Chapter 7 in Naval Modernisation in Southeast Asia
Editors: Till, Geoffrey, Atriandi Supriyanto, Ristian (Eds.)
Palgrave Macmillan, 2017

Chapter 7

Naval Development in Vietnam

Truong-Minh Vu and Nguyen The Phuong

Introduction

The Vietnam’s People Navy (VPN) has been currently attracting attention not only from foreign observers but also from the domestic commentators . Understanding the development and modernization of the armed forces and of the VPN in particular is essential in order to understand the future maritime strategy of Vietnam, in the context of increasing Chinese encroachment and assertiveness in the South China Sea. For a nation with limited resources like Vietnam, an effective navy becomes a tool of both defense and deterrence, a guarantee for security and prosperity in a new century where most of the country’s wealth is being derived from maritime trade and resources. In recent years, the VPN has received more and more capital to  improve its capabilities and combat readiness. One of the first military branches to be modernized, the VPN together with the Vietnam’s People Air Force and Air Defense Force are considered to be at the forefront in protecting the country’s sovereignty against turbulence and uncertainty at sea.

This chapter is divided into two separate sections. In the first section, the authors aim to shed light on the modernization process of the VPN since 2006. This process officially took off after the contract of two Gepard-class frigates was signed as a historic move to turn the VPN into a more capable seafaring navy. This news attracted much attention from the domestic audience  and debates broke out on which kind of armaments would possibly be built into the two new frigates. Before 2006, the VPN had in its service just a few patrol boats, torpedo boats and minesweepers which could only operate near the coastline. Their combat quality was also poor and insufficient as the VPN lacked appropriate equipment as well as investments. The 10-year modernization process which started from 2006, however, has transformed the VPN from one of the most outdated and incapable navies locally to that of a relatively modern and redoubtable naval force.

The second section tells another story, and this is a story which is rarely discussed sufficiently deeply or comprehensively. The authors aim, to develop some insights about the obstacles the VPN is currently facing in its modernisation efforts. Those hurdles are both subjective and objective, and thus require careful consideration and discussion from which meaningful solutions can be drawn out. This section also deliberately does not discuss in detail the weaknesses in the current force structure of VPN, as it could distract us from other fundamental and more important impediments hindering the modernization process.

The modernization process of the Vietnam’s People Navy 

This section will deal with the modernization process brought forward by the VPN, starting with the contract in which Vietnam decided to buy two Gepard-class frigates from Russia in 2006. This contract is considered to be the first modern arms deal within a decade and marked a turning point where Vietnamese navy officially began to modernize its force. Since then and up to 2016, the process was characterized by two major changes in the overall capabilities and strategic thinking of VPN.

The first change was when the navy began trying to improve both the size of its fleet and the quality of its personnel through acquiring warships from foreign contractors, improving its domestic shipbuilding capability as well as restructuring and creating new naval branches which had never existed before, such as submarines or naval aviation. The second change goes toe to toe with the first one in which Vietnamese naval strategists begin to redefine their approaches toward a new and robust regional security environment, as how to make use of its limited resources against the threat posed by the presence of a much more powerful navy.

Before 2011, the VPN was purely a “brown water” navy, having in service dozens of outdated Soviet frigates and patrol boats only capable of operating near the country’s coast line. The most modern warships of VPN until that time were five Petya-class anti-submarine frigates transferred by the Soviet Union at the end of 1970s (two Petya-III) and 1980s (three Petya-III) and one KBO-2000 class fast attack craft (FAC). Besides, there were several other classes of patrol boats, torpedo boats and minesweepers which simply deal with defense matters in shallow waters near Vietnam's main ports.

The first attempt of the VPN to modernize its surface fleet was a joint KBO-2000 project with Russia, in which the Russian Northern Project Design Bureau (SPKB) was in charge of conceptual design while the actual building of the ship was conducted in Ba Son Shipyard in Ho Chi Minh City.[1] Unfortunately, the first and only ship of this class (designated HQ-381) failed to meet the navy’s expectations. Following this attempt, Vietnam also acquired for the first time a modern type of anti-ship missile: Kh-35 Uran.

