US embassy cable - 01HANOI2151

C O N F I D E N T I A L SECTION 01 OF 03 HANOI 002151 
 
SIPDIS 
 
STATE FOR EAP/BCLTV 
STATE ALSO FOR DRL 
SECDEF FOR ISA/LSTERN 
 
E.O. 12958: DECL: 08/29/11 
TAGS: PGOV, ECON, PHUM, VM, SOE, FINREF, DPOL 
SUBJECT: STAFFDEL HEARS VOICES OF REFORM FROM WITHIN 
 
 
1. (U) CLASSIFIED BY CHARGE D'AFFAIRES ROBERT PORTER. 
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REASON: 1.5 (B) AND (D). 
 
2. (C) SUMMARY: STAFFDEL REES AND GUNDERSON MET SEPARATELY 
ON AUGUST 10 AND AUGUST 14 WITH TWO MEMBERS OF THE 
PRESIDIUM OF THE FATHERLAND FRONT - PHAN DINH DIEU IN HANOI 
AND NGUYEN XUAN OANH IN HCMC.  ALTHOUGH NEITHER BELONGS TO THE 
COMMUNIST PARTY, BOTH HAVE ACTIVELY PARTICIPATED IN PARTY 
AND GOVERNMENT AFFAIRS DURING THEIR CAREERS AND REPORTEDLY 
CONTINUE TO BE INFLUENTIAL.  BOTH ARE STRONG ADVOCATES OF 
REFORM, ECONOMIC AS WELL AS POLITICAL.  END SUMMARY. 
 
MEETING WITH PHAN DINH DIEU 
--------------------------- 
 
3. (C) JOSEPH REES (COUNSEL TO THE HOUSE COMMITTEE ON 
INTERNATIONAL RELATIONS) AND BRIAN GUNDERSON (CHIEF OF 
STAFF TO HOUSE MAJORITY LEADER), ALONG WITH CONGENOFF, MET 
WITH PROF. PHAN DINH DIEU ON AUGUST 10 AT HIS HOME IN 
HANOI.  DIEU WAS A NATIONAL ASSEMBLY DELEGATE IN THE 
1970'S.  CURRENTLY HE IS DEPUTY CHAIRMAN OF THE STEERING 
COMMITTEE OF THE NATIONAL PROGRAM ON INFORMATION TECHNOLOGY 
AND, ALTHOUGH NOT A MEMBER OF THE COMMUNIST PARTY, IS A 
MEMBER OF THE CENTRAL PRESIDIUM OF THE PARTY'S NATIONAL 
FATHERLAND FRONT. 
 
4. (C) SPEAKING MOSTLY IN ENGLISH, BUT OCCASIONALLY RELYING 
ON AN INTERPRETER, SIXTY-FOUR-YEAR-OLD DIEU DESCRIBED 
HIMSELF TO THE STAFFDEL AS A MATHEMATICS AND COMPUTER 
SCIENCE RESEARCHER.  HE TOLD THEM THAT HE WAS A NATIONAL 
ASSEMBLY DELEGATE IN THE 1970'S BOTH BEFORE AND AFTER 
REUNIFICATION.  HE DESCRIBED THE FATHERLAND FRONT AS AN 
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UMBRELLA ORGANIZATION FOR VARIOUS ORGANIZATIONS AND 
SOCIETIES, BUT NOTED THAT HE PARTICIPATED IN THE FRONT AS 
AN INDIVIDUAL AND AS A SCIENTIST.  "I AM NOT A POLITICIAN," 
HE CLAIMED, "I AM A CITIZEN AND A PATRIOT." 
 
