This record is a partial extract of the original cable. The full text of the original cable is not available.

310632Z Dec 02

                 UNCLASSIFIED     PTQ7499

PAGE 01        HANOI  03108  01 OF 07  310719Z 
ACTION EAP-00   

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      ITCE-00  DOTE-00  SRPP-00  DS-00    EB-00    EXME-00  OIGO-00  
      E-00     FAAE-00  FBIE-00  UTED-00  VC-00    FRB-00   H-01     
      TEDE-00  INR-00   IO-00    ITC-01   LAB-01   L-00     VCE-00   
      AC-01    NSAE-00  OES-00   OMB-01   OPIC-01  PER-00   PM-00    
      ACE-00   P-00     SP-00    STR-00   TEST-00  USIE-00  FMP-00   
      EPAE-00  PMB-00   DSCC-00  PRM-00   DRL-02   G-00     NFAT-00  
      SAS-00     /008W
                  ------------------1E7B77  310720Z /38    
FM AMEMBASSY HANOI
TO SECSTATE WASHDC 8510
INFO DEPTTREAS WASHDC
NSC WASHDC
USDOC WASHDC
USDA WASHDC
DEPTLABOR WASHDC
SECDEF WASHDC
AMCONSUL HO CHI MINH CITY 
AMEMBASSY TOKYO 
ASEAN COLLECTIVE

UNCLAS SECTION 01 OF 07 HANOI 003108 
 
SIPDIS 
 
STATE FOR EAP/BCLTV, EB/IFD/OMA AND EB/IFD/ODF 
STATE PASS USAID FOR ANE/SPOTS: DMCCLUSKEY AND 
ANE/AFERRARRA 
                       UNCLASSIFIED 
 
PAGE 02        HANOI  03108  01 OF 07  310719Z 
STATE PASS USTR FOR ELENA BRYAN 
TREASURY FOR OASIA 
USDOC FOR 4431/MAC/IFP/OKSA/HPPHO 
USDA FOR FAS/FAA/STEVE HUETE 
SECDEF FOR ABLAGG 
 
E.O. 12958: N/A 
TAGS: EAID EFIN ETRD ECON PREL VM HUMANR ETMIN RELFREE SOE FINREF
SUBJECT:  VIETNAM CONSULTATIVE GROUP MEETING: A REALISTIC 
VIEW OF PROGRESS 
 
REF: HANOI 02805 
 
¶1.  (U)  SUMMARY: THE TENTH VIETNAM CONSULTATIVE GROUP OF 
DONORS (CG) MEETING TOOK PLACE IN HANOI DECEMBER 9-11, 
¶2002. DONORS AT THE MEETING, CO-CHAIRED BY THE GOVERNMENT 
OF VIETNAM (GVN) AND THE WORLD BANK, EXPRESSED CONTINUED 
SUPPORT TO THE GVN'S ACTION PROGRAM FOR 2002-2007 AND 
URGED VIETNAM TO IMPLEMENT ITS COMPREHENSIVE POVERTY 
REDUCTION AND GROWTH STRATEGY (CPRGS).  FIVE KEY TARGETS 
WERE IDENTIFIED AT THE OUTSET: CONTINUED HIGH AND 
SUSTAINED ECONOMIC GROWTH; EQUITABLE SOCIOECONOMIC 
DEVELOPMENT; FURTHER INTEGRATION OF VIETNAM INTO THE 
WORLD ECONOMY; IMPROVED EDUCATION AND TRAINING; AND 
POLITICAL AND SOCIAL STABILITY.  DELEGATES EMPHASIZED THE 
NEED TO SPEED UP IMPLEMENTATION OF REFORMS IN ORDER TO 
ENSURE THAT VIETNAM ATTAINS ITS GOAL OF IMPROVING 
COMPETITIVENESS AND CREATING AN EFFICIENT PUBLIC 
ADMINISTRATION, WHILE ENSURING THAT THE POOR ALSO BENEFIT 
FROM GROWTH.  SOME OF THE OTHER MAJOR THEMES TOUCHED UPON 
BY PARTICIPANTS INCLUDED THE NEED TO EXPEDITE AND IMPROVE 
                       UNCLASSIFIED 
 
PAGE 03        HANOI  03108  01 OF 07  310719Z 
THE EFFICIENCY OF OFFICIAL DEVELOPMENT ASSISTANCE (ODA); 
THE NEED FOR CLEAR GUIDELINES FOR BUSINESS PROTOCOL FOR 
BOTH PUBLIC AND PRIVATE SECTORS; CONTINUED SUPPORT FOR 
THE EQUITIZATION OF STATE-OWNED ENTERPRISES; IMPROVED 
CONTAINMENT OF CORRUPTION; STRONGER ACTIONS TO CURB THE 
SPREAD OF HIV/AIDS; AND ATTENTION TO THE WIDENING GAP 
BETWEEN THE WEALTHY AND THE POOR.  DURING THIS CANDID 
DISCUSSION, PARTICIPANTS ALSO RAISED CONCERNS REGARDING 
HUMAN RIGHTS, THE NEED FOR A FREE PRESS, GENDER EQUITY, 
UNDERSERVED POPULATIONS INCLUDING ETHNIC MINORITIES, 
TRANSPARENCY, AND GVN PROGRESS IN IMPLEMENTING ITS CPRGS. 
 
¶2.  (U)  THE US DELEGATION, CO-CHAIRED BY AMBASSADOR 
BURGHARDT AND USAID REGIONAL MISSION DIRECTOR LISA 
CHILES, MADE A NUMBER OF WELL-RECEIVED INTERVENTIONS 
REGARDING THE IMPORTANCE OF TRANSPARENCY, CLEAN PUBLIC 
ADMINISTRATION, AN OPEN AND VIBRANT ECONOMY, FREE PRESS, 
TRULY OPEN COMPETITION AS THE STATE DISMANTLES STATE- 
OWNED MONOPOLIES SUCH AS TELECOMMUNICATIONS AND POWER, 
AND THE URGENT NEED TO CURB THE HIV/AIDS EPIDEMIC THROUGH 
INCREASED APPROPRIATE PUBLIC LEADERSHIP.  IN ADDITION, 
THEY HIGHLIGHTED THE NEED FOR ODA AND STATE INVESTMENT TO 
FOCUS ON THOSE AREAS THAT ONLY THEY CAN DO, SUCH AS 
HEALTH AND EDUCATION, WHILE ALLOWING THE PRIVATE SECTOR 
TO INVEST IN MANUFACTURING AND SERVICES. THE US 
DELEGATION FURTHER NOTED THE NEED FOR GREATER INVOLVEMENT 
OF LOCAL NON-GOVERNMENTAL ORGANIZATIONS IN CG 
DISCUSSIONS; THE NEED TO REINFORCE NON-TAXATION POLICIES 
FOR ODA; AND THE PROGRESS THE GVN HAS MADE IN 
CONTRIBUTING TO THE HARMONIZATION OF ODA PROGRAMS.  IN 
THE FINAL SESSION, THE USG PLEDGED $33.6 MILLION IN 
                       UNCLASSIFIED 
 
PAGE 04        HANOI  03108  01 OF 07  310719Z 
ASSISTANCE TO VIETNAM, CONTINGENT ON THE AVAILABILITY OF 
FUNDS. THE TOTAL CONTRIBUTION TO VIETNAM IN THE FORM OF 
GRANT AND LOAN ASSISTANCE TOTALED $2.5 BILLION FOR THE 
COMING YEAR - AN OVERALL INCREASE FROM LAST YEAR BUT ONE 
THAT FALLS SHORT OF THE GVN'S ESTIMATION OF NEED - 
ROUGHLY $3 BILLION.  NONETHELESS, GIVEN THE CURRENT WORLD 
ECONOMIC CLIMATE, THIS WAS VIEWED AS A POSITIVE 
COMMITMENT AND A REFLECTION OF GENERAL SATISFACTION WITH 
THE GVN AMONG DONOR COMMUNITY CONSTITUENTS.  END SUMMARY. 
 