Later on, the VPN switched  its attention to another class of FAC, Project 1241.8 or Molniya-class FAC, fitted for hit and run tactics. Up to 2016, six Molniya-class FACs were commissioned (for an overall total of eight) and deployed in different naval regions across the country. The first two were built in Russia and the last four in Vietnam with technological support from Russian experts. It’s worth be noting that the VPN is currently negotiating with Vympel for the license to build additional four more Molniya-class FACs possibly equipped with advanced Kalibr-N or Brahmos missiles.[2] The increasing number of this FAC class to be built (up to at least 12 in total before 2020) reflects the thinking of the VPN about developing operational advantages in sea battle against larger opponents by using swarm tactics in an asymmetric scenario.

The decision to purchase two Gepard-class frigates in 2006 emphasized for the first time in the decades after the Vietnam War that the VPN was seriously pursuing the elevation of its surface fleet. It also marked the first time that the VPN possessed its own modern warships that were capable of operating throughout the vast areas of Vietnam’s sovereign waters. These two 2000-ton frigates, although not equipped with any ASW capabilities, on the one hand help the VPN to strengthen its capabilities in securing the country’s sovereign rights and building up deterrence in South China Sea; on the other hand it contributed to the VPN’s effort to improve its “military diplomacy” through a number of port calls to China, India and Singapore and exercises with other regional navies.[3] Additionally, two more Gepard-class frigates are being built with advanced ASW capability. They are expected to be delivered in 2016 and 2017. The VPN is also considering the procurement of two more frigates of this class, and  possibly to be built in Vietnam when the construction of the new Ba Son Shipyard is officially completed.

The approach of the VPN is gradually to absorb the necessary shipbuilding technique through various joint projects with other foreign contractors, especially those from Russia and the EU. The building of six Molniya-class FACs in Ba Son Shipyard is one typical example. Another would be a significant effort from two of the biggest military shipyards in Vietnam, Z-189 and Z-124 (Sông Thu Shipyard) with support from the Damen Group, to  build up to four 2000-ton DN-2000-class patrol vessels and the future 4000-ton DN-4000-class patrol vessel, the biggest vessel in service that Vietnamese Coast Guard would ever deploy.[4] Yet another example is the success of Z-173 (Hồng Hà Shipyard) in introducing the TT-400TP-class gunboat, a 400-ton “made-in-Vietnam” patrol gunboat which is totally built domestically though based on a foreign design.[5]

Shipbuilding capability in Vietnam, especially that of warships, is improving as the VPN tries to garner as much experience as it can by cooperating with experienced partners in the field. In 2007, Vietnam continued to improve its patrol capabilities by purchasing 4 Svetlyak-class patrol boats, increasing its current Svetlyak fleet to 6 boats in total. This move was considered as a transition as the VPN had to fill the gap in its patrol capability, especially in the water along its northern and southern coastline where many of Vietnamese fishermen are active while waiting for the TT-400TP project.

Vietnam also purchased, in 2006, two K-300P coast defense systems using an advanced type of supersonic anti-ship cruise missile: SS-N-26 “Strobile” (Yakhont). Dubbed as a “carrier killer”, K-300P is not the first coast defense missile system in the VPN’s arsenal, but it is considered the most modern. The latest add-on, K-300P together with 4K51 Rubezh (using SS-N-2 Styx missiles) and 4K44 Redut (using SS-N-3 Shaddock missiles) make up the triad “shield system” in protecting the country’s 3000-long coast against any aggressive amphibious attacks.

These missiles are perhaps the most feared deterrent tools not only because they have various operative ranges (varying from 50 km up to 550 km), but also due to the fact that the VPN successfully negotiated for licenses for domestic production of the latter two missiles.[6] It is also worth noting that Vietnam has also acquired the rights to produce its own versions of the Kh-35 Ural-E missile (SS-N-35 Switchblade) which is currently the main armament of various weapon platforms of the VPN such as the Molniya-class FAC or the single BPS-500 corvette. This license agreement covers three versions, not one, of the domestic Ural-E missile which includes an air-to-sea variant launched from Su-30MK2, a coastal defense variant which is possibly equipped in a future Bal-E coastal defense system, and an anti-ship variant known in its Vietnamese codename as KCT-15.[7]

The biggest defence deal came in 2009, when Vietnam surprisingly announced a 2-billion contract to purchase 6 Kilo-class submarines from Russia, its traditional arms-export partner. The last submarine was to be delivered in 2016. This contract also stipulated the training of Vietnamese submarine crews in Russia as well as including an additional one billion dollars in building of all necessary infrastructure and the delivery of armaments and other equipment. The VPN’s Kilo submarines are an updated version featuring better stealth technology, extended combat range and ability to strike land, surface and underwater targets.

