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

UNCLAS SECTION 01 OF 02 HO CHI MINH CITY 001295 
 
SIPDIS 
 
SENSITIVE 
 
STATE PASS USTR FOR EBRYAN 
USDOC FOR 4431/MAC/AP/OPB/VLC/HPPHO 
 
E.O. 12958: N/A 
TAGS: ECON PREL PGOV SOCI EINV EAID EAGR VM
SUBJECT: MEKONG DELTA DEVELOPMENT- RIPE FOR BIOTECH AND CAPITAL 
 
¶1. (SBU) Summary: Vietnam's Mekong Delta provinces will have 
difficulty meeting the GVN's goal of nearly doubling per capita 
GDP by 2010 without substantial reform and investment.  A recent 
visit by the Consul General to two of the most prosperous Delta 
provinces revealed neither advances in productivity in the 
agriculture sector -- the bedrock of the region's economy -- nor 
in industrial development that are needed to reach the GVN's 
ambitious growth targets.  While provincial leaders in the 
Mekong acknowledge their shortcomings, they have not been able 
to articulate how they will undertake the dramatic changes in 
infrastructure, finance and technology, especially 
biotechnology, necessary to sustain the region's high growth 
rates.  End Summary. 
 
¶2.  (SBU) The Consul General traveled to the Mekong Delta 
December 6 - 8 to visit Can Tho and An Giang Provinces.  He 
visited the 13th annual Can Tho Agricultural Fair, toured the 
Cuu Long Rice Research Institute and met with provincial 
leaders.  Growth rates in these provinces have reached or 
surpassed 10 percent in recent years based on dramatic increases 
in agricultural output and the development of aquaculture. 
Without infrastructure upgrades and the introduction of 
agricultural technology, however, Can Tho and other provinces 
are unlikely to meet their aggressive growth targets.  In the 
case of Can Tho, Party Secretary Nguyen Tan Quyen reported that 
the recently concluded provincial Party Congress had called for 
an increase in provincial GDP from $720 to $1,200 by 2010. 
Secretary Quyen stated his belief that clear and consistent 
 
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polices, coupled with increased investment and access to 
capital, are the keys to the province's development. 
 
Infrastructure and Capital Equipment 
------------------------------------ 
 
¶3. (SBU) Quyen observed that infrastructure development is a 
challenge for the province.  Can Tho, the de facto capital of 
the Delta region, has no working airport and no deepwater port 
facilities, and can only be accessed by ferry.  Although a 
bridge is under construction and other infrastructure upgrades 
are planned, the Delta's roads are often unpaved and narrow, 
making transportation of goods time-consuming and costly. 
Secretary Quyen suggested that the Consulate could assist the 
 
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province in locating an American business partner to upgrade the 
road system, but did not outline any immediate plans on the part 
of the city or the region to develop its ailing road network 
itself. 
 
¶4. (SBU) Growth in the agricultural sector of the Mekong is 
attributable to increases in the output of rice. Rice farmers in 
the Mekong harvest up to three and a half crops per year and 
more intensive cropping is not an option.    However, efficiency 
could be dramatically increased.  Most rice produced is still 
planted and harvested by hand, though plowing, threshing, drying 
are increasingly by machine.    The introduction of small-scale 
machinery could lead to dramatic increases in productivity.  On 
display at the Can Tho Agricultural Fair were many examples of 
affordable farming equipment, including a VINAPPRO mini rice 
combine produced under license from Briggs and Stratton for 
$3,000.  While this cost is still too high for most Mekong Delta 
rice farmers individually, provincial agricultural cooperatives 
could easily acquire capital equipment for its members' use. 
Comprised of an average of 200 families, agricultural 
cooperatives are responsible for much of the irrigation 
infrastructure maintenance in the Mekong Delta.  Although both 
the Chairman of the An Giang People's Committee and Can Tho 
Party Secretary spoke about increased technology as an engine 
for productivity growth, neither province has taken steps to 
assist its rice farmers in obtaining much needed equipment. 
 
