Cablegate: Codel Shelby Touches Down in Hanoi
PP RUEHCHI RUEHDT RUEHFK RUEHHM RUEHKSO RUEHNAG RUEHNH RUEHPB
DE RUEHHI #1018 2490253
ZNR UUUUU ZZH
P 050253Z SEP 08
FM AMEMBASSY HANOI
TO RUEHC/SECSTATE WASHDC PRIORITY 8401
INFO RUEHHM/AMCONSUL HO CHI MINH 5081
RUCNASE/ASEAN MEMBER COLLECTIVE
RUEHZU/ASIAN PACIFIC ECONOMIC COOPERATION
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
UNCLAS HANOI 001018
SINGAPORE FOR TREASURY
TREASURY FOR SCHUN
USTR FOR DBISBEE
E.O. 12958: N/A
TAGS: OREP EFIN EAID ECPS ECON ETRD VM
SUBJECT: CODEL SHELBY TOUCHES DOWN IN HANOI
1. (U) Summary. Senator Shelby met with Vietnamese economic
officials, international organization and business representatives,
and the National Assembly on August 22 in Hanoi. The Senator
delivered a useful message on the need to reform the State owned
enterprise sector, make capital available to small and medium sized
enterprises and adopt effective anti-money laundering laws. End
2. (U) Senator Richard Shelby and two staff members visited Hanoi
for a day of meetings on August 22, 2008. The Senator opened
trading at the Hanoi Securities Trading Center, where he noted the
importance of efficient capital markets for economic development and
the need for transparency and good regulation. Chairman of the
State Securities Commission Vu Bang thanked the Senator for
continuing U.S. technical assistance, noting its critical role in
Vietnam's developing securities market. Senator Shelby held a brief
press event for select local and international journalists.
Questions focused on his views on Vietnam's economy and the U.S. -
Vietnam trade relationship.
3. (U) The Senator and the Ambassador met with the Chairman of the
National Assembly's Economic Committee, Ha Van Hien. Hien said the
Economic Committee's biggest challenge was the fight against
inflation. Senator Shelby counseled that small and medium
businesses create the majority of jobs and so, even in difficult
times, should be given access to capital. Hien responded that such
businesses are a driving force in the Vietnamese economy, but
although the GVN has "priority policies" for them, many are having
trouble getting capital in the current market.
4. (U) The Senator also asked what percentage of the economy was
attributable to state owned enterprises (SOEs), noting that such
organizations distort the market and often rely on subsidies. Hien
said the GVN is in the process of equitizing many of these
companies. In turn, Hien asked about the U.S. banking sector.
Senator Shelby told him that the system was large and well
capitalized but that the current sub-prime problem would take a year
or two to resolve.
5. (U) State Bank of Vietnam (SBV) Deputy Governor Nguyen Van Binh
provided an extensive review of how Vietnam had arrived at its
current macro-economic state. He admitted that economic management
had been weak, but said that the SBV was a leader in the fight
against inflation and that the latest economic numbers showed
improvement. Binh called the banking sector "relatively stable"
with no bankruptcies. He added that the GVN is working on new
anti-inflation measures to help it achieve the goal of single digit
inflation in 2009. Senator Shelby noted the importance of
anti-money laundering (AML) controls in a modern financial system.
Binh responded that AML is a "priority" of the GVN, especially in
light of the upcoming Asia Pacific Group (APG) assessment, but noted
that revision of the relevant laws is challenging. He seemed keenly
aware that Vietnam's lack of AML controls is causing difficulty for
Vietnamese banks wanting to open representative offices in the U.S.
and promised to send a copy of the APG assessment to U.S.
regulators. The Senator and Binh agreed that micro-finance is an
important tool for the development of small and medium-sized
6. (U) Financial sector business and international economic
representatives told Senator Shelby that the Vietnamese government
had taken effective steps to control inflation and reduce the trade
deficit, but needed to maintain a tight monetary and fiscal stance
to ensure the problems were resolved. One economist noted that,
despite the likely effects on inflation, there is increasing
pressure from businesses and some parts of the GVN to lower interest
rates and resume the drive for higher GDP growth.
7. (U) Senator Shelby's staff cleared this cable.