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Cablegate: Ambassador Visits Vietnam's South-Central Coast

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

UNCLAS SECTION 01 OF 03 HANOI 003246

SIPDIS

SENSITIVE

E.O. 12958: N/A
TAGS: PGOV ECON EINV PREL SOCI ETRD VM HUMANR RELFREE HIV AIDS
SUBJECT: AMBASSADOR VISITS VIETNAM'S SOUTH-CENTRAL COAST

REF: HCM 1482

1. (SBU) Summary: The Ambassador visited the south-central coast
of Vietnam and found economic development plans in their infancy.
Senior officials called for U.S. investment and humanitarian
assistance. The Ambassador raised religious freedom, HIV/AIDS,
and educational and cultural exchanges and responded to calls for
USG assistance for Agent Orange victims. He also encouraged local
leaders and firms to consider buying U.S. goods and services. End
Summary.

2. (U) Following participation in an off-site Hanoi-Ho Chi Minh
City Management staff conference, the Ambassador traveled up the
south-central coast of Vietnam November 19-22, beginning at Cam
Ranh Bay and ending in Danang. He called on local leaders in
Khanh Hoa, Binh Dinh and Quang Ngai provinces.

KHANH HOA PROVINCE
------------------

3. (U) In separate meetings, Le Xuan Than, First Vice Chairman of
the Khanh Hoa Provincial People's Committee, and Party Secretary
Nguyen Van Tu focused on plans to develop tourism, particularly on
the peninsula north of Cam Ranh Bay. Soon after the Russian
military withdrew from Cam Ranh Bay in 2002, the GVN announced
plans to develop the large peninsula north of the bay into an
industrial and tourism center and to open Cam Ranh Airport for
commercial flights. Commercial flights began in May 2004, and the
airport plans to begin receiving international flights in 2005.
Provincial leaders hope that the airport's transformation will
pave the way for the region's rapid development.

4. (U) On a tour of the peninsula, the Ambassador traveled along a
new, dual-carriage road connecting the airport with the provincial
capital of Nha Trang and observed construction of a toll bridge
that will link Cam Ranh Peninsula with the mainland and provide a
more direct route to National Highway 1 and Ho Chi Minh City to
the south. Local officials briefed the Ambassador on plans to
build tourist resorts and a golf course on a 13-kilometer stretch
of pristine beach on the peninsula. Although the bridge is
scheduled for completion in May 2006, there is no clear timeline
for construction of the golf course or tourist resorts. The
province is waiting for permission from the central government to
allow foreign investment in the project. Approximately 50
domestic investors have purchased property on the peninsula,
largely for speculative purposes. The Ambassador encouraged local
leaders to develop clear regulations and incentives for investment
and to continue to lobby the GVN to allow foreign investment in
the Cam Ranh development projects. He also encouraged them to
cooperate with U.S. airlines to find ways to draw tourists to the
province.

5. (U) Vice Chairman Than also focused on the province's plans to
develop its seafood processing industry and stated that the
province exported over USD 200 million in seafood products in
2004. The Ambassador noted that as new seafood processing
factories are built or older ones upgraded, American companies
stand ready to provide the technology and equipment they need.

BINH DINH PROVINCE
------------------

6. (U) In Binh Dinh Province, the Ambassador met with Mr. Vu Hoang
Ha, Chairman of the Provincial People's Committee. Ha identified
four development priorities for his office: completing the Nhon
Hoi Economic Zone, developing the tourism industry, improving
human resources, and reforming the public administration system.

7. (U) The Nhon Hoi Economic Zone is located on a peninsula
northeast of the provincial capital of Quy Nhon City. Plans for
the economic zone include a 1,000-hectare industrial zone, a 500-
hectare urban area with high-rise apartments and commercial
centers, a deep-sea port and shipyard, a 500-hectare tourist zone,
a wind power plant, and a new bridge linking the peninsula with
Quy Nhon City. The bridge will be completed in 2005; however, all
other aspects of the project are in the early planning stages. Ha
hopes to submit the plan for the Nhon Hoi Economic Zone to the
Prime Minister for approval by the end of 2004. The Ambassador
encouraged Ha to seek U.S. firms that would be able to provide
equipment and technology for the project as well as investment
capital.

8. (U) Ha pointed out that the province has a 134-kilometer
coastline and a number of Cham towers and other historical sights
that provide the potential for future tourism development. Major
challenges include shortages of human resources and hotels meeting
international standards. The province is focused on building more
hotels and a five-star resort recently opened in Quy Nhon City.

9. (SBU) The Ambassador met with Thomas Williams, Deputy Director
of Pure Bay Oyster Company and his Australian partner. Their
company supplies oysters and other seafood products directly to
high-end hotels throughout Vietnam. In their view, although the
local government was not necessarily helpful, it was "not an
obstacle" either. Overall, they were receiving much better
support than they had in Khanh Hoa Province where they operated
from 1998 to 2000. Their largest frustration is the lack of
reliable transportation routes to deliver products to market.
(There are no international flights from Quy Nhon, and products
must be sent by road to Hanoi and Ho Chi Minh City.) This
obstacle is not preventing the company from growing; Williams
expects the company's profits to double within the next year and
continue growing further.

