US embassy cable - 03HOCHIMINHCITY450

UNCLAS SECTION 01 OF 03 HO CHI MINH CITY 000450 
 
SIPDIS 
 
SENSITIVE 
 
DEPARTMENT FOR EAP/BCLTV, DRL 
 
E. O. 12958: N/A 
TAGS: PGOV, ECON, PHUM, PREL, SOCI, ETRD, EINV, VM, HUMANR, ETMIN, RELFREE, LABOR 
SUBJECT: KON TUM: STILL STRUGGLING..... AND GOING NOWHERE FAST 
 
 
Summary 
------- 
1.  (SBU)  Returning to Kon Tum for the first time in a year, the 
Consul General found little changed in the poorest and least 
developed of the four Central Highlands provinces.  While poverty 
continues to be the biggest story in Kon Tum, local officials 
seemed hopeful that construction of new highways linking the 
province to the outside world would somehow bring an economic 
windfall.  In ConGenoffs' first meeting with the provincial 
Committee on Religious Affairs, the deputy director did not seem 
to realize that Protestantism is now a recognized religion in the 
rest of Vietnam -- and has been for the last two years.  The 
ConGen group was not allowed to visit the 15 villagers who had 
returned from Cambodia under UNHCR auspices in February 2002. 
 
No Longer the Second Poorest Province - We've Moved up to Twelfth 
--------------------------------------------- -------------------- 
2.  (SBU)  According to People's Committee First Vice Chairman 
Huynh Hao, Kon Tum had gone from being the second poorest province 
in the country to twelfth poorest.  Per capita income is just over 
USD$200 for the province's 350,000 inhabitants.  Mr. Hao was 
realistic in describing current 12-15 percent growth rates, 
acknowledging the fact that they were starting from such a low 
level.  Agriculture accounts for 44 percent of the provincial 
economy, down from 70 percent in 1991, but coffee and rubber 
production is still on the rise.  While the ongoing drought 
plaguing the Central Highlands had affected the coffee crop, Kon 
Tum is faring better than its neighbors.  The service and 
industrial sectors account for 37 and 19 percent of the provincial 
economy, respectively. 
 
3.  (SBU)  Director Tran Binh Trong of the Department of Labor, 
Invalids and Social Affairs (DOLISA) described several programs 
aimed at reducing poverty in the province.  Some programs, such as 
providing technical advisers to the communes, tried to improve 
agricultural methods and encourage cultivation of viable 
alternatives to rice, such as "industrial" trees (coffee, pepper, 
rubber).  Other programs, such as DOLISA-subsidized loans at 0.15 
percent interest rates, were intended to spur investment in small 
businesses (especially for ethnic minority graduates of certain 
training programs).  While Kon Tum's 3.2 percent jobless rate is 
lower than the national average, the real problem is 
underemployment due to lack of skills.  Plans are underway to 
establish a labor export program once the SARS scare has passed. 
Mr. Trong blamed higher fertility rates among ethnic minorities 
for their (relatively)greater poverty. 
 
4.  (SBU)  Despite improvements, most Kon Tum residents remain 
poor.  The 1-2 month seasonal famine between crop harvests has 
become less severe, affecting  22 percent of the population, 
mostly ethnic minorities in remote areas.  Fifty-nine of 82 
villages and communes are linked to reliable power from the 
province's own hydropower plant and the national grid.  Whereas 
only 30 percent of children in Kon Tum were enrolled in school 10 
years ago, the province has now met GVN standards for universal 
primary school education and basic literacy.  Unfortunately, weak 
educational infrastructure meant they can only provide secondary 
education to 65 villages and communes.  There is now at least one 
dispensary per village to provide routine health care, but most 
lack their own doctors.  Still, this expanded access -- including 
free care to the indigent and payments equivalent to 35 cents per 
day for custodial family members -- has translated into fewer 
problems with goiter, malaria, and dysentery.  First Vice Chairman 
Hao said the province had received adequate guidance to deal with 
SARS. 
 
Where the Road to Nowhere Meets the Ho Chi Minh Trail 
--------------------------------------------- --------- 
5.  (SBU)  According to Department of Planning and Investment 
(DPI) Director Le Quang Chuong, Kon Tum's economic development 
prospects are closely linked to two highways currently under 
construction: the north-south Ho Chi Minh Highway (following 
roughly the path of the old wartime Ho Chi Minh Trail) and the 
East-West Highway (linking some of the poorest parts of Vietnam, 
Laos, Thailand, and Burma.)  Acknowledging the obvious attractions 
of the richer provinces to the south, he saw the new highways as 
Kon Tum's chance for gaining a competitive edge.  However, 
additional ODA funding is still needed for both roads.  Kon Tum is 
upgrading its own 1400 kilometers of road to improve 
transportation  over some very rough terrain.  First Vice Chairman 
Hao was enthusiastic about opening an international frontier 
crossing into Laos and Cambodia, hoping for an annual turnover of 
USD$1.3 million through trade.  He was also excited about the 
possibility of using Ubon Rachathani in northeastern Thailand as a 
conduit for increased trade.  According to Mr. Hao, a conference 
is planned in Thailand to discuss trade and tourism. 
 