Reports from SIPRI stated that Vietnam also at the same time ordered 50 3M-54 Klub missiles, 80 Type 53-65 and 80 TEST-71 torpedoes all used in its new Kilo-class submarines. The presence of these submarines in the VPN’s arsenal creates a unique opportunity for Vietnam to possess a credible naval deterrent to China in the South China Sea, in the form of a so-called area denial operation off Vietnamese coast and around its military bases in Spratly Islands.[8] In a recent development, Izvestia reported that the VPN intended to order the newest Russian search-and-rescue vessel of Project 21300S “Dolphin” in consequence of  its large size of submarine fleet.[9] This kind of vessel “not only can conduct rescue operations, but also can carry other important tasks, for example researching of the seabed, oceanographic or hydrographic works”.

In 2013, for the first time the Navy Aviation branch was established when the Ministry of Defense transferred the 954^th Air Brigade from the Air Force to the Navy. This brigade is mostly commissioned with Kamov Ka-27/28 helicopters, which could possibly engage in ASW. Those helicopters had also been sent to Sevastopol, Crimea for maintenance and upgrade in 2013 and 2014.[10] With six DHC-6 Twin Otter reconnaissance aircrafts purchased from Canada together with the support of two CASA C-212 patrol aircrafts from the Vietnamese Coast Guard, the VPN until now can deploy relatively modest and limited ASW and ISR capabilities.

The most recent modernizing effort came from the purchase of several EXTRA/ACCULAR rocket batteries from Israel, which were actually deployed on Vietnamese islands in the Spratly archipelago. The contracts also highlight another small trend in Vietnam’s current defense trajectory: turn into other foreign supporters for its naval equipment and weapon platforms, especially Israel. Those rocket batteries are really high-tech in nature and can boost the defense of Vietnamese outposts in the South China Sea, which until now still operate outdated and inaccurate coastal guns. Additionally, in order to increase the effectiveness and accuracy of the newly acquired EXTRA/ACCULAR batteries, the VPN also purchased several Obiter-2 UAVs and intends to order extra Obiter-3 UAVs systems as well from Israel.[11] Another example was the surprising project from VPN to arm several of its elite marine brigades with TAR-21 assault rifle and other modern equipment from Malaysia.

Not only has Israel become an important partner in Vietnam’s defense market, but other partners are also increasing their footholds. The purchase of the first sail training vessel from Poland is an interesting contract. HQ-286 Lê Quý Đôn as it was named, marks the first time that the VPN has in its service a vessel dedicated only for training purposes.[12] Future VPN personnel  definitely could benefit from the new training methodology as well as new curriculum, thus increasing their combat readiness and seafaring experience. Other notable examples of cooperation were a deal with the French Thales company in purchasing Coast Watcher 100 air-and-surface surveillance radars deployed for early warning, or the recently robust defense relationship between Vietnam and India, in which Ha Noi received a $500-million defense credit from New Delhi.[13]       Additionally, the two sides also discussed  the prospect of Vietnam buying a new anti-submarine torpedo, the Varunastra, and upgrading the current fleet of Petya-class ASW frigates for VPN.[14] Yet another example was the surprise order of Pluto Plus UUV from Gaymarine Electronics in Italy, in which VPN has integrated these UUVs alongside its own Sonya and Yurka-class minesweepers.[15]

Challenges of the Vietnam People’s Navy

The VPN’s modernizing efforts took off aggressively since 2009 at the time when China officially announced its “nine-dashed line,” although there is evidence that, the exact plan for this process was on the table rather earlier. Although the overall strength of the VPN has been increasing significantly since the last decade, several challenges are still in place slowing down the modernizing process and showing a huge gap in capabilities compared to those of other navies in the region. This section is intended to shed light on this little discussed topic.

