US embassy cable - 04HANOI2438

UNCLAS SECTION 01 OF 03 HANOI 002438 
 
SIPDIS 
 
SENSITIVE 
 
E.O. 12958:  N/A 
TAGS: PREL, PGOV, ETRD, VM, DPOL 
SUBJECT:  FINAL THOUGHTS FROM HANOI 
 
FROM AMBASSADOR BURGHARDT 
 
Four Fears and One New One 
 
1. An American who knows Vietnam very well related to 
me soon after my arrival in Hanoi how he had briefed 
President Clinton just before Clinton's November 2000 
visit to Vietnam:  He had explained that the leadership of 
the Communist Party of Vietnam (CPV) makes its most 
important decisions in response to four basic fears: 
 
Fear of China 
Fear of the United States 
Fear of Globalization 
Fear of the Consequences of Economic Development 
 
2. Four years later, the Four Fears Analysis is still a valid 
way of understanding the Socialist Republic of Vietnam's 
cautious leadership.  The current generation of Politburo 
members, most of whom studied in the Soviet Union or 
its satellites, were traumatized by the collapse of the 
U.S.S.R., the end of the COMECON system and the 
demonstrations at Tiananmen Square.  As one party 
loyalist told me, "Our nightmare is Poland, where they 
allowed both the labor unions and the Church to become 
independent forces, leading to loss of power.  We won't 
let it happen here." 
 
3. But while Vietnam remains one of the world's last 
Leninist systems, determined to resist the forces of 
"peaceful evolution," we also can see that there has been 
profound change underway in this society and in the 
thinking of the leaders during the past four years.  A new 
fifth fear has reconfigured the influence of the other four: 
 
Fear of falling further behind Vietnam's rapidly 
developing neighbors. 
 
4. By mid-2003 Vietnam's aid donors, led by the World 
Bank, had convinced the Hanoi leadership that a rapid 
increase in Foreign Direct Investment (FDI) and rapid 
development of the domestic private sector were essential 
to provide the 1.5-2 million new jobs needed each year. 
If employment creation was left to the State-Owned 
Enterprises (SOE's), and Government apparatus, the 
country would soon face a very serious economic and 
social crisis, which the party leadership saw as the 
potential prelude to the nightmare scenarios of Eastern 
Europe.  The leaders still saw danger in globalization and 
economic development, but the dominant leadership 
group saw greater danger in trying to resist the inevitable 
trends of the era. 
 
Seeing the U.S. in a New Light 
 
5. In mid-2003, the CPV leadership's new assessment of 
Vietnam's position in the world resulted in a shift of 
policy toward the United States.  The June 2003 Party 
Plenum concluded that Vietnam's national security 
strategy had to be re-balanced.  Relations with China had 
improved rapidly, but so had Vietnam's concern about 
Beijing's aggressive pursuit of greater influence in this 
part of the world.  Relations with the U.S. had soured 
somewhat.  Hanoi saw the inauguration of the Bush 
Administration as an unwelcome development, the 
replacement of a "friend" who normalized U.S.-SRV 
relations by a group seen as unreconstructed Cold 
Warriors.  These suspicions were deepened by the 
Montagnard demonstrations in the Central Highlands In 
Spring 2001, followed by the exodus of 1,000 
Montagnards to Cambodia and their resettlement in 
America.  In the paranoid worldview of the CPV's 
headquarters on Ba Dinh Square, the fact that 
Montagnard exiles in South Carolina had encouraged the 
demonstrations proved that the disturbances were part of 
a destabilization plot directed out of the White House. 
 
6. But by June 2003, the leadership was ready to leave 
that episode behind.  Most party leaders now seemed 
willing to give the Bush Administration the benefit of the 
doubt.  They were delighted by the huge surge in 
Vietnamese exports to the U.S. after the Bilateral Trade 
Agreement (BTA) went into effect in December 2001. 
They wanted to do everything possible to encourage more 
U.S. investment.  They concluded that Vietnam must join 
the WTO, ideally by 2005, and that U.S. support was the 
key ticket for WTO accession.  They opposed the U.S. 
invasion of Iraq, but they were impressed by its quick 
victory.  The U.S. was the dominant world power and it 
would be wise to get along with it.  In Hanoi's realpolitik 
world review, the U.S. role was essential to keep China in 
check. 
 
7. Following the Party Plenum, Vietnamese officials 
moved quickly to make clear to us their desire to improve 
our relationship.  For a government which had treated 
strategic dialogue as almost a taboo subject, the new- 
found enthusiasm of Vietnamese officials to argue for 
"strategic balance" was a striking developing.  When the 
head of the Public Security Ministry's think tank 
announced a conference in Washington in October 2003 
that the U.S. had become "naive about China," we knew 
that we had entered a new era in our dialogue with 
Vietnam.  Two months later we would hear Deputy Prime 
Minister Vu Khoan tell the Secretary and Doctor Rice 
that the U.S. should pay more attention to Southeast Asia, 
that Vietnam feared that the U.S., distracted by the war 
on terrorism, had created a power vacuum in Southeast 
Asia which was being filled by "others."  Whether or not 
we agreed with all these arguments, it was refreshing 
finally to talk about something more edifying that the 
catfish anti-dumping case. 
 
