Vietnam’s new BRICS partnership offers potential access to new financing and export markets but also carries risks. That said, it is only a small step forward and looks more like a pragmatic hedge than a major strategic shift.
Last week, it was announced that Vietnam has officially become a partner to the BRICS (Brazil, Russia, India, China, South Africa) grouping of nations, that has expanded since inception to now include Egypt, Ethiopia, Indonesia, Iran, and the United Arab Emirates as well.
The bloc, formed to act as a counter to Western domination of key global institutions like the World Bank (WB) and the International Monetary Fund (IMF), has been courting Vietnam for some time, and this recent announcement could be seen as somewhat of a coup.
That said, Vietnam will still not be a full member, and whether or not it ever will still remains an open question, on account of a number of conflicts and challenges.
For one, Vietnam has benefited from the international institutions that the BRICS are looking to depose.
The World Bank, in particular, has funded major infrastructure and development programs, including the Vietnam Rural Transport Project and the Mekong Delta Integrated Climate Resilience and Sustainable Livelihoods Project, for example.
Vietnam also utilised about US$1 billion in today’s money in IMF support in the 1990s through the start of the 2000s in order to finance the beginnings of its transition from a command to a market economy.
These institutions have also provided technical expertise and credibility that has helped to anchor Vietnam’s growing role in global trade and investment.
Moreover, one of the BRICS’ signature policies, dedollarization, conflicts with Vietnam’s own currency policy which keeps the Vietnamese dong on a managed peg against the greenback.
It’s also not a popular policy with Vietnam’s biggest buyer, the United States, with the current president, Donald Trump, suggesting attempts to create a new reserve currency to usurp the US dollar would not be welcomed.
“We are going to require a commitment from these seemingly hostile countries that they will neither create a new BRICS currency, nor back any other currency to replace the mighty U.S. dollar or, they will face 100 percent tariffs,” he said in a post on Truth Social back in January.
That is to say, there is a risk that, in joining the bloc, Vietnam might antagonise its key export market.
Notably, the United States bought roughly a third of Vietnam’s exports in 2024 (the BRICS nations combined accounted for about a fifth).
Moreover, the returns on this risk will likely be limited.
Underpinning and empowering the IMF and WB are shared values, particularly a belief in the rule of law.
They also have clear aims and objectives: the IMF to keep the global financial system stable, and the World Bank to support the long-term economic development of developing countries.
The BRICS, however, look to have simply come together to oppose the status quo.
That is to say, it’s not clear that the goals and aims of the BRICS nations necessarily align with those of Vietnam–in fact, it’s not even really clear that there is consensus on the goals and values within the BRICS.
All of that said, there may be some real benefits.
The potential for some very high tariffs on goods exported to the US has highlighted Vietnam’s need to diversify its export base.
BRICS countries are also more likely to buy goods that Vietnamese firms produce–rice, coffee, and fruits and vegetables, for example–as opposed to foreign goods manufactured in Vietnam.
They tend to have more lax import standards and looser enforcement, too.
Some consideration should also be given to the strong historical and political ties the country shares with BRICS states.
As a hangover from the Cold War, Vietnam has close relationships with both China and Russia.
Moreover, China accounts for most of the raw materials used to make the goods that Vietnam ships to the US, and Russia has an abundant, relatively cheap supply of fuel to sell on account of sanctions that may help to keep down the costs of fuelling Vietnam’s rapidly growing economy.
BRICS also has its own financing mechanism that Vietnam may now be able to access.
The bloc’s New Development Bank (NDB), as of January, had announced financing for 92 projects worth about US$32.8 billion.
It’s in this context that the decision to step inside the tent rather than stay out makes sense.
The reality is, however, that it may not amount to much in the face of the broad challenges that will need to be overcome before it can be an effective counter to Western hegemony in global finance.
In fact, there is an argument to be made that Vietnam’s ascension to the BRICS grouping, even if it is only as a partner, strengthens the bloc’s reputation and boosts its gravitas, more than Vietnam stands to gain.
That said, in a world where the global order is undergoing significant changes, it makes sense for countries to hedge their bets, which is what this looks to be for Vietnam: a foot in the door, just in case.