Australia and Vietnam: Partners in shaping our region for the 21st century

RMIT University, Ho Chi Minh City, Vietnam
13 April 2011

I am pleased to be here in Ho Chi Minh city on my first visit to Vietnam.

I come at a time of great global instability with the winds of change blowing across the Middle East. I come at a time of increasing global multi-polarity with the rise of China and the rise of India. I also come at a time when our region itself faces both great challenges and great opportunities.

We have of late faced great natural disasters. We face a region affected by nuclear proliferation — from North Korea to Iran. We face unresolved territorial disputes — the Korean Peninsula, the northern territories of Japan, the East China Sea, the South China Sea, the Thai-Cambodian border, the Sino-Indian border and then Kashmir.

At the same time our economies are now more integrated than at any previous time in our history.

All these great challenges of the 21st Century therefore place a premium on the institutions of cooperation.

Rather than resorting by default to the crude practices of confrontation and conflict so often seen in the 20th Century.

Because out of each of these great challenges springs great opportunity — if, that is, we are able to imagine different futures together, rather than being imprisoned by ancient prejudices.

The truth is we have it within our grasp to shape the institutions, the culture, the habits, the practices, even the methodology of cooperation and collaboration in our region.

And in so doing strengthen a regional rules-based order capable of providing the possibility of security, opportunity and prosperity for all — for great powers and for small powers alike, for aligned and non-aligned, for developed and developing countries alike.

And our two nations, Australia and Vietnam, vastly different in our histories, yet drawn together in the dynamism of the Asia Pacific region, the locus of global power for the 21st Century — together we have both the opportunity, and the responsibility, to shape such a secure, prosperous and sustainable future together.

Vietnam's march

This is my first visit to Vietnam as Foreign Minister.

I am conscious of the antiquity of this great land and its people. I am conscious I am here in an ancient civilisation and a political state with more than a millennium of continuous history. I am conscious also of the ancient wisdom of this land. A land where people are deeply aware of their place in history.

Or as the Vietnamese wisdom would perhaps put it: An qua nho ke trong cay [When eating the fruit, remember who planted the tree].

I am conscious of your victory over French imperialism, of national reunification in 1975.

This year marks a quarter century since 1986 when Vietnam's leaders unlocked a nascent economic power.

Spurred by the great economic reform program Doi Moi Vietnam's economy has been transformed.

In the preceding decade, Vietnam had been emerging from the shattering experience of war. It was struggling to its feet. Its per capita GDP was tiny at around US$200 in today's terms and its economy grew an average of just 3.7 per cent per year in the decade to 1986.

But under Doi Moi, markets were freed from state control, land reform was implemented, farmers were allowed to choose what to produce and in what quantity, food supply burgeoned and food rationing disappeared.

Vietnam changed from being dependent on foreign food imports to become the world's second largest rice exporter.

And, under Doi Moi, Vietnam opened its economy to the outside world: state trading company monopolies were abolished, international trade barriers were removed, and eventually — a further spur to domestic reform — Vietnam joined the WTO.
Vietnam is a trading nation: combined imports and exports now amount to the equivalent of 160 per cent of GDP.

These reforms have grown the country's economy fast, they have boosted its people's incomes fast and they have lifted tens of millions out of poverty.
GDP per capita has grown five or six fold since pre-reform days to around US$1200, meaning Vietnam is approaching the ranks of the world's middle-income nations.

The proportion of Vietnamese living in poverty has plummeted from 58 per cent in 1993 to around 13 per cent today.

The mortality rate of both infants and children under five has halved since 1990.
Polio has been eradicated, measles and maternal and neonatal tetanus have been nearly eradicated, the impact of malaria has been reduced.

Life expectancy has increased from 49 years in 1970 to 75 in 2010.
Nearly 97 per cent of children are enrolled in primary schools, up from 87 per cent in 1990 bringing major education gains.

Vietnam's people are connected to each other and the world: the country has 98 million mobile phones, more phones than there are people, and 23 million internet users.

