EXECUTIVE SUMMARY
- Cambodia and Laos are considered an integral part of Vietnam’s traditional sphere of influence. Both are “special partners” and priorities in Vietnam’s foreign policy.
- However, China’s increasing influence in the region since the late 2000s has challenged Vietnam’s position as the key economic and political partner of its two smaller neighbours.
- In addition, bilateral issues, such as unfinished border demarcation with Cambodia and hydropower dams with Laos, further complicate Vietnam’s efforts to keep the two neighbours by its side.
- Since Vietnam lacks the economic and financial means to match China’s resources, it has taken advantage of its strong historical relationships, political connections, infrastructure linkages, burgeoning economic activities, and robust people-to-people ties to devise an effective engagement strategy with Cambodia and Laos.
- This strategy, which emphasises regionalisation and building linkages between the three countries and other regional and international partners, serves as a counterbalance to China’s influence in Cambodia and Laos, while also benefiting Vietnam and enhancing the strategic autonomy of its neighbours.
*Nguyen Khac Giang is Visiting Fellow in the Vietnam Studies Programme at ISEAS – Yusof Ishak Institute. He was previously Research Fellow at the Vietnam Center for Economic and Strategic Studies.
ISEAS Perspective 2023/82, 16 October 2023
INTRODUCTION
Given their geographical proximity and shared history, Cambodia and Laos are viewed as integral components of Vietnam’s traditional sphere of influence. However, since the late 2000s, this position has been increasingly challenged by China’s growing dominance in the Lower Mekong region. Beijing has surpassed Hanoi to become the primary investor and trade partner for both nations, anchoring them within its sphere of influence through infrastructure investments, concessional loans, and strengthened military cooperation.
Against this backdrop, Hanoi has witnessed a decline in both its economic standing and its influence on policy-making circles in Phnom Penh and Vientiane. This has raised serious security concerns for Vietnam and generated negative implications for its regional agenda, particularly regarding the South China Sea dispute.
This essay examines Vietnam’s ongoing challenges and prospects in its engagement with Cambodia and Laos, in light of China’s increasing influence. It begins by outlining the strategic significance of Cambodia and Laos to Vietnam before detailing Vietnam’s multifaceted challenges in navigating relationships with these neighbours and the economic and political tools available to Hanoi to preserve its influence in both countries. It concludes with insights into the potential trajectories of the trilateral ties.
WHY CAMBODIA AND LAOS ARE VITAL TO VIETNAM
Vietnam regards Cambodia and Laos not merely as neighbours, but as “brother nations”. Emerging from the former French Indochina, these three nations forged strong bonds during their respective struggles for independence. Vietnam makes these two nations a priority in its diplomacy, classifying them both as “special partners”. The Vietnam People’s Army (VPA) played a pivotal role in toppling the brutal Khmer Rouge regime in 1979, paving the way for Hun Sen’s rise to power and long-standing rule in Cambodia. Laos is Vietnam’s sole military ally in the post-Cold War era.[1] In instances like the 2000 unrest in Vientiane, the 2003 Houphan rebellion, and the 2007 Bokeo unrest, Vietnamese security forces came to the aid of the Lao communist regime.[2]
But this historical context is only part of the story. Hanoi views its ties with Cambodia and Laos as indispensable to its own security and economic advancement, and any instability in either nation invariably reverberates across Vietnam, and vice versa.[3]
First, as the two nations cover two-thirds of its land border, Vietnam naturally seeks assurance in having friendly regimes next door. This sentiment particularly resonates with Vietnam’s perpetual anxiety regarding its northern neighbour – China. Given the complex historical legacy and ongoing uncertainty regarding Beijing’s ambitions, consolidating an “Indochina” political front to shield against potential northern threats remains a significant task for Hanoi. Past failures to achieve this, such as in the late 1970s, pushed Vietnam to engage in armed conflicts on both the Northern border against China and the Southern border against Khmer Rouge Cambodia. These wars drained the country’s resources and isolated it from the international community, pushing it to the verge of catastrophe in the mid-1980s. Some contemporary discourses even suggest that Vietnam should reorient its strategic focus landward instead of concentrating solely on the South China Sea.[4]
Vietnam’s concerns go beyond security. Cambodia and Laos serve as conduits for Vietnam’s engagement with mainland Southeast Asia, including Thailand and Myanmar. Given China’s extensive infrastructural investments in the Lower Mekong region, Hanoi is wary of the so-called “infrastructural leverage trap”. The fear is that, once Chinese-backed connectivity frameworks are established, Vietnam might find itself marginalised from primary manufacturing chains and regional trade networks.[5]
