US embassy cable - 04HANOI2908

UNCLAS SECTION 01 OF 02 HANOI 002908 
 
SIPDIS 
 
SENSITIVE 
 
STATE FOR EAP/BCLTV 
STATE PASS USTR FOR EBRYAN 
TREASURY FOR IA/Asia Office 
USDA FOR FAS/ITP/SHIEKH 
USDOC FOR 4431/MAC/AP/OPB/VLC/HPPHO 
 
E.O. 12958: N/A 
TAGS: ECON, ETRD, PGOV, VM, WTO, DPOL 
SUBJECT: VIETNAM:  PRIME MINISTER KHAI'S SPEECH TO THE 
NATIONAL ASSEMBLY 
 
1. (SBU) Summary and Comment:  On October 25, the Ambassador 
attended Prime Minister Phan Van Khai's address at the 
opening of the Sixth Session of the National Assembly's 
Eleventh Legislature.  The PM's lengthy speech focused 
largely on economic issues, outlining socio-economic targets 
for the upcoming year and calling for a breakthrough in the 
country's economic growth in 2005.  PM Khai focused on the 
challenges ahead (speeding up growth, fighting corruption, 
WTO accession), but failed to mention human rights, 
religious freedom or HIV/AIDS.  The legislature's session 
earlier this year was a lively one, with the body taking a 
number of government ministers to task for corruption and 
mismanagement.  To what extent the National Assembly (NA) 
will continue to carve out a meaningful role for itself 
during this session will bear watching.  End Summary and 
Comment. 
 
2.  (U) In his introductory remarks, PM Khai noted that 2005 
would be the final year of the current five-year socio- 
economic development plan.  He acknowledged that the four- 
year economic results are lower than planned, increasing 
pressure on the country to step up the pace in 2005 in order 
to meet the goals of the plan.  He called for stronger GDP 
growth in 2005 as well as improvements in productivity and 
competitiveness of domestic enterprises and said that the 
GVN's efforts to make progress in these areas have not been 
adequate. 
 
Ambitious GDP Target and Goals for 2005 
--------------------------------------- 
 
3. (U) PM Khai stated that Vietnam's GDP is expected to grow 
7.6 percent this year (0.4 percent below the planned target) 
and announced an ambitious target of 8 to 8.5 percent growth 
for 2005, well above the rates of the four previous years. 
The GVN's other stated goals for 2005 include boosting total 
social investment, capping consumer price index (CPI) growth 
at no more than ten percent, maintaining the current 
population growth rate (1.47 percent according to GVN 
statistics) and creating more jobs.  (Note:  According to 
numerous press reports, the goal for total social investment 
is VND300 trillion, or US$19 billion, an increase of 17.7- 
19.5 percent from 2004. Creating 1.6 million more jobs would 
reduce the unemployment rate to 5.5 percent.  End Note.) 
 
Achieving the Goals 
------------------- 
 
4. (U) PM Khai identified several actions the GVN must take 
to meet its economic goals for 2005.  The GVN needs to 
improve the investment environment and enhance Vietnam's 
competitive edge, issue policies that will facilitate 
development in the private business sector and mobilize 
investment resources for socio-economic growth.  The GVN 
must also speed up the equitisation of state-owned 
enterprises (SOEs), increasing the number of private 
enterprises from 150,000 to 500,000 by 2010.  This will make 
private enterprise a strong source of economic development 
and job creation.  The GVN must work to create stronger 
linkages between farmers and their domestic and export 
markets.  PM Khai noted that achieving this goal would 
represent an important step toward rural and agricultural 
industrialization and modernization for Vietnam.  He also 
called for Vietnam to develop policies and plans to 
encourage growth of the services sector, focus on boosting 
exports and accelerate the nation's international economic 
integration. 
5.  (U) Other themes of the speech included WTO accession 
and corruption.  Vietnam should push hard to join the WTO, 
PM Khai said, but warned that this would bring challenges as 
well as benefits to the country.  He urged GVN agencies to 
adjust their rules now to fit within WTO guidelines and 
Vietnamese businesses to improve their competitiveness.  PM 
Khai blamed the slow development of public services such as 
education, healthcare, science and technology, culture and 
sports on the dominance of state-owned agencies in these 
fields.  He also called on the NA to drive back widespread 
government corruption.  He stated that authorities at all 
levels must understand and fully implement NA resolutions 
and the Prime Minister's directive on the issue of 
complaints and denunciations.  In his final comments, PM 
Khai expressed strong dissatisfaction with GVN failures such 
as delays in issuing documents which guide the 
implementation of laws and ordinances, lack of close 
monitoring of law enforcement and policy implementation and 
failure to reduce corruption. 
 
6. (U) This session of the NA will continue until December 
4, 2004.  NA deputies are scheduled to spend six days 
discussing socioeconomic issues, seventeen days working 
through the legislative agenda, and another eleven days 
focusing on other important issues.  The NA plans to pass 
six new laws: (1) the Law on Electricity; (2) the Law on 
Promulgation of Legal Instruments by People's Councils and 
People's Committees; (3) the Amended Law on Publications; 
(4) the Law on Protection and Development of Forests; (5) 
Law on National Security; and (6) the Law on Competition. 
Currently, there are nine draft laws scheduled for 
discussion during this session, including the Commercial Law 
(Amended) and the Civil Code (Amended). 
 
7. (SBU) Comment:  The Prime Minister's frank assessment of 
the GVN's shortcomings and tasks ahead was perhaps a nod to 
the NA's growing role in taking the Government to task for 
corruption and mismanagement.  During this year's spring 
session, for example, legislators chided government 
ministers for policy and management failures -- all on live 
television.  While the NA is far from an independent branch 
of government, it is also no longer a rubber stamp.  How 
much autonomy the legislature will show during this session 
bears watching.  We will report on the results of the 
session in December.  End Comment. 
 
MARINE