004 and 2014, and, according to the results of the May 12 elections, bringing their membership to 26.

The indigenous Kanak population is getting politically active too, showing a hefty 81 percent turnout in the November 4, 2018 independence referendum, which exceeds by more than twice the 40 percent voter turnout in national elections in France proper. Moreover, a meagre 3 percent of ethnic Kanaks voted for loyalists. By 2022, the number of Kanak voters is expected to rise even further, while that of French voters will remain at the present level.

Australia’s position. In the southwest, New Caledonia borders on the exclusive economic zone of Australia, with which it shares the region’s potential hydrocarbon reserves. In the southeast, it borders on the island state of Fiji, which is busy building up ties with China.

Canberra worries about the impact that the developments in New Caledonia could have on the secessionist movements on the Island of Bougainville in Papua New Guinea and West Papua (a province of Indonesia), all the more so given the threat of Islamism and illegal migration. Canberra also prioritizes cooperation with Indonesia in the field of economics, science, culture, defense, and in tackling the consequences of natural disasters.

An uncontrolled process of sovereignty declarations in the South Pacific region threatens to destabilize the regional security system Canberra has been building there for quite some time now. New Caledonia’s potential independence would jeopardize an existing defense agreement between Australia and France, which provides the Australian Navy with access to French military bases in the archipelago.

Differed as they are on the format of cooperation with China, the Australian government and the opposition still recognize the need for building up trust between the two countries, and, above all, for  promoting closer economic ties with Beijing.

Here, however, Canberra’s vision about future of the IPR differs in many respects from Paris’. Australia is careful to avoid a head-on clash with China in the region, preferring instead to seek a balance of interests, mindful of the positions of all regional actors, especially international associations, such as the Quad, FRANZ, ANZUS, APEC, Pacific Islands Forum, etc.

France, for its part, sticks to a more confrontational tactic as it tries to maintain its status as a Pacific power. However, the financial assistance that the states of Oceania are getting from Australia ($1.3 billion) is way bigger that what is provided by France ($100 mln.). (2)

Simultaneously, Canberra would like to see a rise in the humanitarian aspect of the French policies in Oceania.

 First published in our partner International Affairs

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Indo-China integration meets Cambodia’s interests

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Cambodia, which is located between Thailand and Vietnam and has a 440-kilometer coastal zone which is separated from the rest of the country by a mountain ridge, is in need of a “third neighbor” in order to survive economically and politically, and for improving its export opportunities.

Pnomh Penh’s hopes for partnership with the United States fell through. After Washington passed the Cambodia  Democracy Act in 2018 in support of the Cambodian opposition, it became clear that the US was ready to use legal instruments against Pnomh Penh to pursue its interests in the region.

At present, Cambodia’s “third neighbor” is China. Cambodia is doomed to participate in the Chinese infrastructure project “One Belt, One Road” because otherwise it will not get access to South East Asia markets. The extent to which the Cambodian economy is sensitive to market changes was demonstrated by Italy, which initiated extra duties on Cambodian rice imports into the EU. Rice is the main item of Cambodian food exports. Rome thereby secured a review of the Cambodia-EU “Everything Except Weapons” trade scheme.

In the course of a visit to  Beijing in January 2019 by Prime Minister of Cambodia Hun Sen, the Chinese side promised to allocate $ 588 million as aid for Cambodia by 2021, to increase rice imports to 400 thousand tons and boost bilateral trade volume to $ 10 billion by 2023 . This is designed to ensure the economic survival of Cambodia.

In foreign policy, Cambodia avoids aggravating relations with its neighbors lest there appear conflicts detrimental to the weak Cambodian economy, and underscores the importance of maintaining peace in the Asia-Pacific Region.

Phnom Penh is fully aware that it can improve its economic performance only on condition it maintains a long period of peace and strict neutrality. Cambodia is among the world’s fastest growing economies (7.5% in 2018). If the country is to preserve and build on the current pace of development, it will have to boost exports of manufactured goods (80% in the structure of exports) and rice, and should encourage tourism and attract foreign investment.

