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Cablegate: Vietnam Consultative Group Meeting: A Realistic

This record is a partial extract of the original cable. The full text of the original cable is not available.

310632Z Dec 02

UNCLASSIFIED PTQ7499

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E-00 FAAE-00 FBIE-00 UTED-00 VC-00 FRB-00 H-01
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AC-01 NSAE-00 OES-00 OMB-01 OPIC-01 PER-00 PM-00
ACE-00 P-00 SP-00 STR-00 TEST-00 USIE-00 FMP-00
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FM AMEMBASSY HANOI
TO SECSTATE WASHDC 8510
INFO DEPTTREAS WASHDC
NSC WASHDC
USDOC WASHDC
USDA WASHDC
DEPTLABOR WASHDC
SECDEF WASHDC
AMCONSUL HO CHI MINH CITY
AMEMBASSY TOKYO
ASEAN COLLECTIVE

UNCLAS SECTION 01 OF 07 HANOI 003108

SIPDIS

STATE FOR EAP/BCLTV, EB/IFD/OMA AND EB/IFD/ODF
STATE PASS USAID FOR ANE/SPOTS: DMCCLUSKEY AND
ANE/AFERRARRA
UNCLASSIFIED

PAGE 02 HANOI 03108 01 OF 07 310719Z
STATE PASS USTR FOR ELENA BRYAN
TREASURY FOR OASIA
USDOC FOR 4431/MAC/IFP/OKSA/HPPHO
USDA FOR FAS/FAA/STEVE HUETE
SECDEF FOR ABLAGG

E.O. 12958: N/A
TAGS: EAID EFIN ETRD ECON PREL VM HUMANR ETMIN RELFREE SOE FINREF
SUBJECT: VIETNAM CONSULTATIVE GROUP MEETING: A REALISTIC
VIEW OF PROGRESS

REF: HANOI 02805

1. (U) SUMMARY: THE TENTH VIETNAM CONSULTATIVE GROUP OF
DONORS (CG) MEETING TOOK PLACE IN HANOI DECEMBER 9-11,
2002. DONORS AT THE MEETING, CO-CHAIRED BY THE GOVERNMENT
OF VIETNAM (GVN) AND THE WORLD BANK, EXPRESSED CONTINUED
SUPPORT TO THE GVN'S ACTION PROGRAM FOR 2002-2007 AND
URGED VIETNAM TO IMPLEMENT ITS COMPREHENSIVE POVERTY
REDUCTION AND GROWTH STRATEGY (CPRGS). FIVE KEY TARGETS
WERE IDENTIFIED AT THE OUTSET: CONTINUED HIGH AND
SUSTAINED ECONOMIC GROWTH; EQUITABLE SOCIOECONOMIC
DEVELOPMENT; FURTHER INTEGRATION OF VIETNAM INTO THE
WORLD ECONOMY; IMPROVED EDUCATION AND TRAINING; AND
POLITICAL AND SOCIAL STABILITY. DELEGATES EMPHASIZED THE
NEED TO SPEED UP IMPLEMENTATION OF REFORMS IN ORDER TO
ENSURE THAT VIETNAM ATTAINS ITS GOAL OF IMPROVING
COMPETITIVENESS AND CREATING AN EFFICIENT PUBLIC
ADMINISTRATION, WHILE ENSURING THAT THE POOR ALSO BENEFIT
FROM GROWTH. SOME OF THE OTHER MAJOR THEMES TOUCHED UPON
BY PARTICIPANTS INCLUDED THE NEED TO EXPEDITE AND IMPROVE
UNCLASSIFIED

PAGE 03 HANOI 03108 01 OF 07 310719Z
THE EFFICIENCY OF OFFICIAL DEVELOPMENT ASSISTANCE (ODA);
THE NEED FOR CLEAR GUIDELINES FOR BUSINESS PROTOCOL FOR
BOTH PUBLIC AND PRIVATE SECTORS; CONTINUED SUPPORT FOR
THE EQUITIZATION OF STATE-OWNED ENTERPRISES; IMPROVED
CONTAINMENT OF CORRUPTION; STRONGER ACTIONS TO CURB THE
SPREAD OF HIV/AIDS; AND ATTENTION TO THE WIDENING GAP
BETWEEN THE WEALTHY AND THE POOR. DURING THIS CANDID
DISCUSSION, PARTICIPANTS ALSO RAISED CONCERNS REGARDING
HUMAN RIGHTS, THE NEED FOR A FREE PRESS, GENDER EQUITY,
UNDERSERVED POPULATIONS INCLUDING ETHNIC MINORITIES,
TRANSPARENCY, AND GVN PROGRESS IN IMPLEMENTING ITS CPRGS.

2. (U) THE US DELEGATION, CO-CHAIRED BY AMBASSADOR
BURGHARDT AND USAID REGIONAL MISSION DIRECTOR LISA
CHILES, MADE A NUMBER OF WELL-RECEIVED INTERVENTIONS
REGARDING THE IMPORTANCE OF TRANSPARENCY, CLEAN PUBLIC
ADMINISTRATION, AN OPEN AND VIBRANT ECONOMY, FREE PRESS,
TRULY OPEN COMPETITION AS THE STATE DISMANTLES STATE-
OWNED MONOPOLIES SUCH AS TELECOMMUNICATIONS AND POWER,
AND THE URGENT NEED TO CURB THE HIV/AIDS EPIDEMIC THROUGH
INCREASED APPROPRIATE PUBLIC LEADERSHIP. IN ADDITION,
THEY HIGHLIGHTED THE NEED FOR ODA AND STATE INVESTMENT TO
FOCUS ON THOSE AREAS THAT ONLY THEY CAN DO, SUCH AS
HEALTH AND EDUCATION, WHILE ALLOWING THE PRIVATE SECTOR
TO INVEST IN MANUFACTURING AND SERVICES. THE US
DELEGATION FURTHER NOTED THE NEED FOR GREATER INVOLVEMENT
OF LOCAL NON-GOVERNMENTAL ORGANIZATIONS IN CG
DISCUSSIONS; THE NEED TO REINFORCE NON-TAXATION POLICIES
FOR ODA; AND THE PROGRESS THE GVN HAS MADE IN
CONTRIBUTING TO THE HARMONIZATION OF ODA PROGRAMS. IN
THE FINAL SESSION, THE USG PLEDGED $33.6 MILLION IN
UNCLASSIFIED

PAGE 04 HANOI 03108 01 OF 07 310719Z
ASSISTANCE TO VIETNAM, CONTINGENT ON THE AVAILABILITY OF
FUNDS. THE TOTAL CONTRIBUTION TO VIETNAM IN THE FORM OF
GRANT AND LOAN ASSISTANCE TOTALED $2.5 BILLION FOR THE
COMING YEAR - AN OVERALL INCREASE FROM LAST YEAR BUT ONE
THAT FALLS SHORT OF THE GVN'S ESTIMATION OF NEED -
ROUGHLY $3 BILLION. NONETHELESS, GIVEN THE CURRENT WORLD
ECONOMIC CLIMATE, THIS WAS VIEWED AS A POSITIVE
COMMITMENT AND A REFLECTION OF GENERAL SATISFACTION WITH
THE GVN AMONG DONOR COMMUNITY CONSTITUENTS. END SUMMARY.

