Cablegate: Allocation of Additional Esf for Vietnam


DE RUEHHI #0036/01 0100950
O 100950Z JAN 08






E.O. 12958: N/A

1. (SBU) Summary: The Omnibus Appropriations Bill signed on December
26 contains the appropriation of $5.0 million in additional ESF for
Vietnam. The Senate Report on the 2008 Foreign Operations
Appropriations Bill contains the following language with regard to
this appropriation: "The Committee supports judicial and economic
reform programs in Vietnam which strengthen the rule of law, protect
human rights, and expand economic opportunities...The Committee
provides $10,700,000 in ESF assistance for Vietnam, almost double
the request, to support the STAR program and other activities." In
this cable, Mission Vietnam lays out its plans for the allocation of
these funds, which fulfils the intent of the legislators and Mission
Strategic Plan goals. Indeed, our suggested allocation among
current activities is in line with how we intend to utilize a
similar increase in funding now contained in our draft FY-2009
budget request to Congress. End Summary.

2. (SBU) The appropriation of an additional FY 2008 $5 million to
support judicial and economic reform programs in Vietnam is critical
to strengthening further the rule of law, protecting human rights
and expanding economic opportunities in one of the fastest reforming
economies in the world. As highlighted in the Senate Report
language, the success of the USAID "STAR" (Support for Trade
Acceleration) program has been nothing short of remarkable. STAR
and its partner program VNCI (Vietnam Competitiveness Initiative)
are unique in that they have facilitated a partnership with the GVN
which has resulted in Vietnamese agencies seeking technical
assistance from the United States in drafting well over 100 major
regulations and pieces of legislation. Current requests for
technical assistance, many of which could not be met without
additional funding, include support in redrafting the Criminal
Procedure Law, redesigning key legal and court procedures, and
transforming the judiciary. As such, I believe that a portion of
the additional funds should best be devoted to the expansion of
existing programs and to build on public-private partnerships where
our budget dollars can be stretched farthest. Programs relating to
governance, democracy building, and human rights will be further
reviewed in accordance with the report entitled "Governance in
Vietnam: Program Options for USAID," which was received by post in
January 10. I suggest that the amount be allocated as follows:

-- (A) $2 million to be allocated to the STAR program to expand its
focus more vigorously towards supporting the rule of law,
legislative processes and justice system reform as well as to deepen
further its assistance for Vietnam's post-WTO and BTA
implementation. Examples of new activities that could be supported
by additional resources include building capacity for the National
Political Academy (the "party school") to provide training programs
for key state officials on principles of good governance and market
economy operations; further strengthening the capacity of the
National Assembly to create stronger checks and balances in the
system; enhancing the independence, reliability and transparency of
the justice system; assisting the resolution of issues raised in the
implementation of the recently signed bilateral Trade and Investment
Framework Agreement (TIFA) with a focus on IPR enforcement,
investment, and labor issues; and enforcing the laws and regulations
which were recently developed in response to WTO and BTA

-- (B) $750,000 to be used for expanding Vietnam Competitiveness
Initiative (VNCI)'s efforts in supporting good governance through
the administrative and regulatory reform process. This
far-reaching, radical reform led by the GVN Prime Minister will
establish a new way of governing the economy with more transparency
and a mechanism for public participation and consultation, which
will ultimately create an enabling regulatory environment and pave
the way for promoting democracy and broader systemic changes. Some
of the funds can also be used to leverage the success of the
Provincial Competitiveness Index (PCI) to support provincial
governments in seeking innovative ways to tap capital markets for
infrastructure financing, to link national and provincial reform
initiatives through a best practice provincial governance tool
called TIGER and to advocate for a stronger decentralization trend,
especially in fiscal management;

-- (C) $250,000 for capital markets development with the SEC and
related institutions, such as NASDAQ and NYSE. This money will be
used to support Vietnam's securities regulators in their efforts to
manage better the recently booming and yet volatile capital markets,
as well as to enhance financial literacy among the population. This
is critical to mobilize private capital market resources for
economic development and to eliminate the risk of a financial
turmoil that may erode recent achievements;

-- (D) $300,000 for ICT/rural socioeconomic development programs
using corporate partnerships with companies such as Intel and
Microsoft. USAID estimates that corporate contributions could total
an additional $2-3 million in services, training, and products if we
move forward with this additional funding. These projects are
designed to greatly expand internet availability throughout the
-- (E) $340,000 to enhance the capacity of the Vietnam Lawyers
Association (VLA) to effectively promote the rule of law, enhance
popular participation, and strengthen civil society. The VLA has
requested support for this effort to assist VLA to develop codes of
professional ethics and train its members (legal professionals) to
become activists in anti-corruption, protectors of the rule of law,
and advocates for popular participation and civil society
development. VNAH will partner with the U.S.-based International
Center for Not-for-Profit Law (ICNL), which has worked with VNAH
since 2000 on the efforts to develop a sound legal framework for a
strong civil society;
-- (F) $550,000 to promote implementation of grassroots democracy
and mediation legislation at the local level. The Vietnamese
government has issued several laws and regulations on Grassroots
Democracy (GD) (1998, 2003 and 2007) and Community Mediation Groups
(1998, 1999) that remain poorly understood and implemented at the
district, commune and town levels. While falling short of promoting
a truly representative system, these legal documents provide a
foundation for increased popular participation in governance,
strengthened rule of law, and combating corruption through greater
citizen participation in local government;

-- (G) $200,000 to build the capacity of legal and law enforcement
agencies at national and local levels, thus strengthening the
criminal justice responses to prevent and respond to domestic
violence. The proposed activities can be implemented in conjunction
with UNODCs larger project "Building capacity of law enforcement and
justice sectors to prevent and respond to domestic violence;" and

- (H) $610,000 for continuation and expansion of the current program
and other socio-economic development programs for the rural poor of
the Central Highlands area, which aim to improve access to social
and health services, increase economic opportunities and protect the
basic rights of ethnic minority and persons with disabilities.
Activities include agriculture development, sustainable cocoa
farming, building and strengthening capacity for self-helps groups
of vulnerable people, promoting people's participations in the local
decision making and the national socio-economic development planning
process through community development activities.

3. (SBU) Again, given the deep impact, established track record,
potential to support transformational change of STAR and VNCI, and
the nature of the earmark, I believe that the bulk of the additional
allocation should go to these two programs. Mission Vietnam looks
forward to working with Washington as we implement an expanded
program in support of reform in Vietnam.


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