Phnom Penh is worried about two major problems in Asia – the North Korean issue and territorial disputes in the South China Sea as part of a greater US-China conflict.

Pnomh Penh sees the essence of the North Korean issue in that Cambodia traditionally maintains close economic and political ties with both Koreas. Cambodia and North Korea form a united front at international forums on the issue of human rights, North Korean military experts have assisted Cambodia with the development of a demining service, and North Korea has invested $ 24 million in the country’s tourism industry.

South Korea is the second largest investor for Cambodia after China. By 2018, the total volume of South Korean investments in Cambodia had reached $ 4.56 billion. For Pnomh Penh, Seoul is an influential economic player and cooperation with it contributes to the diversification of the Cambodian economy.

South Korean capital helps Phnom Penh to dilute the financial presence of Chinese investors in the Sihanoukville Special Economic Zone – the country’s main economic gateway. For Cambodia, the conflict between the two Koreas is fraught with significant financial and political losses.

In the opinion of Pnomh Penh, diplomatic clashes between the United States and China over territorial disputes in the South China Sea may exacerbate Cambodian-Vietnamese relations. Although relations between Cambodia and Vietnam have  always been tarnished by conflict,  Phnom Penh, following a policy of strict neutrality, has been promoting broader cooperation with Hanoi in recent years.

As Vietnam, unlike China, is moving closer to Washington, Phnom Penh does not want to find itself in a situation where he will have to make a clear choice in favor of one of the parties to the conflict. Militarization of Vietnam, whose territory blocks Cambodia’s access to the sea, will be ruinous for the economy of Cambodia.

Vietnamese seaports are the final point of the Southern Economic Corridor, which runs from Myanmar via Thailand and Cambodia to Vietnam. Phnom Penh pins  big hopes on cooperation within the framework of the Southern Economic Corridor. An ASEAN report describes Cambodia as a perfect place for an export-oriented economy that serves as a binding link for the regional economy as a whole.

Given the situation, it can be assumed that Phnom Penh’s policy over the next few years will focus on diversifying the economy, attracting a greater number of foreign economic partners (Japan, Australia, Russia, the EU), strengthening regional integration within the Southern Economic Corridor and within the framework of the ASEAN, and minimizing US-North Korean, Sino-US, and Sino-Vietnamese differences. 

First published in our partner International Affairs

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Vietnam Fisheries Brace for EU Yellow Card Review

James Borton

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Vietnamese fishing vessels credit: VNA

The tides wait for no one and each day fisheries, particularly those closest to the shores, are over-fished and harmed by industrialization. For emerging economies like Vietnam, the issuance of a yellow card by the European Union caught the attention of fishers and government officials alike, with a clear warning that the country has not been tackling illegal, unreported and unregulated fishing.

Tran VanLinh, the chairman of the Danang Fisheries, like others, is worried about the industry’s export future. After all, the fisheries sector is a cornerstone of the Vietnamese economy and has contributed to an average growth rate of 7.9 percent. Nevertheless, he understands that the yellow card offers not only a roadmap for the government but also for all people to address long-standing conservation and sustainability issues.

“After receiving the commission’s carding system notice, Vietnam has tried to satisfy all the requirements imposed by the EU. We do need to protect our sea and environment,” claims Linh.

The overall picture in the South China Sea or East Sea as Vietnam refers to this body of water, is grim. Total fish stocks have been depleted by 70-95 percent since the 1950s, and catch rates have declined by 70 percent over the last 20 years. Giant clam harvesting, dredging, and artificial island building in recent years severely damaged or destroyed over 160 square kilometers, or about 40,000 acres, of coral reefs, which were already declining by 16 percent per decade.

Challenges around food security and renewable fish resources are fast becoming a hardscrabble reality for more than just fishermen. With dwindling fisheries in the region’s coastal areas, fishing state subsidies, overlapping EEZ claims, and mega-commercial fishing trawlers competing in a multi-billion-dollar industry, fish are now the backbone in this sea of troubles.

