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Cablegate: Central Highlands Socioeconomic Conditions Behind Unrest

VZCZCXRO2215
RR RUEHCHI RUEHDT RUEHNH
DE RUEHHM #0958/01 2970945
ZNR UUUUU ZZH
R 230945Z OCT 08
FM AMCONSUL HO CHI MINH CITY
TO RUEHC/SECSTATE WASHDC 5062
INFO RUEHHI/AMEMBASSY HANOI 3384
RUCNASE/ASEAN MEMBER COLLECTIVE
RUEHHM/AMCONSUL HO CHI MINH CITY 5291

UNCLAS SECTION 01 OF 02 HO CHI MINH CITY 000958

SENSITIVE
SIPDIS

STATE FOR EAP/MLS, DRL/AWH AND DRL/IRF

E.O. 12958: N/A
TAGS: PGOV PREL PHUM SOCI ECON VM
SUBJECT: CENTRAL HIGHLANDS SOCIOECONOMIC CONDITIONS BEHIND UNREST

REF: A) HCMC 682 B) HCMC 693 (C) HCMC 517 (D) HCMC 447 and previous

HO CHI MIN 00000958 001.2 OF 002


1. (SBU) Summary: The Central Highlands region of Vietnam is in
the midst of an economic transformation. While only twenty
years ago much of the Central Highlands was forested and
cultivated by ethnic minorities using swidden (roving
slash-and-burn) agricultural techniques, today the jungle is
clearly in retreat in the face of an onslaught by both giant
State-owned enterprises and individual peasant farmers
cultivating commodity crops for world markets. While economic
development is by-and-large improving living standards and
modernizing the area, indigenous ethnic minorities (often
collectively termed "Montagnards") are being disproportionately
left behind as socio-economic, cultural, and educational
marginalization disadvantages them vis-`-vis their ethnic
Vietnamese neighbors. Frustration over their exclusion and
exploitation is the main trigger of unrest in the area,
especially when it takes the form of corruption and land
misappropriation. End summary.

DEVELOPMENT PROJECTS AND NEW CROPS
----------------------------------
2. (SBU) Large-scale agricultural developments are immediately
evident upon arrival in the Central Highlands. On all but the
steepest mountains, the jungle has been replaced by orderly
rubber groves that stretch as far as the eye can see. Rice,
black pepper, coffee, and cashew farming are ubiquitous in more
populous areas. Though rubber and coffee have been cultivated
in the Central Highlands since the French colonial period, much
of the large-scale transition to cash crops currently taking
place occurred within the past twenty years. For example,
according to official statistics, more than 117,000 hectares of
rubber trees are being cultivated in the Central Highlands, and
a Vietnam Rubber Industry Group's survey said 170,000 additional
hectares could also be converted to rubber production by 2015.
While a high percentage of small-scale farmers have shifted at
least a portion of their production to export-oriented commodity
crops, large-scale agribusiness in the Central Highlands is
almost entirely controlled by SOEs and political insiders who
often rely largely on in-migrant labor from the North and
Northwest Highlands. While large agribusiness projects helped
build the markets for cash crops that are increasing Vietnam's
net income, NGO development studies indicate that the approval
process concentrated power in the hands of the
politically-connected, who are almost exclusively non-indigenous
Kinh-majority Vietnamese.

3. (SBU) While rubber production remains almost exclusively the
domain of large plantations, black pepper and coffee have
emerged as "engines of change" for small farmers in the region.
With reasonably modest capital investment, even small land
holders can take advantage of cash-crop markets to supplement
lower income traditional products such as rice, yams, and corn.
GVN programs encourage the cultivation of these cash crops
through loan programs, training, and subsidies. Gia Lai
Provincial and Chu Se District officials highlighted the new
prosperity that cash crops had brought their people and planned
to continue to promote their cultivation.

4. (SBU) On the conceptual level, both NGOs and the GVN have
expressed interested in introducing new crops -- notably cacao
-- to the area to increase the local value-added. Economic
planners believe cacao cultivation in the Central Highlands,
accompanied by cacao-to-chocolate processing capacity, could
bring not just increased profits but create new fields of
economic opportunity in processing and industry. Local
officials and farmers of other cash crops alike also see the
advantage of crop diversification via cocoa as a shield against
sometimes fickle international commodity markets.