These are enormous achievements. They mean the Vietnam of today is vastly different from that of 36 years ago. They have set Vietnam a potential trajectory to join the big economies of the world by mid century.

A decade ago, Goldman Sachs coined the concept BRICs — to capture the shift in power under way to the great emerging economies including Brazil, India and China.
Last year, the Economist coined a new term, the CIVETS, to identify the next tier of six emerging economies most likely to deliver sustained long-term growth.

The V stands for Vietnam, which because of its recent achievements deserves its place alongside Colombia, Indonesia, Egypt, Turkey and South Africa as one of the markets of the future.

Vietnam is projected to maintain growth above 7 per cent for the next five years, and maintain growth well above 5 per cent for the next 20.

Vietnam is likely to attract US$10 billion in foreign direct investment this year, up tenfold from just a decade ago, and likely to increase to US$15 billion by 2015.
Vietnam's leadership deserves credit, Vietnam's entrepreneurs and business community deserve credit, and Vietnam's people deserve credit.

For it is their determination and their hard work that have delivered the country significant success.

Vietnam and the region

As Vietnam's economy has grown, so too has its stature and role in the region and the wider world.

In 2006, Vietnam welcomed the leaders of the region as it hosted the APEC leaders meeting. In 2007 it acceded to the World Trade Organisation. In 2008 and 2009 it held a seat on the UN Security Council. In 2010 it led ASEAN and hosted the East Asia Summit.

Vietnam is an ancient nation, but its people are young, its economy fast-growing, and its "friends to all" diplomacy dynamic. Vietnam will truly play a significant role in the collective leadership of this region in this 21st century.

Like Vietnam itself, the region has enjoyed sustained, unprecedented growth over the past four decades.

This growth is changing the world in which we live: it is seeing the global centre of strategic and economic gravity shift to our region.

Let's just contemplate the following figures for the moment.

In the 25 years from 1990 to 2015, the IMF predicts that the contribution that East Asia plus India make to global output will rise from 20 per cent in 1990 to nearly 30 per cent in 2015.

By 2030 we may account for 40 per cent of world GDP.

China, the region's largest economy, will have grown 25 fold in the 25 years to 2015, and will become the world's largest economy by 2030 and possibly earlier.
On some projections, India too may eventually rival the United States in terms of pure economic size, perhaps around the middle of this century.

Rising economic power will translate in time to rising military spending and power in our region as well.

China, for example, spends six times what it did on defence 20 years ago. Others will increase their defence spending also.

The world is much less polar than it was forty years ago. Power relativities are much more fluid. And so much more will need to be negotiated among major and middle powers in this 21st century.

This is especially so in our East Asian region.

The countries of our region will therefore need to frame a common sense of rules-based cooperation across our region — across the fields of political, economic and especially security relations — if we are to preserve the prosperity we have won together so far.

Let us never forget war destroys everything.

History teaches us that prosperity can literally be reduced to ashes in the absence of security.

As our European friends have learnt from their own bitter experience across the centuries, we need to develop the mechanisms and habits of cooperation to preserve our collective security.

Particularly when our wider region is littered with such a vast array of unresolved territorial disputes.

In this context, ASEAN has led the way. In the 1970s this region of 10 countries was riven by strife. 35 years later, ASEAN has brought a degree of regional trust, peace and development that was unimaginable back then.

It has achieved a genuine common understanding of security across what remain ten vastly different political entities.

What we now need is to expand that sense of common security understanding across the broader region, to begin to carve out a regional rules-based order for the 21st Century.

To do that, we need the right mechanisms, the right regional architecture to provide the right forums for confident, forthright dialogue among regional states on the key security challenges we face.

Both Australia and Vietnam understand this deeply, which is why we have worked together so hard to develop the East Asia Summit, of which we are foundation members.

And why Vietnam's achievements as Chair of ASEAN and host of the East Asia Summit in Hanoi last year are so significant.

Vietnam made us all focus on the "rules of the road" in Asia — the conduct we expect of all countries in this region if we are all to get along successfully.
It made clear the sort of approach we need to take to solving tensions over the South China Sea.