¶4.  (U) THE CONSULTATIVE GROUP FOR VIETNAM MET UNDER THE 
CO-CHAIRMANSHIP OF MR. VO HONG PHUC, MINISTER OF PLANNING 
AND INVESTMENT, AND MR. KLAUS ROHLAND, THE WORLD BANK'S 
COUNTRY DIRECTOR FOR VIETNAM.  DEPUTY PRIME MINISTER VU 
KHOAN AND MINISTER PHUC LED THE VIETNAMESE DELEGATION. 
ROHLAND OPENED THE MEETING WITH A STATEMENT THAT FOCUSED 
ON THE CURRENT GLOBAL POLITICAL AND ECONOMIC CLIMATE AND 
THE NEED TO WORK FLEXIBLY WITH THE GVN'S COMPREHENSIVE 
POVERTY REDUCTION STRATEGY.  HE ALSO DESCRIBED THE 
PROGRESS VIETNAM HAD WITNESSED OVER THE LAST DECADE, AS 
WELL AS CERTAIN CHALLENGES THAT VIETNAM AND THE 
DEVELOPMENT COMMUNITY WILL FACE, INCLUDING EQUITIZATION 
OF STATE-OWNED ENTERPRISES (SOE'S), FISCAL, FINANCIAL AND 
PUBLIC SECTOR REFORM, AND THE SEARCH FOR NEW WAYS TO 
AVOID INEQUITIES AND INEQUALITIES IN IMPLEMENTING THE 
 
                       UNCLASSIFIED 
 
                           UNCLASSIFIED     PTQ7500 
 
PAGE 01        HANOI  03108  02 OF 07  310720Z 
ACTION EAP-00 
 
INFO  LOG-00   NP-00    AID-00   AMAD-00  EVG-00   CIAE-00  CTME-00 
      ITCE-00  DOTE-00  SRPP-00  DS-00    EB-00    EXME-00  OIGO-00 
      E-00     FAAE-00  FBIE-00  UTED-00  VC-00    FRB-00   H-01 
      TEDE-00  INR-00   ITC-01   LAB-01   L-00     VCE-00   AC-01 
      DCP-01   NSAE-00  OES-00   OMB-01   OPIC-01  PER-00   PM-00 
      ACE-00   P-00     SP-00    IRM-00   STR-00   TEST-00  USIE-00 
      FMP-00   EPAE-00  ECA-00   PMB-00   DSCC-00  PRM-00   DRL-02 
      G-00     NFAT-00  SAS-00     /009W 
                  ------------------1E7B80  310720Z /38 
R 310632Z DEC 02 
FM AMEMBASSY HANOI 
TO SECSTATE WASHDC 8511 
INFO DEPTTREAS WASHDC 
NSC WASHDC 
USDOC WASHDC 
USDA WASHDC 
DEPTLABOR WASHDC 
SECDEF WASHDC 
AMCONSUL HO CHI MINH CITY 
AMEMBASSY TOKYO 
ASEAN COLLECTIVE 
 
UNCLAS SECTION 02 OF 07 HANOI 003108 
 
SIPDIS 
 
STATE FOR EAP/BCLTV, EB/IFD/OMA AND EB/IFD/ODF 
STATE PASS USAID FOR ANE/SPOTS: DMCCLUSKEY AND 
ANE/AFERRARRA 
                       UNCLASSIFIED 
 
PAGE 02        HANOI  03108  02 OF 07  310720Z 
STATE PASS USTR FOR ELENA BRYAN 
TREASURY FOR OASIA 
USDOC FOR 4431/MAC/IFP/OKSA/HPPHO 
USDA FOR FAS/FAA/STEVE HUETE 
SECDEF FOR ABLAGG 
 
 
POVERTY REDUCTION STRATEGY. 
 
¶5.   (U)  DPM KHOAN EXPRESSED GRATITUDE TO THE DONOR AND 
NGO COMMUNITIES FOR ASSISTANCE AND NOTED THE NEED TO 
REVIEW VIETNAM'S SOCIOECONOMIC DEVELOPMENT PLAN.  HE 
POINTED OUT THAT, DESPITE NATURAL DISASTERS, VIETNAM'S 
GDP HAS GROWN 7% THIS YEAR AND THAT VIETNAM'S GENERAL 
PRODUCTIVITY IS ON THE RISE.  DPM KHOAN EXPRESSED 
SATISFACTION WITH THE DECREASE IN THE PERCENTAGE OF 
HOUSEHOLDS BELOW THE POVERTY LINE, WHICH FELL FROM 20% TO 
14.4%. FURTHERMORE, HE LAUDED THE 1.4 MILLION JOBS THAT 
WERE CREATED IN 2002.  HE ALSO HIGHLIGHTED SUBSTANTIAL 
DEVELOPMENT IN THE RURAL SECTOR OVER THE LAST YEAR. 
 
¶6.  (U)  DPM KHOAN TOUCHED ON THREE PRIMARY TASKS FOR THE 
GVN: 1) THE ENHANCEMENT OF THE QUALITY AND EFFICIENCY OF 
THE COMPETITIVENESS OF VIETNAM'S ECONOMY IN THE WORLD 
MARKET, 2) COMPREHENSIVE HUMAN RESOURCES DEVELOPMENT, 
INCLUDING DEVELOPMENT OF SOCIAL AND ENVIRONMENTAL 
FACTORS, AND 3) STRONG AND EFFECTIVE PUBLIC 
                       UNCLASSIFIED 
 
PAGE 03        HANOI  03108  02 OF 07  310720Z 
ADMINISTRATION REFORM WITH PROMOTION OF DEMOCRACY AND 
TRANSPARENCY IN ORDER TO REDUCE CORRUPTION AND INCREASE 
PRODUCTIVITY.  FINALLY, THE DPM INVITED DONORS TO 
PARTICIPATE IN THE IMPLEMENTATION OF THE 2001-2010 MASTER 
PLAN FOR PUBLIC ADMINISTRATION REFORM AND COMMENTED ON 
THE IMPORTANCE OF BUILDING PARTNERSHIPS AND HARMONIZATION 
OF INCOMING ODA AND ASSOCIATED PROGRAMS. 
 
¶7.  (U)  THIS YEAR'S CONSULTATIVE GROUP MEETING FOCUSED 
ON THREE MAIN TOPICS: 1) IMPROVING COMPETITIVENESS AND 
EFFECTIVENESS, HUMAN DEVELOPMENT AND ADMINISTRATION 
REFORM TO GET FAST AND SUSTAINABLE DEVELOPMENT; 2) 
ORGANIZING THE IMPLEMENTATION FOR THE COMPREHENSIVE 
POVERTY REDUCTION AND GROWTH STRATEGY AND FORMULATING AN 
APPROPRIATE PUBLIC INVESTMENT PROGRAM; AND 3) IMPROVING 
ODA EFFECTIVENESS AND NEEDS.  MPI PHUC ADDITIONALLY 
IDENTIFIED FIVE KEY TARGETS: POLITICAL AND SOCIAL 
STABILITY; CONTINUED HIGH AND SUSTAINED ECONOMIC GROWTH; 
EQUITABLE SOCIOECONOMIC DEVELOPMENT; INTEGRATION OF 
VIETNAM INTO THE WORLD ECONOMY; AND, IMPROVED EDUCATION 
AND TRAINING. 
 
