US embassy cable - 01HOCHIMINHCITY1314

UNCLAS SECTION 01 OF 02 HO CHI MINH CITY 001314 
 
SIPDIS 
 
DEPARTMENT FOR EAP/BCLTV (LANGLAND/THORIN) 
 
E.O. 12958: N/A 
TAGS: ECON, ETRD, PREL, PGOV, VM 
SUBJECT: CG'S INITIAL MEETING WITH HCMC PLANNING AND INVESTMENT DEPARTMENT 
 
 
1. SUMMARY: CG YAMAUCHI, ACCOMPANIED BY DPO AND POLOFF, PAID A 
NOVEMBER 20 COURTESY CALL ON MR. TIN HUU NGUYEN, ACTING DIRECTOR 
OF THE HCMC DEPARTMENT OF PLANNING AND INVESTMENT (DPI). TIN 
STATED THAT THE BILATERAL TRADE AGREEMENT (BTA) WOULD INCREASE 
ECONOMIC GROWTH IN HCMC.  TIN VOWED DPI WOULD STRIVE TO ENSURE 
VIETNAMESE BUSINESSES CAN SUCCESSFULLY COMPETE IN U.S. MARKETS. 
HE IS EQUALLY COMMITTED TO MAKING SURE AMERICAN INVESTORS AND 
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BUSINESSES IN VIETNAM FACE LESS BUREAUCRACY AND MORE OPENNESS. 
END SUMMARY. 
 
2. AFTER WELCOMING CG TO VIETNAM, TIN PROVIDED A BRIEF OVERVIEW OF 
BUSINESS ACTIVITY IN HCMC.  CITING HMCO'S PROMISING DOUBLE-DIGIT 
ECONOMIC GROWTH RATE IN THE EARLY 1990S, TIN ADMITTED THAT THE 
REGIONAL ECONOMIC CRISIS HAD TAKEN ITS TOLL -- THE CITY'S ECONOMIC 
GROWTH RATE IS NOW BELOW 10%.  TIN, HOWEVER, PAINTED AN OPTIMISTIC 
PICTURE OF ECONOMIC GROWTH IN THE CITY: HCMC HAS INVESTORS FROM 42 
NATIONS; U.S. INVESTORS ARE AMONG THE TOP FOREIGN INVESTORS; AND 
FOREIGN DIRECT INVESTMENT (FDI) CONTINUES TO CONTRIBUTE 
SIGNIFICANTLY TO ECONOMIC GROWTH.  TIN ADDED THAT DPI WILL 
CONTINUE TO PROMOTE POLICIES TO ENSURE AN EVEN ECONOMIC PLAYING 
FIELD EXISTS BETWEEN STATE-OWNED ENTERPRISES (SOWS), THE PRIVATE 
SECTOR, AND FOREIGN-INVESTED ENTERPRISES, BUT DID NOT ELABORATE 
UPON THE MECHANISMS DPI WOULD EMPLOY. 
 
3. TIN WELCOMED RATIFICATION OF THE BTA.  AS BUSINESS COOPERATION 
PROGRESSED, HE SAID, BOTH THE U.S. AND VIETNAM WOULD BENEFIT. 
CITING THE RESPONSIBILITY OF GOVERNMENT TO CREATE FAVORABLE 
CONDITIONS, TIN STATED THAT DPI WAS CONCERNED WITH HOW BEST TO 
HELP VIETNAMESE BUSINESSES PENETRATE THE AMERICAN MARKET, 
SPECIFICALLY CITING A NEED FOR VIETNAMESE BUSINESSES TO BETTER 
UNDERSTAND U.S. BUSINESS LAWS. 
 
4. PURSUING TIN'S STATEMENT THAT VIETNAMESE BUSINESSES REQUIRED 
MORE EDUCATION, THE CG INQUIRED WHETHER VIETNAMESE GOVERNMENTAL 
AGENCIES AND BUSINESSES POSSESSED SUFFICIENT ACCESS TO THE 
SUBSTANTIVE DETAILS OF THE BTA.  TIN RESPONDED THAT DPI IS NOT 
RESPONSIBLE FOR EDUCATING THE BUSINESS COMMUNITY ABOUT THE BTA'S 
DETAILS--THAT RESPONSIBILITY RESTS WITH THE DEPARTMENT OF TRADE 
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AND INVESTMENT AND THE NEWLY-RENAMED INVESTMENT AND TRADE 
PROMOTION CENTER (ITPC). WHEN CG ASKED WHETHER POST COULD PROVIDE 
INFORMATION TO HELP DPI ASSIST BOTH U.S. AND VIETNAMESE 
BUSINESSES, TIN STATED THAT HE LOOKED FORWARD TO A COOPERATIVE 
RELATIONSHIP AND STATED THAT DPI WAS WORKING ON A LIST OF PROJECTS 
THAT WOULD EDUCATE VIETNAMESE BUSINESSES AND ENCOURAGE FOREIGN 
INVESTORS.  HE LOOKED FORWARD TO CG'S COOPERATION IN THE FUTURE 
AND SAID HE WOULD PROVIDE MORE SPECIFIC PROPOSALS ON AREAS FOR 
COOPERATION AT A LATER DATE. 
 