5. (C) DIEU SAID HE STUDIED IN THE SOVIET UNION IN THE 
1960'S.  HE SAID THAT ALTHOUGH HE BELIEVED IN THE SOCIAL 
AND HUMANITARIAN GOALS OF COMMUNISM, HIS YEARS IN THE 
SOVIET UNION TAUGHT HIM THAT THOSE GOALS COULD NOT BE 
REACHED THROUGH THE POLITICAL AND ECONOMIC MECHANISMS HE 
SAW THERE.  HE SAID THAT VIETNAM'S COMMUNIST PARTY HAD MADE 
GREAT CONTRIBUTIONS TO THE COUNTRY, BUT THAT HE FELT THE 
COMMUNIST ORGANIZATION OF SOCIETY THAT WAS EFFECTIVE IN 
WARTIME COULD NOT BE EFFECTIVE FOR DEVELOPMENT IN 
PEACETIME.  "I SAID THAT OPENLY IN THE NATIONAL ASSEMBLY IN 
THE LATE 1970'S, AND I STILL SAY SO TODAY QUITE OPENLY AND 
PUBLICLY," HE DECLARED. 
 
6. (C) IN 1980, HE SAID, PRIME MINISTER PHAM VAN DONG 
REQUESTED HIM TO PREPARE A PAPER CLARIFYING HIS IDEAS AND 
SUGGESTIONS.  HE SAID HE CRAFTED A LONG STATEMENT ON 
ECONOMIC DEVELOPMENT BASED ON SCIENTIFIC METHODS, MARKET 
MECHANISMS, AND A LOOSENING OF CENTRAL PLANNING AND 
CONTROL.  HE SAID HE PARTICULARLY CRITICIZED THE IDEA OF 
VIETNAM'S MILITARY BEING IN CHARGE OF MANAGING PEACETIME 
BUSINESS ENTERPRISES.  IN 1980, DIEU SAID, THE LEADERS WERE 
NOT PREPARED TO ACCEPT THESE IDEAS, BUT BY 1986, THEY 
RECOGNIZED THE NEED FOR CHANGE.  HE SAID HE ENCOURAGED THEM 
TO ACCEPT THE IDEA OF GRADUAL REFORMS, BEGINNING WITH THE 
INTRODUCTION OF LIMITED MARKET MECHANISMS IN THE ECONOMY. 
 
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7. (C) HE SAID HE WAS WITH PARTY SECRETARY GENERAL DO MUOI 
IN 1989 DURING THE EVENING THE COUP TOOK PLACE IN THE 
SOVIET UNION.  THAT EVENT HAD A PROFOUND EFFECT ON THE 
SECRETARY GENERAL, DIEU SAID.  AFTERWARDS, DIEU SAID HE 
 
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ADVISED DO MUOI TO ACCEPT CHANGE BECAUSE IT WAS INEVITABLE, 
AND FURTHER ADVISED THAT CHANGE COULD OCCUR STEP BY STEP, 
RATHER THAN AS A CATACLYSMIC EVENT SUCH AS WHAT OCCURRED IN 
THE SOVIET UNION AND OTHER COMMUNIST STATES IN EASTERN 
EUROPE. 
 
8. (C) REES INTERJECTED THAT WHAT DIEU SUGGESTED SOUNDED 
LIKE "PEACEFUL EVOLUTION."  DIEU REPLIED THAT ALTHOUGH THE 
PARTY DETESTS THE PHRASE "PEACEFUL EVOLUTION," THAT IN FACT 
IS WHAT HAS BEEN OCCURRING FOR THE PAST TEN YEARS. 
 
9. (C) DIEU SAID PARTY LEADERS ARE AFRAID OF THE POTENTIAL 
FOR INSTABILITY THAT A CHANGE OF LEADERSHIP WOULD ENTAIL. 
HE SAID HE HIMSELF BELIEVES A CHANGE OF LEADERSHIP IS NOT 
NECESSARY FOR THE DEVELOPMENT OF THE COUNTRY; INSTEAD, A 
CHANGE IN THE WAY OF THINKING WAS ESSENTIAL.  VIETNAM HAS 
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NEVER HAD A HISTORY OF DEMOCRACY, HE STATED, AND THERE ARE 
TIMES IN A COUNTRY'S DEVELOPMENT WHEN A MULTI-PARTY SYSTEM 
IS INAPPROPRIATE. 
 