COMPETITIVENESS AND SUSTAINABLE DEVELOPMENT 
------------------------------------------- 
 
¶8.  (U)  MPI PHUC OPENED THE FIRST SESSION WITH AN 
OUTLINE OF MEASURES THAT THE GVN WOULD LIKE TO TAKE, 
INCLUDING RESTRUCTURING THE RURAL ECONOMY AND BUILDING ON 
VIETNAM'S COMPARATIVE ADVANTAGES IN LAND AND LABOR 
RESOURCES.  HE TOUCHED ON INDUSTRIAL GROWTH AND THE NEED 
TO DEVELOP THE SERVICE SECTOR.  ADDITIONALLY, HE NOTED 
                       UNCLASSIFIED 
 
PAGE 04        HANOI  03108  02 OF 07  310720Z 
THE GVN MANDATE FOR THE ABOLISHMENT OF MONOPOLIES IN 
CERTAIN SECTORS, INCLUDING POWER AND TELECOMMUNICATIONS. 
MPI PHUC ALSO EMPHASIZED THE NEED TO DEVISE EFFECTIVE 
ACTION PLANS FOR PUBLIC ADMINISTRATION REFORM.  THE WORLD 
BANK COMMENDED THE GVN ON PLACING GREATER EMPHASIS ON THE 
DEVELOPMENT AND INCLUSION OF RURAL POOR COMMUNITIES IN 
THE CENTRAL HIGHLANDS, WHICH HAVE HISTORICALLY BEEN 
NEGLECTED. 
 
¶9.  (U)  THE FIRST DISCUSSION SESSION, WHICH WAS LED BY 
THE REPRESENTATIVES OF THE UNDP, JAPAN, FRANCE, AND THE 
IMF, EXAMINED THE NEED FOR ENHANCED COMPETITIVENESS, 
PARTICULARLY IN TERMS OF SETTING A REGULATORY FRAMEWORK 
AND IMPROVING THE ENVIRONMENT FOR BOTH FOREIGN AND 
DOMESTIC INVESTMENT.  PROMPTED IN PART BY THE UNDP'S 
STATEMENT ABOUT VIETNAM'S NEED TO MAKE VIETNAM THE "BEST 
PLACE TO LIVE," DISCUSSANTS FOCUSED ON THE NEED FOR 
IMPROVED HUMAN DEVELOPMENT BY PLACING VIETNAMESE CITIZENS 
AT THE CENTER OF DEVELOPMENT.  PARTICIPANTS SUPPORTED THE 
EDUCATION FOR ALL INITIATIVE, THE NEED TO ADDRESS 
VULNERABILITIES OF ETHNIC MINORITY GROUPS, STRONGER 
PUBLIC ACTIONS TO CONTAIN THE SPREAD OF HIV/AIDS, THE 
GROWING NEED FOR EMPLOYMENT OPPORTUNITIES FOR YOUTH, 
GREATER SUPPORT FOR DEVELOPMENT OF THE PRIVATE SECTOR, 
AND THE NEED TO ENSURE POLITICAL, CIVIL AND RELIGIOUS 
 
                       UNCLASSIFIED 
 
                           UNCLASSIFIED     PTQ7501 
 
PAGE 01        HANOI  03108  03 OF 07  310720Z 
ACTION EAP-00 
 
INFO  LOG-00   NP-00    AID-00   AMAD-00  EVG-00   CIAE-00  CTME-00 
      ITCE-00  DOTE-00  SRPP-00  DS-00    EB-00    EXME-00  OIGO-00 
      E-00     FAAE-00  FBIE-00  UTED-00  VC-00    FRB-00   H-01 
      TEDE-00  INR-00   IO-00    ITC-01   LAB-01   L-00     VCE-00 
      AC-01    NSAE-00  OES-00   OMB-01   OPIC-01  PER-00   PM-00 
      ACE-00   P-00     SP-00    STR-00   TEST-00  USIE-00  FMP-00 
      EPAE-00  PMB-00   DSCC-00  PRM-00   DRL-02   G-00     NFAT-00 
      SAS-00     /008W 
                  ------------------1E7B85  310720Z /38 
R 310632Z DEC 02 
FM AMEMBASSY HANOI 
TO SECSTATE WASHDC 8512 
INFO DEPTTREAS WASHDC 
NSC WASHDC 
USDOC WASHDC 
USDA WASHDC 
DEPTLABOR WASHDC 
SECDEF WASHDC 
AMCONSUL HO CHI MINH CITY 
AMEMBASSY TOKYO 
ASEAN COLLECTIVE 
 
UNCLAS SECTION 03 OF 07 HANOI 003108 
 
SIPDIS 
 
STATE FOR EAP/BCLTV, EB/IFD/OMA AND EB/IFD/ODF 
STATE PASS USAID FOR ANE/SPOTS: DMCCLUSKEY AND 
ANE/AFERRARRA 
                       UNCLASSIFIED 
 
PAGE 02        HANOI  03108  03 OF 07  310720Z 
STATE PASS USTR FOR ELENA BRYAN 
TREASURY FOR OASIA 
USDOC FOR 4431/MAC/IFP/OKSA/HPPHO 
USDA FOR FAS/FAA/STEVE HUETE 
SECDEF FOR ABLAGG 
 
 
 
RIGHTS. 
 
¶10.  (U)  ADDITIONAL COMMENTS, INCLUDING THOSE BY THE 
IMF, EMPHASIZED INCREASING VIETNAM'S COMPETITIVENESS, 
IMPROVING THE DOMESTIC LEGAL STRUCTURE AND TRANSPARENCY, 
ACCELERATING DEREGULATION, IMPLEMENTING THE ENTERPRISE 
LAW AGGRESSIVELY OUTSIDE MAJOR URBAN AREAS, AND PAYING 
GREATER ATTENTION TO OCCUPATIONAL HEALTH, SAFETY, AND 
ENVIRONMENTAL STANDARDS.  AMONG OTHERS, THE JAPANESE 
NOTED THAT LOW-COST LABOR ALONE WILL NOT ENSURE 
COMPETITIVENESS.  THE IMF STRESSED THAT SOE EQUITIZATION 
AND THE SUCCESSFUL IMPLEMENTATION OF THE US-VIETNAM 
BILATERAL TRADE AGREEMENT WILL ENHANCE THE PROSPECTS FOR 
VIETNAM'S COMPETITIVENESS IN THE WORLD ECONOMY. 
 
¶11.  (U)_  A NUMBER OF PARTICIPANTS ALSO EXPRESSED 
CONCERNS ABOUT THE HIGH COSTS OF CURATIVE HEALTHCARE AND 
BASIC EDUCATION.  THE "LIKE-MINDED DONORS GROUP," AN AD 
HOC GROUPING OF NINE BILATERAL DONORS THAT ARE DRAWN 
TOGETHER BY A COMMON COMMITMENT TO THE CPRGS AND 
                       UNCLASSIFIED 
 
PAGE 03        HANOI  03108  03 OF 07  310720Z 
IMPROVING THE QUALITY OF AID THROUGH DONOR HARMONIZATION, 
CITED THE WIDENING GAP BETWEEN THE RICH AND THE POOR AND 
MINIMAL PROGRESS ACHIEVED THUS FAR IN PUBLIC 
ADMINISTRATION REFORM.  SOME CONGRATULATED THE GVN FOR 
ITS WORK ON THE NATIONAL EDUCATION PLAN.  HOWEVER, SOME 
RAISED CONCERNS REGARDING VIETNAM'S LACK OF TRANSPARENCY, 
WHICH IS A PREREQUISITE FOR POSITIVE LEGAL REFORM, 
SUSTAINED ECONOMIC GROWTH, AND POVERTY REDUCTION. SEVERAL 
DELEGATES ALSO COMMENTED THAT THE GVN WOULD ONLY BE ABLE 
TO CONTAIN CORRUPTION IF IT REDUCES DISCRETIONARY AND 
DISCRIMINATORY PROCEDURES AND IMPROVES FINANCIAL 
MANAGEMENT.  IMPORTANT ACTIONS PROPOSED BY DELEGATES TO 
COMBAT CORRUPTION INCLUDED STRENGTHENING PROFESSIONALISM 
AND EFFICIENCY IN THE PUBLIC SECTOR, PAYING CIVIL 
SERVANTS A LIVING WAGE, IMPROVING SIMPLICITY AND 
TRANSPARENCY IN DECISION-MAKING PROCESSES, AND 
FACILITATING IDEA-SHARING AND DEBATE IN A FREE PRESS. 
 