4. (U) THE CONSULTATIVE GROUP FOR VIETNAM MET UNDER THE
CO-CHAIRMANSHIP OF MR. VO HONG PHUC, MINISTER OF PLANNING
AND INVESTMENT, AND MR. KLAUS ROHLAND, THE WORLD BANK'S
COUNTRY DIRECTOR FOR VIETNAM. DEPUTY PRIME MINISTER VU
KHOAN AND MINISTER PHUC LED THE VIETNAMESE DELEGATION.
ROHLAND OPENED THE MEETING WITH A STATEMENT THAT FOCUSED
ON THE CURRENT GLOBAL POLITICAL AND ECONOMIC CLIMATE AND
THE NEED TO WORK FLEXIBLY WITH THE GVN'S COMPREHENSIVE
POVERTY REDUCTION STRATEGY. HE ALSO DESCRIBED THE
PROGRESS VIETNAM HAD WITNESSED OVER THE LAST DECADE, AS
WELL AS CERTAIN CHALLENGES THAT VIETNAM AND THE
DEVELOPMENT COMMUNITY WILL FACE, INCLUDING EQUITIZATION
OF STATE-OWNED ENTERPRISES (SOE'S), FISCAL, FINANCIAL AND
PUBLIC SECTOR REFORM, AND THE SEARCH FOR NEW WAYS TO
AVOID INEQUITIES AND INEQUALITIES IN IMPLEMENTING THE

UNCLASSIFIED

UNCLASSIFIED PTQ7500

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INFO LOG-00 NP-00 AID-00 AMAD-00 EVG-00 CIAE-00 CTME-00
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E-00 FAAE-00 FBIE-00 UTED-00 VC-00 FRB-00 H-01
TEDE-00 INR-00 ITC-01 LAB-01 L-00 VCE-00 AC-01
DCP-01 NSAE-00 OES-00 OMB-01 OPIC-01 PER-00 PM-00
ACE-00 P-00 SP-00 IRM-00 STR-00 TEST-00 USIE-00
FMP-00 EPAE-00 ECA-00 PMB-00 DSCC-00 PRM-00 DRL-02
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------------------1E7B80 310720Z /38
R 310632Z DEC 02
FM AMEMBASSY HANOI
TO SECSTATE WASHDC 8511
INFO DEPTTREAS WASHDC
NSC WASHDC
USDOC WASHDC
USDA WASHDC
DEPTLABOR WASHDC
SECDEF WASHDC
AMCONSUL HO CHI MINH CITY
AMEMBASSY TOKYO
ASEAN COLLECTIVE

UNCLAS SECTION 02 OF 07 HANOI 003108

SIPDIS

STATE FOR EAP/BCLTV, EB/IFD/OMA AND EB/IFD/ODF
STATE PASS USAID FOR ANE/SPOTS: DMCCLUSKEY AND
ANE/AFERRARRA
UNCLASSIFIED

PAGE 02 HANOI 03108 02 OF 07 310720Z
STATE PASS USTR FOR ELENA BRYAN
TREASURY FOR OASIA
USDOC FOR 4431/MAC/IFP/OKSA/HPPHO
USDA FOR FAS/FAA/STEVE HUETE
SECDEF FOR ABLAGG


POVERTY REDUCTION STRATEGY.

5. (U) DPM KHOAN EXPRESSED GRATITUDE TO THE DONOR AND
NGO COMMUNITIES FOR ASSISTANCE AND NOTED THE NEED TO
REVIEW VIETNAM'S SOCIOECONOMIC DEVELOPMENT PLAN. HE
POINTED OUT THAT, DESPITE NATURAL DISASTERS, VIETNAM'S
GDP HAS GROWN 7% THIS YEAR AND THAT VIETNAM'S GENERAL
PRODUCTIVITY IS ON THE RISE. DPM KHOAN EXPRESSED
SATISFACTION WITH THE DECREASE IN THE PERCENTAGE OF
HOUSEHOLDS BELOW THE POVERTY LINE, WHICH FELL FROM 20% TO
14.4%. FURTHERMORE, HE LAUDED THE 1.4 MILLION JOBS THAT
WERE CREATED IN 2002. HE ALSO HIGHLIGHTED SUBSTANTIAL
DEVELOPMENT IN THE RURAL SECTOR OVER THE LAST YEAR.

6. (U) DPM KHOAN TOUCHED ON THREE PRIMARY TASKS FOR THE
GVN: 1) THE ENHANCEMENT OF THE QUALITY AND EFFICIENCY OF
THE COMPETITIVENESS OF VIETNAM'S ECONOMY IN THE WORLD
MARKET, 2) COMPREHENSIVE HUMAN RESOURCES DEVELOPMENT,
INCLUDING DEVELOPMENT OF SOCIAL AND ENVIRONMENTAL
FACTORS, AND 3) STRONG AND EFFECTIVE PUBLIC
UNCLASSIFIED

PAGE 03 HANOI 03108 02 OF 07 310720Z
ADMINISTRATION REFORM WITH PROMOTION OF DEMOCRACY AND
TRANSPARENCY IN ORDER TO REDUCE CORRUPTION AND INCREASE
PRODUCTIVITY. FINALLY, THE DPM INVITED DONORS TO
PARTICIPATE IN THE IMPLEMENTATION OF THE 2001-2010 MASTER
PLAN FOR PUBLIC ADMINISTRATION REFORM AND COMMENTED ON
THE IMPORTANCE OF BUILDING PARTNERSHIPS AND HARMONIZATION
OF INCOMING ODA AND ASSOCIATED PROGRAMS.

7. (U) THIS YEAR'S CONSULTATIVE GROUP MEETING FOCUSED
ON THREE MAIN TOPICS: 1) IMPROVING COMPETITIVENESS AND
EFFECTIVENESS, HUMAN DEVELOPMENT AND ADMINISTRATION
REFORM TO GET FAST AND SUSTAINABLE DEVELOPMENT; 2)
ORGANIZING THE IMPLEMENTATION FOR THE COMPREHENSIVE
POVERTY REDUCTION AND GROWTH STRATEGY AND FORMULATING AN
APPROPRIATE PUBLIC INVESTMENT PROGRAM; AND 3) IMPROVING
ODA EFFECTIVENESS AND NEEDS. MPI PHUC ADDITIONALLY
IDENTIFIED FIVE KEY TARGETS: POLITICAL AND SOCIAL
STABILITY; CONTINUED HIGH AND SUSTAINED ECONOMIC GROWTH;
EQUITABLE SOCIOECONOMIC DEVELOPMENT; INTEGRATION OF
VIETNAM INTO THE WORLD ECONOMY; AND, IMPROVED EDUCATION
AND TRAINING.