Meanwhile, Vietnam’s fisheries employ more than 4.5 million people and the nation is ranked as the world’s fourth largest exporter of fish commodities after China, Norway and Thailand. In 2016, the country’s seafood products were exported to 160 countries and territories with the three major markets of the US (20.6%), EU (17.3%), and Japan (15.7%). Vietnam is currently the largest tra fish supplier and fourth biggest shrimp exporter in the world.

There’s even greater pressure placed on fishermen to meet Vietnam’s ambitious seafood sector target of earning 10 billion USD from exports this year, up 10 percent from 2018.  According to the Vietnamese Association of Seafood Exporters and Producers (VASEP), the goal can be achieved largely from $4.2 billion from shrimp exports, $2.3 billion from tra fish exports, and some $3.5 billion from other seafood shipments.

Meanwhile, coastal fish stocks have become either fully exploited or overfished. As a consequence, the South China Sea is considered Vietnam’s vital fishing ground.

With a delegation of the EU’s Directorate of Maritime Affairs and Fisheries expected to arrive at the end of May, Vietnam is urgently adopting measures to convince inspectors that they have smartly corrected their fishery conservation course.

 “The Danang Fishery Department has implemented numerous educational programs to teach fishermen about the new laws and to train them about the EU requirements,” adds Linh, a respected industry leader.

From Hai Phong, Da Nang, LySon, Phu Quoc and Vung Tau, more fisheries are attempting to reign in bad practices and reach towards modernization, eliminating the destructive fishing practices which affects fishery resources. However, more work is still required to revise their legal framework to insure compliance with international and regional rules, to increase the traceability of its seafood products, and to strengthen the implementation of its conservation and management of fisheries resources.

Mr. Le Khuon, chairman of the fishery association in An Vinh Village located in Quang Ngai Province and a former fisherman, who has stared down an aggressive Chinese fishing vessel or two near the Paracels, knows the hardships of fishing. “Of course the yellow card does impact on our local fishermen since we export sea cucumbers to the EU.”

Along with others in the area, Ly Son fishermen recognize the importance of marine protected areas since the coastal areas are overfished. “It’s a hard life and I have lost friends to the sea,” claims 42 year-old Tran Phuc Linh, who has also been harassed by the Chinese since he often fishes near disputed historic fishing grounds in the Paracel Islands.

In fact, the fishing incidents continue in the Spratlys, where China’s mega steel hulled vessels regularly intimidate Vietnam’s colorful wooden trawlers. Just two months ago, a fishing trawler moored at Da Loiis land, in the Paracel archipelago was chased by a Chinese Maritime Surveillance vessel before it crashed upon the rocks and sunk without loss of life to crew.

According to analyst and consultant, Carlyle A. Thayer, “the Chinese government, as a matter of policy, employs it commercial fishing fleet as a third arm of its maritime forces after the regular navy and civilian maritime enforcement agencies, now grouped into a national Coast Guard.”

Linh and his wife do not want their two teenage sons to make their living as fishermen. They know the perils at sea from the seasonal typhoons and the threats associated with patrol and interdiction of ships violating mutually agreed upon fishing restrictions.

Sent by their governments to find food for their people, fishers find themselves on the front lines of this new ecological battle. These fishing sentinels and their trawlers are fighting the maritime disputes between China and its neighbors.

This fishing competition for available fish has resulted in increased number of fishing vessel conflicts. These hostile sea encounters have been witnessed in Indonesia waters whereat least 23 fishing boast from Vietnam and Malaysia have been accused of poaching in that nation’s waters.

As a result, Indonesia’s fisheries minister, Susi Pudijastuti, ordered the dynamiting of these boats and over 170 fishing vessels have been sunk in their waters over the past several years. The increasing number of fishing incidents reflects not only deeply different interpretations and application of the law of the sea, but a fundamental conflict of interest between coastal states and maritime powers.