Second, Vietnam’s border regions adjacent to Cambodia and Laos present complex security challenges. Although Hanoi has largely managed to stave off widespread riots and unrests, the few that did erupt mostly originated from these border provinces, as evidenced by the recent deadly assault in Dak Lak Province that killed nine people.[6] Furthermore, these border areas are notorious hotbeds for human and drug trafficking. Ensuring border stability necessitates close collaboration with Cambodian and Lao authorities, particularly as Vietnamese law enforcement occasionally needs to conduct operations within these neighbours’ territories.[7]
Third, Cambodia and Laos contribute significantly to the legitimacy of the Communist Party of Vietnam (CPV). Both were involved in the independence struggle that gave rise to modern Vietnam, where tens of thousands of Vietnamese sacrificed their lives as volunteer soldiers. In its 2019 Defence White Paper, the VPA lauded its endeavours in supporting Cambodia and Laos, invoking the late President Ho Chi Minh’s proclamation: “To help our friends is to help ourselves”.[8] Furthermore, Vietnam and Laos also have a shared interest in upholding socialist ideals. Consequently, any potential drift of Cambodia and Laos away from Vietnam’s orbit raises considerable anxiety among the general public and scholars alike, damaging the CPV’s historical legitimacy.[9]
VIETNAM’S MULTIFACETED CHALLENGES IN CAMBODIA AND LAOS
Over the past decade, Vietnam’s role in the economic and political affairs of Cambodia and Laos has significantly been tested due to a multitude of factors.
First and foremost, China has replaced Vietnam as the chief economic stakeholder in both Cambodia and Laos. China accounts for nearly half of foreign direct investment (FDI) in Cambodia,[10] while half of Laos’ escalating public debt is attributed to China. Economic ascendancy inevitably provides political leverage, causing these traditional allies of Vietnam to distance themselves from Hanoi. This is markedly evident in their reluctance to involve themselves in the South China Sea dispute. For example, in 2012, Cambodia prevented ASEAN from releasing a joint communiqué, a first in 45 years, due to its unwillingness to mention the dispute in the document. Similarly, in 2016, under Laos’ ASEAN chairmanship, the association’s stance on the South China Sea was notably tempered, although the grouping managed to release a joint statement this time.[11] This shifting allegiance has made it increasingly difficult for Vietnam to build a more unified ASEAN position on the South China Sea dispute.
Second, Vietnam also faces distinct challenges in its bilateral relationships with Cambodia and Laos. These issues are rooted in history and in competing economic interests. Regarding Cambodia, contentious matters include the status of ethnic Vietnamese, unresolved border demarcation, and the potential stationing of the Chinese navy at the Ream Naval Base near Vietnam.[12] Additionally, anti-Vietnamese sentiments, sporadically voiced by Hun Sen himself,[13] exacerbate the situation. With regards to Laos, Vietnam’s primary concern lies in Laos’ hydropower development strategy, perceived by Hanoi as detrimental to the Mekong River’s ecosystem and Vietnam’s Mekong Delta. Notably, half of Laos’ 60 dams on the Mekong’s tributaries and two on the Mekong mainstream are directly financed by China.[14]
Third, Vietnam’s slow post-pandemic economic recovery has limited its ability to fulfil its infrastructure commitments to its neighbours. In contrast to China’s swift completion of its Laos-China railway project within three years, Vietnam’s promised rail link between Vientiane and the Vietnamese seaport of Vung Ang has yet to be initiated.[15] Similarly, progress on a 2017 agreement to construct a highway connecting the economic hubs of Ho Chi Minh City (HCMC) and Phnom Penh has only been made on the Cambodian side, as Vietnam struggles to secure the US$700 million needed for its section.[16]
Finally, the uncertainty of the two countries’ internal affairs also poses challenges to the formulation of a good strategic plan. In August 2023, Cambodia experienced a significant power transition with Hun Sen passing his prime ministerial role to his son, Hun Manet, accompanied by a comprehensive cabinet reshuffle.[17] Vietnamese leaders have been actively engaging with these shifts, as evidenced by meetings between Prime Minister (PM) Pham Minh Chinh, National Assembly Chairman Vuong Dinh Hue, and President Vo Van Thuong, and Hun Manet in 2022.[18] However, new leadership always brings about unpredictability, and the lack of historical connection between Hun Manet and Vietnam may make the situation even more challenging for Vietnam. Meanwhile, Laos’ precarious economic climate has led to political uncertainties and sporadic public protests since last year.[19] This culminated in PM Phankham Viphavanh’s resignation in December 2022,[20] and the country’s continued economic slump in 2023 has made it imperative for Hanoi to recalibrate its support strategies for Vientiane.