The Vietnam Summit also made us focus on our region's architecture, and the need to expand the East Asia Summit:

• so that we have an institution comprising all the key players of our region including the ASEAN states, but also the United States, China, Japan, the ROK, India, Russia, Australia and New Zealand;
• so that we have an institution with a mandate to cooperate on the full range of political, security and economic challenges confronting the region;
• and so that we have an institution meeting at summit level that is capable of making strategic decisions for our region's future.

This indeed was Australia's core objective in proposing the concept of an Asia-Pacific community.

Last year, under Vietnamese leadership, the membership of the EAS and the ASEAN+8 Defence Ministers' Meeting was indeed expanded.
As Foreign Minister Khiem said in October last year:
"Inviting Russia and the US to join the EAS is a strategic decision by ASEAN to turn the EAS into a forum for co-operation at a higher level with broader scope in the region."
At last the broader region now has a forum with the right membership, the right mandate.

Now we need to work on strengthening this institution's agenda.
The forward agenda should embrace:
• a more substantive leaders' dialogue on security issues;
• more direct links to the ASEAN+8 Defence Ministers' Meeting and the work of the ASEAN Regional Forum;
• a greater role for the EAS itself on practical security cooperation.

I pay tribute to Vietnam's leadership across the vast array of these challenges.
Leadership like this will see our region produce strong, outward-looking nations, confident to interact with each other through the habits of dialogue and cooperation that are our best guarantee of security.

Vietnam's challenges

The last quarter century of Vietnam's history has seen such phenomenal progress; where will the next quarter century take us?

What will the Vietnam of 2035 look like? Because it is to this future Vietnam that the students of this great university will be making their contribution.
The people of any era face the challenge of further reform.

In the mid 1980s Australia's Government faced the challenge of modernising what had been a highly protected economy, hiding behind high tariff walls and a fixed exchange rate.

Reforms in the 1980s and 90s — floating the dollar, reducing tariffs to close to zero, opening our economy to global competition, domestic competition policy reform, an independent monetary policy, maintaining fiscal discipline and continuing program of microeconomic reform have provided the platform for two decades of uninterrupted economic growth, notwithstanding the global financial crisis when every other major developed economy went into recession.

Ahead of Australia is further vital reform — including pricing carbon, and building the infrastructure of the 21st Century.

Economic reform is a never ending process.

In Vietnam it is no different.

The reforms of a quarter century ago have given Vietnam a sound platform for growth. But it is also important to see the Vietnamese leadership embracing a new wave of reform for the future.

The policy settings of the first quarter century of economic reform are being updated:
• To put in place the sort of financial system that will ensure its financial health;
• To build the infrastructure in its cities and across its regions that will ensure maximum productivity in both urban and rural areas, and allow it to tap into markets in ASEAN and further abroad; and
• To build up its skills base so that it takes maximum benefit from the globalisation to which it has opened itself.

Your young, dynamic population will approach 100 million by 2020.
This represents an enormous opportunity if their productive potential can be fully realised.

And they, like the youth of the world, will want their young voices heard in an increasingly pluralist system where continuing human rights challenges will need to be addressed.

Australia: A new partnership with Vietnam

Australia wishes to build a new partnership with Vietnam for the long-term future.
Australia is the world's sixth-largest nation by land mass. We are the world's 13th largest economy. We are the 4th largest economy in Asia. We are a founding member of the United Nations, the G20, APEC, the ARF and the EAS. We are also members or observers of most of the major councils of the world.

Australia is a middle power with global interests — and with pronounced regional interests.

We are committed to the principle of good international citizenship through which we seek to enhance the global and regional rules-based order. In security, in politics, in the economy, in humanitarian intervention, in development and in the environment.
It is in our individual and collective interests to enhance a rules-based order across all these domains. The forces of globalisation require that we do so. The alternative is anarchy.

