Cablegate: Scenesetter for Assistant Secretary Hill Visit to Vietnam

DE RUEHHI #0225/01 0570914
R 260914Z FEB 08






E.O. 12958: N/A

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Summary and Introduction

1. (SBU) Ambassador Hill: Mission Vietnam looks forward to welcoming
you back to Hanoi. Your visit is well timed to focus Vietnamese
leaders on the importance we attach to strengthening and deepening
our bilateral relationship in the year ahead, especially after bad
weather in China forced the last-minute cancellation of Deputy
Secretary Negroponte's visit to Vietnam last month. Overall, the

U.S.-Vietnam relationship continues to broaden and mature, and the
transformation of the economic, social and technological landscape
continues to create "space" for Vietnam's people, including a
greater ability to be heard. The young generation is increasingly
networked, and does not harbor the deep anti-Americanism we find in
some of their older compatriots. Indeed, the United States is
viewed by the majority of Vietnamese as a key partner in Vietnam's
current and future success. We are finding opportunities to
influence developments here, responding to Vietnam's own interest in
globalization, reform of economic governance, combating corruption,
progress toward improvement in overall governance, and enhancing
educational opportunities for its people.

2. (SBU) There is much to discuss. Vietnam's economic successes
have translated into greater international clout, especially in the
region. Vietnam's role as a non-permanent member of the UN Security
Council has raised its international profile. Hanoi is not fully
sure how to handle all the attention, but understand that the United
States has - and is - playing a direct role in creating the
conditions for their nation's success. Leaders here are thankful,
in particular, for the key technical assistance we've given over the
past seven years in reforming the system of economic governance.

3. (SBU) Challenges of course remain. GVN leaders argue that
maintaining the Party's preeminent political role is critical to
preserving stability. Conservatives still seek to use issues like
Agent Orange, as well as other "war legacy" issues, to put the
United States in a bad light. China remains Vietnam's critical
strategic preoccupation, and this can complicate our efforts to
engage in some key areas. At the same time, Vietnam's leaders also
realize that the United States is an important force in maintaining
a stable geopolitical environment in which even "small" countries
like Vietnam are assured their independence and freedom of action.
As Vietnam continues its rapid economic and social transition, many
Vietnamese view the strength of its relations with the United States
as a key indicator of how much progress has been made in leaving the
dark days of the 1970's and 1980's behind. For these reasons,
Vietnam's leaders are committed to continued progress in bilateral
relations and will likely speak positively and optimistically about
the future of U.S.-Vietnam ties.

4. (SBU) One of the key drivers for the substantial enhancements in
our relationship over recent years has been the top-level visit.
Since 2005, there has been one formal visit between involving either
the Vietnamese Head of State or Head of Government with President
Bush each year. These have definitely proven their worth in
spurring positive changes in Vietnam, as well as in pinning down
those in Vietnam who might otherwise work to sidetrack or limit
those advances. The White House has invited Prime Minister Nguyen
Tan Dung to Washington in 2008. We are working to confirm the Prime
Minister's intention to come and to settle upon dates.

The Economy, WTO and Investment

5. (SBU) Vietnam's dynamic economy grew by 8.5% in 2007 and has
averaged over 7.5% for the past decade. Per capita annual income
jumped from about $220 in 1993 to over $800 in 2007. Since 1986,
the Vietnamese government has continued to implement an economic
reform program known as "Doi Moi" (renovation). As a result,
effective market-oriented policies have improved the quality of life
for many Vietnamese and have succeeded in slashing the poverty rate
from 58% in 1993 to well under 25% today. Increased trade and
foreign direct investment have been key drivers in Vietnam's
economic growth. Vietnam formally acceded to the WTO as its 150th
member on January 11, 2007. While its chief exports are crude oil,
apparel, footwear and aquatic products, Vietnam is also increasing
its exports of furniture, machinery, cameras, computers, printers,
consumer electronics, coffee, rice and other diverse products. The
United States is currently Vietnam's third largest overall trade
partner (behind China and Japan), but remains its largest export
market. The GVN still needs to meet the challenges of expanding
infrastructure, increasing energy production, stamping out
corruption, transforming state-owned enterprises (SOEs) into more
competitive entities, improving worker and professional skills,
implementing WTO commitments, and maintaining the course of reform.