Vietnam has never been truly a maritime power even it is definitely a coastal state. There were several well-known battles celebrated in history about how ancient Vietnamese army could defeat much stronger war fleets from its northern neighbor, but most of them actually took place on rivers and coastal areas. The first true “naval battle” between Vietnam and a foreign naval power probably took place in 1643, in which a naval force mostly comprising of small vessels with high mobility led by Lord Nguyen Phuc Lan and his son Nguyen Phuc Tan successfully defeated three warships from the Dutch East India Company assisting the force of Trinh Lord at that time. The Nguyen Dynasty later developed a small but modern navy of around 300 warships but their role was just defensive in nature.

The VPN was established in 1955. During the Vietnam War its  the primary mission of the navy was to patrol  coastal areas and  inland waterways. Apart from patrolling, the VPN also had the mission of transporting military supplies from the North to their allies in the South during the Vietnam War. A naval clash with the Chinese navy over controlling of Johnson Reef in Spratly Islands in 1988, which left 64 Vietnamese dead, highlighted the picture of a VPN lacking  modern warships and suitable tactics in dealing with more capable enemies. This event prompted the VPN to seriously consider modernizing its naval weapons and its overall capabilities.

Budget constraint has always been one of the most enduring challenges to the efforts of the VPN in modernizing its outdated arsenal. Impressive economic growth after Đổi Mới encouraged the state to engage actively in seeking for modern weapon platforms, but because of the budget issue as well as other development priorities, little efforts had been made to actually modernize the VPN until around 2005. According to SIPRI statistics, Vietnam’s defence budget has increased dramatically since 1988 to 2015. Between 2005 and 2015, the country’s military spending went up 115 per cent, considered the largest amongst Southeast Asian states, but the percentage of this budget accounted for just around two percent of total GDP at the same period. The latest figure in 2016 shows that total spending could reach nearly $US 5 billion.[16]

Unfortunately, the exact amount of money allocated to the VPN has always been shrouded in mystery, as well as those budgets for other military branches. Analysts and experts, even inside Vietnam, are facing immense difficulties in trying to figure out this data. It is not clear at the moment whether or not there is competition between different military branches for budget allocation, but one thing for sure: the VPN is not the only branch of the armed forces that will “proceed directly to modernization”. Former Minister of National Defense Phung Quang Thanh stated on August 2011 that the air force and air defense force, signal corps, technical surveillance and electronic warfare units also join the same direction.

In 2015, Lieutenant General Vo Van Tuan, Deputy Chief of the General Staff, announced that in the next five years the army will also be the focus of modernization.[17] More guests joining the party means less resources for all and it is very likely that the VPN has to compete with others such as the coast guard or the air force to gain its necessary funds. Additionally, Vietnam’s economy after the 2007/2008 global financial crisis has not been fully recovered. The Vietnamese government is still struggling with mountainous tasks to restructure the economy, thus any large-scale military buildup will require carefully consideration, as to how it can be balanced in given account sheets. As a consequence, the future modernization scenario of the VPN is not only dependent on China’s ongoing assertiveness in the South China Sea, but also on how strong the economy will become and how much budget it would possibly get.

Budget constraint has also made the VPN’s leaders  overcautious in seeking new weapon platforms. Reasonable prices of one platform as well as a good post-purchase policy are often considered essential. This also largely explains why most of Vietnam’s newest weaponry (93 per cent according to SIPRI in 2015), especially of the navy, comes from Russia. Only 7 per cent was imported from other markets, namely Ukraine, Romania, Czech Republic and Israel.[18] It is definitely understandable that Vietnamese armed forces has a long and successful tradition of utilizing Russian weapons, not only in real combat situations but also in maintenance and building spare parts. However, over-dependence on one source of weaponry supply creates several risks affecting the VPN’s capabilities in fully making use of its power.

·       First, the supply may be interrupted if some particular problems take place from the side of supplier, both objectively and subjectively. One example was such a delay in delivering the second pair of Gepard-class frigates due to current conflict between Russia and Ukraine, from which the turbines for those frigates, which made in Ukraine, could not be delivered on time. Delaying in the transfer of weapons has the potential to slow down the pace of exploiting new capabilities and ultimately affects other real-time defensive and offensive calculations on the ground.