In Australia's case we seek wherever we can to enhance the rules-based order through the agency of creative middle power diplomacy.
In recent years we have done so, in partnership with others:
• in the Cambodian peace settlement;
• the negotiations of the chemical weapons convention and the Comprehensive Test Ban Treaty;
• the establishment of the Cairns Group of free trading nations;
• the establishment of the G20;
• advancing the concept of an Asian Pacific Community; and
• most recently, in the international diplomacy in support of a Libyan no-fly-zone.

We have also sought to be diplomatically active across our own region.
We were ASEAN's first foreign dialogue partner. Our country and people are integrally linked to the high cultures and great economies of Asia. More than two-thirds of Australia's trade is with Asia, and Asia buys three-quarters of Australia's goods for export.

And so the success of ASEAN and the greater East Asian region is core to Australia's own success.

Australia's deep commitment to the region is central to our national interests. And Vietnam's success is important to Australia's success.

Australia and Vietnam established diplomatic relations in 1973, towards the end of the Vietnam War.

The return in 2009 of the remains of the last Australians unaccounted for in that terrible conflict has drawn a line under that chapter in our shared history, though the terrible sacrifice on both sides in that war will never be forgotten.

The relationship we now share could not be more different from the relationship we began 38 years ago.

Indeed, Australia recognises Vietnam as one of our most important partnerships in the region — vital now, more vital the further we press into the 21st century.
I'm pleased that Australia's interest is reciprocated by Vietnam.

That's why we have greatly upgraded the relationship, most clearly through the 2009 Comprehensive Partnership Agreement, the signing of which I witnessed as Prime Minister in Canberra with General Secretary Nong Duc Manh.

Within this framework, we are building a truly comprehensive cooperation.
• First, political and security cooperation both bilaterally and multilaterally through the ARF, the ADMM and the EAS.
• Second, economic cooperation through trade, investment, and development cooperation.
• Third, people to people cooperation through the great bridge of education.

These are three strong pillars in the new Comprehensive Partnership we framed together in 2009.
In the last three years, we have welcomed:
• General Secretary Manh;
• Prime Minister Dung; and
• National Assembly Chairman, and now General Secretary Trong.

I have spoken already of the close political and security cooperation we are pursuing together in the East Asia Summit and the ASEAN + 8 Defence Ministers Meeting to develop these institutions' agenda.

Bilaterally we are also deepening defence ties through our recent Defence MOU.
We plan to strengthen our joint training activities.

Already Australia has been training Vietnamese officers for over 10 years, providing language training to over 96 in Vietnam, and further training at Australian military colleges to a further 60.

In trade terms, we are both parties to the recent Australia New Zealand ASEAN Free Trade Agreement which entered into force on 1 January last year. This is for both Vietnam and Australia a major step forward in reducing transaction costs for the trade of goods and services over an area with a combined population of 600 million and a combined economy of US$3.2 trillion.

And Australia is pleased to be working with Vietnam in negotiations for the Trans Pacific Partnership. This partnership of nine nations including the United States, with a combined economy of US$17 trillion is already hugely significant, but will provide the platform for an eventual free trade area for the Asia-Pacific.
We have one of the fastest-growing aid programs of any developed economy, with a budget that has doubled over the past five years and is projected to double again by 2015.

Through Australia's greatly expanded aid program for Vietnam, Australia seeks to support Vietnam reach its development goals — symbolised by both the My Thuan Bridge and the Cao Lanh Bridge and the fact that we are the largest foreign provider of scholarships to Vietnam worldwide.

We've helped build roads, irrigation and electricity schemes, health centres, and cultural houses. This infrastructure has benefited nearly 9 million people.

In the area of governance, Australia is supporting trade policy training that is helping Vietnam's public service achieve its trade reform agenda.

We are providing training also to promote the openness and accountability that can help guard against corruption.

We recognise the improvements that Vietnam has made in human rights in recent years. This is especially the case in advancing socio-economic rights, the rights of women and freedom of religion. And so we welcome the 2010 appointment of a non-resident papal envoy to Vietnam.

However we remain concerned at the imprisonment of people for the peaceful expression of their political, religious or other beliefs.

Australia values its ongoing bilateral human rights dialogue with Vietnam; we held the seventh round of talks with Vietnamese officials in February.