Humanitarian and Technical Assistance

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6. (SBU) Since 1995, U.S. Agency for International Development
(USAID) programs have provided aid in legal reform, governance,
economic growth, HIV/AIDS, environmental protection and disaster
prevention. For FY 2007, total U.S. aid from all agencies was about
USD 86.6 million, the bulk of which has gone towards providing
health-related assistance, notably in the area of HIV/AIDS treatment
and prevention and the fight against avian influenza. Vietnam is
one of fifteen countries in the President's Emergency Plan for AIDS
Relief (PEPFAR). The United States provided USD 65 million in FY
2007 to expand integrated HIV/AIDS prevention, care and treatment
programs. The FY 2008 expenditure has increased to around $88
million. Since 2000, DOD has supported a wide variety of Overseas
Humanitarian, Disaster and Civic Aid (OHDCA) projects in Vietnam.
Additionally, USPACOM has facilitated multiple donations of excess
medical property to various medical facilities throughout Vietnam.

7.(SBU) Since 1998, U.S. Centers for Disease Control and
Prevention(USAID) has had a presence in Vietnam. From 1998, CDC
provided technical assistance for programmatic implementation,
training, disease surveillance, and program monitoring for HIV/AIDS.
Since 2005, CDC has provided in-country technical support for
influenza surveillance, rapid response, and emergency disaster
planning. CDC has also provided technical assistance for emergency
outbreak response for diseases including SARS.

8. (SBU) U.S. assistance in areas other than HIV/AIDS remains very
modest in relation to spending in smaller neighboring nations, but
increased substantially in FY08 from that low base to over $10
million due to earmarks for governance programming and demining.
The Administration's FY09 request roughly equals the total for FY08.
To a large degree, the FY08 earmarks reflect a recognition that
several U.S. programs are having a profound impact here. The "STAR"
(Support for Trade Acceleration) program, for example, has played a
major role in helping Vietnam to reshape its trade and commercial
laws and regulations. While initially established to help Vietnam
comply with its obligations under the 2001 Bilateral Trade
Agreement, STAR also played a critical role in Vietnam's
preparations for WTO membership and its broader entry into the
global economic system. Another relatively small program, the
Vietnam Competitiveness Index (VNCI), is having a profound impact on
promoting good economic governance domestically by providing a
quantitative measure of the impact of governance and rule of law on
economic development. Provinces' rankings on the annual VNCI report
are closely watched and leaders of provinces that score well have a
particularly good chance of being promoted to more senior positions
in Hanoi. VNCI also provided the Prime Minister's Office with key
support in developing an "economic guillotine," which is designed to
greatly cut red tape at the provincial level. If successful, this
program will have a huge positive impact on governance throughout
the country.

9. (SBU) Through a combination of Fulbright grants and the Vietnam
Education Foundation (VEF), an innovative program created through
legislation to facilitate the training of Vietnamese scientists, the
United States is now sponsoring well over 200 students for graduate
study in the United States. The VEF was established with the unpaid
proceeds of loans extended to the old South Vietnamese government.
Another important activity is the Fulbright Education Training
Program (FETP), through which 70 mid-level Vietnamese professionals
receive in-country training in economics and public policy each year
in a program run by Harvard University. Today, nearly 1,000 FETP
alumni are working in government and private sector positions
throughout the nation.

10. (U) I hosted an Education Conference in Hanoi January 24-25 to
help spur forward both public and private American efforts in
education in Vietnam. The Conference was a forum for American
universities, companies, NGOs and USG-funded educational programs to
generate ideas and action plans about how best to meet three
principal goals: a significant increase in the flow of Vietnamese
students to the United States, more and deeper linkages between
American and Vietnamese universities, and higher quality of human
resources in the pool from which American companies in Vietnam hire.
Over 200 participants attended, including representatives of some
of the largest U.S. companies operating here. Collectively, we have
built momentum toward achieving our three objectives that I will
work to maintain.