ETHNIC MINORITIES LEFT BEHIND
-----------------------------
5. (SBU) Ethnic minorities have not been nearly as successful as
native Vietnamese immigrants to the Central Highlands in
benefiting from the dramatic economic growth so evident
throughout the Central Highlands. The historical dependence of
ethnic minorities on a swidden agriculture way of life makes
sedentary agriculture, let alone agribusiness farming,
culturally foreign. Accustomed to a very difficult but
independent lifestyle, ethnic minorities frequently find work in
organized enterprises unattractive. This has led some mangers
of SOEs to complain that ethnic minorities have such a poor work
ethic that they were forced to replace them with ethnic
Vietnamese migrants. These cultural difficulties are compounded
by generally minimal levels of education (ref septel) among
ethnic minorities, geographic isolation, years of war, mutual
suspicion, and FULRO separatism.

6. (SBU) Basic structural and historical imbalances work to the
economic disadvantage of ethnic minority groups native to the

HO CHI MIN 00000958 002.2 OF 002


Central Highlands. Starting in 1954 under President Diem's
South Vietnamese government, Catholic refugees from the north
were encouraged to resettle in the South, including the Central
Highlands. Under Diem, lands traditionally belonging to
Montagnards was decreed "Sovereign Territory" and reallocated to
the new Kinh (ethnic Vietnamese) immigrants for cultivation.
After the Vietnam War, the central government continued the
policy of encouraging Kinh resettlement to the Central Highlands
in the hopes it would spur economic development and increase
national security. Ethnic minority community leaders relayed
that the in-migration of Kinh with access to capital and
experience in banking has led to a steady transfer of land from
ethnic minorities to Kinh migrants. This is a tricky problem to
address, because (as noted ref C) well intentioned policies to
restrict land transfers from ethnic minorities to ethnic
Vietnamese bred resentment and charges that the GVN was
purposefully marginalizing ethnic minorities by not allowing
them a share in Vietnam's economic boom. The domination of
local government by Kinh officials has exacerbated the problem
as SOEs and other Kinh-led enterprises have used sometimes
questionable land appropriation schemes to strip ethnic
minorities of their traditional land. Anger over land
appropriation and misappropriation seems to be the leading cause
of unrest in the region (ref D).

7. (SBU) In a replay of the clash of aboriginal and modern
culture that has been replayed in the USA, Canada, Australia and
elsewhere, differing conceptions of land ownership and land
rights have also played a significant role in breeding
resentment among ethnic minorities. In Vietnam's case, ethnic
minority individuals frequently complain that the GVN
"confiscated" their lands on the pretext of being "unused."
Within the tradition conceptions of land and territory among
Central Highlands minorities, the "territory" of one village or
ethnic group consists not just of the land where they live and
farm at any given time. Instead, it includes the entire forest
region in the area where the group lives, areas where they have
lived and areas where they might live again in the future, as
over time they abandon one area to be slowly reclaimed by the
forest and relocate their dwellings and farms to newly cleared
forest land. Ethnic Vietnamese immigrants, in contrast,
typically viewed tribal lands as consisting only of those lands
actively used for farms and homes by the ethnic minorities at
the time the immigrants arrived. The immigrants -- and GVN
officials charged with distributing land rights -- viewed all
other surrounding forest land as "vacant."

8. (SBU) While government loan programs (such as Programs 134
and 135) target ethnic minorities for microfinance loans, their
Kinh counterparts frequently out-compete them with their greater
access to capital. According to some ethnic minority members
who have returned to Vietnam after fleeing to Cambodia in search
of a better life, ethnic minorities can generally borrow only
4-20 million dong (240-1200 USD), while their Kinh neighbors can
borrow up to 100 million dong (6000 USD). Such differences are
not necessarily the result of prejudice. Banks are reluctant to
loan more to ethnic minorities because they both generally do
not have sufficient collateral and have history of fleeing to
Cambodia, a sad but true factor. Minorities' relative lack of
access to capital, however, serves to further compound the
growing gap between them and ethnic Vietnamese both by allowing
ethnic Vietnamese to profit more from the most profitable cash
crops and by perpetuating an environment in which ethnic
minorities do not learn the skills needed to interact with
modern banks or manager larger-scale operations.

COMMENT
-------
9. (SBU) As long as substantial numbers of Montagnards feel
marginalized and angry, the Central Highlands will remain a
tense and potentially unstable region. While some in the GVN
continue to see FULRO separatism in every dark jungle corner,
ethnic minority discontent is primarily rooted in economic
deprivation and fears -- well-founded fears, based upon the
unfortunate history of aboriginal peoples in other nations --
that the clash of aboriginal and modern cultures will lead to a
loss of ethnic traditions and ultimately even ethnic identity.
Defusing this volatile situation will be very challenging even
if the GVN is successful in eradicating corruption and other
forms of active discrimination against ethnic minorities. End
Comment.

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

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