VZCZCXRO9427
PP RUEHCHI RUEHDT RUEHNH
DE RUEHHM #1222/01 2980937
ZNR UUUUU ZZH
P 250937Z OCT 06
FM AMCONSUL HO CHI MINH CITY
TO RUEHC/SECSTATE WASHDC PRIORITY 1669
INFO RUEHHI/AMEMBASSY HANOI PRIORITY 1174
RUCNASE/ASEAN MEMBER COLLECTIVE
RUEHHM/AMCONSUL HO CHI MINH CITY 1756

UNCLAS SECTION 01 OF 03 HO CHI MINH CITY 001222 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PHUM PINR SOCI PREL KIRF PGOV PREL VM
SUBJECT: PHU YEN PROVINCE: PROMISING OR PROBLEMATIC? 
 
 
HO CHI MIN 00001222  001.2 OF 003 
 
 
¶1. (SBU) Summary: Phu Yen province in Central Coastal Vietnam 
has promise -- especially in aquaculture, light industry and 
tourism -- but is being held back by a rigid and insular 
government.  Despite the relatively orthodox approach to 
economic development, the province appears to be implementing 
the legal framework on religion, particularly with regard to the 
recognition and registration of Protestant churches.  Our 
September visit also indicated some unrest in at least one 
ethnic minority area in the province; provincial officials are 
concerned about the spread of ethnic minority separatist 
ideology in areas bordering the Central Highlands.  However, we 
have not seen any evidence to corroborate allegations of 
government-orchestrated violence against ethnic minorities in 
the province.  Unless the province's leaders show greater 
leadership and initiative, particularly in promoting the private 
sector and foreign investment, the province will remain a poor 
backwater.  End Summary. 
 
¶2. (SBU) From September 13 to 15, ConGenOffs traveled to the 
coastal province of Phu Yen to assess economic, human rights and 
religious freedom conditions in the province.  This was our 
first visit since 2002 and comes after the province declined a 
number of our requests to visit.  Relatively unspoiled and 
isolated, Phu Yen borders the Central Highlands provinces of Gia 
Lai and Dak Lak with the more economically vibrant provinces of 
Khanh Hoa and Binh Dinh to the south and north, respectively. 
Phu Yen, population 860,000 ranked 21 out of 63 ranked provinces 
in the 2006 Vietnam Provincial Competitiveness Index (VVCCI), 
which measures the effectiveness of government support for 
business. 
 
A Very Provincial Provincial Government 
--------------------------------------- 
 
¶3. (SBU) Phu Yen People's Committee Vice-Chairman Le Kim Anh 
opened our discussion by noting that, while the province wanted 
economic development, it must be pursued under the banner of 
"social justice, security and national defense."  The 
Vice-Chairman said that Phu Yen's three industrial zones 
attracted 27 FDI projects with a total licensed capital of USD 
200 million.  Thus far, ten projects have begun operations.  The 
province also has 1,000 small, domestic private enterprises. 
The Vice-Chairman said that Phu Yen is trying to develop tourism 
and was open to U.S. investment in this sector.  He noted that 
transportation and communication infrastructure shortcomings 
were an obstacle for investment, but did not offer any 
solutions.  Similarly, he stated that the province offered 
attractive concessions for foreign investment but did not 
mention specifics.  In his presentation, Vice-Chairman Anh 
remarked that Phu Yen was heavily affected by the Vietnam War 
and Agent Orange, claiming that there were 10,000 victims in the 
province.  (Phu Yen's per capita GDP was USD 400 in 2006, well 
below the national average of USD 640.) 
 
¶4. (SBU) Visits to two FDI projects -- shrimp and automotive 
assembly -- showed the modest scale of FDI investment in the 
province.  The shrimp farm, owned by Asia Hawaii Ventures 
Company (AHV), is a joint-stock venture with American and 
Taiwanese investors.  The 50-hectare farm represents a USD two 
million investment and employs 150 workers.  The Phu Yen plant 
appeared to be an expansion of other AHV operations further up 
the coast in Binh Dinh and Thua Thien Hue provinces. 
 