COMPETITIVENESS AND SUSTAINABLE DEVELOPMENT
-------------------------------------------

8. (U) MPI PHUC OPENED THE FIRST SESSION WITH AN
OUTLINE OF MEASURES THAT THE GVN WOULD LIKE TO TAKE,
INCLUDING RESTRUCTURING THE RURAL ECONOMY AND BUILDING ON
VIETNAM'S COMPARATIVE ADVANTAGES IN LAND AND LABOR
RESOURCES. HE TOUCHED ON INDUSTRIAL GROWTH AND THE NEED
TO DEVELOP THE SERVICE SECTOR. ADDITIONALLY, HE NOTED
UNCLASSIFIED

PAGE 04 HANOI 03108 02 OF 07 310720Z
THE GVN MANDATE FOR THE ABOLISHMENT OF MONOPOLIES IN
CERTAIN SECTORS, INCLUDING POWER AND TELECOMMUNICATIONS.
MPI PHUC ALSO EMPHASIZED THE NEED TO DEVISE EFFECTIVE
ACTION PLANS FOR PUBLIC ADMINISTRATION REFORM. THE WORLD
BANK COMMENDED THE GVN ON PLACING GREATER EMPHASIS ON THE
DEVELOPMENT AND INCLUSION OF RURAL POOR COMMUNITIES IN
THE CENTRAL HIGHLANDS, WHICH HAVE HISTORICALLY BEEN
NEGLECTED.

9. (U) THE FIRST DISCUSSION SESSION, WHICH WAS LED BY
THE REPRESENTATIVES OF THE UNDP, JAPAN, FRANCE, AND THE
IMF, EXAMINED THE NEED FOR ENHANCED COMPETITIVENESS,
PARTICULARLY IN TERMS OF SETTING A REGULATORY FRAMEWORK
AND IMPROVING THE ENVIRONMENT FOR BOTH FOREIGN AND
DOMESTIC INVESTMENT. PROMPTED IN PART BY THE UNDP'S
STATEMENT ABOUT VIETNAM'S NEED TO MAKE VIETNAM THE "BEST
PLACE TO LIVE," DISCUSSANTS FOCUSED ON THE NEED FOR
IMPROVED HUMAN DEVELOPMENT BY PLACING VIETNAMESE CITIZENS
AT THE CENTER OF DEVELOPMENT. PARTICIPANTS SUPPORTED THE
EDUCATION FOR ALL INITIATIVE, THE NEED TO ADDRESS
VULNERABILITIES OF ETHNIC MINORITY GROUPS, STRONGER
PUBLIC ACTIONS TO CONTAIN THE SPREAD OF HIV/AIDS, THE
GROWING NEED FOR EMPLOYMENT OPPORTUNITIES FOR YOUTH,
GREATER SUPPORT FOR DEVELOPMENT OF THE PRIVATE SECTOR,
AND THE NEED TO ENSURE POLITICAL, CIVIL AND RELIGIOUS

UNCLASSIFIED

UNCLASSIFIED PTQ7501

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INFO LOG-00 NP-00 AID-00 AMAD-00 EVG-00 CIAE-00 CTME-00
ITCE-00 DOTE-00 SRPP-00 DS-00 EB-00 EXME-00 OIGO-00
E-00 FAAE-00 FBIE-00 UTED-00 VC-00 FRB-00 H-01
TEDE-00 INR-00 IO-00 ITC-01 LAB-01 L-00 VCE-00
AC-01 NSAE-00 OES-00 OMB-01 OPIC-01 PER-00 PM-00
ACE-00 P-00 SP-00 STR-00 TEST-00 USIE-00 FMP-00
EPAE-00 PMB-00 DSCC-00 PRM-00 DRL-02 G-00 NFAT-00
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------------------1E7B85 310720Z /38
R 310632Z DEC 02
FM AMEMBASSY HANOI
TO SECSTATE WASHDC 8512
INFO DEPTTREAS WASHDC
NSC WASHDC
USDOC WASHDC
USDA WASHDC
DEPTLABOR WASHDC
SECDEF WASHDC
AMCONSUL HO CHI MINH CITY
AMEMBASSY TOKYO
ASEAN COLLECTIVE

UNCLAS SECTION 03 OF 07 HANOI 003108

SIPDIS

STATE FOR EAP/BCLTV, EB/IFD/OMA AND EB/IFD/ODF
STATE PASS USAID FOR ANE/SPOTS: DMCCLUSKEY AND
ANE/AFERRARRA
UNCLASSIFIED

PAGE 02 HANOI 03108 03 OF 07 310720Z
STATE PASS USTR FOR ELENA BRYAN
TREASURY FOR OASIA
USDOC FOR 4431/MAC/IFP/OKSA/HPPHO
USDA FOR FAS/FAA/STEVE HUETE
SECDEF FOR ABLAGG

RIGHTS.

10. (U) ADDITIONAL COMMENTS, INCLUDING THOSE BY THE
IMF, EMPHASIZED INCREASING VIETNAM'S COMPETITIVENESS,
IMPROVING THE DOMESTIC LEGAL STRUCTURE AND TRANSPARENCY,
ACCELERATING DEREGULATION, IMPLEMENTING THE ENTERPRISE
LAW AGGRESSIVELY OUTSIDE MAJOR URBAN AREAS, AND PAYING
GREATER ATTENTION TO OCCUPATIONAL HEALTH, SAFETY, AND
ENVIRONMENTAL STANDARDS. AMONG OTHERS, THE JAPANESE
NOTED THAT LOW-COST LABOR ALONE WILL NOT ENSURE
COMPETITIVENESS. THE IMF STRESSED THAT SOE EQUITIZATION
AND THE SUCCESSFUL IMPLEMENTATION OF THE US-VIETNAM
BILATERAL TRADE AGREEMENT WILL ENHANCE THE PROSPECTS FOR
VIETNAM'S COMPETITIVENESS IN THE WORLD ECONOMY.

11. (U)_ A NUMBER OF PARTICIPANTS ALSO EXPRESSED
CONCERNS ABOUT THE HIGH COSTS OF CURATIVE HEALTHCARE AND
BASIC EDUCATION. THE "LIKE-MINDED DONORS GROUP," AN AD
HOC GROUPING OF NINE BILATERAL DONORS THAT ARE DRAWN
TOGETHER BY A COMMON COMMITMENT TO THE CPRGS AND
UNCLASSIFIED

PAGE 03 HANOI 03108 03 OF 07 310720Z
IMPROVING THE QUALITY OF AID THROUGH DONOR HARMONIZATION,
CITED THE WIDENING GAP BETWEEN THE RICH AND THE POOR AND
MINIMAL PROGRESS ACHIEVED THUS FAR IN PUBLIC
ADMINISTRATION REFORM. SOME CONGRATULATED THE GVN FOR
ITS WORK ON THE NATIONAL EDUCATION PLAN. HOWEVER, SOME
RAISED CONCERNS REGARDING VIETNAM'S LACK OF TRANSPARENCY,
WHICH IS A PREREQUISITE FOR POSITIVE LEGAL REFORM,
SUSTAINED ECONOMIC GROWTH, AND POVERTY REDUCTION. SEVERAL
DELEGATES ALSO COMMENTED THAT THE GVN WOULD ONLY BE ABLE
TO CONTAIN CORRUPTION IF IT REDUCES DISCRETIONARY AND
DISCRIMINATORY PROCEDURES AND IMPROVES FINANCIAL
MANAGEMENT. IMPORTANT ACTIONS PROPOSED BY DELEGATES TO
COMBAT CORRUPTION INCLUDED STRENGTHENING PROFESSIONALISM
AND EFFICIENCY IN THE PUBLIC SECTOR, PAYING CIVIL
SERVANTS A LIVING WAGE, IMPROVING SIMPLICITY AND
TRANSPARENCY IN DECISION-MAKING PROCESSES, AND
FACILITATING IDEA-SHARING AND DEBATE IN A FREE PRESS.