VIETNAM’S ECONOMIC APPROACH
Vietnamese leadership recognises the importance of economic development in shaping the nature of the tripartite relationship. While Vietnam may not match China in terms of economic and financial resources, Hanoi has smartly capitalised on its geographic proximity in order to reinforce its economic ties with both Cambodia and Laos.
First, while China has more to offer in terms of big infrastructure projects as seen with the Laos–China railway project, Vietnam offers greater connectivity to landlocked Laos, particularly in terms of land roads and sea transportation. As the Vientiane-Vung Ang rail project has been delayed for years,[21] the main Vietnamese seaports in the central area, such as Vung Ang, Cua Lo, Chu Lai and Tien Sa, have been utilised as the export channel for Laos products to overseas markets. Vietnam can also help Cambodia to diversify trade and investment with the help of its extensive land connections. In fact, Vietnam is currently Cambodia’s biggest trade partner in ASEAN and plays an important role in linking up certain Cambodian industries to the global supply chain.[22]
Second, China may have the upper hand in state-led trade and investments, but Vietnam benefits from deeply rooted economic ties with both Laos and Cambodia, notably among non-state entities. Notably, Vietnam has 10 international border gates with Laos and 11 with Cambodia, while there are only five with China, despite China being Vietnam’s biggest trade partner. This shows the intensive cross-border economic activities among the three Lower Mekong nations, and Hanoi’s dedication to further integrate these three economies. In several key border regions, Vietnam has created or is in the process of constructing special economic zones to enhance economic connections, a plan launched by former Prime Minister Nguyen Tan Dung in 2010.[23] Laos and Cambodia are the first and second biggest recipients of Vietnam’s outward FDI.[24] Renowned Vietnamese corporations such as Viettel and Hoang Anh Gia Lai have invested in these countries for years, making major contributions to their infrastructural development and creating jobs for hundreds of thousands of people. These ties, born from both high-level initiatives and grassroots level engagement, are deeply rooted, and it would take a significant amount of time and efforts for China to replicate them.
Third, Vietnam has promoted economic linkage between the three countries, helping to reduce their dependence on China. Vietnamese officials often emphasise the importance of regionalisation in the CLV region in bilateral and trilateral talks. During a recent meeting with former Lao PM Phankham Viphavanh and Cambodian PM Hun Sen, Vietnamese PM Pham Minh Chinh asserted that fostering “independent and self-reliant economies” remains a strategic imperative for all three nations.[25] The Cambodia-Laos-Vietnam Development Triangle Area (CLV-DTA) – a regional cooperation framework that focuses on cross-border economic cooperation between the three countries – was originally proposed by Hun Sen in 1999. However, it was Vietnam that sought to expand the agreement from the original 13 provinces to the entire CLV region.[26]
POLITICAL ENGAGEMENT
Politically, Vietnam has significantly increased its bilateral and trilateral engagement with Cambodia and Laos across four key channels: party-to-party, government-to-government, parliament-to-parliament, and people-to-people. These channels have been in place for a while, but political activities have seen a notable resurgence since the early 2010s.