Human Resources Development 
--------------------------- 
 
¶5.  (SBU) Chairman of An Giang People's Committee Nguyen Hoang 
Viet, An Giang Part Secretary Le Phu Hoi, and Can Tho Party 
Secretary Nguyen Tan Quyen all spoke at length about the need 
 
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for human resources development in the region, though they did 
not present any plans to achieve this goal.  This apparent lack 
of concrete planning was underscored during a visit to An Giang 
University.  Dr. Ho Thanh My Phuong, Director of the An Giang 
University International Relations Department and former Ford 
Foundation scholarship grantee, remarked that provincial support 
for local universities was still inadequate.  Dr. Phuong also 
said employment prospects for university graduates in An Giang 
did not match opportunities available to graduates in other 
provinces in the region; she noted that annual salaries of many 
An Giang graduates were still far below regional norms. 
 
Biotechnology and the Cuu Long Rice Research Institute 
--------------------------------------------- --------- 
 
¶6.  (U) Biotechnology is another means of spurring economic 
growth in the Mekong Delta, and the region has its own research 
facility to promote agricultural development.  The Cuu Long Rice 
Research Institute (CLRRI) was founded in 1977 and is the 
Delta's premier government institution specializing in rice 
study.  CLRRI pursues basic and applied research on rice and 
other crops and on the Mekong Delta's agricultural systems in 
order to determine strategies for increasing yield.  CLRRI is 
one of 19 research institutions and centers of the Ministry of 
Agricultural and Rural Development (MARD). The institute also 
has strong links with development organizations in Vietnam and 
with the International Rice Research Institute of the 
Consultative Group on International Agricultural Research.  The 
360-hectare campus contains seven operational laboratories 
specializing in biotechnology, pathology, soil and grain 
analysis, and microbiology, as well as 250 hectares for rice 
seed production. 
 
¶7.  (SBU) In recent years, the CLRRI has become the primary 
biotechnology research center in southern Vietnam, having 
developed its own strains of transgenic BT   cotton and soybeans 
as well as Vitamin A and iron fortified "golden" rice. 
According to Dr. Bui Chi Buu, CLRRI's rector, the introduction 
of these crops to Mekong agriculture would have a positive 
impact on both production levels and product quality.  GM crops 
could also benefit human health.  The adoption of the 
institute's bio-fortified rice could improve nutrition in 
Vietnam dramatically, while the use of pest -resistant cotton 
strains would reduce the use of pesticide as well as pesticide 
pollution and pesticide poisoning deaths.  Dr. Buu also reported 
a fifty percent decrease in the flow of the Mekong River in the 
last twenty years and sees biotechnology as the key to 
preserving the region's agricultural production in the face of 
increased up-stream damming of the Mekong.  Dr. Nguyen Tri 
Khiem, Dean of the Faculty of Economics and Business 
Administration at An Giang University, reported corresponding 
increases in river salinity, further highlighting the 
environmental challenges to the Delta.  The CLRRI is in the 
process of developing drought resistant strains of many of its 
crops in attempt to preserve crop viability. 
 
¶8.  (SBU) Despite the potential economic, health and 
environmental benefits of biotech crops, Dr. Buu said 
genetically modified crops are not being used in Vietnam.  The 
institute only was granted permission to begin field-testing its 
crops in 2004.  The Ministry of Environment and Natural 
Resources is in the process of completing a risk assessment 
study and will make a decision on the use of genetically 
modified crops in late 2006 or 2007. 
 
¶9.  (SBU) Comment: While Delta leaders are unanimous in their 
view that growth targets can be met only through investment, 
innovation and reform, they did not spell out clear plans for 
how they would transform their provinces' bureaucracies or 
economies to meet a very ambitious 12 percent annual growth rate 
target.  As previously reported, political leadership in the 
Delta has long been chosen more for strong "revolutionary" 
credentials than for technical expertise and competent 
management.  It is telling that the Party chose to send HCMC 
Party Secretary Triet -- whose credentials as an economic 
reformer are unmatched -- to the recent Can Tho Party Congress. 
There he emphasized the need to focus on human resources 
development to achieve development goals, which many observers 
agree is code for a generational shift in Mekong Delta 
leadership.  End Comment. 
WINNICK