US embassy cable - 04HANOI3246

UNCLAS SECTION 01 OF 03 HANOI 003246 
 
SIPDIS 
 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: PGOV, ECON, EINV, PREL, SOCI, ETRD, VM, HUMANR, RELFREE, HIV/AIDS 
SUBJECT: AMBASSADOR VISITS VIETNAM'S SOUTH-CENTRAL COAST 
 
REF:  HCM 1482 
 
1. (SBU) Summary:  The Ambassador visited the south-central coast 
of Vietnam and found economic development plans in their infancy. 
Senior officials called for U.S. investment and humanitarian 
assistance.  The Ambassador raised religious freedom, HIV/AIDS, 
and educational and cultural exchanges and responded to calls for 
USG assistance for Agent Orange victims.  He also encouraged local 
leaders and firms to consider buying U.S. goods and services.  End 
Summary. 
 
2. (U) Following participation in an off-site Hanoi-Ho Chi Minh 
City Management staff conference, the Ambassador traveled up the 
south-central coast of Vietnam November 19-22, beginning at Cam 
Ranh Bay and ending in Danang.  He called on local leaders in 
Khanh Hoa, Binh Dinh and Quang Ngai provinces. 
 
KHANH HOA PROVINCE 
------------------ 
 
3. (U) In separate meetings, Le Xuan Than, First Vice Chairman of 
the Khanh Hoa Provincial People's Committee, and Party Secretary 
Nguyen Van Tu focused on plans to develop tourism, particularly on 
the peninsula north of Cam Ranh Bay.  Soon after the Russian 
military withdrew from Cam Ranh Bay in 2002, the GVN announced 
plans to develop the large peninsula north of the bay into an 
industrial and tourism center and to open Cam Ranh Airport for 
commercial flights.  Commercial flights began in May 2004, and the 
airport plans to begin receiving international flights in 2005. 
Provincial leaders hope that the airport's transformation will 
pave the way for the region's rapid development. 
 
4. (U) On a tour of the peninsula, the Ambassador traveled along a 
new, dual-carriage road connecting the airport with the provincial 
capital of Nha Trang and observed construction of a toll bridge 
that will link Cam Ranh Peninsula with the mainland and provide a 
more direct route to National Highway 1 and Ho Chi Minh City to 
the south.  Local officials briefed the Ambassador on plans to 
build tourist resorts and a golf course on a 13-kilometer stretch 
of pristine beach on the peninsula.  Although the bridge is 
scheduled for completion in May 2006, there is no clear timeline 
for construction of the golf course or tourist resorts.  The 
province is waiting for permission from the central government to 
allow foreign investment in the project.  Approximately 50 
domestic investors have purchased property on the peninsula, 
largely for speculative purposes.  The Ambassador encouraged local 
leaders to develop clear regulations and incentives for investment 
and to continue to lobby the GVN to allow foreign investment in 
the Cam Ranh development projects.  He also encouraged them to 
cooperate with U.S. airlines to find ways to draw tourists to the 
province. 
 
5. (U) Vice Chairman Than also focused on the province's plans to 
develop its seafood processing industry and stated that the 
province exported over USD 200 million in seafood products in 
2004.  The Ambassador noted that as new seafood processing 
factories are built or older ones upgraded, American companies 
stand ready to provide the technology and equipment they need. 
 
BINH DINH PROVINCE 
------------------ 
 
6. (U) In Binh Dinh Province, the Ambassador met with Mr. Vu Hoang 
Ha, Chairman of the Provincial People's Committee.  Ha identified 
four development priorities for his office:  completing the Nhon 
Hoi Economic Zone, developing the tourism industry, improving 
human resources, and reforming the public administration system. 
 
7. (U) The Nhon Hoi Economic Zone is located on a peninsula 
northeast of the provincial capital of Quy Nhon City.  Plans for 
the economic zone include a 1,000-hectare industrial zone, a 500- 
hectare urban area with high-rise apartments and commercial 
centers, a deep-sea port and shipyard, a 500-hectare tourist zone, 
a wind power plant, and a new bridge linking the peninsula with 
Quy Nhon City.  The bridge will be completed in 2005; however, all 
other aspects of the project are in the early planning stages.  Ha 
hopes to submit the plan for the Nhon Hoi Economic Zone to the 
Prime Minister for approval by the end of 2004.  The Ambassador 
encouraged Ha to seek U.S. firms that would be able to provide 
equipment and technology for the project as well as investment 
capital. 
 
8. (U) Ha pointed out that the province has a 134-kilometer 
coastline and a number of Cham towers and other historical sights 
that provide the potential for future tourism development.  Major 
challenges include shortages of human resources and hotels meeting 
international standards.  The province is focused on building more 
hotels and a five-star resort recently opened in Quy Nhon City. 
 
9. (SBU) The Ambassador met with Thomas Williams, Deputy Director 
of Pure Bay Oyster Company and his Australian partner.  Their 
company supplies oysters and other seafood products directly to 
high-end hotels throughout Vietnam.  In their view, although the 
local government was not necessarily helpful, it was "not an 
obstacle" either.  Overall, they were receiving much better 
support than they had in Khanh Hoa Province where they operated 
from 1998 to 2000.  Their largest frustration is the lack of 
reliable transportation routes to deliver products to market. 
(There are no international flights from Quy Nhon, and products 
must be sent by road to Hanoi and Ho Chi Minh City.)  This 
obstacle is not preventing the company from growing; Williams 
expects the company's profits to double within the next year and 
continue growing further. 
 
