US embassy cable - 04HANOI2816

UNCLAS SECTION 01 OF 02 HANOI 002816 
 
SIPDIS 
 
SENSITIVE 
 
STATE FOR EAP/BCLTV 
STATE PASS USAID FOR ANE/KUNDER AND ANE-SPO BRADY 
STATE ALSO PASS USAID FOR ANE/KENNEDY 
STATE PASS USTR FOR EBRYAN 
USDOC FOR 4431/MAC/AP/OPB/VLC/HPPHO 
TREASURY FOR OASIA 
 
E.O. 12958: N/A 
TAGS: ETRD, EAID, EINV, VM, HIV/AIDS 
SUBJECT: VIETNAM: AMBASSADOR'S CALL ON MINISTER OF PLANNING 
AND INVESTMENT 
 
SENSITIVE BUT UNCLASSIFIED 
 
1 (U) Summary:  In a meeting October 14, Minister of 
Planning and Investment Vo Hong Phuc expressed appreciation 
for USG funding for HIV/AIDS prevention in Vietnam under the 
President's Emergency Plan for AIDS Relief (PEPFAR) and told 
the Ambassador that the agenda for the December Consultative 
Group (CG) meeting would include discussion of the GVN's 
draft Five Year Plan for 2006-2010, HIV/AIDS prevention and 
poverty reduction.  He also expressed support for concluding 
a bilateral framework agreement on assistance with the 
United States Agency for International Development (USAID) 
by December.  The Ambassador encouraged Minister Phuc to 
work quickly to resolve current U.S. investment disputes 
including insurance licenses, auto tariffs, Tricore's 
interest in the Hanoi Ring Road Project and the dissolution 
of the McCullagh/Krong Ana joint coffee venture in Daklak 
Province.  End Summary. 
 
Framework Agreement 
------------------- 
 
2.  (U) Minister Phuc expressed appreciation for the level 
of official development assistance (ODA) the USG has 
provided Vietnam, noting in particular the U.S. commitment 
to providing humanitarian assistance.  Minister Phuc 
expressed his hope that U.S. assistance levels will rise 
significantly in the future and noted that this would 
necessitate conclusion of a bilateral framework agreement on 
assistance.  Minister Phuc told the Ambassador that the MPI 
had finished compiling comments from other ministries and 
agencies on the draft framework agreement and had submitted 
its report to the Government.  The Minister expressed his 
hope that the agreement could be finalized in time for 
signing during the next Consultative Group (CG) meeting in 
Hanoi December 1-2. 
 
HIV/AIDS 
-------- 
 
3. (U) Minister Phuc expressed appreciation for President 
Bush's decision to name Vietnam as one of fifteen countries 
under the President's Emergency Plan for AIDS Relief 
(PEPFAR) and assured the Ambassador that preventing the 
spread of HIV/AIDS is a priority for the GVN.  HIV/AIDS is 
discussed at the GVN's monthly meetings as well as at the 
two meetings of the CG each year.  Minister Phuc assured the 
Ambassador that the MPI would coordinate with the other 
relevant GVN ministries and agencies as well as with the 
U.S. Mission team to ensure PEPFAR funds are used 
efficiently. 
 
Consultative Group 
------------------ 
 
4. (U) Minister Phuc told the Ambassador that he had 
discussed the agenda for the December CG with Klaus Rohland, 
Country Director for the World Bank in Hanoi.  According to 
Minister Phuc, discussion of the draft for Vietnam's next 
Five Year Plan (2006-2010) will be an important agenda item 
for the December CG.  The GVN will begin drafting the Plan 
later this year and will submit it to the National Assembly 
for comment in 2005 and for approval in early 2006.  The 
Plan will direct the development of socio-economic policy 
for the next five years and will identify next steps in the 
renovation (Doi Moi) process.  Minister Phuc said the CG 
agenda would also include poverty reduction and HIV/AIDS 
prevention.  The Ambassador informed Minister Phuc that he 
planned to meet with Mr. Rohland at the World Bank next week 
to discuss the agenda for the December CG. 
 
Investment Climate 
------------------ 
 
5. (SBU) The Ambassador reminded Minister Phuc that while 
bilateral trade has increased dramatically since entry-into- 
force of the Bilateral Trade Agreement (BTA) in December 
2001, U.S. investment in Vietnam has not grown as quickly. 
To improve its business climate, the GVN should continue its 
efforts to accede to the WTO and liberalize its market.  In 
addition, the GVN should work quickly to find equitable 
resolutions to existing investment disputes so that 
investors will speak positively about their experience in 
Vietnam.  The Ambassador cited insurance licenses, auto 
taxes and tariffs, the Tricore Ring Road project and the 
McCullagh-Krong Ana coffee joint venture as issues that the 
GVN should work quickly to resolve. 
 
6. (SBU) Minister Phuc assured the Ambassador that he wants 
to work together to promote U.S. investment in Vietnam.  On 
insurance licenses, he told the Ambassador that the MPI 
"fully supports" New York Life and Ace's intention to invest 
in Vietnam.  On autos, Minister Phuc said that among GVN 
ministries and agencies there are "discussions, arguments 
and differences of opinion" over the auto policy.  He 
acknowledged, however, that the GVN needs to "reconsider the 
special consumption tax" because of its negative impact on 
consumers and that he "personally" wants to develop the auto 
industry in Vietnam.  Minister Phuc also said he had asked 
the Ministry of Transportation to work with Tricore and all 
interested parties on the Hanoi Ring Road Project and that 
he hoped there would be a "good solution" to the issues 
delaying the dissolution of the McCullagh-Krong Ana coffee 
joint venture in Dak Lak province. 
 
MARINE