Despite the ongoing Fukushima nuclear crisis, Prime Minister Yoshihiko Noda is expected to confirm Japan's commitment to exporting nuclear technology to Vietnam at a meeting with visiting Vietnamese Prime Minister Nguyen Tan Dung on Oct. 31.
The two leaders are also expected to discuss the pledges of official development assistance (ODA) for major infrastructure projects in Vietnam that Japan used to open the door to the nuclear deal.
In October 2010, Japan and Vietnam agreed to the export of technology for two nuclear plants costing a total of about 1 trillion yen ($13.2 billion).
Japanese government sources said Vietnamese government officials made clear at the time that their cooperation was dependent on help with seven high-priority infrastructure projects, including an expressway linking northern and southern Vietnam and a high-tech industrial park.
Sources said the Japanese negotiators agreed because they wanted specific results for their nuclear export strategy. The Democratic Party of Japan had made the export of nuclear technology a key element of its growth strategy after taking over the government in 2009, and Vietnam, which plans to construct 10 additional nuclear plants, is a key market.
Another sweetener for the Japanese side was a project to jointly develop rare earths extraction in Vietnam, which is also expected to be discussed by Noda and Dung. Japan is keen to find new sources of rare earths for its high-tech industries outside China, which currently dominates supplies.
Vietnam did not ask Japan to immediately provide assistance for the seven infrastructure projects in October, but the joint statement after the October deal mentioned Japanese participation in them alongside the nuclear and rare earth projects. High-ranking Japanese Foreign Ministry officials say the infrastructure projects could lead to investment by Japanese companies.
Noda and Dung are expected to agree at their meeting that Japan will provide yen loans for the construction of a high-tech industrial park in Hanoi.
Government sources said Japan's ODA is seen by officials as an important diplomatic tool, particularly because Japan cannot provide military assistance to foreign countries. However, the difficulty of balancing that diplomacy with the ostensible purpose of ODA, helping developing nations, is evident in the Vietnamese case. Since last year's agreement, Vietnam has asked for an even wider range of economic assistance.
Vietnam recently presented a list of 70 candidate projects it wants yen loans for.
The DPJ compiled a report in June 2010 about ODA, but did not clarify the relationship between the program and the government's economic and natural resources diplomacy.
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