8. During the past fifteen months we have rapidly made 
progress on a number of long-standing issues.  Our 
relationship can now be considered more fully 
normalized: 
 
We normalized military ties with the Defense Minister's 
visit to Washington in November 2003, followed by the 
first two U.S. Navy ship visits to Vietnam since the war. 
The Minister told me last week that ship visits could now 
be considered something "routine" and volunteered ideas 
for the future such as search-and-rescue cooperation. 
 
The new civil aviation agreement should result in the first 
U.S. flagged planes landing at Tan Son Nhat in 
December. 
 
The counternarcotics agreement finally was signed in 
December and training programs have begun. 
 
America-bashing is way down in the official press. 
 
The Embassy and our official visitors now have much 
better access to the Vietnamese leadership. 
 
Humanitarian programs have greatly expanded, 
especially on HIV/AIDS and educational, and cultural 
exchange.  Vietnamese counterparts for these programs 
have become much easier to work with. 
 
The Year Ahead 
 
9. Next year will be an important one for U.S.-Vietnam 
relations.  Both countries are already planning events to 
commemorate the tenth anniversary of diplomatic 
normalization.  The most important event could be an 
official visit to Washington by Prime Minister Phan Van 
Khai, the first to the U.S. by an SRV Chief of State.  We 
have given the GVN a list of necessary actions to create 
the right atmosphere for a successful visit.  The list 
includes some desired agreements (Article 98, IMET, use 
of a salvage ship for MIA searches), but is heavily 
weighted toward human rights and religious freedom 
issues.  2005 also will be a critical year in Vietnam's 
negotiations to enter the WTO.  If we conclude a bilateral 
accession agreement, we will then go to our Congress to 
approve Permanent Normal Trade Relations (PNTR) for 
Vietnam.  During the past few months we have regularly 
warned Vietnam's leaders that the PNTR vote will 
become the occasion for a congressional review of our 
overall relationship.  Now is the time for Vietnam to 
expand its still rather narrow constituency of friends in 
the U.S.  Now is the time to resolve human rights issues, 
open the market, and give U.S. companies some big 
contracts. 
 
10. The Tenth Anniversary Year of our relationship will 
be important for Vietnam's leaders for another very 
different reason  he lead-up to the tenth Party Congress 
in early 2006.  The jockeying for power, factional 
conflicts, and ideological debates have already begun. 
Some leaders are trying to give more prominence again to 
the old fears.  Respected leaders of the revolutionary 
generation, including Gen. Vo Nguyen Giap, have 
circulated letters highlighting the risk to the party of 
corruption and use of the military intelligence service to 
spy on party leaders.  Hardliners in the military and 
security service reportedly have reacted by launching a 
new wave of paranoia about "peaceful evolution." 
Vietnamese tell us that the competing party factions split 
along several lines, which only partially coincide and 
which all probably exaggerate the differences:  Regional 
(North, Central and South); rapid economic reform vs. 
continued statism; pro-China vs. pro-U.S.  All of this 
political action "behind the screen" will probably result in 
revelations of new "scandals" as competing leaders reveal 
the cupidity of their rivals.  It also may slow the already 
arthiritic decision-making process as consensus becomes 
even more difficult. 
 
Our Strategy 
 
11. For the U.S., Vietnam is a rapidly developing mid- 
size country which has growing commercial and strategic 
value.  It will become stronger and wealthier and will 
play a more important role in ASEAN and other regional 
organizations.  This relationship is important to several 
American constituencies:  The Vietnamese-Americans, 
veterans groups, MIA families, refugee advocacy groups, 
human rights organizations, and a slowly growing 
number of businesses. 
 
12. The long-term trend here complements our interests 
and will not be affected by the current period of 
leadership competition.  The leaders who will prevail 
know that change is inevitable and that successful change 
requires good relations with Washington.  They now 
openly state that their goals are integration with the world 
and the development of a market economy.  We will 
continue to see in Vietnam a rapidly growing private 
sector, stronger rule of law, increased foreign influence, 
the erosion of government control over people's lives, 
deepening cynicism or indifference toward the 
Communist Party, and the budding of a civil society.  We 
should continue to encourage these powerful trends.  Our 
strategic dialogue, economic policy negotiations, military 
interaction and humanitarian programs are all now on the 
right track.  Our law enforcement cooperation is still at a 
very basic level and progress toward intelligence sharing 
has stalled.  The Public Security types still don't trust us. 
The Easter 2004 Montagnard demonstrations, followed 
by the Giap letter, gave the hardliners new vigor, so we 
probably should not expect much progress on the 
intel/law enforcement front until after the Party Congress. 
 
13. Our commercial ties are developing well, but 
commercial advocacy issues seem to have become almost 
invisible in the Washington agenda for Vietnam, which is 
dominated by human rights topics.  That anomaly should 
be corrected some time over the next year.  Otherwise, 
we hand the Europeans and Japanese avoidable victories 
and, even worse, we suggest that this relationship is not 
really that important to us.  We should maintain our 
agenda on human rights issues while recognizing that the 
CPV's hardliners in fact are right  eaceful evolution is 
happening.  Meanwhile we could remind ourselves that 
Nixon also was right:  Peaceful evolution is not a 
government policy or strategy:  it is the inexorable trend 
of history. 
BURGHARDT