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Cablegate: Ambassador's Meetings with State Bank, Finance On U.S.

VZCZCXRO1170
PP RUEHHM
DE RUEHHI #0936/01 1411038
ZNR UUUUU ZZH
P 211038Z MAY 07
FM AMEMBASSY HANOI
TO RUEHC/SECSTATE WASHDC PRIORITY 5418
INFO RUEHHM/AMCONSUL HO CHI MINH 3066
RUEHBK/AMEMBASSY BANGKOK 5696
RUEHGP/AMEMBASSY SINGAPORE 2350
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUEAWJA/DEPT OF JUSTICE WASHINGTON DC

UNCLAS SECTION 01 OF 02 HANOI 000936

SIPDIS

DEPT FOR EAP/MLS, EB/IFD, CA/OCS, CA/OCS/CI, F, INL AND L
USAID FOR ANE
HO CHI MINH CITY FOR CONS AND DHS OIC
DEPT PASS USTR FOR D BISBEE
BANGKOK FOR PEACE CORPS AND USAID/RDMA
SINGAPORE FOR TREASURY S BAKER
DEPT PLEASE PASS FED RESERVE SAN FRANCISCO FOR D FINEMAN

SENSITIVE BUT UNCLASSIFIED
SIPDIS

E.O. 12958: N/A
TAGS: EFIN EAID ECON PREL VM
SUBJECT: AMBASSADOR'S MEETINGS WITH STATE BANK, FINANCE ON U.S.
ASSISTANCE PROGRAMS


(U) THIS CABLE IS SENSITIVE BUT UNCLASSIFIED. NOT FOR INTERNET.

REF: HANOI 932

1. (SBU) Summary: The Ambassador reviewed ongoing U.S. financial
sector technical assistance programs in separate meetings May 17 and
18 with State Bank Governor Le Duc Thuy and the Finance Minister Vu
Van Ninh. Both officials expressed appreciation for and asked for
more assistance. Governor Thuy also provided his views on the
evolution of his institution. These meetings also covered other
topics, and this cable should be read in conjunction with reftel.
End Summary.

2. (SBU) The Ambassador used both meetings to highlight ongoing
U.S. assistance programs underway with the Finance Ministry and
State Bank. For Finance, he described the status of Treasury's
response to Finance Vice Minister Tran Xuan Ha's January request for
technical assistance in taxation, insurance regulation, credit
guarantee programs and banking reform. The Ambassador made specific
reference to ongoing discussions regarding a State/INL project to
assist the Vietnam's Customs Service (part of MOF) in enforcing
intellectual property rights regulations. The Ambassador noted an
agreement to this effect could be highlighted during President
Triet's proposed June visit to the United States. At the State
Bank, he cited USAID's Support for Trade Acceleration (STAR) project
and its solid track record of good relationships, and called for
continued close cooperation.

3. (SBU) State Bank Governor Le Duc Thuy and Finance Minister Vu
Van Ninh were appreciative of U.S. assistance and support in their
responses. Indeed, Minister Ninh's opening remarks concentrated on
thanking the United States for its support to Vietnam's WTO
application, PNTR, U.S. investment and its help in making Vietnam a
market-oriented economy. SBV Governor Thuy noted the value of
USAID/STAR's current leading role in providing technical assistance
to formulate four key banking sector laws on the central bank,
credit institutions, financial supervision and deposit insurance.

4. (SBU) Minister Ninh was pleased about U.S. Treasury's response
to his Ministry's request and commented favorably on the prospects
for further cooperation and help from Treasury. Clearly prepared
for this topic, he ticked off areas for increased investment,
cooperation and assistance:

* continued support and investment in Vietnam's economy, including
trade, tourism, and investment;

* support for science and technology, particularly information
systems;

* promotion of opportunities for access to loans and grants for
telecommunications and infrastructure development;

* support for Vietnam's inclusion in the General System of
Preferences;

* U.S. recognition of market economy status for Vietnam; and,

* technical assistance for help in meeting Vietnam's commitments to
the WTO and the Bilateral Trade Agreement.

Finally, responding to a point raised by the Ambassador, Minister
Ninh endorsed the regional bond market technical assistance project
in APEC.

5. (SBU) For his part, State Bank Governor Thuy singled out USAID's
STAR project in his response. The Governor did not present a
separate list of needs; rather his openness to assistance and closer
cooperation was spread throughout his remarks. In his discussion of
capital controls, he sought U.S. assistance in understanding and
managing this phenomenon. He also made a specific plea for
assistance in managing venture funds and hedge funds.

6. (SBU) In response to a question posed by the Ambassador,
Governor Thuy went on at length about the future role of the State
Bank. He noted a recent government decision to enhance the State
Bank's role and said the key question is how the State Bank can
evolve to become a modern central bank in a market economy. The
extent of its autonomy will be an issue as the new government (a

HANOI 00000936 002 OF 002


7. (SBU) To both officials, the Ambassador expressed his hopes for
continued cooperation and assured them that he and his staff were
open to continued dialogue on assistance needs and friendly advice.

8. (SBU) Comment: Nothing in these discussions will generate
headlines, but we did come away convinced of both the SBV's and the
Ministry of Finance's appreciation for U.S. support and assistance
and their strong interest in more of the same. Both institutions
clearly want to keep steering Vietnam on the path of a
market-oriented economy and both institutions have a good grasp of
areas where they need help. The positive comments of these two
officials underscores Mission Vietnam's reporting on the importance
of USAID's STAR project and other U.S. technical assistance efforts.
Moreover, with respect to the new laws Governor Thuy cited, the
USAID STAR project has played a lead role in revamping the legal
framework for Vietnam's financial institutions. End comment.

MARINE

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