Vietnam Increases Defense Spending To $5 Billion Amid Territorial Disputes With China

Vietnam has dramatically increased its military spending in recent years to $5 billion in response to territorial disputes with China.

The southeast Asian nation boosted its defense budget by 113 percent between between 2004 and 2013, which accounts for the largest increase in the region, and Vietnam may be looking to buy billions more in weapons very soon. President Obama announced the lifting of a decades-old arms embargo against the country at a joint press conference with Vietnamese President Tran Dai Quang on Monday. Vietnam’s military spending has been around 4 percent of its budget for most of the past decade, but now has increased to 8 percent, according to CNN Money.

“Last year, Vietnam’s military expenditures totaled $4.4 billion, or 8% of total government spending, according to the Stockholm International Peace Research Institute. That’s a dramatic rise from 2005, when Vietnam spent roughly $1 billion — though the numbers are a bit fuzzy because the government doesn’t publicize its defense budget.”

The country’s military budget is expected to increase to $5 billion this year, and to $6.2 billion by 2020. The country was number 12 on the list of top arms importers in the world between the years 2010 and 2014 with around 80 percent of its military purchases coming from Russia, with whom it has had strong ties since the Cold War. However, simply because Vietnam is no longer under American weapons sanctions doesn’t mean it will start buying the latest in military technology from the U.S., as Obama stressed, according to the Fiscal Times.

“Every sale that we make to everybody is viewed as a particular transaction, and we examine what’s appropriate and what’s not, and there’s some very close allies of ours where we may not make a particular sale until we have a better sense of how that piece of equipment may end up being used,” Obama said. “So we’re going to continue to engage in the case-by-case evaluations of these sales.”

Given the conflicts with China in the wake of its aggressive moves to expand its foothold in the South China Sea, it comes as no surprise Vietnam wants to buy arms. An estimated $1.6 billion will be earmarked for defense purchases this year, and is set to increase to $2 billion by 2020 as the defense budget increases. Vietnam plans to use it to modernize its maritime capabilities, according to the Asia Maritime Transparency Initiative, which notes that the year 2011 marked a turning point for Vietnamese military aims.

“That year the Central Committee of the ruling Communist Party issued a detailed maritime strategy for 2011-2020, making the protection of maritime sovereignty and the maritime economy key national security pillars. Vietnam has a 2,000-mile coastline facing the South China Sea and 50 percent of its population living along the coast, and the government sees its largest security threat as external and maritime in nature.”

Vietnam is especially interested in beefing up its surface and submarine fleets, as well as its anti-ship batteries, missiles, and other coastal defenses. Hanoi is expected to purchase more combat aircraft and naval patrol craft. This change in Vietnam’s strategy may mean closer ties to the U.S. and Japan, who have also become concerned about China’s growing assertiveness in the South China Sea.

Already, the U.S. is training their coast guard personnel. Washington approved an $18 million maritime security assistance package for Vietnam back in 2013, and is currently sending six patrol vessels to help counter Chinese influence. CNN reported that Vietnam may be considering purchases from Lockheed Martin.

“Some of the equipment Vietnam is believed to be reviewing for purchase include Lockheed Martin’s (LOCKHE) P-3 Orion maritime patrol aircraft and Raytheon (RTN) coastal radar systems, IHS said. Vietnam is also expected to boost its maritime security with patrol aircraft, coastal radars and naval craft. But the government is likely to need some financing aid to complete the purchases. Much of the business is expected to include some collaboration. In recent years, Vietnam has pushed for joint production or R&D to help upgrade its domestic capabilities.”

The United States currently leads the world in military spending with a budget of $596 billion in 2015. China comes in second place at $215 billion last year.

[Image via Bojan Pavlukovic /]