¶5. (SBU) JRD Manufacturing Automobiles Joint Venture Company, 
technically is a 100 percent-owned Malaysian-invested venture. 
General Manager Jackson Cheong said that the USD two million 
factory would assemble up to 300 SUVs, trucks and mini-vans per 
month, with major components imported from China and South-East 
Asia.  The cars will be sold domestically as well as exported to 
Malaysia, China and Thailand.  The plant currently employs 100 
local workers and five mainland Chinese engineers.  JRD intends 
to transport vehicles overland to HCMC and use the Saigon port 
for export.  Cheong would not specify why JRD invested in Phu 
Yen province -- especially as the major domestic market and port 
was a day's travel away in HCMC -- other to note that the 
company had received favorable terms from the province. 
 
Religion 
-------- 
 
¶6. (SBU) Nguyen Van Linh, head of the Phu Yen Committee for 
Religious Affairs (CRA) told us that the province respects 
religious freedom and implements Vietnam's legal framework on 
religion.  He noted that, before the implementation of the legal 
framework on religion in early 2005, the province had "security 
issues" with some Protestant groups, but none since.  He also 
noted that the province has seen a spillover from "separatist 
problems" in the Central Highlands, but did not elaborate.  The 
CRA Chairman told us that, in addition to the GVN-recognized 
Southern Evangelical Church of Vietnam (SECV), a number of house 
church organizations including the Baptists, Presbyterians, 
 
HO CHI MIN 00001222  002.2 OF 003 
 
 
Seventh Day Adventists, the Unified Gospel Outreach Church 
(UGOC) and Assembly of God were active in the province.  The 
house church organizations were allowed to operate without 
interference and the province was working to legalize their 
status in accordance with the law. 
 
¶7.  (SBU) However, the province refused our repeated requests to 
meet with the UGOC.  The provincial Vice-Chairman explained that 
the group was "not stable" and cited a lack of religious texts, 
self-appointed pastors, and a shifting following.  The CRA 
Chairman said that the UGOC in Phu Yen is a breakaway group of 
the Assembly of God church and that the province has not yet 
decided if it is a "legitimate congregation."   That said, the 
province is working with the congregation on its registration 
application and UGOC can meet freely, the officials claimed.  A 
phone conversation with Pastor Si, the senior UGOC 
representative in the province, seemed to support the official 
position.  Pastor Si did not report any problems with Phu Yen 
officials or interference in UGOC religious practice.  He 
claimed that the UGOC has been operating in Phu Yen since the 
1920s, but did not provide any more specifics. 
 
¶8. (SBU) In a private meeting, Pastor Thong, provincial 
representative of the SECV, told us that the SECV operates 50 
places of worship in the province.  Progress has been steady 
since the legal framework on religion came into effect in early 
¶2005.  Ten SECV churches have been recognized.  Another fifteen 
are in the process of registering.  The remaining twenty-five 
operate as house churches, but do not face harassment.  The SECV 
has 4,081 followers, of which 1,098 are ethnic minority.  The 
SECV currently has only two ordained pastors to serve the 
province.  Although the SECV is able to operate freely, the 
pastor complained that the province has been uncooperative in 
resolving the church's outstanding property disputes, even 
though some of the confiscated lots now lay vacant and unused. 
CRA officials told us that in 1975 the SECV "gave the land" to 
Phu Yen and that land used for "public welfare" cannot be 
returned. 
 
Ethnic Minorities Issues 
------------------------ 
 
¶9.  (SBU) Provincial Committee for Ethnic and Minority Affairs 
(CEMA) Deputy Chief Le Vai Ty told us that there are 
twenty-eight ethnic minority groups in Phu Yen.  The largest are 
the Ede, Cham, Bahnar and Tay.  Ty reported there are twenty 
Bahnar ethnic representatives in the various branches of the 
provincial government, including himself.  Other groups did not 
appear to have a significant representation in government. 
 