12. (U) MPI PHUC RESPONDED TO COMMENTS FROM THE
DELEGATES BY NOTING THAT THE GVN IS DEVELOPING PROGRAMS
FOR RURAL DEVELOPMENT, WITH SPECIAL ATTENTION TO LAND AND
HOUSING CONCESSIONS FOR ETHNIC MINORITIES IN THE CENTRAL
HIGHLANDS AND NORTHERN MOUNTAINOUS AREAS. HE ALSO SAID
THAT HUMAN RESOURCE DEVELOPMENT HAS BEEN AND WILL
CONTINUE TO BE A STRONG FOCUS OF THE GVN. ACCORDING TO
PHUC, DEMOCRACY AND TRANSPARENCY ARE INTEGRAL COMPONENTS
OF VIETNAM'S LEGAL REFORM.

13. (U) REFERRING TO PHUC'S ASSERTION THAT THE GVN WAS
MOVING TOWARD ABOLISHING GVN MONOPOLIES IN
TELECOMMUNICATIONS, POWER GENERATION, AND OTHER RELATED
UNCLASSIFIED

PAGE 04 HANOI 03108 03 OF 07 310720Z
INDUSTRIES, AMBASSADOR BURGHARDT NOTED THAT SUCH
MONOPOLIES COME AT A HIGH COST TO VIETNAM. HE EMPHASIZED
THAT THE COST WOULD ONLY BE REDUCED IF TRUE COMPETITION
WERE ALLOWED IN ALL SECTORS, INCLUDING SHIPPING,
TRANSPORT, AND MINING. AMBASSADOR EXPRESSED SATISFACTION
WITH THE GVN MOVE TOWARD ABOLISHING MONOPOLIES, BUT
CAUTIONED AGAINST THE CURRENT GVN NOTION OF INCREASING
"COMPETITION," THAT IS, CREATING NEW SOE'S WITHIN THE
GOVERNMENT MONOPOLY RATHER THAN INTRODUCING REAL
COMPETITION BY ALLOWING THE ENTRY OF DOMESTIC AND FOREIGN
PRIVATE ENTERPRISES. SUCH REAL COMPETITION, HE STATED,
WOULD PUT VIETNAM ON A POSITIVE PATH TOWARD WTO
ACCESSION. AMBASSADOR ALSO EXPRESSED SUPPORT FOR
STATEMENTS MADE BY THE EU REGARDING CLEANER PUBLIC
ADMINISTRATION, FREE PRESS, AND TRANSPARENCY OF
INFORMATION FLOW, WHICH ARE KEY INGREDIENTS FOR COMBATING
CORRUPTION. AMBASSADOR CITED RECENT GVN DECREES DESIGNED
TO MONITOR, CONTROL, AND INTERFERE WITH INFORMATION FLOW
VIA THE INTERNET THAT RUN CONTRARY TO THE REGIONAL TREND
TOWARDS A DIGITAL ECONOMY. IN PARTICULAR, HE URGED THE
GVN TO RECONSIDER ITS NEW REQUIREMENT TO LICENSE AND
CENSOR WEBSITES, INCLUDING THOSE CRUCIAL FOR E-COMMERCE,
EDUCATIONAL, DIPLOMATIC, AND OTHER INFORMATION SERVICES.
HE ENCOURAGED THE GVN TO ALLOW ALL CITIZENS TO
PARTICIPATE FREELY IN THE CIVIL, ECONOMIC, AND POLITICAL

UNCLASSIFIED

UNCLASSIFIED PTQ7502

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INFO LOG-00 NP-00 AID-00 AMAD-00 EVG-00 CIAE-00 CTME-00
ITCE-00 DOTE-00 SRPP-00 DS-00 EB-00 EXME-00 OIGO-00
E-00 FAAE-00 FBIE-00 UTED-00 VC-00 FRB-00 H-01
TEDE-00 INR-00 IO-00 ITC-01 LAB-01 L-00 VCE-00
AC-01 NSAE-00 OES-00 OMB-01 OPIC-01 PER-00 PM-00
ACE-00 P-00 SP-00 STR-00 TEST-00 USIE-00 FMP-00
EPAE-00 PMB-00 DSCC-00 PRM-00 DRL-02 G-00 NFAT-00
SAS-00 /008W
------------------1E7B95 310720Z /38
R 310632Z DEC 02
FM AMEMBASSY HANOI
TO SECSTATE WASHDC 8513
INFO DEPTTREAS WASHDC
NSC WASHDC
USDOC WASHDC
USDA WASHDC
DEPTLABOR WASHDC
SECDEF WASHDC
AMCONSUL HO CHI MINH CITY
AMEMBASSY TOKYO
ASEAN COLLECTIVE

UNCLAS SECTION 04 OF 07 HANOI 003108

SIPDIS

STATE FOR EAP/BCLTV, EB/IFD/OMA AND EB/IFD/ODF
STATE PASS USAID FOR ANE/SPOTS: DMCCLUSKEY AND
ANE/AFERRARRA
UNCLASSIFIED

PAGE 02 HANOI 03108 04 OF 07 310720Z
STATE PASS USTR FOR ELENA BRYAN
TREASURY FOR OASIA
USDOC FOR 4431/MAC/IFP/OKSA/HPPHO
USDA FOR FAS/FAA/STEVE HUETE
SECDEF FOR ABLAGG

LIFE OF THEIR NATION, REGARDLESS OF GENDER, ETHNICITY, OR
RELIGION. HE ALSO STRONGLY SUPPORTED THE UNDP POSITION
REGARDING THE NEED TO CONTAIN THE HIV/AIDS VIRUS.

14. (U) A NUMBER OF DELEGATIONS SUPPORTED THE US
INTERVENTION (AND MANY MORE SIGNALED SUPPORT WITH NODS
AROUND THE ROOM). MP PHUC RESPONDED IMMEDIATELY THAT THE
FREEDOM OF RELIGION AND FREEDOM OF THE PRESS WERE
GUARANTEED BY THE VIETNAMESE CONSTITUTION, THAT THE
PROBLEM IN VIETNAM WAS NOT TOO FEW NEWSPAPERS BUT TOO
MANY, AND THAT VIETNAMESE WERE FREE TO WORSHIP AS THEY
CHOSE, AS EVIDENCED BY SOME ETHNIC GROUPS IN THE CENTRAL
HIGHLANDS THAT STILL WORSHIPED SPIRITS IN THE TREES.