UNSC and Global Security Issues

11. (SBU) Vietnam's UNSC membership creates a window of opportunity
to encourage Vietnam to speak out in a constructive way on global
security issues, and to help Hanoi distance today's Vietnam from the

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NAM and Communist-Bloc focus driving its old-style foreign policy.
We have been proactive here and in Washington in educating GVN
leaders and officials on Burma, North Korea and Iran, where in the
past it has been unwilling to engage constructively with us due to
"traditional friendship" and non-interference. Despite repeated
demarches the GVN has so far this year, Vietnam lined up against our
positions in UNSC debates on Burma and Kosovo. You will want to
note this, and call on Hanoi to engage more constructively with us
as we move forward.

12. (SBU) As it raises its profile on the world stage, Hanoi has
expressed a general willingness to prepare its military for
participation in UN peacekeeping operations at some point in the
future. At the same time, the GVN has proven reluctant to engage
with us bilaterally on training, despite our invitation to
participate in PKO training through the Global Peace Operations
Initiative. A key factor in Hanoi's reluctance is that such
engagement will set a precedent for security cooperation that
requires difficult internal negotiations and decisions.
Additionally, the GVN lacks a recent precedent for military
engagement beyond Vietnam's borders, which would reportedly require
legislative action to authorize. We emphasize that taking the first
steps toward PKO training does not require a commitment on Hanoi's
part, and are still hopeful that Vietnam will participate in GPOI
beginning later this year.

13. (SBU) Vietnam says the right things about the threat of global
terrorism and has participated with us in modest cooperative
activities. During President Bush's visit in 2006, the President
and his Vietnamese counterpart pledged to increase cooperation to
halt the proliferation of weapons of mass destruction and related
technology and materials in accordance with international and
national laws and each country's capacities. The United States
provides counterterrorism assistance to Vietnam by funding
Vietnamese participation in counterterrorism-related training at the
International Law Enforcement Academy (ILEA) in Bangkok, and through
military-to-military exchanges with an emphasis on counterterrorism
themes. Vietnam has signed eight out of thirteen UN terrorism
conventions. Approval of the remaining five is winding its way
through the cumbersome GVN bureaucracy, the delay explained in part
by GVN concern with its capacity to carry out obligations under the
conventions. Two of the remaining conventions are reportedly in the
final stages of GVN approval, while the status of the other three
remains unclear.

Challenges on Human Rights

14.(SBU) While we share common views with the GVN in many areas,
differences over human rights remain, and lingering fears that the
United States supports the overthrow of the current regime continue
to complicate the relationship. The existence of groups in the
United States and elsewhere that continue to explicitly advocate
regime change helps generate negative charges by conservatives here
which stoke a lingering paranoia that we are indeed still "the
enemy." Reassuring the GVN that the USG does not support separatist
groups can assist in building a better human rights dialogue based
on mutual trust.

15. (SBU) Serious deficiencies related to human rights in Vietnam
include lack of freedom of speech, freedom of assembly and freedom
of the press. One of our key objectives is to end the use of
catch-all "national security" provisions such as Article 88 of the
GVN criminal code, which prohibits "conducting propaganda against
the State." The U.S. Mission tracks approximately 50 individual
cases of prisoners of conscience and activists under various forms
of house arrest, surveillance, and/or harassment. We continue to
call for the release of all prisoners of conscience and freedom of
peaceful expression of political views, but where we see individuals
expressing their political opinions, many of our government
interlocutors see "lawbreakers" trying to destabilize the regime.

16. (SBU) Perceptible progress is, however, being made. Key
Vietnamese leaders are committed to enhancing governance
establishing the rule of law, and combating corruption, all critical
in building guarantees of individual freedoms. Vietnam's leading
newspapers are more aggressive in terms of the types of news they
publish and their willingness to push back against censors. Only a
few years ago, any protest resulted in swift and severe police
action. Over this past year, various peaceful protests occurred
involving issues such as land rights, opposition to Chinese
territorial claims, and demands for the return of Catholic Church
property, with one stretching out for a month before it finally
ended peacefully. With regard to religious freedom, Vietnam has
made surprising progress, in large part due to the intensive
engagement of Ambassador Hanford over recent years. More needs to
be done, but the country no longer qualifies as a particularly

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severe violator of religious freedom under our legal definition and
we removed the nation from the list of countries of particular
concern in late 2006.