·       Second, Russia is also trying to make similar weapon sales, such as those of the Kilo submarine or Su-30 fighter jets, or even more superior platforms to China. In 2015, for example, Russia signed a $2 billion contract to sell 24 Su-35 aircrafts to Beijing. In that same year, Moscow also reached an agreement to sell four to eight S-400 air-defense systems to China. Through the possession and deployment of similar or even more advanced weapon systems of the same source by China, the country that has serious territorial disputes with Vietnam, could pose serious risks, as Chinese technical experts can figure out the strengths and weaknesses of Vietnamese weapon systems, from which they can come up with effective counter-measures. Diversifying supply will minimize this risk.

·       Third, several Russian defense technologies, such as automation control, unmanned aerial vehicle, or advanced electronic warfare, lag behind that supplied by Western countries. These technologies are necessary for the VPN in ways that they could significantly improve its command and control, computers, communications, intelligence, surveillance and reconnaissance (C4ISR) capabilities. The American decision to fully lift a decades-old ban on sales of lethal arms to Vietnam was a major policy shift and certainly the VPN could make use of this opportunity to expand its supply on advanced naval weaponry.

·       Another challenge arises from the lacking of an open-debated naval strategy. Although Vietnam has its own maritime strategy announced in 2011 pointing out some orientations for developing the country’s marine future, little detail about how to particularly develop a sufficient navy was actually mentioned other than “to fully integrate economic and maritime national defense measures”. So far, no truly naval strategy has been publicized and the public seems highly unlikely to get any knowledge of such strategy due to its secrecy. Experts and analysts, even inside Vietnam, have been able to gather no more than fragmented information. Therefore, incomplete analyses are made only by observing the VPN’s foreign contracts and through several of its leaders’ statements. This thick fog of secrecy and lack of transparency surrounding the making of naval and related strategies limits the participation in the policy-making process of other intellectuals outside the military realm, thus creating unnecessary restrictions on how to make comprehensive and effective comments or providing feedback.

Unlike the Vietnamese ground force which has been praised as well-trained and highly experienced in combat, the VPN has almost never engaged in a large naval battle since its foundation. Lacking  proper training in modern naval warfare tactics and strategies is considered the most serious challenge for VPN, as its seamen are incapable of getting sufficient knowledge and experience about the new weapon systems themselves and how to operate them in a real combat situation. Naval exercises with live ammunition are rarely organized due to budget constraints. To overcome this hurdle, the VPN has been recently purchased several simulation training systems from Russia for some of its naval systems such as the Gepard-class frigate and Molniya-class FAC.[19] The deployment of VPN’s first sail training vessel could also help the Naval Academy to improve its training curriculum. However, the prospect of a qualified and well-organized training programme totally depends on future budget allocation as well as a clear policy setting in which naval training would play an important part in modernizing efforts.

The quality and quantity of the fleet is another major concern. The VPN’s surface fleet still has in its ranks mostly outdated and small vessels from the Soviet-era. With a vast exclusive economic zone and an increasing encroachment of much more advanced Chinese forces into its sovereign waters, the capabilities of the VPN to protect the country’s interests at sea are put at risk. The recent military buildup is apparently not enough to ensure  sufficient deterrence against  naval conflicts breaking out in the South China Sea. As said, the VPN needs both time and other resources to train its seamen in getting used of new weapon systems and tactics related to them.

The final challenge arises from the lack of an openly-debated naval strategy. Although Vietnam has its own maritime strategy announced in 2011 and pointing out some orientations for developing the country’s marine future, little detail about how to particularly develop a sufficient navy was actually provided other than “to fully integrate economic and maritime national defense measures”.[20] So far, no truly naval strategy has been publicized and the public seems highly unlikely to get any more knowledge of such strategy due to its secrecy. Experts and analysts, even inside Vietnam, have  been able to gather only fragmented information. Therefore, incomplete analyses are made based only on observation of the  VPN’s foreign contracts and through several of its leaders’ statements. This thick fog of secrecy and lack of transparency surrounding the making of naval and related strategies limits the participation in policy-making process of other intellectuals outside the military realm, thus creating unnecessary restrictions on how to make comprehensive and effective comments or providing feedback.