Vietnam to spend billions on islands amid China dispute

Vietnam has announced an 8.5-billion-dollar economic and defence development plan for a string of islands along its resource-rich coastline, as a broader sovereignty dispute simmers with China.

A copy of the plan, dated April 28, was obtained by AFP on Tuesday.

It calls for development over a 10-year period of a string of islands stretching from Phu Quoc near Cambodia in the southwest to Cat Ba off Haiphong in the north near China.

The document says authorities aim to boost seafood, tourism, agro-forestry and other sectors under the plan, which will require an estimated investment of 162.5 trillion dong (8.5 billion dollars) over 10 years to 2020.

"That's a significant wad of cash for Vietnam to be spending," said Ian Storey, a fellow at the Institute of Southeast Asian Studies in Singapore.

The plan also calls for increased investment in the islands' defences.

"It is essential to pay attention to security and defence tasks during arrangements for economic and civil projects on islands," the document says, calling for them to become an "outer defence stronghold".

The stronghold would include the Spratlys, the document says, although the South China Sea archipelago is not among the islands listed for the economic development initiative.

Vietnam and China are engaged in a long-running dispute over sovereignty of the Spratlys and another archipelago to the north, the Paracels, which China occupies.

The archipelagos are considered strategic outposts with potentially vast oil and gas reserves and rich fishing grounds.

Taiwan also claims the Paracels, while the Spratlys are claimed in full or in part by China and Vietnam as well as the Philippines, Malaysia, Brunei and Taiwan.

Over the past year Vietnam has reported cases of fishing boats and equipment being seized by China.

In the latest incident, reported by the state Vietnam News on Monday, China released 23 Vietnamese fishermen but allegedly kept one of their boats and gear worth 500 million dong. The men were arrested while fishing off the Paracels.

Among the islands included in Vietnam's development plan are Phu Quy and Con Dao, off southern Vietnam, where the country already produces oil and gas.

Last year a US State Department official said Beijing told US and other foreign oil companies to halt work with Vietnamese partners in the South China Sea or face consequences.

While Vietnam's island initiative appears to be about economic development, "another factor would be the need to protect these offshore oil and gas deposits" as well as fishing stocks, Storey said.

In December, Vietnam reached a major arms deal with Russia that was reported to involve the purchase of six submarines. Analysts said the deal aimed to bolster Vietnam's maritime claims against China.