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Cablegate: Ewec Conference Provides Venue for Press to Question

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DE RUEHHM #0921/01 2480807
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FM AMCONSUL HO CHI MINH CITY
TO RUEHC/SECSTATE WASHDC 3076
INFO RUEHHI/AMEMBASSY HANOI 2163
RUEHBJ/AMEMBASSY BEIJING 0027
RUCNARF/ASEAN REGIONAL FORUM COLLECTIVE
RUCPDOC/USDOC WASHDC 0035
RUEHHM/AMCONSUL HO CHI MINH CITY 3283

UNCLAS SECTION 01 OF 02 HO CHI MINH CITY 000921

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SENSITIVE
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STATE FOR EAP/MLS
STATE PASS USTR FOR DAVID BISBEE
COMMERCE FOR HPPHO

E.O. 12958: N/A
TAGS: PREL PGOV ECON ETRD ELNT VM
SUBJECT: EWEC CONFERENCE PROVIDES VENUE FOR PRESS TO QUESTION
LEADERS


HO CHI MIN 00000921 001.4 OF 002


1. (SBU) SUMMARY. One of the most interesting developments at a
recent Vietnamese-hosted conference to promote the East-West
Economic Corridor (EWEC) linking Vietnam, Laos, Thailand and
Burma was not so much the keynote address from Vietnamese Deputy
Prime Minister Pham Gia Khiem to the 500 international attendees
but the questions posed by some members of the Vietnamese press.
GVN officials and conference presenters appeared somewhat
caught off-guard by aggressive questions pressing for specific
examples of how the EWEC has benefited people in Vietnam as well
as by implications that the project's real benefits have been
modest. In addition to policy-level speeches, the conference
covered topics from the nuts and bolts of border controls to
business networking. While China lies well north of the EWEC,
delegates from Guanxi and Yunnan provinces seemed omnipresent
(from the 'business match-up' session to photos with Vietnamese
leaders), upstaging everyone else, including the leader of the
Burmese Delegation Deputy Minister of Foreign Affairs U Maung
Myint, who was virtually ignored by delegates intent on finding
commercial opportunities. Government and business delegates
alike agreed that further simplification of paperwork and visa
rules would greatly benefit provinces along the EWEC. End
summary.

FROM IDEA TO REALITY - THE PRESS ASKS AGAIN
-------------------------------------------
2. (SBU) Vietnam's Ministry of Foreign Affairs Economics
Department hosted the August 27-31 EWEC Week Conference at the
corridor's eastern terminus in Danang. Most government and
business delegation leaders spoke about variations on the
conference theme "EWEC - From Idea to Reality," citing a 16
percent increase this year in tourist transit at the
Vietnam/Laos border over the same period in 2006 and a similar
increase in cargo traffic. Leaders announced that recent
discussions will resolve issues of right- versus left-hand
drive, improve border crossing/law enforcement cooperation, and
simplify paperwork at the borders.

3. (SBU) At the plenum's question and answer session, business
delegates repeatedly complained that onerous visa procedures and
burdensome paperwork are still preventing tourism from really
taking off along the EWEC. The catchphrase "Four Countries One
Destination" obviously rang hollow not only with tourist
industry representatives but also with members of the Vietnamese
press, including the influential national newspaper Thanh Nien,
who took the panel to task. The reporters asked for concrete
information on any specific investment projects being planned,
reforms that will promote private sector, and plans to develop
Vietnam's human resources capacity. In response, a clearly
agitated Deputy-Minister of Planning and Investment Cao Viet
Sinh insisted that with the infrastructure now in place,
investors would look favorably on the region. In the concluding
press conference, a more polished Deputy Minister of Foreign
Affairs Vu Dung also fielded barbed questions about the
organization of the EWEC event from a Vietnam Chamber of
Commerce and Industry Magazine reporter.

LOOKING AROUND THE NEIGHBORHOOD
-------------------------------
4. (SBU) By virtue of location, the Vietnamese hosts dominated
the conference, with local small and medium-sized enterprises
searching for sources of raw materials from northeast Thailand
or Laos. Burma's meager representation at the conference and
the trade exposition suggested superficial involvement at best.
In contrast Chinese goods were everywhere at the exposition, and
the government delegations from Guanxi and Yunnan were nearly as
active as their business delegations, posing for pictures with
Vietnamese notables during the conference.

FACT CHECKING ON THE STREETS OF DANANG
--------------------------------------
5. (SBU) Following the conference, Danang-based industry, NGO,
and government managers privately echoed the concerns raised by
the press. While the EWEC has improved Danang's infrastructure
significantly, most large investments have been in tourism and
real estate development rather than creating jobs and boosting
the local economy. Simplifying border procedures and promoting
the private sector are crucial, most agreed. Danang "equitized"
(transformed 100 per cent State-owned enterprises into
joint-stock or limited liability companies subject to the
Enterprise Law, to help restructure, upgrade and enhance
efficiency) nine of 14 municipally-owned enterprises (five
others are in the process) and some of the proceeds have helped
fund the development of industrial parks. The Port of Danang is
growing at a modest but steady eight percent over 2006, but only

HO CHI MIN 00000921 002.2 OF 002


captures a fraction of the region's container traffic because of
the port's low volume. Phuoc Tien seafood processing said it
ships through Ho Chi Minh City Port because the busier port can
land products in Japan in six or seven days as opposed to up to
13 days through the Danang Port.

COMMENT
-------
6. (SBU) The press events at EWEC conference demonstrate that
Vietnam's press is capable of challenging leaders in certain
contexts. While most of the reporters pitched softballs, it was
encouraging to see some stand up in front of Deputy Prime
Minister Khiem and call for answers on questions of development
strategy and the role of the private sector. The conference
also provided a clear reminder that China continues to make
commercial inroads throughout Southeast Asia. While Danang is
benefiting from significant investment in infrastructure and
tourism, additional reforms will be necessary to diversify the
city's economy.

7. (U) This cable was coordinated with Embassy Hanoi.
FAIRFAX

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