10. (U) The Ambassador also discussed opportunities for
cooperation with Quy Nhon University President Tran Tin Kiet and
the possibility of bringing more American Fulbright scholars and
guest lecturers to the university. Quy Nhon University currently
hosts three American volunteers who are teaching English language
classes, and the university is eager for more cooperation.

QUANG NGAI PROVINCE
-------------------

11. (SBU) Local officials in Quang Ngai Province focused on plans
for the Dung Quat Industrial Zone, which will include a tax-free
economic zone, a deep-sea port, a shipyard and the nation's first
oil refinery. Dr. Nguyen Kim Hieu, Chairman of the Provincial
People's Committee, and Mr. Tran Le Trung, Chairman of the Dung
Quat Industrial Estate Authority, both said the Dung Quat
industrial zone and its lead project, the refinery, are "the
driving force to speed the development of Central Vietnam."
(NOTE: Most commercial experts agree a better location for the
nation's first refinery would have been the Vung Tau region, where
most offshore oil and gas wells are located. However, the GVN
decided for political reasons to locate the refinery in the
central part of the country to create jobs and boost
industrialization in the region.) The Ambassador urged Hieu and
Trung to seek American firms to provide supplies and services for
the project as subcontractors.

12. (U) The Ambassador noted that the Mission has had little
interaction with the province in the past and said he was looking
for areas where we could cooperate in the future. Hieu requested
humanitarian assistance in the areas of education, health care,
environmental protection and natural disaster mitigation. He
noted that Quang Ngai is a poor province with a per capita GDP
that is half the national average. The province faces a number of
challenges including lack of skilled labor (there is no university
in the province) and a harsh natural environment prone to
flooding. (Note: Hieu's last point was borne out by the province's
heavy losses, in both people and property, during this week's
typhoon-related flooding. End Note.)

COMMON THEMES: INVESTMENT, AO, HIV/AIDS, AND RELIGIOUS FREEDOM
--------------------------------------------- -----------------

13. (SBU) In all three provinces, local leaders called for more
American investment. The Ambassador pointed out the provinces
were competing not only with other provinces in Vietnam but also
with other countries in the region for foreign investment dollars.
He urged provincial leaders to eliminate corruption and improve
regulatory transparency, rule of law and investment incentives in
order to make their provinces more competitive and attractive to
investors.

14. (SBU) Leaders in each province requested USG assistance for
victims of Agent Orange. On each occasion, the Ambassador noted
that the United States works to provide humanitarian support to
all those in need, regardless of the cause of their disabilities,
noting that the USG will provide some USD 60 million in
development assistance to Vietnam in FY-2005 in addition to the
millions of dollars donated by American NGOs. The Ambassador also
pointed out that the USG has provided USD four million to work
with the GVN on projects to improve scientific understanding of
the effects of Agent Orange.

15. (SBU) The Ambassador took the opportunity in each province to
raise the issues of human rights and religious freedom and to
underscore U.S. abiding interest in these areas. He acknowledged
that Vietnam has made progress in these areas, but noted continued
reports of forced renunciations and other limits on the peaceful
practice of religion tarnish the bilateral relationship. With the
exception of Chairman Ha in Binh Dinh, none of the provincial
leaders went further than the standard response that the GVN
recognizes human rights and religious freedom. (The Ambassador's
November 21 meeting with Unified Buddhist Church of Vietnam
Patriarch Thich Huyen Quang and his conversation with Chairman Ha
were reported reftel.)

16. (U) The Ambassador addressed HIV/AIDS prevention and treatment
efforts in each province and noted the USG was looking for ways to
expand its efforts beyond Ho Chi Minh City, Hanoi and other areas
with high prevalence rates. Leaders in Khanh Hoa and Binh Dinh
provinces stated they understood the stigma associated with
HIV/AIDS and were personally working on the issue in their
provinces. They pledged to speak out publicly on the issue.

17. (SBU) Comment: Khanh Hoa and Binh Dinh provinces hope to
develop their tourism industries over the coming years. Their
success will depend upon their ability to draw tourists from the
more popular destinations of Ho Chi Minh City, Hanoi and Danang.
Khanh Hoa has clear advantages over other provinces in the region
- a large airport, beautiful natural environment, and ten months
of sunshine per year - that will draw tourists and investors.
Quang Ngai faces the greatest challenges, disadvantaged by its
harsh environment and lack of skilled labor. It is doubtful that
all three will succeed in keeping pace with the national average
in GDP growth.

18. (U) This cable was prepared by Consulate General Ho Chi Minh
City.

MARINE

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