10. (U) The Ambassador also discussed opportunities for 
cooperation with Quy Nhon University President Tran Tin Kiet and 
the possibility of bringing more American Fulbright scholars and 
guest lecturers to the university.  Quy Nhon University currently 
hosts three American volunteers who are teaching English language 
classes, and the university is eager for more cooperation. 
 
QUANG NGAI PROVINCE 
------------------- 
 
11. (SBU) Local officials in Quang Ngai Province focused on plans 
for the Dung Quat Industrial Zone, which will include a tax-free 
economic zone, a deep-sea port, a shipyard and the nation's first 
oil refinery.  Dr. Nguyen Kim Hieu, Chairman of the Provincial 
People's Committee, and Mr. Tran Le Trung, Chairman of the Dung 
Quat Industrial Estate Authority, both said the Dung Quat 
industrial zone and its lead project, the refinery, are "the 
driving force to speed the development of Central Vietnam." 
(NOTE: Most commercial experts agree a better location for the 
nation's first refinery would have been the Vung Tau region, where 
most offshore oil and gas wells are located.  However, the GVN 
decided for political reasons to locate the refinery in the 
central part of the country to create jobs and boost 
industrialization in the region.)  The Ambassador urged Hieu and 
Trung to seek American firms to provide supplies and services for 
the project as subcontractors. 
 
12. (U) The Ambassador noted that the Mission has had little 
interaction with the province in the past and said he was looking 
for areas where we could cooperate in the future.  Hieu requested 
humanitarian assistance in the areas of education, health care, 
environmental protection and natural disaster mitigation.  He 
noted that Quang Ngai is a poor province with a per capita GDP 
that is half the national average.  The province faces a number of 
challenges including lack of skilled labor (there is no university 
in the province) and a harsh natural environment prone to 
flooding. (Note: Hieu's last point was borne out by the province's 
heavy losses, in both people and property, during this week's 
typhoon-related flooding.  End Note.) 
 
COMMON THEMES: INVESTMENT, AO, HIV/AIDS, AND RELIGIOUS FREEDOM 
--------------------------------------------- ----------------- 
 
13. (SBU) In all three provinces, local leaders called for more 
American investment.  The Ambassador pointed out the provinces 
were competing not only with other provinces in Vietnam but also 
with other countries in the region for foreign investment dollars. 
He urged provincial leaders to eliminate corruption and improve 
regulatory transparency, rule of law and investment incentives in 
order to make their provinces more competitive and attractive to 
investors. 
 
14. (SBU) Leaders in each province requested USG assistance for 
victims of Agent Orange.  On each occasion, the Ambassador noted 
that the United States works to provide humanitarian support to 
all those in need, regardless of the cause of their disabilities, 
noting that the USG will provide some USD 60 million in 
development assistance to Vietnam in FY-2005 in addition to the 
millions of dollars donated by American NGOs.  The Ambassador also 
pointed out that the USG has provided USD four million to work 
with the GVN on projects to improve scientific understanding of 
the effects of Agent Orange. 
 
15. (SBU) The Ambassador took the opportunity in each province to 
raise the issues of human rights and religious freedom and to 
underscore U.S. abiding interest in these areas.  He acknowledged 
that Vietnam has made progress in these areas, but noted continued 
reports of forced renunciations and other limits on the peaceful 
practice of religion tarnish the bilateral relationship.  With the 
exception of Chairman Ha in Binh Dinh, none of the provincial 
leaders went further than the standard response that the GVN 
recognizes human rights and religious freedom.  (The Ambassador's 
November 21 meeting with Unified Buddhist Church of Vietnam 
Patriarch Thich Huyen Quang and his conversation with Chairman Ha 
were reported reftel.) 
 
16. (U) The Ambassador addressed HIV/AIDS prevention and treatment 
efforts in each province and noted the USG was looking for ways to 
expand its efforts beyond Ho Chi Minh City, Hanoi and other areas 
with high prevalence rates.  Leaders in Khanh Hoa and Binh Dinh 
provinces stated they understood the stigma associated with 
HIV/AIDS and were personally working on the issue in their 
provinces.  They pledged to speak out publicly on the issue. 
 
17. (SBU) Comment:  Khanh Hoa and Binh Dinh provinces hope to 
develop their tourism industries over the coming years.  Their 
success will depend upon their ability to draw tourists from the 
more popular destinations of Ho Chi Minh City, Hanoi and Danang. 
Khanh Hoa has clear advantages over other provinces in the region 
- a large airport, beautiful natural environment, and ten months 
of sunshine per year - that will draw tourists and investors. 
Quang Ngai faces the greatest challenges, disadvantaged by its 
harsh environment and lack of skilled labor.  It is doubtful that 
all three will succeed in keeping pace with the national average 
in GDP growth. 
 
18. (U) This cable was prepared by Consulate General Ho Chi Minh 
City. 
 
MARINE