REDUCING POVERTY AND PUBLIC INVESTMENT PRIORITIES
--------------------------------------------- ----

15. (U) THE SECOND SESSION OF THE MEETING FOCUSED ON
THE IMPLEMENTATION OF THE COMPREHENSIVE POVERTY REDUCTION
AND GROWTH STRATEGY (CPRGS) AND THE FORMULATION OF AN
UNCLASSIFIED

PAGE 03 HANOI 03108 04 OF 07 310720Z
APPROPRIATE PUBLIC INVESTMENT PROGRAM (PIP). LED BY THE
ADB, AUSTRALIA, GERMANY, AND SWEDEN, THE DISCUSSION WAS
MARKED BY A GENERAL CONSENSUS THAT THE GVN HAD DONE A
GOOD JOB ON ITS CPRGS FOR 2001-2005 BUT THAT SERIOUS
QUESTIONS REMAINED REGARDING THE PIP AND THE GVN'S
PRIORITIES FOR PUBLIC INVESTMENT. ACCORDING TO THE WORLD
BANK, VIETNAM'S CPRGS IS UNIQUE FROM A GLOBAL
PERSPECTIVE, BECAUSE OF ITS LEVEL OF GOVERNMENTAL
OWNERSHIP. THE CPRGS EMBODIES A PARTICIPATORY PROCESS
THAT ENCOURAGES COOPERATION AMONG NUMEROUS STAKEHOLDERS.
PARTICIPANTS EMPHASIZED THE NEED TO PUSH FORWARD ON
IMPLEMENTATION OF THE CPRGS AND THE NEED TO MEASURE
PROGRESS AND OUTCOMES THROUGH A UNIFIED MONITORING AND
EVALUATION SYSTEM. PARTICIPANTS ALSO NOTED THE NEED TO
LINK RECURRENT AND CAPITAL PUBLIC RESOURCES TO THE
PRIORITIES ARTICULATED IN THE CPRGS.

16. (U) THE GVN OUTLINED THE GOALS OF THE CPRGS AND
ANNOUNCED THE ESTABLISHMENT OF A WORKING GROUP TO SUPPORT
A DECENTRALIZED APPROACH TO MINISTRY INVOLVEMENT. THE
GVN HIGHLIGHTED THE LINKS AMONG THE PIP, THE CPRGS, AND
POVERTY REDUCTION VIA THREE CHANNELS OF INVESTMENT:
DIRECT INVESTMENT, THE NATIONAL TARGET PROGRAM, AND
INVESTMENT IN EXISTING DEVELOPED INDUSTRIES WITH HIGH
POTENTIAL. THE ADB FOCUSED ON SUPPORT FOR THE GVN'S
SOCIALLY INCLUSIVE DEVELOPMENT AND THE NEEDS TO MAXIMIZE
EMPLOYMENT OPPORTUNITIES, TO REDUCE INEQUALITIES IN
SOCIAL SECTORS INCLUDING HEALTH AND EDUCATION, TO DEFINE
NON-STATE SECTOR INVOLVEMENT, TO ALIGN ODA RESOURCES
BETTER, AND TO AVOID THE INCREASING THE POVERTY GAP.
THIS LAST ISSUE WAS ECHOED BY THE AUSTRALIAN DELEGATION,
UNCLASSIFIED

PAGE 04 HANOI 03108 04 OF 07 310720Z
WHICH ALSO POINTED OUT THE CPRGS' LACK OF RELATION
TO/INTEGRATION INTO THE PIP. AN NGO REP STRESSED THE
NEED FOR THE GVN TO FOCUS ON EDUCATION FOR THE POOR AND
RAISED THE ISSUE OF HIGH EDUCATIONAL COSTS, ESPECIALLY IN
THE PROVINCES, WHICH CONTRIBUTED GREATLY TO STUDENTS
HAVING TO LEAVE SCHOOL AT AN EARLY AGE.

17. (U) VICE MINISTER OF TRADE LUONG VAN TU MADE A
STRONG PITCH FOR ASSISTANCE FROM THE DONORS IN SECURING
GREATER MARKET ACCESS FOR AGRICULTURAL EXPORTS, CLAIMING
THAT THE POOR HAVE SUFFERED FROM TRADE BARRIERS AND
AGRICULTURAL SUBSIDIES ESTABLISHED BY INDUSTRIALIZED
COUNTRIES. SEVERAL DELEGATES, INCLUDING NEW ZEALAND,
ECHOED THIS REQUEST. DELEGATES ALSO NOTED THE NEED FOR
BROAD-BASED PARTICIPATION, INCLUDING BY THE NATIONAL
ASSEMBLY, PRIVATE SECTOR ASSOCIATIONS, AND CIVIL SOCIETY
GROUPS, IN ORDER TO ENSURE EFFECTIVE IMPLEMENTATION OF
THE CPRGS. THIS BROAD STAKEHOLDER PARTICIPATION REQUIRES
PERMANENT SUPPORT OF THE NATIONAL ASSEMBLY, GRASSROOTS
DEMOCRACY, AND CONTINUED INVOLVEMENT OF INTERNATIONAL AND
NATIONAL NGOS IN THE CONSULTATIVE GROUP FORUM. DELEGATES
ALSO POINTED OUT THE NEED TO INVOLVE LOCAL GOVERNMENTS IN
EFFORTS TO DECENTRALIZE CPRGS IMPLEMENTATION,
NECESSITATING STRENGTHENED CAPACITY AT THE LOCAL LEVEL.

UNCLASSIFIED

UNCLASSIFIED PTQ7505

PAGE 01 HANOI 03108 05 OF 07 310721Z
ACTION EAP-00

INFO LOG-00 NP-00 AID-00 AMAD-00 EVG-00 CIAE-00 CTME-00
ITCE-00 DOTE-00 SRPP-00 DS-00 EB-00 EXME-00 OIGO-00
E-00 FAAE-00 FBIE-00 UTED-00 VC-00 FRB-00 H-01
TEDE-00 INR-00 IO-00 ITC-01 LAB-01 L-00 VCE-00
AC-01 NSAE-00 OES-00 OMB-01 OPIC-01 PER-00 PM-00
ACE-00 P-00 SP-00 STR-00 TEST-00 USIE-00 FMP-00
EPAE-00 PMB-00 DSCC-00 PRM-00 DRL-02 G-00 NFAT-00
SAS-00 /008W
------------------1E7BA6 310721Z /38
R 310632Z DEC 02
FM AMEMBASSY HANOI
TO SECSTATE WASHDC 8514
INFO DEPTTREAS WASHDC
NSC WASHDC
USDOC WASHDC
USDA WASHDC
DEPTLABOR WASHDC
SECDEF WASHDC
AMCONSUL HO CHI MINH CITY
AMEMBASSY TOKYO
ASEAN COLLECTIVE

UNCLAS SECTION 05 OF 07 HANOI 003108

SIPDIS

STATE FOR EAP/BCLTV, EB/IFD/OMA AND EB/IFD/ODF
STATE PASS USAID FOR ANE/SPOTS: DMCCLUSKEY AND
ANE/AFERRARRA
UNCLASSIFIED

PAGE 02 HANOI 03108 05 OF 07 310721Z
STATE PASS USTR FOR ELENA BRYAN
TREASURY FOR OASIA
USDOC FOR 4431/MAC/IFP/OKSA/HPPHO
USDA FOR FAS/FAA/STEVE HUETE
SECDEF FOR ABLAGG