Greater openness in governance and in the field of human rights more generally will benefit Vietnam.

Australia is also working hard to help Vietnam build the infrastructure it needs to reach its potential.

As noted already, our biggest aid project in Vietnam — a $160 million contribution to the design and construction of the Cao Lanh bridge — exemplifies this.
The bridge over a major Mekong tributary will be a key part of major new road infrastructure — the Central Mekong Delta Connectivity Project — that will link five million people to markets across the Delta and into greater South East Asia.
Replacing river ferries, the productivity boost to the region will be enormous.
Our assistance builds on Australia's earlier contribution to the My Thuan bridge. Opened in 2000, this bridge now carries 5 million vehicles per year.
Australia is also helping strengthen the environmental sustainability of Vietnam's economy.

Like Australia, Vietnam will feel the impact of climate change, especially in the rich rice-growing Mekong Delta region. Australia is assisting farmers of the Delta adapt to climate change through the Australian Centre for International Agricultural Research which is researching rice strains that can tolerate the salty conditions likely accompany sea level rise in the Mekong Delta.

If harnessing maximum productivity from a young population of 100 million will be Vietnam's greatest economic challenge, perhaps the best pathway forward will be developing the skill base of this enormous workforce.

I know Vietnam has already set itself an impressive objective: to see Vietnam's education system comparable to world standards by 2020. Right across the full spectrum of learning — from early childhood, to schooling, to technical education, tertiary education and ongoing adult education.

The Higher Education goals are particularly impressive: one of them is to train 20 000 PhD students by 2020, 10 000 of them overseas.

As Australia's Foreign Minister, I am proud that Australia is playing such a key role in supporting this higher education revolution, through:
• 400 higher education scholarships per year for high performing Vietnamese students to study in Australia under the Australia Asia Awards
o these complement the 100 scholarships that the Vietnamese Government itself issues to its students to study in Australia
• 26 000 Vietnamese student enrolments in schools, technical colleges, English education and universities, overwhelmingly self-funded;
• And 15 000 Vietnamese students studying Australian courses right here in Vietnam.

Conclusion

2011 is a milestone for this great institution.

RMIT was established 138 years ago in Melbourne.

It is now 10 years since RMIT established a university here in Vietnam, the first foreign university to do so.

We are proud of that fact.
From quite humble beginnings — I understand early MBA students trudged across the rice paddies to class in wearing gumboots — you have now developed first-class facilities on your campuses in both Ho Chi Minh and Hanoi, and produced 2500 proud graduates.
 

I know the Prime Minister was delighted to open your new campus in Hanoi last October.

I am just as pleased to open your expanded campus facilities today in Ho Chi Minh.
I acknowledge the vision and hard work of RMIT which has brought its considerable expertise to Vietnam.
 

I acknowledge the generosity of Atlantic Philanthropies, without whose grants these facilities would not have been possible.

And I acknowledge the farsightedness of Vietnamese authorities here and in Hanoi, who have had the wisdom to develop a bold, long-term plan to invest in the skilling up of young Vietnamese students, including through international universities like this one.

And so this institution, RMIT Vietnam, which boasts 6 000 of these students, is an important part of the great skilling-up of Vietnam's young people.

You students can be proud of your achievements in qualifying to learn at a fine Australian and Vietnamese institution.

You can be proud of the achievements of your country.

You should be excited about your country's future.

The next part of this story — fulfilling the growth potential of your nation through infrastructure, skills development, economic reform and greater opening up of the country as a whole — will be a story written by young Vietnamese like you.
It is for your generation to seize the opportunity presented by your education, by your country's growing role, by our region's emergence as the centre of global economic and strategic weight.

It is for graduates of your generation to contribute to the leading businesses of the region.

To fill the scholarly journals of the region and the world.
To make the research breakthroughs that will bring technological advance to the region.

I am confident in Vietnam, I am confident in you, and I am confident that RMIT Vietnam will deliver you the very best possible training for your role in this dynamic 21st century- the century of the Asia Pacific.