US embassy cable - 03HANOI593

UNCLAS SECTION 01 OF 02 HANOI 000593 
 
SIPDIS 
 
SENSITIVE 
 
STATE FOR EAP/BCLTV; EAP/PMBS 
 
E.O. 12958: N/A 
TAGS: PREL, PTER, PGOV, ETRD, IZ, SN, VM, ASEAN 
SUBJECT:  SINGAPORE PRIME MINISTER REAFFIRMS STRONG 
--         ECONOMIC RELATIONSHIP 
 
1.  (SBU)  SUMMARY.  Singapore Prime Minister Goh Chok Tong 
underscored a shared determination to advance the already 
strong economic ties with Vietnam.  PM Goh encouraged his 
hosts to "look beyond Singapore" for future trade and 
investment partners, however.  Both sides reaffirmed a 
commitment to counterterrorism and Vietnam reiterated its 
hope for a peaceful solution to the Iraq situation.  END 
SUMMARY. 
 
2.  (U)  PM Goh Chok Tong visited Vietnam March 3-5 at the 
invitation of GVN Prime Minister Phan Van Khai.  This was PM 
Goh's third visit to Vietnam since 1994; he was last here in 
1998 for the ASEAN summit.  Singapore Embassy First 
Secretary Andrew Teng told poloff on March 10 that PMs Goh 
 
SIPDIS 
and Khai "know each other well" from bilateral visits as 
well as their attendance at various regional and 
multilateral fora.  PM Goh's visit was the most senior from 
Singapore since President S.R. Nathan visited in February 
2001; President Tran Duc Luong visited Singapore in 1998. 
 
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VISIT CONSIDERED "UNOFFICIAL" 
----------------------------- 
 
3.  (SBU)  Although not described as such in the state- 
controlled media (which reported prominently about the 
visit), Teng said that the Singaporeans considered the visit 
a "working, unofficial visit."  Singapore authorities only 
informed the GVN "about a week" in advance, although there 
had been an invitation on record for a "considerable time," 
he added.  Teng suggested that PM Goh, who already had a 
trip planned to Thailand, liked the idea of also adding 
Vietnam.  However, PM Goh apparently preferred not to have 
the "ceremonial trappings" of a full-blown state visit. 
According to Teng, the GVN "was not thrilled" with the idea, 
but went along with it, probably, in part, due to 
Singapore's importance as a foreign investor.  Due to the 
unofficial nature of the trip, Teng noted that there was no 
large entourage of government and business officials and no 
agreements were signed. 
 
4.  (U)  Despite the relatively short notice, PM Goh met 
with Vietnam's three major leaders: PM Khai, President 
Luong, and Communist Party of Vietnam General Secretary Nong 
Duc Manh.  In addition, PM Goh also met with resident 
Singapore businessmen and paid a visit to the Singapore- 
sponsored training center in Hanoi. 
 
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ECONOMICS:  VIETNAM SHOULD LOOK BEYOND SINGAPORE 
--------------------------------------------- --- 
 
5.  (U)  According to press reports, Singapore is the 
largest foreign investor in Vietnam, totaling over USD 7.2 
billion spread over 320 projects.  Teng cautioned against 
reading too much into this figure, however.  While 
undoubtedly Singapore is a "major economic force in 
Vietnam," probably "about 50 percent" of the foreign 
investment credited to Singapore is actually third party 
investment that goes through Singapore (Note:  including at 
least USD 1 billion from US companies based in Singapore, 
according to Embassy Hanoi's estimate).  Two-way trade is 
also significant, having reached about USD 3.5 billion in 
2002. 
 
6.  (SBU)  According to Teng, PM Goh told his hosts that if 
Vietnam wanted to move to the next stage of economic 
development, it should "actually look beyond" Singapore and 
other ASEAN countries and focus its efforts on large markets 
such as the European Union and the United States.  PM Goh 
told the GVN leadership that while ASEAN will no doubt 
remain an important market for Vietnam, the "long term 
future" is in the West.  Separately, Dr. Tran Khanh, 
Director of the Center for ASEAN Studies, Institute of 
Southeast Asian Studies, told poloff on March 11 that this 
message "is not new" to the GVN.  "Our leaders know that we 
will have to look beyond ASEAN truly to compete in this era 
of globalization," he added. 
 
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SINGAPORE BUSINESS COMMUNITY:  GENERALLY UPBEAT 
--------------------------------------------- -- 
 
7.  (U)  Teng noted that when PM Goh met with the local 
Singapore business community, they were generally upbeat on 
the business climate in Vietnam.  Many have been here close 
to 10 years, he added, and "know their way around." 
However, several suggested to PM Goh that he remind his 
hosts of the need for faster economic reforms.  Some also 
expressed frustration at what they termed "poor policy 
coordination" among ministries involved with the business 
community.  On the positive side, business leaders told PM 
Goh that they believe there is good potential in Vietnam for 
tourism and real estate ventures, including hotels and 
residential facilities. 
-------------------------------- 
SINGAPORE TRAINING WELL RECEIVED 
-------------------------------- 
 
8.  (SBU)  At his visit to the Singapore-sponsored training 
facility in central Hanoi, PM Goh had a "lively discussion" 
with the Vietnamese students.  This was his only substantial 
contact with the public during the visit, Teng noted. 
Nearly 400 Vietnamese students have received short-term 
training at the center in a wide variety of fields.  The 
center, according to Teng, can be viewed as Singapore's 
contribution to the ongoing ASEAN effort of encouraging 
wealthier nations to help the less developed.  During the 
visit, PM Goh also discussed with Vietnam's leadership the 
possibility that Singapore would sponsor more student 
exchanges.  Teng said that the GVN leaders viewed this idea 
positively. 
 
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POLITICAL ISSUES:  NOT BILATERAL 
-------------------------------- 
 
9.  (SBU)  Teng and Khanh said separately that, while 
Singapore and Vietnam have no outstanding bilateral 
political issues, PM Goh and Party Secretary Manh touched on 
terrorism, with Manh claiming that Vietnam is "sympathetic" 
to counterterrorism needs because of its "past experience." 
Teng expressed some puzzlement about Manh's exact meaning 
but suggested that Manh might have been making an oblique 
reference to past "terrorist" incidents perpetrated against 
Vietnam by overseas Vietnamese.  Khanh commented that, since 
terrorism is "an extremely sensitive issue in Singapore," 
the leaders likely had no desire to go beyond a very limited 
discussion.  Regarding Iraq, Teng said that the topic came 
up in the meeting with PM Khai, who repeated the standard 
GVN line about Vietnam's desire for a peaceful solution and 
the need to work within the UN framework. 
 
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WHAT'S NEXT? 
------------ 
 
10.  (SBU)  Teng said that PM Goh would return to Vietnam in 
2004, when Vietnam hosts the next ASEM meeting.  PM Goh also 
invited PM Khai to Singapore.  Teng added that PM Khai 
"happily accepted" but no dates have been fixed. 
PORTER