¶12.  (U)  MPI PHUC RESPONDED TO COMMENTS FROM THE 
DELEGATES BY NOTING THAT THE GVN IS DEVELOPING PROGRAMS 
FOR RURAL DEVELOPMENT, WITH SPECIAL ATTENTION TO LAND AND 
HOUSING CONCESSIONS FOR ETHNIC MINORITIES IN THE CENTRAL 
HIGHLANDS AND NORTHERN MOUNTAINOUS AREAS.  HE ALSO SAID 
THAT HUMAN RESOURCE DEVELOPMENT HAS BEEN AND WILL 
CONTINUE TO BE A STRONG FOCUS OF THE GVN.  ACCORDING TO 
PHUC, DEMOCRACY AND TRANSPARENCY ARE INTEGRAL COMPONENTS 
OF VIETNAM'S LEGAL REFORM. 
 
¶13.  (U)  REFERRING TO PHUC'S ASSERTION THAT THE GVN WAS 
MOVING TOWARD ABOLISHING GVN MONOPOLIES IN 
TELECOMMUNICATIONS, POWER GENERATION, AND OTHER RELATED 
                       UNCLASSIFIED 
 
PAGE 04        HANOI  03108  03 OF 07  310720Z 
INDUSTRIES, AMBASSADOR BURGHARDT NOTED THAT SUCH 
MONOPOLIES COME AT A HIGH COST TO VIETNAM.  HE EMPHASIZED 
THAT THE COST WOULD ONLY BE REDUCED IF TRUE COMPETITION 
WERE ALLOWED IN ALL SECTORS, INCLUDING SHIPPING, 
TRANSPORT, AND MINING.  AMBASSADOR EXPRESSED SATISFACTION 
WITH THE GVN MOVE TOWARD ABOLISHING MONOPOLIES, BUT 
CAUTIONED AGAINST THE CURRENT GVN NOTION OF INCREASING 
"COMPETITION," THAT IS, CREATING NEW SOE'S WITHIN THE 
GOVERNMENT MONOPOLY RATHER THAN INTRODUCING REAL 
COMPETITION BY ALLOWING THE ENTRY OF DOMESTIC AND FOREIGN 
PRIVATE ENTERPRISES.  SUCH REAL COMPETITION, HE STATED, 
WOULD PUT VIETNAM ON A POSITIVE PATH TOWARD WTO 
ACCESSION.  AMBASSADOR ALSO EXPRESSED SUPPORT FOR 
STATEMENTS MADE BY THE EU REGARDING CLEANER PUBLIC 
ADMINISTRATION, FREE PRESS, AND TRANSPARENCY OF 
INFORMATION FLOW, WHICH ARE KEY INGREDIENTS FOR COMBATING 
CORRUPTION.  AMBASSADOR CITED RECENT GVN DECREES DESIGNED 
TO MONITOR, CONTROL, AND INTERFERE WITH INFORMATION FLOW 
VIA THE INTERNET THAT RUN CONTRARY TO THE REGIONAL TREND 
TOWARDS A DIGITAL ECONOMY.  IN PARTICULAR, HE URGED THE 
GVN TO RECONSIDER ITS NEW REQUIREMENT TO LICENSE AND 
CENSOR WEBSITES, INCLUDING THOSE CRUCIAL FOR E-COMMERCE, 
EDUCATIONAL, DIPLOMATIC, AND OTHER INFORMATION SERVICES. 
HE ENCOURAGED THE GVN TO ALLOW ALL CITIZENS TO 
PARTICIPATE FREELY IN THE CIVIL, ECONOMIC, AND POLITICAL 
 
                       UNCLASSIFIED 
 
                           UNCLASSIFIED     PTQ7502 
 
PAGE 01        HANOI  03108  04 OF 07  310720Z 
ACTION EAP-00 
 
INFO  LOG-00   NP-00    AID-00   AMAD-00  EVG-00   CIAE-00  CTME-00 
      ITCE-00  DOTE-00  SRPP-00  DS-00    EB-00    EXME-00  OIGO-00 
      E-00     FAAE-00  FBIE-00  UTED-00  VC-00    FRB-00   H-01 
      TEDE-00  INR-00   IO-00    ITC-01   LAB-01   L-00     VCE-00 
      AC-01    NSAE-00  OES-00   OMB-01   OPIC-01  PER-00   PM-00 
      ACE-00   P-00     SP-00    STR-00   TEST-00  USIE-00  FMP-00 
      EPAE-00  PMB-00   DSCC-00  PRM-00   DRL-02   G-00     NFAT-00 
      SAS-00     /008W 
                  ------------------1E7B95  310720Z /38 
R 310632Z DEC 02 
FM AMEMBASSY HANOI 
TO SECSTATE WASHDC 8513 
INFO DEPTTREAS WASHDC 
NSC WASHDC 
USDOC WASHDC 
USDA WASHDC 
DEPTLABOR WASHDC 
SECDEF WASHDC 
AMCONSUL HO CHI MINH CITY 
AMEMBASSY TOKYO 
ASEAN COLLECTIVE 
 
UNCLAS SECTION 04 OF 07 HANOI 003108 
 
SIPDIS 
 
STATE FOR EAP/BCLTV, EB/IFD/OMA AND EB/IFD/ODF 
STATE PASS USAID FOR ANE/SPOTS: DMCCLUSKEY AND 
ANE/AFERRARRA 
                       UNCLASSIFIED 
 
PAGE 02        HANOI  03108  04 OF 07  310720Z 
STATE PASS USTR FOR ELENA BRYAN 
TREASURY FOR OASIA 
USDOC FOR 4431/MAC/IFP/OKSA/HPPHO 
USDA FOR FAS/FAA/STEVE HUETE 
SECDEF FOR ABLAGG 
 
LIFE OF THEIR NATION, REGARDLESS OF GENDER, ETHNICITY, OR 
RELIGION.  HE ALSO STRONGLY SUPPORTED THE UNDP POSITION 
REGARDING THE NEED TO CONTAIN THE HIV/AIDS VIRUS. 
 
¶14.  (U)  A NUMBER OF DELEGATIONS SUPPORTED THE US 
INTERVENTION (AND MANY MORE SIGNALED SUPPORT WITH NODS 
AROUND THE ROOM).  MP PHUC RESPONDED IMMEDIATELY THAT THE 
FREEDOM OF RELIGION AND FREEDOM OF THE PRESS WERE 
GUARANTEED BY THE VIETNAMESE CONSTITUTION, THAT THE 
PROBLEM IN VIETNAM WAS NOT TOO FEW NEWSPAPERS BUT TOO 
MANY, AND THAT VIETNAMESE WERE FREE TO WORSHIP AS THEY 
CHOSE, AS EVIDENCED BY SOME ETHNIC GROUPS IN THE CENTRAL 
HIGHLANDS THAT STILL WORSHIPED SPIRITS IN THE TREES. 
 