More on Vietnamese Concerns About China

17. (SBU) While Vietnam's engagement with the United States will
continue to broaden, China necessarily constitutes Vietnam's most
important strategic preoccupation. This is not to say that Vietnam
is "choosing" China over the United States; the situation is much
more complex than that. For starters, Vietnam's leadership is
sophisticated enough to realize that relations with China and the
United States do not represent a zero sum game; it is possible to
have good relations with both. Each relationship also creates
challenges, however. While China constitutes a vital and necessary
commercial partner and former ally, it is also perceived as a
significant and frustrating constraint to Vietnam's freedom on

18. (SBU) Chinese bullying of foreign companies in an attempt to
compel them to cease oil and gas exploration efforts in the South
China Sea serves to remind Vietnamese officials that while the
Vietnamese may not approve of all U.S. policies, the same is
certainly true of Chinese actions. While progress has been made in
settling the land border, there is no commonality of views on
sovereignty issues regarding the South China Sea, known as the "East
Sea" to the Vietnamese. Hanoi is also "riding the tiger" with
regard to managing the deep negative views toward China of many
Vietnamese. China is widely disliked and distrusted as a former
colonial master, and Beijing's actions in the Spratlys and Paracels
threaten to inflame those passions. Should Hanoi allow
unconstrained protests against the Chinese, however, it would appear
weak in the face of calls to action that it could not satisfy, as
well as risking Beijing's anger.

19. (SBU) On security matters, China looms large. There is an
understandable GVN caution with regard to China's potential reaction
to enhancements in Vietnam's cooperation with the United States.
U.S.-Vietnam cooperation in the security field is also constrained
by an institutional conservatism born of concern over "peaceful
evolution" as a real threat to the regime, as well as by an
ingrained caution on the part of Vietnam's military in the face of
relative power calculations vis-a-vis China.

Gradual Progress in Defense Cooperation

20. (SBU) Defense relations have nonetheless advanced at a measured
pace, and have actually come quite far if viewed over the past
decade. We are in year three of a new IMET program, and we now have
professional military exchanges with the People's Army of Vietnam
(PAVN) in a limited but growing range of areas including military
law, military nursing, public affairs, search and rescue,
meteorological/ oceanographic (METOC) prediction, and disaster
preparedness. Since 2003, U.S. Navy ships have made five port
visits to Vietnam, including most recently a November 14-18 visit by
two mine countermeasures ships, the USS Guardian and the USS
Patriot, at Haiphong port. The USS Mercy is set to visit Nha Trang
this spring on a humanitarian mission, following the very
successful, similar visit by the USS Peleliu last summer. Reaching
our full potential for closer cooperation in defense activities,
including multilateral peacekeeping, humanitarian assistance efforts
and attendance at U.S. military schools is attainable, but will
require time, persistence and patience, and a lot of hard work.

Fullest Possible Accounting

21. (SBU) Predating the re-establishment of diplomatic relations and
normal defense contacts, U.S. military and DoD elements continue
their efforts toward the fullest possible accounting of Americans
missing from the Vietnam Conflict. Since 1988, the Joint POW/MIA
Accounting Command (JPAC), a USPACOM subordinate element, has
evolved to include forward Detachments in Vietnam, Laos, and
Thailand/Cambodia. With its Vietnam Detachment (Det 2), it has
completed 90 Joint Field Activities (JFA), which incorporated
extensive research, interviews, analysis, and excavations in order
to accomplish its mission. From its inception, Det 2 has forged
good relations with its GVN counterparts. Ultimately, JPAC's
efforts in Southeast Asia have resulted in accounting for 880
Americans previously listed as MIA; 1766 remain missing throughout
Southeast Asia.

