Cablegate: From Ideology Czar to Reform Advocate

VZCZCXRO1574
PP RUEHDT RUEHPB
DE RUEHHM #0872/01 2330948
ZNR UUUUU ZZH
P 210948Z AUG 07
FM AMCONSUL HO CHI MINH CITY
TO RUEHC/SECSTATE WASHDC PRIORITY 3017
INFO RUEHHI/AMEMBASSY HANOI PRIORITY 2130
RUCNARF/ASEAN REGIONAL FORUM COLLECTIVE
RUEHHM/AMCONSUL HO CHI MINH CITY 3222

UNCLAS SECTION 01 OF 02 HO CHI MINH CITY 000872

SIPDIS

SENSITIVE
SIPDIS

EAP/MLS FOR BRETT BLACKSHAW

E.O. 12958: N/A
TAGS: PHUM SOCI ECON PREL PGOV VM
SUBJECT: FROM IDEOLOGY CZAR TO REFORM ADVOCATE

REF: HCMC 805 AND PREVIOUS

HO CHI MIN 00000872 001.4 OF 002

1. (SBU) SUMMARY: On August 16, People's Council Chairwoman Pham
Phuong Thao and CG discussed issues ranging from the city's
plans for attracting private investment to meet much of the
city's massive infrastructure requirements to the social and
political challenges posed by the widening economic disparity
among the residents of this booming city. Over the course of
the one-hour meeting, Chairwoman Thao, whose resume includes a
stint as the chief of Communist ideology for HCMC, began rather
stiffly but eventually spoke earnestly of the need to make local
government more responsive to people's needs and her wish that
the national government would act more swiftly on economic
liberalization. END SUMMARY.

WARMING TO CHANGE
-----------------
2. (SBU) After listening to a fairly typical recitation of GVN
policies and goals in HCMC, CG Fairfax used examples from his
past work on urban redevelopment in the U.S. as well as from his
experiences in other transition economies to draw out Chairwoman
Thao on how the People's Council (which is analogous to a City
Council) is facing the challenges that inevitably accompany
rapid change.

3. (SBU) While Thao was initially quite guarded in her
responses, as she warmed to the topic she said that while HCMC
is dynamic and young, like any youth, it demands a great deal of
attention. In particular, Thao believes the HCMC government
cannot afford to become complacent due to its past successes and
must instead learn to respond to increasing pressure and public
demands, citing as examples a recent survey of city residents
conducted to measure satisfaction with public services and the
fact that her office now has a hotline to receive "a great many"
complaints from residents every day. At another point in the
conversation, she also expressed her desire for the GVN to move
forward more quickly on economic liberalization, citing a new
law on public-private partnership projects as well as
administrative reforms as key areas in need of rapid action.
Having (mildly) criticized the GVN for slow action on reform,
Thao also admitted that while the People's Council has made
administrative reforms a key priority for the past two years,
progress has thus far proved elusive.

4. (SBU) Asked about the economic "winners and losers" in HCMC's
rapid transformation in general and about those HCMC residents
who took part in recent land rights protests (reftels) in
particular, Thao readily acknowledged that a number of HCMC
residents have been left behind as the overall economy has moved
forward. On the land issue, she explained that hundreds of
thousands of HCMC residents have been affected by the city's
urban development projects and that not all of them were able to
find replacement housing. While she started with the line that
"everyone must make sacrifices for the sake of development and
progress," she also acknowledged that those sacrifices have not
been spread evenly.

5. (SBU) Thao explained that while some of the people who have
been displaced have been able to use their compensation money to
acquire new residences and even to open successful businesses,
others have been less fortunate. She said that in some cases it
was a question of timing while in others projects should have
been managed better. While she believes that a large majority
of residents in redeveloped areas wind up better off than they
were before, she admitted that tens of thousands out of the few
hundred thousand households that have been displaced nonetheless
wound up much worse off. She described a two-pronged approach
to address this problem. First, the city is moving to
compensate those unfairly disadvantaged in the past by providing
new housing. She estimated 4,700 units would be made available
in 2007 alone and she hopes for a larger number in 2008.
Second, to avoid creating new problems the city has adopted
policies on major development projects under which developers --
public and private -- must mitigate the impact of their projects
on local residents and the environment.

CASH TO TAKE OUT THE TRASH
--------------------------
6. (U) Looking to the future, Thao said the government's
multi-year urban infrastructure plan included projects to
renovate HCMC's transportation, education and health care
networks. She also explained her conviction that the key to the
city's future economic success is mobilizing private sector
expertise and private capital to complete many of these public
infrastructure projects. Thao hoped the CG would continue to
help HCMC attract more U.S. expertise and funding for urban
development projects, citing an American investment in a new
solid waste processing facility as a huge success and model for
future projects. While not the largest of the city's six major
dumps, she explained that this single new American investment

HO CHI MIN 00000872 002.4 OF 002

will soon accommodate one half of the city's urban waste (3,000
tons a day) in a state of the art facility that incorporates
advanced recycling, composting and environmental projection
technologies -- all of it built without a dime of public money.
(Comment: We believe she was referring to a facility built by
California Waste Management that is operated on a commercial
basis with tipping fees providing its income stream.)

7. (U) Noting that nothing builds success like success, the CG
expressed his hope that the city would help to ensure the
success of recently formed private infrastructure investment
funds by working closely with them. He also volunteered to
return for a future meeting accompanied by commercial experts so
that they could discuss specific infrastructure projects that
the city believes are suitable for private or PPP development.

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

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