6.  (SBU)  While DPI Director Chuong deferred to the central 
government's  overall economic strategy, he said Kon Tum was 
working directly with neighboring provinces to evaluate 
opportunities.  Streamlined investment procedures and planned 
industrial zones are expected to attract foreign and domestic 
investment, but there is a crying need for vocational training for 
the future work force.  Mr. Chuong seemed genuinely interested in 
hosting HCMC American Chamber of Commerce visits to the province 
and meeting with the American business community in HCMC.  He 
acknowledged that most investors "see only problems when they 
think about Kon Tum.  We have to market ourselves more as 'virgin 
territory' to make ourselves attractive."  There are no industrial 
parks in the province, and the Bilateral Trade Agreement has had 
no impact.  One setback this year is that the once promising 
USD$350 million Dak Tho paper pulp processing plant is currently 
on hold for an environmental impact study.  The original 
projections for processing 130,000 tons of pulp the first year, 
and 260,000 the second, had not taken into account the effect on 
limited forest resources, nor an increased interest in ecotourism 
as a promising route for growth.  Straying from his brief at the 
end of the meeting, DPI Director Chuong admitted that "ethnic 
tensions have had a negative effect", but the differences in the 
standards of living between ethnic minorities and ethnic 
Vietnamese Kinh are longstanding. 
 
"Kon Tum is not perfect (but others are worse)." 
--------------------------------------------- --- 
7.  (SBU)  First Vice Chairman Hao downplayed the ethnic minority 
"problem" in Kon Tum, saying that Vietnam cared about its ethnic 
minorities but needed time to recover from the effects of war. 
Reading from notes, he asked the CG to convey to the U.S. Congress 
his unhappiness over the reintroduction of the Vietnam Human 
Rights Act.  He spoke matter-of-factly about how close cooperation 
with individual border provinces in Laos and Cambodia will prevent 
"bad people" from luring Kon Tum's ethnic minorities across the 
border and will help "break up any rebellious plots."  A border 
agreement signed between Kon Tum and Ratanakiri provides for the 
return of illegal immigrants.  Mr. Hao described the ethnic 
minorities who fled the unrest/crackdown in 2001 --and 
subsequently returned under UNHCR auspices -- as economic 
migrants.  He said Kon Tum was working on programs to distribute 
land for coffee and rubber production, and provide industrial jobs 
to those in need.  He noted that his province had "greater 
political stability" than Dak Lak or Gia Lai provinces.  Mr. Hao 
acknowledged that Kon Tum "is not perfect, but other provinces are 
worse.  I have travelled to the North and I have seen them." 
 
8.  (SBU)  According to Kon Tum authorities, ethnic minorities had 
also benefited from the GVN's Decision 168, which raised living 
standards in the Central Highlands by providing clothing, iodized 
salt, medical care, and electricity subsidies.  Provincial 
government efforts to encourage the ethnic minorities to resettle 
near transportation links had left only 12 percent still living in 
remote areas.  Kon Tum's goal is land for everyone by 2004 and 
improved housing by 2005.  Facing a shortage of trained ethnic 
minority teachers, the province relies on a corps of ethnic 
Vietnamese Kinh trained in local languages.  The ethnic minority 
boarding school, presumably the source of future teachers, was 
described as still relatively undeveloped.  Schools and school 
materials are free for ethnic minorities (and the poorest of the 
poor).  Ethnic minority students take the national university 
entrance exam for free and compete on a separate point scale. 
According to First Vice Chairman Hao, 70-80 percent of Kon Tum's 
USD$32.5 million budget is devoted to 24 different programs aimed 
at improving the living standards of the ethnic minorities. 
 
9.  (SBU)  First Vice Chairman Hao turned down the CG's request to 
visit 15 villagers (the original February 2002 UNHCR returnees) 
with whom Ambassador Burghardt and/or ConGenoffs had met on two 
previous occasions.  He said that "so many groups have been 
publicizing and reporting on the villagers that various 
misinterpretations have arisen.  This has upset the villagers' 
lives and the People's Committee as well.  Also, since it is 
planting season, the returnees would lose work hours if they are 
called in from the fields to meet with outsiders."  Mr. Hao 
assured ConGenoffs that Ia Sia village was stable, and the 
returnees had been well cared for.  They now realized they had 
been "lured" to Cambodia and promised never to flee again.  At a 
later dinner, provincial External Relations Office escorts 
explicitly stated that other villagers were jealous of all the 
attention the returnees were getting. 
 