On the party-to-party dimension, the CPV has been keen to foster trilateral ties with the Cambodian People’s Party (CPP) and the Lao People’s Revolutionary Party (LPRP). In 2011, the national fronts of the three countries – the top party institutions geared towards mobilising society – established a biannual meeting mechanism.[27] Other party institutions, such as youth unions, have also expedited many exchange activities between the three countries.[28] A stronger testament to this effort is the trilateral summit held in Hanoi on 26 September 2021, involving CPV General Secretary Nguyen Phu Trong, Cambodian PM Hun Sen, and Lao President Thongloun Sisoulith.[29] This summit was the first of its kind involving the leaders of three ruling parties to be held since the end of the Cold War. Moreover, the summit among the three party leaders was held again in Hanoi in early September 2023, suggesting that this could become a regular event.[30]
At the governmental level, the prime ministers and heads of state of the three nations frequently meet, both in specifically tailored events and on the sidelines of regional meetings. In 2010, then-President Nguyen Minh Triet visited both Laos and Cambodia in a single journey, emphasising the connection between the three countries and setting the precedent for other Vietnamese leaders to follow.[31] In late 2022, the national assemblies of the three countries concluded a tripartite agreement to initiate the biannual summit of the leaders of the three parliaments. The inaugural summit is scheduled for this year in Vientiane.[32] Additionally, people-to-people ties have deepened, with Vietnam offering scholarships and training programmes to thousands of cadres from Cambodia and Laos over the years.[33] Within border regions, Vietnamese mass organisations mobilise local residents to organise recurring cultural, sports and volunteer activities with neighbouring Cambodian and Laotian communities.
In essence, the three countries maintain regular and intensive interactions across all levels, a practice they do not have with other nations, including China.[34] Evidently, Vietnam’s strategy aims to establish, even if unofficially, a trilateral Cambodia-Laos-Vietnam (CLV) group. Considering all the cooperative frameworks, the frequency of high-level summits, and mutual commitments, the bond among CLV nations can be construed as a soft alliance network which aims to achieve common goals.
It is noteworthy that Hanoi has taken significant steps to demonstrate its perception of Cambodia and Laos as equals in their bilateral interactions. For example, at a reception for Cambodian Defence Minister Tea Banh and Lao Defence Minister Chansamone Chanyalath in December 2019, Vietnamese PM Nguyen Xuan Phuc emphasised the trilateral relationship of Vietnam, Cambodia, and Laos as a “three-legged stool” stabilised by mutual respect, equality and a win-win approach.[35] This stance is in stark contrast to China’s approach, which typically involves taking a dominant position with smaller nations. It also differs from Vietnam’s policy during the Cold War period.
Hanoi has also worked to strengthen its connections with its neighbours, not as an exclusive group but as an integral part of existing regional frameworks, particularly ASEAN. For example, Vietnam placed emphasis on the Mekong sub-region in ASEAN during its ASEAN chairmanship in 2020.[36] In addition, it has also involved other regional partners, such as Japan, South Korea, and the United States,[37] in collaboration with Laos and Cambodia. Accordingly, Japan has provided significant technical and financial aid for the CLV-DTA initiative.[38] In the Vietnam–Laos railway project, Hanoi has sought financial backing from South Korea and the Asian Development Bank. This strategy not only relieves some of Vietnam’s financial pressures but also builds positive perceptions from Vientiane and Phnom Penh as it reduces concerns of excessive reliance on Vietnam.
CONCLUSION
In the past decade, Vietnam has worked hard to foster unity within the CLV group amid China’s growing influence in Cambodia and Laos. Hanoi has leveraged its long-standing ties with political elites, vibrant grassroots economic connectivity and geographical proximity, to solidify the trilateral bonds. Rather than attempting to keep Cambodia and Laos as its “backyard”, Hanoi has made it clear that it wants to treat them as equals. It has also encouraged Phnom Penh and Vientiane to become more deeply integrated in regional frameworks and to engage with regional partners, thereby increasing their strategic autonomy and helping to address Vietnam’s security concerns.
Both Cambodia and Laos have strategic reasons for maintaining their strong relations with Vietnam as Hanoi offers certain benefits that other partners, including China, cannot match. For Laos, Vietnam provides the optimal route to the sea for commerce, while Cambodia stands to gain from its economic proximity to Vietnam. Furthermore, China-funded infrastructure projects have encumbered Laos and Cambodia with significant debts, making them susceptible to Beijing’s influence. Vietnam serves as a counterbalance to this dynamic, making strengthening bonds between the three countries a win-win situation for all. Moving forward, all three countries are motivated to strengthen their ties, especially as the regional geopolitical environment continues to be complex and uncertain. Economic integration is to be prioritised, as was highlighted at the tripartite party summit in September 2023, but defence-security and social connections will also be essential components.
ENDNOTES
For endnotes, please refer to the original pdf document.
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