18. (U) MS. CHILES EXPRESSED SUPPORT FOR THE GERMAN AND
NGO POSITIONS REGARDING THE IMPORTANCE OF LOCAL NGO
PARTICIPATION IN THE CG. SHE ALSO NOTED CONCERN FOR THE
RISING TREND IN HIV/AIDS AND ITS ENTRANCE INTO THE
GENERAL POPULATION - BOTH OF WHICH REQUIRE STRONG
LEADERSHIP AT THE HIGHEST LEVELS. MS. CHILES ASSURED THE
GVN THAT IT HAS MANY FRIENDS PREPARED TO ASSIST WITH THIS
PROCESS. AMBASSADOR BURGHARDT REFERRED TO THE ADB'S
INTERVENTION REGARDING PRIVATE SECTOR DEVELOPMENT AND THE
NEED TO FOSTER ITS GROWTH THROUGH TRANSPARENCY AND A
CLEAR REGULATORY FRAMEWORK. HE WARNED AGAINST CROWDING
OUT POTENTIAL PRIVATE SECTOR CONTRIBUTIONS BY DEVOTING
ODA AND STATE FUNDS TO AREAS THAT THE PRIVATE SECTOR IS
BETTER SUITED TO PROVIDE. HE FURTHER COMMENTED THAT IF
THE PRIVATE SECTOR IS NOT ENABLED TO INVEST IN SUCH
AREAS, PUBLIC RESOURCES MAY NOT BE AVAILABLE FOR AREAS
THAT SHOULD BE RELEGATED TO PUBLIC SPENDING, SUCH AS
HEALTH AND EDUCATION.

19. (U) THE WORLD HEALTH ORGANIZATION POINTED OUT THAT
UNCLASSIFIED

PAGE 03 HANOI 03108 05 OF 07 310721Z
THOSE WHO ARE ENGAGED IN HEALTH SECTOR PROGRAMMING HAVE
OTHER GRAVE CONCERNS IN ADDITION TO HIV/AIDS. THE
DELEGATION HIGHLIGHTED THE NEED FOR GREATER REGULATION OF
BOTH PUBLIC AND PRIVATE SECTOR HEALTH-RELATED SERVICES,
ESPECIALLY GIVEN THE GROWING ELDERLY POPULATION AND
BURGEONING YOUTH POPULATION. IN ADDITION, VIETNAM FACES
GREAT CHALLENGES IN MANAGING OTHER HEALTH CONCERNS, SUCH
AS THE DETRIMENTAL EFFECTS OF SMOKING, A HIGH PREVALENCE
OF INJURIES FROM ACCIDENTS, AND TUBERCULOSIS. THE
DELEGATION NOTED THE NEED FOR INCREASED TRAINING AND
PUBLIC SPENDING TO BUILD THE HUMAN CAPACITY AT LOCAL
LEVELS.

ODA EFFECTIVENESS AND PRIORITIES
--------------------------------

20. (U) THE THIRD SESSION FOCUSED ON IMPROVING ODA
EFFECTIVENESS AND CLARIFYING PRIORITIES. THE GVN
PRESENTED VIETNAM'S PUBLIC INVESTMENT REQUIREMENTS AS
OUTLINED IN THE 5-YEAR PLAN, HIGHLIGHTING SOME OF THE
STEPS TAKEN BY THE GVN TO IMPROVE EFFECTIVENESS AND
EFFICIENCY OF ODA. MPI PHUC NOTED THAT VIETNAM'S TOTAL
INVESTMENT REQUIRED DURING THE FIVE-YEAR PLANNING PERIOD
WILL BE $60 BILLION. EFFICIENT ODA TRANSACTIONS AND
ACCOUNTABILITY WILL BE ESSENTIAL, GIVEN THE SCARCITY OF
RESOURCES. THEREFORE, NECESSARY ACTIONS WILL HAVE TO
INCLUDE THE ESTABLISHMENT OF AN INSTITUTIONAL AND LEGAL
FRAMEWORK AND PROCEDURES FOR EFFECTIVE ODA USE, THE
PROVISION OF COUNTERPART FUNDS, AND SOUND MONITORING AND
EVALUATION OF ODA TRANSACTIONS AND USE. THE GVN ALSO
REMARKED THAT SOME PARTNERSHIPS AMONG THE DONOR COMMUNITY
UNCLASSIFIED

PAGE 04 HANOI 03108 05 OF 07 310721Z
HAVE CAUSED A BURDEN ON THE ODA PLANNING AND DISTRIBUTION
SYSTEM.

21. (U) ACCORDING TO THE DISCUSSANT PAPER PRODUCED BY
THE UK, VIETNAM'S PROJECTS-BASED APPROACH TO ODA DELIVERY
HAS A NUMBER OF NOTABLE DRAWBACKS. THESE INCLUDE HIGH
TRANSACTION COSTS, UNDERMINING OF GOVERNMENT SYSTEMS
THROUGH THE ESTABLISHMENT OF PARALLEL PROJECT MANAGEMENT
AND FINANCIAL ADMINISTRATION SYSTEMS, AND FRAGMENTATION
OF THE DEVELOPMENT EFFORT, WHICH LEADS TO GAPS AND
INEFFICIENT SPENDING. THE PAPER FURTHER OUTLINED SOME
RECOMMENDATIONS FOR THE GVN IN ORDER TO PROMOTE MORE
SECTORAL AND PROGRAMMATIC APPROACHES, INCLUDING FIDUCIARY
RISK ASSESSMENT, ELABORATION OF A PRIORITIZED AND
PRACTICAL AGENDA TO IMPLEMENT THE CPRGS WITH GVN
RESOURCES ALIGNED TO STRATEGIC OBJECTIVES, CONTINUED
PUBLIC ADMINISTRATION REFORM, FINANCE MODERNIZATION, AND
CAPACITY BUILDING FOR ODA MANAGEMENT. THE PAPER ALSO
EXAMINED THE PROS AND CONS OF DIRECT BUDGET SUPPORT TO
NATIONAL STRATEGIES, WHICH HELPS TO PROMOTE OWNERSHIP,
PARTNERSHIP, PUBLIC ACCOUNTABILITY, AND SUSTAINABILITY,
BUT CARRIES FUDICIARY RISKS FOR TRACKING AND UTILIZATION
OF FUNDS. OVERALL, THE UK CALLED FOR INCREASED
RESPONSIBILITY ON THE PART OF THE GVN, WHILE OTHER
DELEGATES ENCOURAGED STREAMLINING OF BUREAUCRACIES AND

UNCLASSIFIED

UNCLASSIFIED PTQ7506

PAGE 01 HANOI 03108 06 OF 07 310721Z
ACTION EAP-00

INFO LOG-00 NP-00 AID-00 AMAD-00 EVG-00 CIAE-00 CTME-00
ITCE-00 DOTE-00 SRPP-00 DS-00 EB-00 EXME-00 OIGO-00
E-00 FAAE-00 FBIE-00 UTED-00 VC-00 FRB-00 H-01
TEDE-00 INR-00 IO-00 ITC-01 LAB-01 L-00 VCE-00
AC-01 NSAE-00 OES-00 OMB-01 OPIC-01 PER-00 PM-00
ACE-00 P-00 SP-00 STR-00 TEST-00 USIE-00 FMP-00
EPAE-00 PMB-00 DSCC-00 PRM-00 DRL-02 G-00 NFAT-00
SAS-00 /008W
------------------1E7BAD 310721Z /38
R 310632Z DEC 02
FM AMEMBASSY HANOI
TO SECSTATE WASHDC 8515
INFO DEPTTREAS WASHDC
NSC WASHDC
USDOC WASHDC
USDA WASHDC
DEPTLABOR WASHDC
SECDEF WASHDC
AMCONSUL HO CHI MINH CITY
AMEMBASSY TOKYO
ASEAN COLLECTIVE

UNCLAS SECTION 06 OF 07 HANOI 003108

SIPDIS

STATE FOR EAP/BCLTV, EB/IFD/OMA AND EB/IFD/ODF
STATE PASS USAID FOR ANE/SPOTS: DMCCLUSKEY AND
ANE/AFERRARRA
UNCLASSIFIED

PAGE 02 HANOI 03108 06 OF 07 310721Z
STATE PASS USTR FOR ELENA BRYAN
TREASURY FOR OASIA
USDOC FOR 4431/MAC/IFP/OKSA/HPPHO
USDA FOR FAS/FAA/STEVE HUETE
SECDEF FOR ABLAGG

GREATER FLEXIBILITY ON THE PART OF DONORS.