REDUCING POVERTY AND PUBLIC INVESTMENT PRIORITIES 
--------------------------------------------- ---- 
 
¶15.  (U)  THE SECOND SESSION OF THE MEETING FOCUSED ON 
THE IMPLEMENTATION OF THE COMPREHENSIVE POVERTY REDUCTION 
AND GROWTH STRATEGY (CPRGS) AND THE FORMULATION OF AN 
                       UNCLASSIFIED 
 
PAGE 03        HANOI  03108  04 OF 07  310720Z 
APPROPRIATE PUBLIC INVESTMENT PROGRAM (PIP).  LED BY THE 
ADB, AUSTRALIA, GERMANY, AND SWEDEN, THE DISCUSSION WAS 
MARKED BY A GENERAL CONSENSUS THAT THE GVN HAD DONE A 
GOOD JOB ON ITS CPRGS FOR 2001-2005 BUT THAT SERIOUS 
QUESTIONS REMAINED REGARDING THE PIP AND THE GVN'S 
PRIORITIES FOR PUBLIC INVESTMENT.  ACCORDING TO THE WORLD 
BANK, VIETNAM'S CPRGS IS UNIQUE FROM A GLOBAL 
PERSPECTIVE, BECAUSE OF ITS LEVEL OF GOVERNMENTAL 
OWNERSHIP.  THE CPRGS EMBODIES A PARTICIPATORY PROCESS 
THAT ENCOURAGES COOPERATION AMONG NUMEROUS STAKEHOLDERS. 
PARTICIPANTS EMPHASIZED THE NEED TO PUSH FORWARD ON 
IMPLEMENTATION OF THE CPRGS AND THE NEED TO MEASURE 
PROGRESS AND OUTCOMES THROUGH A UNIFIED MONITORING AND 
EVALUATION SYSTEM.  PARTICIPANTS ALSO NOTED THE NEED TO 
LINK RECURRENT AND CAPITAL PUBLIC RESOURCES TO THE 
PRIORITIES ARTICULATED IN THE CPRGS. 
 
¶16.  (U)  THE GVN OUTLINED THE GOALS OF THE CPRGS AND 
ANNOUNCED THE ESTABLISHMENT OF A WORKING GROUP TO SUPPORT 
A DECENTRALIZED APPROACH TO MINISTRY INVOLVEMENT.  THE 
GVN HIGHLIGHTED THE LINKS AMONG THE PIP, THE CPRGS, AND 
POVERTY REDUCTION VIA THREE CHANNELS OF INVESTMENT: 
DIRECT INVESTMENT, THE NATIONAL TARGET PROGRAM, AND 
INVESTMENT IN EXISTING DEVELOPED INDUSTRIES WITH HIGH 
POTENTIAL.  THE ADB FOCUSED ON SUPPORT FOR THE GVN'S 
SOCIALLY INCLUSIVE DEVELOPMENT AND THE NEEDS TO MAXIMIZE 
EMPLOYMENT OPPORTUNITIES, TO REDUCE INEQUALITIES IN 
SOCIAL SECTORS INCLUDING HEALTH AND EDUCATION, TO DEFINE 
NON-STATE SECTOR INVOLVEMENT, TO ALIGN ODA RESOURCES 
BETTER, AND TO AVOID THE INCREASING THE POVERTY GAP. 
THIS LAST ISSUE WAS ECHOED BY THE AUSTRALIAN DELEGATION, 
                       UNCLASSIFIED 
 
PAGE 04        HANOI  03108  04 OF 07  310720Z 
WHICH ALSO POINTED OUT THE CPRGS' LACK OF RELATION 
TO/INTEGRATION INTO THE PIP.  AN NGO REP STRESSED THE 
NEED FOR THE GVN TO FOCUS ON EDUCATION FOR THE POOR AND 
RAISED THE ISSUE OF HIGH EDUCATIONAL COSTS, ESPECIALLY IN 
THE PROVINCES, WHICH CONTRIBUTED GREATLY TO STUDENTS 
HAVING TO LEAVE SCHOOL AT AN EARLY AGE. 
 
¶17.  (U) VICE MINISTER OF TRADE LUONG VAN TU MADE A 
STRONG PITCH FOR ASSISTANCE FROM THE DONORS IN SECURING 
GREATER MARKET ACCESS FOR AGRICULTURAL EXPORTS, CLAIMING 
THAT THE POOR HAVE SUFFERED FROM TRADE BARRIERS AND 
AGRICULTURAL SUBSIDIES ESTABLISHED BY INDUSTRIALIZED 
COUNTRIES.  SEVERAL DELEGATES, INCLUDING NEW ZEALAND, 
ECHOED THIS REQUEST.  DELEGATES ALSO NOTED THE NEED FOR 
BROAD-BASED PARTICIPATION, INCLUDING BY THE NATIONAL 
ASSEMBLY, PRIVATE SECTOR ASSOCIATIONS, AND CIVIL SOCIETY 
GROUPS, IN ORDER TO ENSURE EFFECTIVE IMPLEMENTATION OF 
THE CPRGS.  THIS BROAD STAKEHOLDER PARTICIPATION REQUIRES 
PERMANENT SUPPORT OF THE NATIONAL ASSEMBLY, GRASSROOTS 
DEMOCRACY, AND CONTINUED INVOLVEMENT OF INTERNATIONAL AND 
NATIONAL NGOS IN THE CONSULTATIVE GROUP FORUM.  DELEGATES 
ALSO POINTED OUT THE NEED TO INVOLVE LOCAL GOVERNMENTS IN 
EFFORTS TO DECENTRALIZE CPRGS IMPLEMENTATION, 
NECESSITATING STRENGTHENED CAPACITY AT THE LOCAL LEVEL. 
 
                       UNCLASSIFIED 
 
                           UNCLASSIFIED     PTQ7505 
 
PAGE 01        HANOI  03108  05 OF 07  310721Z 
ACTION EAP-00 
 
INFO  LOG-00   NP-00    AID-00   AMAD-00  EVG-00   CIAE-00  CTME-00 
      ITCE-00  DOTE-00  SRPP-00  DS-00    EB-00    EXME-00  OIGO-00 
      E-00     FAAE-00  FBIE-00  UTED-00  VC-00    FRB-00   H-01 
      TEDE-00  INR-00   IO-00    ITC-01   LAB-01   L-00     VCE-00 
      AC-01    NSAE-00  OES-00   OMB-01   OPIC-01  PER-00   PM-00 
      ACE-00   P-00     SP-00    STR-00   TEST-00  USIE-00  FMP-00 
      EPAE-00  PMB-00   DSCC-00  PRM-00   DRL-02   G-00     NFAT-00 
      SAS-00     /008W 
                  ------------------1E7BA6  310721Z /38 
R 310632Z DEC 02 
FM AMEMBASSY HANOI 
TO SECSTATE WASHDC 8514 
INFO DEPTTREAS WASHDC 
NSC WASHDC 
USDOC WASHDC 
USDA WASHDC 
DEPTLABOR WASHDC 
SECDEF WASHDC 
AMCONSUL HO CHI MINH CITY 
AMEMBASSY TOKYO 
ASEAN COLLECTIVE 
 
UNCLAS SECTION 05 OF 07 HANOI 003108 
 
SIPDIS 
 
STATE FOR EAP/BCLTV, EB/IFD/OMA AND EB/IFD/ODF 
STATE PASS USAID FOR ANE/SPOTS: DMCCLUSKEY AND 
ANE/AFERRARRA 
                       UNCLASSIFIED 
 
PAGE 02        HANOI  03108  05 OF 07  310721Z 
STATE PASS USTR FOR ELENA BRYAN 
TREASURY FOR OASIA 
USDOC FOR 4431/MAC/IFP/OKSA/HPPHO 
USDA FOR FAS/FAA/STEVE HUETE 
SECDEF FOR ABLAGG 
 
 
 
