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Cablegate: Hcmc Business Leaders -- The South Is Rising Again

VZCZCXRO8638
OO RUEHDT RUEHPB
DE RUEHHM #0039/01 0101139
ZNR UUUUU ZZH
O P 101139Z JAN 08
FM AMCONSUL HO CHI MINH CITY
TO RUEHC/SECSTATE WASHDC IMMEDIATE 3550
INFO RUCPDOC/USDOC WASHDC PRIORITY 0061
RUEHHI/AMEMBASSY HANOI PRIORITY 2415
RUCNARF/ASEAN REGIONAL FORUM COLLECTIVE
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUEHHM/AMCONSUL HO CHI MINH CITY 3769

UNCLAS SECTION 01 OF 03 HO CHI MINH CITY 000039

SIPDIS

SENSITIVE
SIPDIS

STATE FOR EAP/MLS, EEB/TPP/BTA/ANA
STATE PASS TO USTR DBISBEE
TREASURY FOR SCHUN
COMMERCE FOR HHPHO
USAID/ANE

E.O. 12958: N/A
TAGS: ECON EAGR ELNT ETRD BEXP VM
SUBJECT: HCMC BUSINESS LEADERS -- THE SOUTH IS RISING AGAIN

REF: (A) 07 HCMC 1281, (B) HCMC 10

HO CHI MIN 00000039 001.2 OF 003


1. (SBU) SUMMARY: For proof that Vietnam really is changing, one
need look no further than the fate of persons closely associated
with the pre-1975 Republic of Vietnam (RVN) government and their
families. After years of poverty and deprivation, often
including lengthy stints in harsh "reeducation camps" and years
of unemployment as political undesirables, a rising number of
these individuals once again rank among Vietnam's most
successful economic leaders. Through dogged determination they
have seized the opportunities on offer during Vietnam's economic
liberalization and built up business empires. While they owe
their continued success to a certain degree of caution and a
good sense of what is allowable and what is not, they
nonetheless remain unabashed advocates of further reform as well
as for good governance and increased transparency. Having lived
both extremes, they see building their communities and U.S.
education for their children as the best way ensure future
prosperity. End summary.

2. (SBU) This is the third in a series of three cables analyzing
how HCMC's business community is active in shaping Vietnam's
policies. Reftels assess the role of the politically-connected
as well as those without connection who have risen through
innovation and hard work.

Starting From Less than Nothing
-------------------------------
3. (SBU) After his service in the Marine Corps of South Vietnam
from 1972-1975, Nguyen Van Phan landed in re-education camp for
seven years then spent three years nearly starving on the
streets of HCMC since he was considered too politically
undesirable to employ. Through constant labor, Phan went from
being penniless in 1983 to running Vietnam's largest rice
processing and exporting company and Director of one of the
country's top fish farms, Hiep Thanh Aqua-Cultural.

4. (SBU) Despite his hard life, Phan is upbeat about Vietnam and
hopes for a better life for both his family and his workers.
While he personally sleeps in a cot above the non
air-conditioned factory floor, he is proud of the fact that he
includes air conditioning in all the housing he builds for his
workers. He also insists the highest possible level of food
quality and safety for his workers, hiring a German firm to
deliver food of guaranteed quality and purity by the truckload
for his 4,000+ workers. Among the projects he is working on at
present are a daycare facility for workers' children and
expanded kitchen space to prepare more meals for workers. While
Phan's only daughter is currently in college in the U.S., Phan
himself never graduated from school, does not speak English and
has never traveled abroad.

5. (SBU) Phan speaks openly about economic problems in the
Mekong Delta and tries to develop solutions for the community
and businesses. In 1999, local factories faced a serious
shortage of electricity about which Phan expressed concerns to
local authorities. Authorities said they were aware of the
problem and but could do nothing. Unhappy with that answer,
Phan wrote to different newspapers until Vietnam Television sent
reporters to conduct an interview that was televised
nation-wide. Shortly after, Electricity of Vietnam built a
power station for the district to address the power shortage for
production factories and the community. Today, his leading
political campaign is to shame the government into fulfilling a
nearly 10-year old promise to improve road conditions.

Overcoming Prejudices
---------------------
6. (SBU) Hang Vay Chi, who comes from Vietnam's ethnic Chinese
minority, worked for various Japanese and Chinese language
newspapers in Saigon from 1965 to 1972 then worked as an
import/export manager for a company closely connected with old
regime until 1975. After years of outright hostility to ethnic
Chinese living in Vietnam, he emerged as a business leader when
economic reform policies began to change the country. By 1981
he accumulated enough money selling clothing on the streets of
and started Viet Huong Company to produce seasonings, instant
noodle and other foodstuffs and established small facilities in
Binh Duong to make handicrafts and pottery products. Chi got to
know the pragmatic and pro-business Nguyen Minh Triet, then
provincial chairman and now Vietnam's President. With Triet's
support, Chi established the first private industrial park
licensed in Vietnam in 1995, Viet Huong industrial park in Binh
Duong.