10. (C) DIEU SAID HE BELIEVED VIETNAM WOULD EVENTUALLY 
DEVELOP A FREE MARKET ECONOMY AND A DEMOCRATIC SOCIETY.  HE 
QUICKLY ADDED THAT A COUNTRY MIGHT TAKE MANY DIRECTIONS ON 
THE ROAD TO A MULTI-PARTY SYSTEM, HOWEVER.  HE SAID HE 
WOULD NOT ATTEMPT TO PREDICT WHAT VIETNAM'S NEXT STEPS 
WOULD BE, BUT ADDED, "WE ARE ALREADY EMBARKED ON A NON- 
REVERSIBLE TREND TOWARD ECONOMIC AND POLITICAL REFORM."  HE 
SAID THE GREATEST HOPE FOR FURTHER REFORM IN VIETNAM IS THE 
FRESH OUTLOOK AND DYNAMISM OF VIETNAM'S YOUTH. 
 
MEETING WITH NGUYEN XUAN OANH 
----------------------------- 
 
11. (C) REES, GUNDERSON AND CONGENOFF MET WITH NGUYEN XUAN 
OANH AT HIS OFFICE IN HCMC ON AUGUST 14.  OANH WAS DEPUTY 
PRIME MINISTER FOR ECONOMY AND FINANCE IN SOUTH VIETNAM 
FROM 1963-67, AND WAS ACTING PRIME MINISTER FOR A SHORT 
TIME IN 1965-66.  IN THE LATE 1970'S HE RE-EMERGED AS AN 
ADVISOR FOR TO VO VAN KIET.  CURRENTLY, HE IS PRESIDENT OF 
N.X. OANH ASSOCIATES, A BUSINESS, MANAGEMENT & FINANCE 
CONSULTING AGENCY IN HCMC.  OANH, WHO IS IN HIS LATE 70'S 
OR EARLY 80'S, RECEIVED A BA IN ECONOMICS AT THE KYOTO 
IMPERIAL UNIVERSITY IN JAPAN IN 1949 AND A PH.D. FROM 
HARVARD UNIVERSITY IN 1954.  LIKE PHAN DINH DIEU, OANH IS 
NOT A COMMUNIST PARTY MEMBER, BUT IS A MEMBER OF THE 
CENTRAL PRESIDIUM OF THE PARTY'S NATIONAL FATHERLAND FRONT. 
 
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12. (C) OANH TOLD THE STAFFDEL THAT AFTER 1975, THE NEW 
GOVERNMENT PLACED HIM UNDER HOUSE ARREST FOR NINE MONTHS 
UNTIL THEY DECIDED HE WAS A "HARMLESS TECHNOCRAT."  HE SAID 
HE IMMEDIATELY BEGAN WRITING FOR THE "TIN SANG" ("MORNING 
NEWS") NEWSPAPER, AND THAT MANY OF HIS ARTICLES WERE 
CONSTRUCTIVE CRITICISMS OF THE BANKING SYSTEM AND OF 
GOVERNMENT ECONOMIC POLICIES.  HE SAID THAT IN 1978, VO VAN 
KIET (THEN COMMUNIST PARTY SECRETARY FOR HO CHI MINH CITY) 
SUMMONED HIM TO HIS OFFICE.  OANH RECOUNTED THAT KIET 
ORDERED HIM TO STOP HIS PUBLIC NEWSPAPER CRITICISMS, BUT 
ALSO SAID HE FOUND THE IDEAS IN OANH'S ARTICLES THOUGHT 
PROVOKING AND WISHED TO DISCUSS THEM FURTHER.  ACCORDING TO 
OANH, THUS BEGAN A CONFIDENCE THAT CONTINUED AS OANH 
ADVISED KIET ON MONETARY AND FISCAL MATTERS EVEN AFTER KIET 
WENT TO HANOI IN 1988, EVENTUALLY BECOMING PRIME MINISTER. 
 