22. (U) DELEGATES ALSO NOTED A NUMBER OF VIETNAM'S
ACHIEVEMENTS IN THE MANAGEMENT OF ODA, INCLUDING
COMMITMENT TO THE PUBLIC ADMINISTRATION REFORM MASTER
PLAN, THE COMPLETION OF THE COUNTRY FINANCIAL
ACCOUNTABILITY ASSESSMENT AND THE COUNTRY PROCUREMENT
ASSESSMENT, AND THE MPA WEBSITE, WHICH HAS HELPED
INCREASE TRANSPARENCY. THESE ACCOMPLISHMENTS HAVE
INCREASED DONOR OPTIMISM ABOUT USING SECTOR-WIDE
APPROACHES AND DIRECT BUDGET SUPPORT. HOWEVER, DELEGATES
NOTED CERTAIN REFORMS HAVE TO BE IMPLEMENTED IN ORDER TO
ACCOUNT FOR THE MISMATCH BETWEEN ACTIONS PROPOSED IN THE
CPRGS AND ACTIVITIES FUNDED IN THE PIP, AS WELL AS THE
LACK OF A MEDIUM-TERM EXPENDITURE FRAMEWORK TO FACILITATE
PRIORITIZATION. ADDITIONALLY, DELEGATES NOTED THE
DISCONNECT BETWEEN CAPITAL AND RECURRENT BUDGETING,
WEAKNESSES IN DOMESTIC ACCOUNTABILITY, AND CONCERNS
REGARDING CORRUPTION. ALSO OF GREAT CONCERN WERE
ACCOUNTABILITY ISSUES IN TRANSACTIONS AND DISBURSEMENTS,
UNCLASSIFIED

PAGE 03 HANOI 03108 06 OF 07 310721Z
AND SLUGGISH DISBURSEMENT PROCESSES.

23. (U) THE EU DELEGATION COMMENTED ON THE POSITIVE
EFFECTS OF ODA HARMONIZATION, INCLUDING A REDUCTION IN
TRANSACTION COSTS AND INCREASE IN VIETNAMESE OWNERSHIP.
THE EU ALSO NOTED CONSTANT INTERNATIONAL STAFF TURNOVER
AS ONE PARTICULAR DRAWBACK IN THE HARMONIZATION PROCESS.
AN NGO REP CAUTIONED THE CG THAT, GIVEN THE CURRENT
MISMATCH BETWEEN SECTORAL POLICIES AND PLANS, SECTOR-WIDE
APPROACHES SHOULD BE APPROACHED WITH CARE. ADDITIONALLY,
HE NOTED THE OVERWHELMINGLY DISPROPORTIONATE ALLOCATION
OF EXPENDITURES ON TRANSPORTATION INFRASTRUCTURE, RATHER
THAN ON ESSENTIAL HUMAN DEVELOPMENT PROGRAMS SUCH AS
HEALTH AND EDUCATION. IN ADDITION, GVN INITIATIVES FOR
PEOPLE WITH DISABILITIES HAVE BEEN NEGLECTED, INCLUDING
EFFORTS TOWARD ENFORCEMENT OF BARRIER-FREE ACCESS TO
PUBLIC AND PRIVATE BUILDINGS, VOCATIONAL TRAINING, AND
INCLUSIVE EDUCATION. ROUGHLY SEVEN MILLION PEOPLE LIVE
WITH DISABILITIES IN VIETNAM; ONLY 30% OF CHILDREN WITH
DISABILITIES RECEIVE PROPER EDUCATION AND ROUGHLY 96% OF
ALL PEOPLE WITH DISABILITIES ARE UNEMPLOYED. FINALLY,
THE EU EMPHASIZED THAT, WHILE THERE ARE A SIGNIFICANT
NUMBER OF ORGANIZATIONS WORKING IN PREVENTION ACTIVITIES
FOR HIV/AIDS, NOT ENOUGH PUBLIC SUPPORT HAS BEEN PLACED
ON CARE AND SUPPORT OF PEOPLE LIVING WITH HIV/AIDS.

24. (U) AMBASSADOR BURGHARDT NOTED CONCERNS REGARDING
TAXATION OF ODA. ALTHOUGH THE GVN IS SUPPOSED TO PROVIDE
VAT REIMBURSEMENT FOR ODA, THE MINISTRY OF FINANCE RARELY
REFUNDS VAT ON USG-FUNDED PROGRAMS. THE AMBASSADOR
EMPHASIZED THAT THESE NON-REIMBURSED FUNDS CANNOT BE USED
UNCLASSIFIED

PAGE 04 HANOI 03108 06 OF 07 310721Z
FOR ASSISTANCE PROGRAMS, CRIPPLING POTENTIAL PROGRAM
SUCCESSES. ON HARMONIZATION, THE AMBASSADOR REMARKED
THAT COLLABORATION AND COORDINATION ARE AS ESSENTIAL FOR
THE GVN AS THEY ARE FOR DONORS AND IMPLEMENTING AGENCIES.
THE AMBASSADOR COMPLIMENTED THE GVN FOR ITS HARMONIZED
APPROACH TO TECHNICAL COOPERATION IN SUPPORT OF THE BTA.
SPECIFICALLY, THE USAID-FUNDED STAR PROGRAM HAS OVER 40
COUNTERPARTS, AND THE GVN IS SYNCHRONIZING THEIR INPUTS
ADMIRABLY. BOTH DELEGATIONS FROM DENMARK AND THE EU
ASSOCIATED THEMSELVES WITH THE AMBASSADOR'S STATEMENTS
REGARDING ODA TAXATION.

25. (U) DURING THE FINAL SESSION, THE MINISTRY OF
EDUCATION AND TRAINING REPORTED ON BUDGET ALLOCATIONS FOR
2003 AND PREDICTIONS FOR 2005. CURRENTLY, THE GVN
PROVIDES 15.5 PERCENT OF ITS NATIONAL BUDGET FOR
EDUCATION. THIS PERCENTAGE WILL GROW TO 16 PERCENT NEXT
YEAR, AND 18 PERCENT BY 2005.