¶18.   (U) MS. CHILES EXPRESSED SUPPORT FOR THE GERMAN AND 
NGO POSITIONS REGARDING THE IMPORTANCE OF LOCAL NGO 
PARTICIPATION IN THE CG.  SHE ALSO NOTED CONCERN FOR THE 
RISING TREND IN HIV/AIDS AND ITS ENTRANCE INTO THE 
GENERAL POPULATION - BOTH OF WHICH REQUIRE STRONG 
LEADERSHIP AT THE HIGHEST LEVELS.  MS. CHILES ASSURED THE 
GVN THAT IT HAS MANY FRIENDS PREPARED TO ASSIST WITH THIS 
PROCESS.  AMBASSADOR BURGHARDT REFERRED TO THE ADB'S 
INTERVENTION REGARDING PRIVATE SECTOR DEVELOPMENT AND THE 
NEED TO FOSTER ITS GROWTH THROUGH TRANSPARENCY AND A 
CLEAR REGULATORY FRAMEWORK.  HE WARNED AGAINST CROWDING 
OUT POTENTIAL PRIVATE SECTOR CONTRIBUTIONS BY DEVOTING 
ODA AND STATE FUNDS TO AREAS THAT THE PRIVATE SECTOR IS 
BETTER SUITED TO PROVIDE.  HE FURTHER COMMENTED THAT IF 
THE PRIVATE SECTOR IS NOT ENABLED TO INVEST IN SUCH 
AREAS, PUBLIC RESOURCES MAY NOT BE AVAILABLE FOR AREAS 
THAT SHOULD BE RELEGATED TO PUBLIC SPENDING, SUCH AS 
HEALTH AND EDUCATION. 
 
¶19.  (U)  THE WORLD HEALTH ORGANIZATION POINTED OUT THAT 
                       UNCLASSIFIED 
 
PAGE 03        HANOI  03108  05 OF 07  310721Z 
THOSE WHO ARE ENGAGED IN HEALTH SECTOR PROGRAMMING HAVE 
OTHER GRAVE CONCERNS IN ADDITION TO HIV/AIDS. THE 
DELEGATION HIGHLIGHTED THE NEED FOR GREATER REGULATION OF 
BOTH PUBLIC AND PRIVATE SECTOR HEALTH-RELATED SERVICES, 
ESPECIALLY GIVEN THE GROWING ELDERLY POPULATION AND 
BURGEONING YOUTH POPULATION.  IN ADDITION, VIETNAM FACES 
GREAT CHALLENGES IN MANAGING OTHER HEALTH CONCERNS, SUCH 
AS THE DETRIMENTAL EFFECTS OF SMOKING, A HIGH PREVALENCE 
OF INJURIES FROM ACCIDENTS, AND TUBERCULOSIS.  THE 
DELEGATION NOTED THE NEED FOR INCREASED TRAINING AND 
PUBLIC SPENDING TO BUILD THE HUMAN CAPACITY AT LOCAL 
LEVELS. 
 
ODA EFFECTIVENESS AND PRIORITIES 
-------------------------------- 
 
¶20.  (U)  THE THIRD SESSION FOCUSED ON IMPROVING ODA 
EFFECTIVENESS AND CLARIFYING PRIORITIES.  THE GVN 
PRESENTED VIETNAM'S PUBLIC INVESTMENT REQUIREMENTS AS 
OUTLINED IN THE 5-YEAR PLAN, HIGHLIGHTING SOME OF THE 
STEPS TAKEN BY THE GVN TO IMPROVE EFFECTIVENESS AND 
EFFICIENCY OF ODA.  MPI PHUC NOTED THAT VIETNAM'S TOTAL 
INVESTMENT REQUIRED DURING THE FIVE-YEAR PLANNING PERIOD 
WILL BE $60 BILLION.  EFFICIENT ODA TRANSACTIONS AND 
ACCOUNTABILITY WILL BE ESSENTIAL, GIVEN THE SCARCITY OF 
RESOURCES.  THEREFORE, NECESSARY ACTIONS WILL HAVE TO 
INCLUDE THE ESTABLISHMENT OF AN INSTITUTIONAL AND LEGAL 
FRAMEWORK AND PROCEDURES FOR EFFECTIVE ODA USE, THE 
PROVISION OF COUNTERPART FUNDS, AND SOUND MONITORING AND 
EVALUATION OF ODA TRANSACTIONS AND USE.  THE GVN ALSO 
REMARKED THAT SOME PARTNERSHIPS AMONG THE DONOR COMMUNITY 
                       UNCLASSIFIED 
 
PAGE 04        HANOI  03108  05 OF 07  310721Z 
HAVE CAUSED A BURDEN ON THE ODA PLANNING AND DISTRIBUTION 
SYSTEM. 
 
¶21.  (U) ACCORDING TO THE DISCUSSANT PAPER PRODUCED BY 
THE UK, VIETNAM'S PROJECTS-BASED APPROACH TO ODA DELIVERY 
HAS A NUMBER OF NOTABLE DRAWBACKS.  THESE INCLUDE HIGH 
TRANSACTION COSTS, UNDERMINING OF GOVERNMENT SYSTEMS 
THROUGH THE ESTABLISHMENT OF PARALLEL PROJECT MANAGEMENT 
AND FINANCIAL ADMINISTRATION SYSTEMS, AND FRAGMENTATION 
OF THE DEVELOPMENT EFFORT, WHICH LEADS TO GAPS AND 
INEFFICIENT SPENDING.  THE PAPER FURTHER OUTLINED SOME 
RECOMMENDATIONS FOR THE GVN IN ORDER TO PROMOTE MORE 
SECTORAL AND PROGRAMMATIC APPROACHES, INCLUDING FIDUCIARY 
RISK ASSESSMENT, ELABORATION OF A PRIORITIZED AND 
PRACTICAL AGENDA TO IMPLEMENT THE CPRGS WITH GVN 
RESOURCES ALIGNED TO STRATEGIC OBJECTIVES, CONTINUED 
PUBLIC ADMINISTRATION REFORM, FINANCE MODERNIZATION, AND 
CAPACITY BUILDING FOR ODA MANAGEMENT.  THE PAPER ALSO 
EXAMINED THE PROS AND CONS OF DIRECT BUDGET SUPPORT TO 
NATIONAL STRATEGIES, WHICH HELPS TO PROMOTE OWNERSHIP, 
PARTNERSHIP, PUBLIC ACCOUNTABILITY, AND SUSTAINABILITY, 
BUT CARRIES FUDICIARY RISKS FOR TRACKING AND UTILIZATION 
OF FUNDS.  OVERALL, THE UK CALLED FOR INCREASED 
RESPONSIBILITY ON THE PART OF THE GVN, WHILE OTHER 
DELEGATES ENCOURAGED STREAMLINING OF BUREAUCRACIES AND 
 
                       UNCLASSIFIED 
 
                           UNCLASSIFIED     PTQ7506 
 
PAGE 01        HANOI  03108  06 OF 07  310721Z 
ACTION EAP-00 
 
INFO  LOG-00   NP-00    AID-00   AMAD-00  EVG-00   CIAE-00  CTME-00 
      ITCE-00  DOTE-00  SRPP-00  DS-00    EB-00    EXME-00  OIGO-00 
      E-00     FAAE-00  FBIE-00  UTED-00  VC-00    FRB-00   H-01 
      TEDE-00  INR-00   IO-00    ITC-01   LAB-01   L-00     VCE-00 
      AC-01    NSAE-00  OES-00   OMB-01   OPIC-01  PER-00   PM-00 
      ACE-00   P-00     SP-00    STR-00   TEST-00  USIE-00  FMP-00 
      EPAE-00  PMB-00   DSCC-00  PRM-00   DRL-02   G-00     NFAT-00 
      SAS-00     /008W 
                  ------------------1E7BAD  310721Z /38 
R 310632Z DEC 02 
FM AMEMBASSY HANOI 
TO SECSTATE WASHDC 8515 
INFO DEPTTREAS WASHDC 
NSC WASHDC 
USDOC WASHDC 
USDA WASHDC 
DEPTLABOR WASHDC 
SECDEF WASHDC 
AMCONSUL HO CHI MINH CITY 
AMEMBASSY TOKYO 
ASEAN COLLECTIVE 
 
UNCLAS SECTION 06 OF 07 HANOI 003108 
 
SIPDIS 
 
STATE FOR EAP/BCLTV, EB/IFD/OMA AND EB/IFD/ODF 
STATE PASS USAID FOR ANE/SPOTS: DMCCLUSKEY AND 
ANE/AFERRARRA 
                       UNCLASSIFIED 
 
PAGE 02        HANOI  03108  06 OF 07  310721Z 
STATE PASS USTR FOR ELENA BRYAN 
TREASURY FOR OASIA 
USDOC FOR 4431/MAC/IFP/OKSA/HPPHO 
USDA FOR FAS/FAA/STEVE HUETE 
SECDEF FOR ABLAGG 
 
 
 
GREATER FLEXIBILITY ON THE PART OF DONORS. 
 