Protestant Catch-22 
------------------------ 
10.  (SBU)  Despite frequent references to Vietnam's 
constitutional provisions on freedom of religion, Deputy Director 
Pham Van Long of the Committee on Ethnic Minority and Religious 
Affairs was clearly not up to speed.  Pointing to the number of 
Catholic churches and Buddhist pagodas as proof that religion was 
thriving in Kon Tum, he put on the brakes when it came to 
Protestants.  Mr. Long was unfamiliar with the Southern 
Evangelical Church of Vietnam (SECV), the umbrella organization 
for registered Protestant churches which was legally established 
two years ago.  He persisted in calling Protestantism "illegal" 
and none of the three other Committee members disputed this. 
 
11.  (SBU)  Describing the "different characteristics" of Kon Tum, 
Mr. Long noted that Protestant believers are free to worship in 
their homes.  They are not, however, allowed to gather in worship 
until they registered as legal churches -- which they are only 
allowed to do if they can prove that they regularly gather 
together to worship.  Believers are also required to show that 
they have a physical church and a legal pastor -- despite the fact 
that they could not legally have either until they were 
registered.  Mr. Long then pointed out the government's conversion 
of most pre-1975 Protestant churches to other uses, such as health 
clinics.  While he claimed to have staff available to respond to 
requests for registration, it is difficult to see how any 
congregation can meet these Catch-22 requirements.  Deputy 
Director Long seemed to have missed completely the GVN's 
recognition of the SECV and the subsequent implementation of a 
system for registering Protestant "associations" and "sub- 
associations."  (Post Note: In contrast, both Gia Lai and Dak Lak 
provinces have been visited by SECV representatives and their 
respective Committees on Ethnic Minority and Religious Affairs 
have started processing Protestant registration requests.) 
 
No Social Evils, But Plenty of Dioxin 
------------------------------------- 
12.  (SBU)  DOLISA Director Tran Binh Trong noted that Kon Tum had 
fewer problems than other provinces with prostitution, drugs, and 
HIV/AIDS.  With such small numbers of prostitutes (50-60) and drug 
users (21), it was more economical to send them to a 
rehabilitation center in neighboring Gia Lai province, than build 
one in Kon Tum.  Most current HIV/AIDS cases are attributed to 
migrants from the north.  Regarding trafficking in persons, Mr. 
Trong nodded and said preventive measures are being considered to 
coincide with the opening of the international frontier pass and 
the two highways. 
 
13.  (SBU)  At the meeting's end,  Director Trong made an almost 
apologetic plea for assistance with the nearly 2400 children 
believed to have been affected by chemical agents during the war. 
Saying he "didn't care about the politics, he just wanted to help 
the children," he lamented the central government's lack of funds 
to assist Kon Tum in caring for its disabled.  He seemed sincerely 
embarrassed to be asking a foreign government for support. 
(Post Note: Two NGOs, including U.S.-based Vietnam Assistance for 
the Handicapped - VNAH, carry out a few scattered programs 
centered mostly on education and the disabled.) 
 
14.  (SBU)  Comment:  After a year's hiatus, it was a new set of 
interlocutors in Kon Tum.  Vice Chairman Ha Ban, whose portfolio 
includes socio-cultural and educational affairs, and with whom 
ConGenoffs have met on three previous occasions, was on official 
business in Hanoi.  First Vice Chairman Hao, while more senior, 
was not quite in command of his brief.  Still, his matter-of-fact 
acknowledgement that local Lao, Cambodian, and Vietnamese 
authorities were cooperating to prevent "illegal" immigrants from 
crossing the border and to "break up rebellious plots" was new to 
us.  Likewise, Kon Tum's apparent decision to cast its economic 
lot not with the burgeoning economies of Ho Chi Minh City and 
Hanoi, but with other poor provinces in Laos, Burma and Cambodia - 
- where they might be the first among equals.  The Committee on 
Ethnic Minority and Religious Affairs' ignorance of or deliberate 
denial of the SECV's existence was troubling.  While on previous 
trips, ConGenoffs had found Vice Chairman Ban willing to engage on 
sensitive issues, on this trip the only bright lights were DPI's 
Director Chuong and DOLISA's Director Trong. 
YAMAUCHI