5. SHIFTING GEARS, CG ASKED HOW IMPLEMENTATION OF DIRECTIVE 28 -- 
A RECENTLY PASSED ADMINISTRATIVE REFORM -- WAS PROGRESSING.  TIN 
STATED THAT ALL VIETNAMESE AGENCIES WELCOMED DIRECTIVE 28, BECAUSE 
IT AIMS TO REDUCE THE BUREAUCRACY FACED BY FOREIGN INVESTORS. 
ACCORDING TO TIN, THE DIRECTIVE REQUIRES DPI TO PROVIDE FOREIGN 
INVESTORS WITH INFORMATION ABOUT LAND AVAILABLE FOR RENT IN HCMC, 
AND TO REDUCE THE AMOUNT OF TIME IT TAKES FOR FOREIGNERS TO 
RECEIVE PERMITS TO SET UP BUSINESSES.  WHEN QUESTIONED, TIN 
ACKNOWLEDGED THE DPI WOULD NOT RECEIVE ADDITIONAL STAFF/RESOURCES 
TO ACCOMPLISH ITS NEW ACCELERATED ROLE AS A SERVICE PROVIDER.  HE 
SAID DPI - AND OTHER CITY DEPARTMENTS -- WOULD INSTEAD RESTRUCTURE 
THEMSELVES AND OFFER A WEBSITE TO HELP DISSEMINATE INFORMATION. 
TIN PROMISED THAT DPI WOULD CONTINUE TO CREATE MORE OPEN 
CONDITIONS IN HCMC TO ATTRACT AMERICAN INVESTMENT. 
 
6. ASKED IF DIRECTIVE 28 WOULD REQUIRE DPI TO WORK MORE CLOSELY 
WITH OTHER GOVERNMENTAL AGENCIES, TIN RESPONDED THAT THE HCMC 
PEOPLE'S COMMITTEE REQUIRED ALL AGENCIES, IN LIGHT OF DIP'S NEW 
MISSION, TO RESTRUCTURE THEMSELVES AND COOPERATE WITH DPI.  TIN 
STATED THAT REPRESENTATIVES FROM DIFFERENT GOVERNMENTAL AGENCIES 
MEET WEEKLY TO DISCUSS POTENTIAL PROBLEMS, AND THAT ANY CONFLICTS 
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THAT CANNOT BE RESOLVED ARE THEN REFERRED TO THE HCMC PEOPLE'S 
COMMITTEE FOR RESOLUTION.  TIN DECLINED TO CITE ANY SPECIFIC 
DISAGREEMENTS AMONG GOVERNMENTAL AGENCIES, BUT SUGGESTED THEY 
RELATED TO HOW TO MAKE DECISIONS ABOUT SPECIFIC PROJECTS.  HE 
ADDED THAT THERE WERE ALWAYS SUCH CONFLICTS, BUT THEIR NUMBER AND 
SERIOUSNESS HAD DECLINED SINCE GENERAL AGREEMENT HAD BEEN REACHED 
ON THE NEED TO CREATE BETTER CONDITIONS FOR FOREIGN BUSINESS. 
DPI'S CLEARER COORDINATING ROLE HAS ALSO HELPED. 
 
7. TIN CLOSED THE 45-MINUTE MEETING BY HANDING OUT DPI'S SLICK NEW 
ENGLISH-LANGUAGE BROCHURE -- COMPLETE WITH A CD ENTITLED "A CITY 
OF OPPORTUNITY & PROSPERITY: TEN REASONS WHY HO CHI MINH CITY 
SHOULD BE YOUR INVESTMENT DESTINATION." 
 
8. NOTE ON DPI: TIN WAS JUST NAMED ACTING DIRECTOR OF DPI AT THE 
BEGINNING OF OCTOBER, HAVING SERVED AS THE DEPUTY DIRECTOR.  DPI 
TRADITIONALLY IS A VERY POWERFUL BODY.  FOR EXAMPLE, IN DECEMBER 
1999, NEW PEOPLE'S COMMITTEE OFFICERS WERE SELECTED IN ALL OF 
VIETNAM'S PROVINCES.  OF THE NEWLY-SELECTED PROVINCIAL PEOPLE'S 
COMMITTEE CHAIRMEN, MORE HAD SERVED AS DIRECTOR OF THEIR 
RESPECTIVE DPIS JUST PRIOR TO THEIR PROMOTION THAN ANY OTHER 
DEPARTMENT OR AGENCY.  END NOTE. 
 
 
9. COMMENT:  THIS MEETING WAS ONE OF SEVERAL POST HAS HAD RECENTLY 
TO ASSESS THE LIKELY IMPACT OF DIRECTIVE 28.  THE "STREAMLINED" 
PROCEDURES ARE A POSITIVE STEP, BUT TIN'S COMMENTS SUGGEST DPI IS 
STILL FEELING ITS WAY.  PERHAPS CAUTIOUS BECAUSE OF HIS VERY 
RECENT APPOINTMENT, TIN SEEMED MORE RIGID, STRAIGHT BY-THE-BOOK, 
"NOT IN MY JOB DESCRIPTION" THAN OTHER HCMC OFFICIALS WE HAVE MET. 
DESPITE A SLICK OPENING PRESENTATION, WE EXPECT CONTINUED 
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INCREMENTAL PROGRESS -- RATHER THAN A VAST SEA CHANGE -- IN THE 
CLIMATE FOR DOING BUSINESS IN HCMC.   YAMAUCHI 
 
                       UNCLASSIFIED