¶22.  (U)  DELEGATES ALSO NOTED A NUMBER OF VIETNAM'S 
ACHIEVEMENTS IN THE MANAGEMENT OF ODA, INCLUDING 
COMMITMENT TO THE PUBLIC ADMINISTRATION REFORM MASTER 
PLAN, THE COMPLETION OF THE COUNTRY FINANCIAL 
ACCOUNTABILITY ASSESSMENT AND THE COUNTRY PROCUREMENT 
ASSESSMENT, AND THE MPA WEBSITE, WHICH HAS HELPED 
INCREASE TRANSPARENCY.  THESE ACCOMPLISHMENTS HAVE 
INCREASED DONOR OPTIMISM ABOUT USING SECTOR-WIDE 
APPROACHES AND DIRECT BUDGET SUPPORT. HOWEVER, DELEGATES 
NOTED CERTAIN REFORMS HAVE TO BE IMPLEMENTED IN ORDER TO 
ACCOUNT FOR THE MISMATCH BETWEEN ACTIONS PROPOSED IN THE 
CPRGS AND ACTIVITIES FUNDED IN THE PIP, AS WELL AS THE 
LACK OF A MEDIUM-TERM EXPENDITURE FRAMEWORK TO FACILITATE 
PRIORITIZATION.  ADDITIONALLY, DELEGATES NOTED THE 
DISCONNECT BETWEEN CAPITAL AND RECURRENT BUDGETING, 
WEAKNESSES IN DOMESTIC ACCOUNTABILITY, AND CONCERNS 
REGARDING CORRUPTION.  ALSO OF GREAT CONCERN WERE 
ACCOUNTABILITY ISSUES IN TRANSACTIONS AND DISBURSEMENTS, 
                       UNCLASSIFIED 
 
PAGE 03        HANOI  03108  06 OF 07  310721Z 
AND SLUGGISH DISBURSEMENT PROCESSES. 
 
¶23.  (U)  THE EU DELEGATION COMMENTED ON THE POSITIVE 
EFFECTS OF ODA HARMONIZATION, INCLUDING A REDUCTION IN 
TRANSACTION COSTS AND INCREASE IN VIETNAMESE OWNERSHIP. 
THE EU ALSO NOTED CONSTANT INTERNATIONAL STAFF TURNOVER 
AS ONE PARTICULAR DRAWBACK IN THE HARMONIZATION PROCESS. 
AN NGO REP CAUTIONED THE CG THAT, GIVEN THE CURRENT 
MISMATCH BETWEEN SECTORAL POLICIES AND PLANS, SECTOR-WIDE 
APPROACHES SHOULD BE APPROACHED WITH CARE. ADDITIONALLY, 
HE NOTED THE OVERWHELMINGLY DISPROPORTIONATE ALLOCATION 
OF EXPENDITURES ON TRANSPORTATION INFRASTRUCTURE, RATHER 
THAN ON ESSENTIAL HUMAN DEVELOPMENT PROGRAMS SUCH AS 
HEALTH AND EDUCATION. IN ADDITION, GVN INITIATIVES FOR 
PEOPLE WITH DISABILITIES HAVE BEEN NEGLECTED, INCLUDING 
EFFORTS TOWARD ENFORCEMENT OF BARRIER-FREE ACCESS TO 
PUBLIC AND PRIVATE BUILDINGS, VOCATIONAL TRAINING, AND 
INCLUSIVE EDUCATION.  ROUGHLY SEVEN MILLION PEOPLE LIVE 
WITH DISABILITIES IN VIETNAM; ONLY 30% OF CHILDREN WITH 
DISABILITIES RECEIVE PROPER EDUCATION AND ROUGHLY 96% OF 
ALL PEOPLE WITH DISABILITIES ARE UNEMPLOYED.  FINALLY, 
THE EU EMPHASIZED THAT, WHILE THERE ARE A SIGNIFICANT 
NUMBER OF ORGANIZATIONS WORKING IN PREVENTION ACTIVITIES 
FOR HIV/AIDS, NOT ENOUGH PUBLIC SUPPORT HAS BEEN PLACED 
ON CARE AND SUPPORT OF PEOPLE LIVING WITH HIV/AIDS. 
 
¶24.  (U)  AMBASSADOR BURGHARDT NOTED CONCERNS REGARDING 
TAXATION OF ODA.  ALTHOUGH THE GVN IS SUPPOSED TO PROVIDE 
VAT REIMBURSEMENT FOR ODA, THE MINISTRY OF FINANCE RARELY 
REFUNDS VAT ON USG-FUNDED PROGRAMS.  THE AMBASSADOR 
EMPHASIZED THAT THESE NON-REIMBURSED FUNDS CANNOT BE USED 
                       UNCLASSIFIED 
 
PAGE 04        HANOI  03108  06 OF 07  310721Z 
FOR ASSISTANCE PROGRAMS, CRIPPLING POTENTIAL PROGRAM 
SUCCESSES.  ON HARMONIZATION, THE AMBASSADOR REMARKED 
THAT COLLABORATION AND COORDINATION ARE AS ESSENTIAL FOR 
THE GVN AS THEY ARE FOR DONORS AND IMPLEMENTING AGENCIES. 
THE AMBASSADOR COMPLIMENTED THE GVN FOR ITS HARMONIZED 
APPROACH TO TECHNICAL COOPERATION IN SUPPORT OF THE BTA. 
SPECIFICALLY, THE USAID-FUNDED STAR PROGRAM HAS OVER 40 
COUNTERPARTS, AND THE GVN IS SYNCHRONIZING THEIR INPUTS 
ADMIRABLY.  BOTH DELEGATIONS FROM DENMARK AND THE EU 
ASSOCIATED THEMSELVES WITH THE AMBASSADOR'S STATEMENTS 
REGARDING ODA TAXATION. 
 
¶25.  (U)  DURING THE FINAL SESSION, THE MINISTRY OF 
EDUCATION AND TRAINING REPORTED ON BUDGET ALLOCATIONS FOR 
2003 AND PREDICTIONS FOR 2005.  CURRENTLY, THE GVN 
PROVIDES 15.5 PERCENT OF ITS NATIONAL BUDGET FOR 
EDUCATION.  THIS PERCENTAGE WILL GROW TO 16 PERCENT NEXT 
YEAR, AND 18 PERCENT BY 2005. 
 