22. (SBU) An area of heightened bilateral cooperation is the
undertaking of investigation and recovery efforts at sea. During
the Vietnam Conflict, more than 400 American aviators were lost in

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the waters off the coast of Vietnam. While the majority of those
Americans were declared dead and their remains deemed not
recoverable, JPAC continues to conduct underwater investigation and
survey activity when information obtained and validated has the
potential to lead to a recovery. This is a resource-intensive
endeavor. In December, 2006 the GVN gave its approval for the use
of U.S. naval vessels to operate within their territorial waters in
order to enhance JPAC's underwater investigations towards the
identification of potential recovery sites.

Consequences of War

23. (SBU) In your meetings, you may hear references to "consequences
of war" or "legacies of war" issues, especially given the recent
U.S. Court of Appeals decision to dismiss the lawsuit against
American chemical companies. In addition to Agent
Orange(AO)/Dioxin, however, "legacy" issues include unexploded
ordnance (UXO) and land mines from the war era and the recovery of
missing Vietnamese military personnel.

24. (SBU) On Agent Orange, while scientists and GVN officials
continue to debate the human impact of the 80 million liters of AO
sprayed over 2.6 million hectares and 3,000 hamlets in Vietnam,
recent GVN-approved studies reveal that Dioxin contamination is not
widespread, but rather is concentrated in roughly 20 "hotspots."
Former U.S. bases, from which Operation Ranch Hand missions were
staged and AO was stored, have soil dioxin concentrations exceeding
concentration levels recommended by the U. S. Environmental
Protection Agency (EPA) and World Health Organization, while other
areas thought to be targets of heavy aerial spraying do not
currently have soil concentrations considered hazardous to health.

25. (SBU) Much has been accomplished recently in turning a new leaf
on the AO/Dioxin issue with regards to government-to-government
relations and changing the tone of the dialogue both in meetings and
in the press. Beginning in 2006, the State Department and EPA
provided USD 400,000 in technical assistance to the GVN's Office 33
and MOD's Chemical Command for remediation planning and immediate
interventions at the Danang airport. Congress appropriated an
additional USD 3 million in Economic Support Funds (ESF) for "dioxin
mitigation and health activities," thereby helping Vietnam to
remediate areas with demonstrably high levels of dioxin and assist
those with disabilities. This follows four years of USG support to
build the capacity of the Vietnam Academy of Science for analysis of
contaminated soils and sediment. The USG is continuing to work
together with the GVN, UNDP, Ford Foundation and other NGOs to
discuss the next steps in the environmental remediation of three
priority hotspots in Danang, Hoa Binh and Phu Cat airfields.

27. (SBU) Since 1989, USAID, through support from the Patrick J.
Leahy War Victims Fund (LWVF) and other sources, has provided over
USD 43 million to support NGOs and private voluntary organizations
to develop comprehensive programs for people with disabilities. In
addition, since 1993 the USG has been actively involved in assisting
the people of Vietnam in overcoming the social and economic impacts
of remaining UXO from the war. Vietnam was formally accepted as the
37th participant in the U.S. Humanitarian De-mining Program in June
2000, and the USG is now the largest donor of humanitarian
assistance for mine action programs in Vietnam. The USG has
invested over USD 37 million in a broad spectrum of programs not
only to locate, remove and destroy unexploded ordnance and
landmines, but also to address the UXO effects on health and
livelihood of Vietnamese living in affected areas.

28. (SBU) Today, various NGOs conduct UXO and land mine clearance,
risk education and victim rehabilitation. The USG has also donated a
significant quantity of equipment to the PAVN to assist efforts in
UXO and landmine clearance and return land to productive use. In
2006, the State Department provided USD 3.5 million to support UXO
action and demining activities in Vietnam, almost a third of which
went directly to PAVN in the form of donated demining equipment.
FY08, an additional USD 2.5 million will be provided to underwrite
mine action related activities in Vietnam. For FY08, Congress
dictated that approximately $2.5 million be spent on demining
programs, a substantial increase from the $800,000 requested by the

Adoption Issues

29. (SBU) Baby and child buying are serious and troubling issues in
Vietnam and in recent weeks have captured the attention of national
- and international - media. In the meantime, Vietnamese
authorities, stung by revelations of fraud and other abuses, are
harassing our consular officers as they try to verify cases. We
have informed the GVN that we will not renew the current bilateral

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agreement, which permitted the resumption of adoptions by American
parents in 2006, without changes. This raises the question of
whether adoptions will be permitted after September. The clear "way
forward" for Vietnam is to accede to the Hague Convention on
Inter-Country Adoption, which it says it wishes to do, as soon as
possible. In the interim, we are working within the USG to
determine our next steps.