26. (U) DONORS COLLECTIVELY PLEDGED $2.5 BILLION IN
ASSISTANCE, A SUM EXCEEDING THE PRIOR YEAR'S PLEDGE LEVEL
BY ONE MILLION DOLLARS, OR AN INCREASE OF 4.5% FROM THE
PREVIOUS YEAR. MS. CHILES INDICATED THE USG'S INTENTION
TO PROVIDE $33.6 MILLION IN ASSISTANCE TO VIETNAM,
SUBJECT TO CONGRESSIONAL APPROVAL AND AVAILABILITY OF

UNCLASSIFIED

UNCLASSIFIED PTQ7507

PAGE 01 HANOI 03108 07 OF 07 310721Z
ACTION EAP-00

INFO LOG-00 NP-00 AID-00 AMAD-00 EVG-00 CIAE-00 CTME-00
ITCE-00 DOTE-00 SRPP-00 DS-00 EB-00 EXME-00 OIGO-00
E-00 FAAE-00 FBIE-00 UTED-00 VC-00 FRB-00 H-01
TEDE-00 INR-00 IO-00 ITC-01 LAB-01 L-00 VCE-00
AC-01 NSAE-00 OES-00 OMB-01 OPIC-01 PER-00 PM-00
ACE-00 P-00 SP-00 STR-00 TEST-00 USIE-00 FMP-00
EPAE-00 PMB-00 DSCC-00 PRM-00 DRL-02 G-00 NFAT-00
SAS-00 /008W
------------------1E7BB4 310721Z /38
R 310632Z DEC 02
FM AMEMBASSY HANOI
TO SECSTATE WASHDC 8516
INFO DEPTTREAS WASHDC
NSC WASHDC
USDOC WASHDC
USDA WASHDC
DEPTLABOR WASHDC
SECDEF WASHDC
AMCONSUL HO CHI MINH CITY
AMEMBASSY TOKYO
ASEAN COLLECTIVE

UNCLAS SECTION 07 OF 07 HANOI 003108

SIPDIS

STATE FOR EAP/BCLTV, EB/IFD/OMA AND EB/IFD/ODF
STATE PASS USAID FOR ANE/SPOTS: DMCCLUSKEY AND
ANE/AFERRARRA
UNCLASSIFIED

PAGE 02 HANOI 03108 07 OF 07 310721Z
STATE PASS USTR FOR ELENA BRYAN
TREASURY FOR OASIA
USDOC FOR 4431/MAC/IFP/OKSA/HPPHO
USDA FOR FAS/FAA/STEVE HUETE
SECDEF FOR ABLAGG

FUNDS. THE ASSISTANCE WILL BE COMPRISED OF TECHNICAL
TRAINING AND SUPPORT IN NUMEROUS FACULTIES INCLUDING
HEALTH, TRADE, AND THE ENVIRONMENT, AS WELL AS
HUMANITARIAN ASSISTANCE, DISASTER RELIEF, EDUCATION, AND
FOOD ASSISTANCE. USG AGENCIES INVOLVED INCLUDE USAID,
THE CENTERS FOR DISEASE CONTROL, THE DEPARTMENT OF LABOR,
THE DEPARTMENT OF DEFENSE, THE DEPARTMENT OF AGRICULTURE,
AND THE AMBASSADOR'S EMERGENCY RESPONSE FUNDING
MECHANISM.

HUMAN RIGHTS
------------

27. (U) ADDITIONALLY, SOME DELEGATES SHARED CONCERNS
ABOUT HUMAN RIGHTS ISSUES, INEQUALITIES, AND THE WIDENING
GAP BETWEEN THE WEALTHY AND THE POOR. IN ITS OFFICIAL
DELEGATION STATEMENT, THE US NOTED AS YET INSUFFICIENT
PROGRESS WITH REGARD TO CERTAIN FREEDOMS, ESPECIALLY THAT
OF RELIGIOUS FREEDOM. THE DELEGATION STATEMENT URGED THE
GVN TO DO MORE TO DEVELOP ITS HUMAN RESOURCES AND TO
UNCLASSIFIED

PAGE 03 HANOI 03108 07 OF 07 310721Z
INCREASE ACCESS TO THE INFORMATION NECESSARY FOR CITIZENS
TO PARTICIPATE MEANINGFULLY IN LEGAL AND CIVIL
INSTITUTIONS AS WELL AS IN THE POLITICAL PROCESS. THE
NGO DELEGATION, AMONG OTHERS, ALSO NOTED THAT THERE STILL
REMAIN SOCIAL INEQUALITIES, MARGINALIZING ETHNIC
MINORITIES WHO LIVE IN THE CENTRAL HIGHLANDS AND NORTHERN
MOUNTAINOUS REGIONS.

28. (U) COMMENT: THIS YEAR'S VIETNAM CG WAS
CHARACTERIZED BY POSITIVE SUPPORT FOR THE GVN'S PROGRESS
ON DEVELOPING PLANS AND STRATEGIES TO INCREASE
DEVELOPMENT AND COMBAT POVERTY, AS WELL AS DONOR
ENCOURAGEMENT FOR FASTER REFORMS IN THE BANKING AND SOE
SECTORS. DELEGATES NOTED A NEED FOR MORE EFFICIENT
TRANSACTIONS AND HARMONIZATION IN ODA DISBURSEMENT AND
UTILIZATION. THE USDEL COMMENTS WERE WELL-RECEIVED AND
SUPPORTED AT THIS YEAR'S CONSULTATIVE GROUP MEETING.

29. (U) COMMENT CONTINUED: THE GENERAL TENOR OF THE
MEETING WAS REALISTIC, WITH BOTH BILATERAL AND
MULTILATERAL DONORS ENGAGING IN A CONSTRUCTIVE DIALOGUE
WITH THE GVN. WHILE ALL PARTICIPANTS TOOK NOTE OF THE
PROGRESS MADE IN THE PAST YEAR, THEY ALSO POINTED TO
AREAS WHERE CONTINUED WORK REMAINS NECESSARY. UNLIKE
PAST YEARS, JAPAN, THE LARGEST DONOR, WAS VISIBLY
DISSATISFIED WITH RECENT GVN POLICIES. IN ITS PLEDGING
STATEMENT, THE DELEGATION EXPLICITLY LINKED VIETNAMESE
ECONOMIC POLICIES TO THE CONTINUATION OF GOJ ASSISTANCE,
STATING THAT "THE POLICIES THAT THE VIETNAMESE GOVERNMENT
ADOPT AND IMPLEMENT IN THE FIELD OF BUSINESS ENVIRONMENT
WILL BE AN IMPORTANT ELEMENT FOR OUR EXAMINATION FOR
UNCLASSIFIED

PAGE 04 HANOI 03108 07 OF 07 310721Z
DETERMINING THE DIRECTION, CONTENT, AND SIZE OF JAPANESE
ASSISTANCE IN THE FUTURE." ALTHOUGH NOT EXPLICITLY
MENTIONED, THIS POSITION IS LIKELY A RESULT OF THE GVN'S
SUDDEN AND ARBITRARY DECISION IN OCTOBER TO CHANGE
DRASTICALLY THE CONDITIONS OF INVESTMENT LICENSES OF
SEVERAL JAPANESE MOTORBIKE PRODUCERS AND TO LIMIT THE
IMPORTATION OF MOTORBIKE KITS, AN IMPORTANT JAPANESE
INVESTMENT HERE. OVERALL, THE MEETING WAS SUCCESSFUL,
PRODUCTIVE, AND A TRUE FORUM FOR SHARED IDEAS, CRITIQUE
AND PRAISE.
BURGHARDT

UNCLASSIFIED

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