US embassy cable - 05HOCHIMINHCITY11

UNCLAS SECTION 01 OF 03 HO CHI MINH CITY 000011 
 
SIPDIS 
 
SENSITIVE 
 
DEPARTMENT PLEASE PASS TO USTR, ELENA BRYAN 
 
E.O. 12958: N/A 
TAGS: PGOV, ECON, EINV, PREL, SOCI, ETRD, PHUM, VM, KCRM, SMIG, SNAR, LABOR, HIV/AIDS, TIP, CNARC 
SUBJECT: DELTA FACES DIFFICULTIES ON THE ROAD TO PROSPERITY 
 
REF:  A) HCMC 1575  B) HCMC 1128 
 
1.  (SBU) Summary: Visiting the Mekong Delta, the Ambassador found 
that considerable investment in infrastructure, education and 
government reform are needed to set conditions for rapid economic 
growth.  The long, porous border with Cambodia is a challenge for 
local officials, who are struggling to combat trafficking in 
persons, HIV/AIDS and smuggling.  While early efforts are underway 
to strengthen border controls, there is much more to be done.  The 
region's universities are ill equipped to train their students to 
meet the demands of industry and a modernizing economy.  End 
Summary. 
 
WEAK INFRASTRUCTURE HINDERING DEVELOPMENT 
--------------------------------------------- --------------------- 
----------- 
 
2. (SBU) The Ambassador, accompanied by Conoff and Pol/Econ 
specialist, traveled to Can Tho and An Giang provinces December 12- 
14.  In meetings with Can Tho and An Giang People's Committees, 
the Ambassador discussed growing competition for investment among 
provinces as Vietnam moves into the global economy.  He noted the 
comparative advantage of the delta in agriculture and aquaculture, 
but stressed the need for improved infrastructure.  Local 
officials, however, seemed satisfied with a steady approach to 
modernization controlled from Hanoi. 
 
3. (SBU) The Vice-Chairman of the Can Tho People's Committee, Mr. 
Pham Phuoc Nhu, noted that GDP growth in the province this year 
reached 15 percent, its highest level ever.  He recognized that 
lack of infrastructure was the main obstacle to continued growth. 
He agreed that the main North-South highway in the region is 
inadequate to support industrial development, and confirmed that 
commercial operations at Can Tho airport remain suspended.  There 
are only two modest U.S. foreign direct investment (FDI) projects 
in the region: a feed mill in Can Tho City operated by Cargill and 
the Mien Tay Plastic Company.  Moreover, there have been no new 
U.S. FDI projects since 2002.  The Can Tho Bridge, financed with 
Japanese ODA, is not expected to be completed until 2008.  The 
airport is currently scheduled to reopen (for the first time since 
1975) in 2007 for domestic flights.  A new, six-lane national 
highway has been discussed, but is not yet in the planning stages. 
The Ambassador noted that if the delta region is to keep pace with 
the industrial centers of Hanoi, Da Nang and Ho Chi Minh City, 
these projects must be pursued more aggressively. In response, 
however, Nhu would only affirm that "the [modernization] targets 
set by Hanoi are correct, because living conditions are improving 
steadily." 
 
4. (SBU) The Director of the Can Tho International Agriculture 
Fair, Mr. Nguyen Thanh Son, recognized the obstacles presented by 
the region's weak transportation systems, but also focused on the 
need to attract advanced technology to increase agricultural 
output.  Son expressed a strong desire to seek out U.S. companies 
that could provide such expertise, especially for the region's 
rapidly expanding aquaculture industry.  He hopes that the seven 
years of cooperation with USDA/FAS at the Fair could be a 
springboard for such cooperation.  He said that he would like to 
enlist the help of the Consulate General in Ho Chi Minh City in 
seeking out those companies most suited to providing these 
technologies.  The Ambassador encouraged Son to take a more 
proactive approach, suggesting that he seek the assistance sooner 
rather than later. 
 
5. (SBU) In discussions with Mr. Nguyen Hoang Viet, the Chairman 
of the An Giang People's Committee, the Ambassador noted 
bureaucratic obstacles to growth including difficulties in 
obtaining required permits, corruption, and intellectual property 
rights (IPR) protection.  He said that the lack of a "one-stop 
shopping" approach made the province less attractive to investors. 
The complex procedures for obtaining government approvals slow the 
pace of investment, and foster corruption at every phase of the 
process.  A single department with responsibility for assisting 
foreign companies to invest in the province would help.  Finally, 
IPR must be protected, the Ambassador emphasized.  He said that 
Vietnam's poor record in safeguarding IPR has had a direct, 
negative impact on foreign investment.  If An Giang Province hopes 
to attract U.S. companies to provide advanced technologies, it 
must find strategies to ensure that those technologies are 
protected.  Although he agreed that IPR is a fundamental issue 
with regard to attracting investment, Viet outlined no specific 
measures that the provincial government was taking to combat this 
problem. 
 