HO CHI MIN 00000039 002.2 OF 003

7. (SBU) By most accounts, Chi is the most successful and
respected ethnic Chinese businessmen in HCMC. Chi has
maintained his close relationship with President Triet and given
his high-profile role in a community of 800,000 ethnic Chinese
in HCMC, Vietnam's leaders value his advice. Chi is also the
leader of the Chinese Language Education Sponsorship Society in
HCMC, initiated in 1996 to foster the teaching of Chinese to
young ethnic Chinese in Vietnam.

Starving Relative to Business Magnate
-------------------------------------
8. (SBU) As the son of a RVN Army (ARVN) colonel, Tran Duc Lam
could have departed for the United States near the end of the
war. While his father and uncle (another ARVN officer) arranged
transportation for both their families, at the last moment Lam's
mother could not stand to leave the land of their ancestors.
What followed was nearly a decade of reeducation camp for Lam's
father while Lam, along with his mother and 10 brothers and
sisters, were moved from their Saigon home to a poor, remote
village. Despite not being allowed to study beyond primary
school, Lam taught himself mathematics and English so well that
by the time reforms had kicked into gear in 1993 he was able to
secure a job teaching high school math. Still unable to support
his family following the death of his father, Lam struck out for
HCMC to try to land a job with one of the new foreign companies
opening up. After overseeing the process of setting up new
offices for a foreign firm, Lam once again struck out on his
own, this time to open his own furniture factory.

9. (SBU) With 1,500 employees and millions of dollars in annual
sales, Lam can not only feed his family, he can provide them
with luxuries such as a large country estate that is only
minutes from downtown HCMC via his personal speedboat and the
best private tutors for his children. After nearly three
decades of being the "poor Vietnamese relative" in his family
who stayed behind in HCMC while his many cousins were more
successful with their new lives in Texas, Lam now finds that his
"poor American cousins" are coming to their multi-millionaire
uncle for support in getting their own careers launched.

10. (SBU) Like many others in his position, Lam carefully
eschews overtly political activities. At the same time, the way
he runs his growing business empire with dedication to
transparency and honesty speaks volumes about his desires for
the future of Vietnam.

From Deprivation to Burgers -- to Good Works
--------------------------------------------
11. (SBU) As an employee of the U.S. military and later as a
business person with good U.S. connections in 1975, Dao Manh Ha
probably could have joined many of his relatives as they
departed for the USA. Instead he stayed in Vietnam with his
wife and child and endured three years of reeducation camp
followed by his forced ejection from his home in Saigon to a
poor rural area in the Central Highlands. After the economic
reforms of Doi Moi began to really take hold in the early
1990's, however, Ha returned to HCMC to build a new life.
Today, his business interests include Vietnam's largest chain of
fast food restaurants, which he owns with a Korean partner.
While he is nearing retirement age and thinking of moving to
join his daughter as well as much of his extended family in
California, he is also actively supporting the work of his son,
an American-trained and ordained Jesuit whose many activities
include serving as an informal conduit between Vietnamese and
American Jesuits and brining health care to Vietnam's most
impoverished rural areas. While he gives the GVN credit for the
extent of reforms, he remains highly critical of the level of
corruption and has refused to participate in various business
ventures.

Next Generation Business Leaders with Western Education
--------------------------------------------- ----------
12. (SBU) As Vietnam grows richer HCMC's business leaders can
increasingly afford a highly-prized U.S. education for their
children. The number of Vietnamese students enrolled in U.S.
institutions of higher education jumped by nearly 1,500 from
4,597 to 6,036, during the 2006/2007 academic year, a 31.3
percent increase over the 2005/06 academic year and the highest
percentage increase in the East Asia-Pacific Region. While the
early wave of Vietnamese students studying in the USA went on
government scholarships and often came from politically
connected families, today roughly 80% of all U.S.-bound students

HO CHI MIN 00000039 003.2 OF 003


are supported by their families. A remarkably high percentage
of HCMC business leaders strive to send their children to the
United States for education: Nguyen Thi Mai Thanh's (ref A) son
has already returned and is working for a foreign bank in HCMC
and Nguyen Van Phan and Hang Vay Chi both have daughters
studying in California. These students, as well as thousands of
others, will become the next generation of HCMC business leaders
and could play an equally important role in Vietnamese politics.

Comment:
--------
13. (SBU) Vietnam is changing for the better. Economic reforms
are improving the lives of ordinary citizens and this reinforces
support for the business community to take a stronger role in
policy-making. The fact that even those previously deemed
untouchable now have the opportunity to succeed demonstrates the
breadth of change. Much of this change is pragmatic; the
Communist Party of Vietnam needs ideas and support from business
to maintain the economic growth that Vietnam's people have come
to expect. Nevertheless economic reforms are creating space for
business leaders to voice their opinions on some policy issues.
This trend should be encouraged. End comment.

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

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