13. (C) OANH SAID THAT DURING THE 1980'S, HE ADVOCATED 
PRIVATE OWNERSHIP OF CAPITAL AND OF ENTERPRISES.  HE 
RECOUNTED THAT PARTY SECRETARY GENERAL DO MUOI ONCE ASKED 
HIM, "BUT HOW CAN PRIVATE INDIVIDUALS OWN A BANK?"  OANH 
SAID THAT CURRENT LEADERS STILL SUFFER FROM THE OLD 
COMMUNIST MINDSET, AND THAT IS WHY THE SCOPE OF THE PRIVATE 
SECTOR IS STILL LIMITED IN VIETNAM.  AS AN EXAMPLE, HE 
NOTED THAT THREE YEARS EARLIER, THE GOVERNMENT DISBANDED 
THE MINISTRY OF HEAVY INDUSTRY AND REPLACED IT WITH SEVERAL 
CORPORATIONS.  "BUT THE CAPITAL FOR THESE CORPORATIONS 
STILL COMES FROM THE GOVERNMENT," HE SAID, "AND THE 
MANAGEMENT IS STILL DIRECTED BY THE GOVERNMENT."  HE SAID 
VIETNAM SHOULD GIVE UP ALTOGETHER THE NOTION OF STATE-OWNED 
ENTERPRISES IF IT WANTS ITS ECONOMY TO WORK. 
 
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14. (C) REES ASKED OANH IF HE THOUGHT ECONOMIC REFORM COULD 
PROGRESS WITHOUT POLITICAL REFORM.  OANH SAID HE BELIEVED 
POLITICAL REFORM HAD ALREADY "COME IN THROUGH THE BACK DOOR 
OF ECONOMIC REFORM," ALBEIT AT A VERY SLOW PACE.  HE NOTED 
THAT SEVERAL NATIONAL ASSEMBLY DELEGATES ARE NON-PARTY 
MEMBERS.  HE SAID HE KNEW MANY PEOPLE, PARTICULARLY 
UNIVERSITY PROFESSORS, WHO WOULD LIKE TO SEE THE 
DEVELOPMENT OF A "LOYAL OPPOSITION, AS IN ENGLAND."  HE 
FURTHER SAID, "WE ALL, INCLUDING NONG DUC MANH AND THE 
OTHERS, BELIEVE THERE WILL BE A MULTI-PARTY SYSTEM IN 
VIETNAM IN 10-15 YEARS."  THEN HE ADDED THAT THE COMMUNIST 
PARTY WOULD MANAGE THE TRANSITION SO THE RESULTING MULTI- 
PARTY SYSTEM WOULD NOT BE WHAT OUTSIDERS MIGHT EXPECT.  IT 
WILL BE A POLITICAL SYSTEM UNIQUE TO VIETNAM, HE CONCLUDED. 
 
15. (C) REES NOTED THAT MANY OF THE THINGS OANH SAID 
SOUNDED SIMILAR TO THINGS DISSIDENT NGUYEN DAN QUE HAD SAID 
IN THE PAST, BUT QUE ENDED UP IN PRISON FOR HIS COMMENTS. 
OANH ADMITTED THAT THE BOUNDARY BETWEEN WHAT YOU CAN AND 
CANNOT SAY IS VERY FUZZY.  OANH SAID HE NEVER ADVOCATED 
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OVERTHROWING THE GOVERNMENT, BUT INSTEAD CRITICIZED 
POLICIES IN A CONSTRUCTIVE WAY.  "IF ONE CRITICIZES, ONE 
SHOULD ALSO OFFER PRACTICAL SOLUTIONS.  IT IS AS IMPORTANT 
HOW YOU SAY THINGS, AS IT IS WHAT YOU SAY," HE EXPLAINED. 
 
16. (U) THE STAFFDEL DID NOT HAVE AN OPPORTUNITY TO CLEAR 
THIS MESSAGE BEFORE DEPARTURE. 
 
PORTER 
 
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