MAXIMIZING THE POTENTIAL OF HUMAN CAPITAL 
--------------------------------------------- --------------------- 
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6. (U) The Ambassador met separately with Can Tho University (CTU) 
Vice-Rector Dr. Nguyen Anh Tuan and Dr. Vo Tong Xuan, Rector of An 
Giang University (AGU).  Both expressed their commitment to 
building strong ties with U.S. institutions.  The educational 
infrastructure in the delta is inadequate to meet demand.  Can Tho 
had the only university in the delta until 2002, when An Giang was 
converted from a teaching college to a university.  CTU has 34,000 
students and AGU 7,000.  However, both institutions accept only 
one in twelve applicants.  While this ensures the quality of the 
students, Dr. Tuan and Dr. Xuan recognized the need to increase 
enrollment to keep pace with the economic growth. 
7. (U) To meet demand, CTU enrolls 17,000 of its students at the 
main campus in Can Tho City, while the remaining 17,000 attend 
"satellite" campuses around the region.  Dr. Tuan stated that the 
long-term goal was to turn these satellites into semi-autonomous 
community colleges as in the United States.   CTU is also 
assisting An Giang University, and is increasing its number of 
graduate students to train new faculties for the region.  CTU is 
working with the Japanese, Dutch and Belgians to upgrade computer 
systems, but has yet to exploit CD-ROM and digital video 
conferencing to broaden its reach. 
 
8. (SBU) All agreed that exchange programs, particularly with the 
United States, had been helpful.  Dr. Tuan expressed frustration 
that most Fulbright and Vietnam Educational Foundation grant 
recipients come from Hanoi and Ho Chi Minh City.  He asked that a 
quota be set aside for the Delta. 
 
BORDER SECURITY CONCERNS 
-------------------------------------------- 
 
9. (SBU) Provincial officials and border security forces in An 
Giang drew attention to efforts to strengthen controls along the 
border with Cambodia.  The Ambassador stressed the need for 
stepped-up action on the provincial level in the fight against 
HIV/AIDS.   People's Committee Vice-Chairman Nhu in Can Tho and 
Chairman Viet in An Giang expressed appreciation for Emergency 
Plan support for Vietnam.  The People's Committees of Can Tho and 
An Giang spoke of "programs" and "workshops" to address prevention 
and long-term care, but provided no specifics on these programs. 
The Ambassador stressed the need for direct involvement by senior 
provincial officials and action on the ground to implement Hanoi's 
policies on issues like the rights of those afflicted and the need 
to combat public misperceptions. 
 
10. (SBU) The Ambassador visited the border crossing at Xuan To in 
An Giang Province and discussed trafficking in persons and 
narcotics with representatives from the Customs Department, the 
Border Defense Army and the District People's Committee.  Tinh 
Bien Customs Department officials said that narcotics and 
trafficking were top priorities but that they understood the need 
to stop counterfeit goods as well. An Giang's border with Cambodia 
stretches for 100km, with five official crossing points manned by 
200 customs officers. The border army makes regular patrols 
between points.  For much of the year the region is flooded and 
passable only by boat.  Most of the illicit trade crosses from 
Cambodia during these months.  UNODC sponsors six Joint Task 
Forces in key border provinces to assist GVN with trafficking 
issues, but all task force officers in An Giang are seconded on a 
part-time basis from their agencies.  Officials also complained 
about lack of boats, vehicles and adequate training.  The 
Ambassador stressed the need for greater cooperation between USG 
and GVN on all law enforcement issues, especially counter- 
narcotics. 
 
11. (SBU) The Ambassador visited an anti-trafficking pilot project 
in Nui Sam Ward of An Giang Province.  Run by the Women's Union of 
the District People's Committee and supported by the Asia 
Foundation, the project's 21-member team of volunteers provides 
workshops and community outreach aimed at prevention and 
reintegration of trafficking victims into their communities. 
Since early 2003, they have held 47 meetings, reaching 2,578 
participants.  The at-risk target population consists of females 
aged 13 to 30 with minimal education.  Project leaders claimed 
that there have been no new cases of trafficking since the project 
began.  Local officials have only recently begun to focus on 
trafficking and little data exists on trends, making it difficult 
to measure success.   The program also assists victims through 
micro-lending projects (supported by the International 
Organization for Migration) and training (run through the 
province's Department of Labor).   Despite the apparent success of 
the project in Nui Sam, there are as yet no plans to expand the 
project to other wards.  The Ambassador suggested a more proactive 
approach in assisting neighboring wards to establish similar 
programs. 
 
12. (SBU) Comment: Both Can Tho and An Giang are making strides in 
the right direction economically.  Continuation of rapid growth 
requires improvement in governance, rapid modernization of the 
transportation infrastructure, and increased access to higher 
education.  Better control of the border will help address 
trafficking, drug smuggling and the attendant spread of HIV/AIDS. 
End comment. 
 
WINNICK