Management Issues: New Embassy Compound, APP Danang
--------------------------------------------- ------

30. (U) The economic dynamism described above has pushed Vietnam to
a stage of development where a significant number of people have the
ability and desire to travel to the USA for pleasure, family visits
or education. The impact of this economic shift is being felt
particularly hard at ConGen HCMC where the total number of NIV
applications processed has climbed by nearly 110 percent in just two
years (2006-2007). The total number of student (F) visas is up a
whopping 275 percent during the same period. Other consular units
(immigrant visas, American Citizen Services, the Fraud Prevention
Unit) have also experienced significant, albeit less spectacular
increases in workload. Unfortunately, consular staffing at ConGen
HCMC has remained unchanged during this period of continuing rapid
increase in demand. ConGen HCMC's consular section is in need of
immediate staffing increases. In addition, the consulate needs to
start planning for physical expansion now since there are not enough
interview windows to handle the rapidly growing volume.

31. (SBU) When we established diplomatic relations in 1995, Scot
Marciel helped us find an "interim" building to set up initial
operations and carry us through our first years. It was a good
"fix" at the time. Thirteen years later, however, we're still
there. As you know from your previous visits, our facilities are
overcrowded, inefficient, insecure, and just plain ugly. The long
term solution involves the construction of a New Embassy Compound
(NEC), a "priority" deferred for over ten years. U.S. interests in
Vietnam dictate that we create an appropriate platform in Hanoi for
our diplomatic activities in this increasingly important nation. We
recently received a counter-offer from the GVN that should provide
the basis for further negotiations for the NEC land purchase. Even
if our negotiations progress, it will be many years before we cut a
ribbon on an NEC. OBO recognizes the need for expansion of our
office space in the interim.

32. (SBU) State Department budget limitations will delay the
scheduled opening of APP Danang at least until FY2009. Although we
have not had formal negotiations with GVN officials regarding the
opening of the APP, informal soundings indicate that they are quite
receptive to the idea. We hope a way can be found to begin
negotiations "in principle" with the GVN on new consulates. This
will allow us to get necessary agreements in place before our side
decides to begin allocating funds. Meanwhile, we also face critical
space issues in Ho Chi Minh City. All agree, for example, that the
Consular Section, which is experiencing rapid growth in workload,
will soon be inadequate for our needs. Again, OBO recognizes this
priority. The expansion of other offices in HCMC will also create
issues in our rented space there.

What You Can Expect

33. (SBU) You can expect your interlocutors not only to be
articulate and well informed, but also to speak in terms generally
supportive of growth in the bilateral relationship. As noted above,
lingering suspicions still exist among conservatives in leadership
about the development of closer ties with the United States, and it
will be interesting to see if your interlocutors feel the need to
raise the U.S. court decision regarding the "Agent Orange victims."
Nonetheless, I fully expect the overall tenor to be one of support
and interest at a measured pace that will not upset the GVN's
calibrated attempts to maintain balance among its other regional
partners. Your upcoming trip to Hanoi will add momentum to our
efforts to help translate those good feelings into measurable
accomplishments in our bilateral relationship.

34. (U) Media interest in your visit is high, both among Vietnamese
and international outlets. We are making arrangements for a press
conference and, in addition to questions on the purpose of your
visit and the results or your meetings, would anticipate questions
on China, the DPRK, human rights and the arrest of several American
citizens suspected of membership in an anti-government organization,
one of whom remains in Vietnamese custody.

35. (SBU) Again, we look forward to your visit and stand ready to do
everything we can to make your visit to Vietnam as productive as

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