¶26.  (U)  DONORS COLLECTIVELY PLEDGED $2.5 BILLION IN 
ASSISTANCE, A SUM EXCEEDING THE PRIOR YEAR'S PLEDGE LEVEL 
BY ONE MILLION DOLLARS, OR AN INCREASE OF 4.5% FROM THE 
PREVIOUS YEAR.  MS. CHILES INDICATED THE USG'S INTENTION 
TO PROVIDE $33.6 MILLION IN ASSISTANCE TO VIETNAM, 
SUBJECT TO CONGRESSIONAL APPROVAL AND AVAILABILITY OF 
 
                       UNCLASSIFIED 
 
                           UNCLASSIFIED     PTQ7507 
 
PAGE 01        HANOI  03108  07 OF 07  310721Z 
ACTION EAP-00 
 
INFO  LOG-00   NP-00    AID-00   AMAD-00  EVG-00   CIAE-00  CTME-00 
      ITCE-00  DOTE-00  SRPP-00  DS-00    EB-00    EXME-00  OIGO-00 
      E-00     FAAE-00  FBIE-00  UTED-00  VC-00    FRB-00   H-01 
      TEDE-00  INR-00   IO-00    ITC-01   LAB-01   L-00     VCE-00 
      AC-01    NSAE-00  OES-00   OMB-01   OPIC-01  PER-00   PM-00 
      ACE-00   P-00     SP-00    STR-00   TEST-00  USIE-00  FMP-00 
      EPAE-00  PMB-00   DSCC-00  PRM-00   DRL-02   G-00     NFAT-00 
      SAS-00     /008W 
                  ------------------1E7BB4  310721Z /38 
R 310632Z DEC 02 
FM AMEMBASSY HANOI 
TO SECSTATE WASHDC 8516 
INFO DEPTTREAS WASHDC 
NSC WASHDC 
USDOC WASHDC 
USDA WASHDC 
DEPTLABOR WASHDC 
SECDEF WASHDC 
AMCONSUL HO CHI MINH CITY 
AMEMBASSY TOKYO 
ASEAN COLLECTIVE 
 
UNCLAS SECTION 07 OF 07 HANOI 003108 
 
SIPDIS 
 
STATE FOR EAP/BCLTV, EB/IFD/OMA AND EB/IFD/ODF 
STATE PASS USAID FOR ANE/SPOTS: DMCCLUSKEY AND 
ANE/AFERRARRA 
                       UNCLASSIFIED 
 
PAGE 02        HANOI  03108  07 OF 07  310721Z 
STATE PASS USTR FOR ELENA BRYAN 
TREASURY FOR OASIA 
USDOC FOR 4431/MAC/IFP/OKSA/HPPHO 
USDA FOR FAS/FAA/STEVE HUETE 
SECDEF FOR ABLAGG 
 
 
 
FUNDS.   THE ASSISTANCE WILL BE COMPRISED OF TECHNICAL 
TRAINING AND SUPPORT IN NUMEROUS FACULTIES INCLUDING 
HEALTH, TRADE, AND THE ENVIRONMENT, AS WELL AS 
HUMANITARIAN ASSISTANCE, DISASTER RELIEF, EDUCATION, AND 
FOOD ASSISTANCE.  USG AGENCIES INVOLVED INCLUDE USAID, 
THE CENTERS FOR DISEASE CONTROL, THE DEPARTMENT OF LABOR, 
THE DEPARTMENT OF DEFENSE, THE DEPARTMENT OF AGRICULTURE, 
AND THE AMBASSADOR'S EMERGENCY RESPONSE FUNDING 
MECHANISM. 
 
HUMAN RIGHTS 
------------ 
 
¶27.  (U) ADDITIONALLY, SOME DELEGATES SHARED CONCERNS 
ABOUT HUMAN RIGHTS ISSUES, INEQUALITIES, AND THE WIDENING 
GAP BETWEEN THE WEALTHY AND THE POOR.  IN ITS OFFICIAL 
DELEGATION STATEMENT, THE US NOTED AS YET INSUFFICIENT 
PROGRESS WITH REGARD TO CERTAIN FREEDOMS, ESPECIALLY THAT 
OF RELIGIOUS FREEDOM.  THE DELEGATION STATEMENT URGED THE 
GVN TO DO MORE TO DEVELOP ITS HUMAN RESOURCES AND TO 
                       UNCLASSIFIED 
 
PAGE 03        HANOI  03108  07 OF 07  310721Z 
INCREASE ACCESS TO THE INFORMATION NECESSARY FOR CITIZENS 
TO PARTICIPATE MEANINGFULLY IN LEGAL AND CIVIL 
INSTITUTIONS AS WELL AS IN THE POLITICAL PROCESS.  THE 
NGO DELEGATION, AMONG OTHERS, ALSO NOTED THAT THERE STILL 
REMAIN SOCIAL INEQUALITIES, MARGINALIZING ETHNIC 
MINORITIES WHO LIVE IN THE CENTRAL HIGHLANDS AND NORTHERN 
MOUNTAINOUS REGIONS. 
 
¶28.  (U)  COMMENT: THIS YEAR'S VIETNAM CG WAS 
CHARACTERIZED BY POSITIVE SUPPORT FOR THE GVN'S PROGRESS 
ON DEVELOPING PLANS AND STRATEGIES TO INCREASE 
DEVELOPMENT AND COMBAT POVERTY, AS WELL AS DONOR 
ENCOURAGEMENT FOR FASTER REFORMS IN THE BANKING AND SOE 
SECTORS.  DELEGATES NOTED A NEED FOR MORE EFFICIENT 
TRANSACTIONS AND HARMONIZATION IN ODA DISBURSEMENT AND 
UTILIZATION.  THE USDEL COMMENTS WERE WELL-RECEIVED AND 
SUPPORTED AT THIS YEAR'S CONSULTATIVE GROUP MEETING. 
 
¶29.  (U)  COMMENT CONTINUED:  THE GENERAL TENOR OF THE 
MEETING WAS REALISTIC, WITH BOTH BILATERAL AND 
MULTILATERAL DONORS ENGAGING IN A CONSTRUCTIVE DIALOGUE 
WITH THE GVN.  WHILE ALL PARTICIPANTS TOOK NOTE OF THE 
PROGRESS MADE IN THE PAST YEAR, THEY ALSO POINTED TO 
AREAS WHERE CONTINUED WORK REMAINS NECESSARY.  UNLIKE 
PAST YEARS, JAPAN, THE LARGEST DONOR, WAS VISIBLY 
DISSATISFIED WITH RECENT GVN POLICIES.  IN ITS PLEDGING 
STATEMENT, THE DELEGATION EXPLICITLY LINKED VIETNAMESE 
ECONOMIC POLICIES TO THE CONTINUATION OF GOJ ASSISTANCE, 
STATING THAT "THE POLICIES THAT THE VIETNAMESE GOVERNMENT 
ADOPT AND IMPLEMENT IN THE FIELD OF BUSINESS ENVIRONMENT 
WILL BE AN IMPORTANT ELEMENT FOR OUR EXAMINATION FOR 
                       UNCLASSIFIED 
 
PAGE 04        HANOI  03108  07 OF 07  310721Z 
DETERMINING THE DIRECTION, CONTENT, AND SIZE OF JAPANESE 
ASSISTANCE IN THE FUTURE."  ALTHOUGH NOT EXPLICITLY 
MENTIONED, THIS POSITION IS LIKELY A RESULT OF THE GVN'S 
SUDDEN AND ARBITRARY DECISION IN OCTOBER TO CHANGE 
DRASTICALLY THE CONDITIONS OF INVESTMENT LICENSES OF 
SEVERAL JAPANESE MOTORBIKE PRODUCERS AND TO LIMIT THE 
IMPORTATION OF MOTORBIKE KITS, AN IMPORTANT JAPANESE 
INVESTMENT HERE. OVERALL, THE MEETING WAS SUCCESSFUL, 
PRODUCTIVE, AND A TRUE FORUM FOR SHARED IDEAS, CRITIQUE 
AND PRAISE. 
BURGHARDT 
 
                       UNCLASSIFIED