Vietnam: Israel’s closest ASEAN partner

Growing ties could help narrow Vietnam’s development gap.

Israel’s relations with ASEAN countries have not received a great deal of attention. In reality, however, there is an increasing tendency of Israel to benefit from the growing economies of Southeast Asia.

Relations between Israel and Vietnam typify this trend. While many countries in the region have been reluctant, or at least careful, in pursuing relationship with the Jewish state, Vietnam enjoys a relatively strong relationship with Israel.

Even though contacts between Israel and Vietnam can be traced back to the 1970s, when a large number of Vietnamese migrated to Israel to escape prosecution and torture, formal bilateral cooperation between the two countries was established in mid-1993.

Since then, Hanoi and Tel Aviv have witnessed remarkable developments in their relationship with reciprocal visits at various levels and the establishment of diplomatic representative offices.

Interestingly, an important part of cooperation between Israel and Vietnam is the military. Even though Israel’s arms overtures to Vietnam have only recently increased, it has a long rooted history of military contacts with Hanoi, particularly with the presence of people of Vietnamese decent serving in the Israeli Defense Force (IDF).

The most important development in Israeli-Vietnamese military cooperation was the 2012 visit by Israel’s Ministry of Defense general director Udi Shani and representatives from SIBAT Defense Export and Defense Cooperation to see potential prospects in Vietnam.

A plan was subsequently made by Israel Weapon Industries Ltd to open a light-arms plant with an investment of over $100 million. The plant helps to manufacture and to supply Israel’s AS advanced version of the Galil infantry rifle.

The most recent development took place early this year when the Vietnamese government purchased an air defense missile system to enhance its air defense capacity. What is also remarkable is that Israel’s Air Defense and Air Force Service conducted an English course for its units assigned to receive, manage, and exploit these new weapons and equipment in Hanoi in April this year.

Given Vietnam’s large military and obsolete weapons systems, Israel could be expected to play a considerable role in upgrading the country’s defense systems and its technologies. Thus it is not surprising that last year the two countries signed an MoU on defense cooperation and Israel has opened a defense attaché in Vietnam.

Economic relations have sharply increased in recent years, especially after the signing of a bilateral economic and trade agreement in 2004. This was further strengthened in 2009 when both governments inked an agreement on double tax avoidance, creating a transparent and healthy legal environment for their businesses to increase transactions.

Recent reports suggest that the trade volume between the two countries is expected to be more than $1 billion, with Israeli exports jumping by 120 per cent. Vietnam mainly exports agricultural products, garments, and electronic equipment while it imports fertilizer, machinery, equipment, as well as electronic parts from Israel. There are hundreds of Israeli companies, such as Iscar, that have made their way to Vietnam.

In 2011, Israel and Vietnam also signed a $250 million agreement involving financial protocol and maritime development. The deal came on the heel of increasing demand in Vietnam for Israeli products, especially agricultural products and technologies. This economic cooperation is expected to flourish in the coming years as both governments recently agreed on a free-trade agreement.

Israel has been a considerable partner in Vietnam’s agricultural and dairy industries. Israeli firm SAE Afikim, for instance, has been running the $500 million project to supply 300 million liters of milk every year, produced by imported cows at 12 state-of-the-art mega dairies and a milk processing plants – all built with Israeli equipment and expertise.

It was reported that the project is the largest of its kind in the world and the biggest ever undertaken by an Israeli firm. Additionally, a group of Israeli experts have also conducted courses on agriculture in Vietnam. There are also plans to expand cooperation into the fields of aquaculture and other fishery-related spheres.

People-to-people exchanges have also contributed to the strengthening of the relationship. Besides a large number of Vietnamese workers in Israel, there are frequent meetings between politicians, businessmen, and academics.

Both countries have also exerted efforts to promote their tourism to each other. To ease air connectivity, Air Vietnam has also opened a representative office in the Jewish state.

In more recent years, Israel’s ties with Vietnam have expanded into different realms. Even though not widely reported, education has become an important element in Israel-Vietnam relations. It is reported that there are approximately 2,000 Vietnamese students studying agriculture in Israel. Other exchanges are taking place in the realms of culture, biotech, information technology, and communications.

Relations have also been strengthened by humanitarian aid. In 2006 and 2007, for example, a team of 54 doctors and nurses from Israel headed out to nine remote areas of Vietnam to provide desperately needed medical care to Vietnamese.

Besides providing medical care as well as distributed foods and clothing, the teams also provided a farm animal to every household in these areas to offer a long-term economic base to the impoverished villagers.

Looking forward, Vietnam will continue to be Israel’s closest ally in ASEAN. While the bloc’s majority Muslim countries such as Indonesia and Malaysia face pressures and oppositions from inside, Vietnam does not have a similar challenge.

In tandem with the forthcoming ASEAN Economic Community, Vietnam offers Israel not only a gateway to large investment opportunities, but also provides a way to expand to the wider ASEAN region. With no sign to an end to the instability in the Middle East, it is not surprising that Israel sees the growing economies of Southeast Asia as prudent alternatives.

Meanwhile from Vietnam’s view, Israel’s growing presence is welcome.

Israel’s top-notch renewable and farming technologies are fundamental to realising its agricultural abilities. Tel Aviv could also offer an access to untapped consumer markets and perhaps a hub for expansion in the wider Middle East.

Simultaneously, Israel’s ventures are waited as the country is in need of billions of dollars in investment to revamp its economy and bring down unemployment.

All in all, this expanding relationship could help minimise the developmental gap between Vietnam and other ASEAN countries.

Muhammad Zulfikar Rakhmat is a PhD scholar at the University of Manchester.