Russia to stress Vietnam ties

Vietnam hopes tourism can lift economic growth

By Clare Arthurs BBC Hanoi Correspondent

Russia's Prime Minister Mikhail Kasyanov is expected to sign a number of agreements with Vietnam on energy and health during a two-day visit, due to begin late on Tuesday.

Correspondents say he is likely to discuss Russia's early departure from its leased, deep sea port of Cam Ranh Bay in the south of Vietnam.

The use of the port dates back to the days when the two countries were Cold War allies.

Russia still hopes to sell more of its guns and planes to Vietnam and continuing military co-operation remains a strong bond between the two old friends.

Russia's decision to leave the Cam Ranh port two years before its lease expires is to save money. The remaining issue is exactly when the pullout will be completed.

Hanoi says the port will not be leased again but kept for Vietnam's own development.

Russia has an important role in Vietnam's economic progress. Major ties between the two partners are in the oil, gas and power sectors.

Debt write-off

One project still on the drawing board is a $1.3bn plant, Vietnam's first oil refinery. Russia has blamed the delays on tendering problems and on funding and the project could be on Mr Kasyanov's agenda.

Last year, during a visit by the President Vladimir Putin, Russia forgave much of the massive Soviet era debt owed by Vietnam - estimated at $11bn. About a quarter of that will be repaid over about 20 years, partly through increased trade.

As well as oil and gas ventures, Russia buys coffee and rice from Vietnam.

New projects in fuel and energy are expected to further boost bilateral trade, which on Russian figures reached more than $500m last year.