Australia-Vietnam: An Ambassador’s Reflection

By John McCarthy AO, Former Australian Diplomat

In a speech to an Australia-Vietnam forum, John McCarthy, who served as ambassador to Vietnam between 1981 and 1983, reflects on the historical trajectory of 50 years of official diplomatic relations.

The Australia-Vietnam relationship has come a long way.

It is no secret that we began in opposite camps.

For the first generation after the Pacific war, the region was dominated by the Cold War and by the process of decolonisation.

Vietnam was seen in Australia as the major fulcrum for great power competition in Southeast Asia. This prompted us to side with the United States when it intervened in Vietnam.

Our role in that war did not prevent us from recognising Vietnam’s inherent dynamism as a nation which, having emerged from the dying embers of the Pacific War, fought successfully against France, the USA, and China.

Equally, few in Australia would deny the greatness of Vietnam’s leadership in that era.

President Ho Chi Minh was of course pre-eminent. It was a privilege of my time as ambassador that I was able to converse with some of President Ho’s inner circle such as Pham Van Dong and Truong Chinh.

Vietnam could never be taken lightly. It always counted.

The second phase in our relationship was from reunification in 1975 until the Cambodia settlement in 1991.

For Vietnam this was a time of adjustment.

This period was notable for famine, the task of blending the North and South, the war in Cambodia and the border war with China, and continued barriers in Vietnam’s relationships with Southeast Asia and parts of the West.

These were difficult days. Vietnam was destitute. Having won the war, would Vietnam win the peace?

Well, it did.

The Doi Moi economic reforms driven by Truong Chinh at the sixth party congress of 1986 led to a surge of economic growth.

In 1989, after years of food shortages, Vietnam exported rice – 1.4 million tonnes of it.

For the first twenty years after Doi Moi, GDP grew at an average of 6.5 percent per annum.

Over this second phase, Vietnam sought to heal the breaches with the West and ASEAN that had occurred following Vietnam’s intervention in Cambodia.

It is not unreasonable to suggest that the visit to Hanoi by then Australian foreign minister Bill Hayden in 1983 and the return visit to Australia in 1984 by Vietnam’s formidable Nguyen Co Thach laid some of the groundwork not only for a stronger Vietnam-Australian partnership, but for a more accommodating relationship between Vietnam and the West.

That said, it was the end of the Cold War that brought real fluidity to global and regional relationships.

In 1991, the Paris Peace Accords on Cambodia effectively closed the last chapter of what were then known as the Indochina wars.

Australia’s then foreign minister, Gareth Evans, and his Indonesian counterpart, Ali Alatas, worked closely with Nguyen Co Thach on the shape of the Accords.

Vietnam normalised relations with China in 1991 and the United States in 1995.

The third phase of our relationship ran from the mid-nineties to roughly the present time.

Vietnam now is one of the leading countries in the region.

According to the World Bank, in 2022 GDP per capita was in current dollars USD 4,163.

This was about halfway between the Philippines and Indonesia.

Not bad for a country which in the mid-1980s was almost in penury!

The diversification of Vietnam’s relationships has added to its international profile. Vietnam has been active in ASEAN and on the UN Security Council.

Hanoi’s commitment to global economic integration and trade liberalisation has been demonstrated in APEC, which Vietnam hosted in 2017, and in its approach to more recent economic groupings – the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Regional Comprehensive Economic Partnership (RCEP).

Vietnam’s friends admire the balance with which it navigates the complex geopolitical shoals which surround the country.

Vietnam’s international security policy stands out for its wisdom, determination and perhaps, above all, calibration.

What then awaits us in the future - the phase that we are now entering?

In Australia, we see Vietnam as a country with gravitas - in the top tier of our relationships.

But we need to put more substance into our economic relationship.

Australia was a pioneer investor in Vietnam. We built the first undersea cable, satellite ground stations, and high voltage transmission lines. The first foreign bank, university and law firm were also Australian.

We lost our edge as Vietnam’s economy moved into large scale, labour intensive, manufacturing.

As Vietnam progresses into high-tech and service industries, we hope again to become a serious investor.

In international commerce, a country should always lead with its strong cards - where it already has a reputation.

For Australia that means engaging with partners on agriculture, water, mining technology, health, and education. But we must look also to the new skills: particularly those which relate to energy and climate.

It is for Australia to generate interest amongst our business community about opportunities in Vietnam.

This process will be immeasurably aided as Vietnam implements its reform program.

Global capital is interested in Vietnam and likes what it sees. But decision-making processes and regulatory barriers still need to be seriously addressed.

Indeed, I ask myself if Vietnam is perhaps not ready for a Doi Moi Mark 2?

On international security policy, I don’t have advice to offer Vietnam. Suffice to say we are strengthening bilateral defence and security cooperation and that a secure Vietnam is in Australia’s interest.

But international engagement depends only partly on what governments do.

Much also depends on a myriad of attitudes formed and actions taken at a popular level. Countries are better able to engage with each other if their populations are involved. Such mutual involvement is stimulated by knowledge of each other.

I have two points here.

First, many in Australia are concerned about the decline in our own community of knowledge of our region.

While we are a multicultural country, our systems and outlook are those of a western – and anglophone – democracy.

But our foreign policy challenge is different to most other western democracies.

This is because the countries that are closest to us have systems, cultures and historical backgrounds quite different to our own.

This difference also highlights the importance for Australia of institutions such as the Vietnam-Australia Centre of which the remit is to promote knowledge in each country of the other.

Second, Australia, as a multicultural country, is the home of many diasporas.

This national composition enriches us and enables us to forge international links which would otherwise elude us.

But particularly where parts of a diaspora have perspectives that differ from those of the government of their country of origin, problems can arise, which requires forbearance by all parties.

The Greek physician, Hippocrates, was at least partly right when he said: “time heals all wounds.”

So, we are very different countries. The circumstances of the second half of the twentieth century brought us together. Dare I say it, the circumstances of the twenty-first century will keep us there.

That is our great challenge and our great opportunity.

John McCarthy is the former ambassador to Vietnam and several other countries. He is a Vice Chancellor’s Fellow at the University of Melbourne and a senior adviser to Asialink.

This is an edited version of the keynote speech to the Vietnam Australia Forum held at the Vietnam Australia Centre, Ho Chi Minh National Academy of Politics, in Hanoi on 22 August.