¶10.  (SBU) According to Ty, all of ethnic minority villages have 
electricity and access to clean water.  He noted that there were 
eleven predominately ethnic minority communes (communes can 
encompass a number of villages) that are categorized as 
extremely poor by the GVN.  We raised reports from the 
Montagnard Foundation (MF) alleging ethnic minority clashes with 
police, confiscations of cell phones and arrests.  For example, 
in a May press release, the MF claimed that an ethnic Vietnamese 
individual "savagely attacked" several ethnic minority 
individuals, presumably at the behest of police.  Reportedly, 
two ethnic minority students were arrested and ethnic minority 
victims refused medical treatment.   Ty denied any ethnic 
minority unrest of clashes between ethnic minority individuals 
and ethnic Vietnamese, saying that he only knew of "incidents 
stemming from drunkenness." 
 
¶11.  (SBU) A tour of an ethnic Ede village some 40 miles (and 
two hours) from the provincial capital showcased a large and 
relatively prosperous village.  Ly village in Song Hinh District 
has 176 households with a population of 916.  According to 
Village Chief Ma Jom, villagers do not follow a specific 
religion.  He claimed that poverty has been reduced in their 
village thanks an irrigation channel built by the government in 
¶2001.  However, only 50 percent of the villagers have land.  He 
was not aware of any government benefits programs for landless 
villagers. 
 
¶12. (SBU) The village chief said he understood that there was an 
incident involving ethnic minority individuals in May, but could 
not provide specifics as the affected village was some 25 miles 
away.  SECV Pastor Thong told us that the May incident was a 
personal clash between an ethnic minority individual and an 
ethnic Vietnamese.  Neither individual was Christian.  When 
police were called, ethnic minority villagers threw rocks at the 
police. 
 
¶13. (SBU) We also visited an ethnic minority boarding school in 
the district government seat of Hai Rieng.  The school, 
established in 1982, covers grades six to nine.  It has 30 
teachers for 167 students.  Seven ethnic groups are represented, 
with Ede and Bahnar comprising the bulk of the students. 
 
HO CHI MIN 00001222  003.2 OF 003 
 
 
According to Principal Nguyen Chi Thi, the local government sets 
quotas for the different ethnic groups in the district. 
Students come from ten different communes up to 20 miles away. 
The school was relatively large but only had basic facilities. 
A much larger and more modern facility being built across the 
road was, according to accompanying officials, a new school to 
train Communist Party cadres. 
 
Comment 
------- 
 
¶14. (SBU) Phu Yen is a poor, sleepy backwater.  Its wide 
boulevards largely are bereft of vehicle traffic or 
private-sector commerce.  Party and Government leaders here are 
politically inbred, more orthodox, and suspicious of outsiders 
-- especially the United States.  They have a relatively 
uncomplicated and comfortable existence and want to keep it that 
way.  Tuy Hoa, the provincial capital, has a long, wide beach 
that has yet to be developed and a decent airport, but the 
government hasn't shown the initiative to draw tourists. 
 
¶15. (SBU) Because Phu Yen still is relatively more rigid than 
many other provinces in the consular district, it is encouraging 
that -- even here -- efforts to implement the legal framework on 
religion in the province generally appear to be moving ahead. 
We will seek to overcome provincial resistance to meet with the 
local branch of the UGOC church in a subsequent visit.  However, 
our contacts with the Phu Yen and national branches of the 
organization indicate that the province is living up to its 
obligation not to harass this or any other Protestant religious 
organization operating there.  Despite the government's 
protestations to the contrary, there appear to be tensions 
between the ethnic minorities and ethnic Vietnamese in at least 
some rural communities in the province.  And the government also 
is concerned about spillover from ethnic minority separatism in 
the neighboring Central Highlands.  That said, we did not find 
any evidence to support allegations of wholesale, 
government-orchestrated violence against ethnic minorities in 
the province.  End Comment. 
Winnick