Even with these threatening clouds on the horizon, some fisheries are going about responsibly reigning in illegal fishing. In Da Nang, its 509 fishing trawlers (all longer than 15 metres) have installed with GPS. This includes the seven steel hulled vessels subsidized by the government’s generous loan program.

The mandatory installation of the GPS offers more assurance in the identification of catch origins and it also helps that more fishermen are also completing and submitting the required fishing diary or logbook.

Meanwhile, the government insists that statistics on fishing vessels, fishing logs and fishing yields of each commercial trawler are now part of a Vietnam Fish Base, a nationwide fishery software database in accordance with the law.

Within the disputed territory, there are over 1.9 billion people, seventy-five percent of them living within one hundred kilometers of the coast. Nearly eighty-five percent of the world’s fishers are concentrated in Asia, particularly in the South China Sea, according to the Food and Agriculture Organization of the United Nations.

Subsequently, fishing remains a politically sensitive and emotionally charged national security issue for all claimant nations. This ocean plundering presents the region with a looming food crisis. Any effort to balance the economic benefits with the security context within the South China Sea will require a coordinated, multi-level response from scientists, historically engaged in collaborative research and already addressing issues of sustained productivity and environmental security in the region.

It’s a prevailing view that the collapse of fisheries is the major driver of competition for marine resources. This continues to result in a lack of respect among claimants for mutually agreed-upon fishery restrictions within 12 nautical miles of outposts and in the recognition of management area within 200 nautical miles of coastline. Last year 86 Vietnamese fishing boats were destroyed by Indonesia for illegally catching fish in its waters.

However, senior Vietnamese officials are confident that these violations are now being eliminated, if not sharply reduced.

“ Because local governments and relevant agencies such as the Coastguard, and Border guard are conducting more surveillance and enacting stern measures in monitoring and investigating; fishing violations are reduced,” claims Nguyen Manh Dong, Director General of the Department of Maritime Affairs, and National Boundary Commission.

He’s quick to add that while the EU’s requirements have been fulfilled including port control, some cases still happen, particularly with Indonesia.

To offer additional counter-balance, Vietnam’s Fisheries Resources Surveillance Department has stated that it is working to raise awareness of maritime boundaries and international maritime laws among its fishermen, apart from conducting frequent patrols to prevent potential violations

The complicated nature of the Vietnam’s East Sea or the South China Sea (SCS) disputes, makes short term resolution of fishing disputes difficult. More parties, believe that proper management of these disputes to insure stability  becomes a priority.

“Vietnam will never tolerate or permit activities related to illegal, unreported and unregulated (IUU) fishing,” adds Deputy Minister of Agriculture and Rural Development (MARD) Vu Van Tam.

For example, Binh Dinh province is adopting necessary measures to remove the “yellow card” status. All local fishing boats are required to obtain certificates of registration, inviting local authorities to review design documents, supervise the building, improvement and repairing of fishing vessels.

Among policy shapers, and marine scientists, there’s a general consensus that the best approach for managing SCS disputes and addressing IUU issues is to set aside the sovereignty disputes and jointly develop and manage the natural resources, such as fisheries. While advancing fisheries cooperation in the SCS has been increasingly recognized as a political, ecological, socio-economic and security imperative, a crucial question remains unanswered. What objective can be achieved through fisheries cooperation in the SCS?

Marine biologists like Professor Nguyen Chu Hoi advocate the creation of ecosystem- based fishery zones covering reefs that are vital to regional fish stocks, especially in the Spratlys and Paracels. This action requires the adoption of an urgent cooperative marine management system, regardless of the location of their territorial and maritime claims.

While the growing demand for fish by global markets can fray even the strongest fisher’s net, the challenge for Vietnam is the imperative for management of its declining fisheries in order to create long-term sustainability. The protection of the “commons” requires more than a pass fail report card from the EU.

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