VZCZCXRO0969
RR RUEHHM
DE RUEHHM #0059/01 0180718
ZNR UUUUU ZZH
R 180718Z JAN 07
FM AMCONSUL HO CHI MINH CITY
TO RUEHC/SECSTATE WASHDC 2003
INFO RUEHHI/AMEMBASSY HANOI 1457
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEHHM/AMCONSUL HO CHI MINH CITY 2168

UNCLAS SECTION 01 OF 02 HO CHI MINH CITY 000059 
 
SIPDIS 
 
USDOC 
SENSITIVE 
SIPDIS 
 
DEPT FOR EAP/MLS 
USDOC FOR 4431 (MAC/AP/OPB/VLC/HPPHO) 
 
E.O. 12958: N/A 
TAGS: ECON EAID EINV PGOV VM
SUBJECT: LOST OPPORTUNITIES IN BINH PHUOC PROVINCE 
 
 
¶1. (SBU) Summary: Binh Phuoc Province, located north of Ho 
Chi Minh City, is a backwater that could do more to take 
advantage of its proximity to HCMC.  Provincial leaders 
used a recent investor conference to wine, dine and sing 
martial karaoke with their cronies.  In many respects, a 
visit to the province is stepping back to the bad old days, 
complete with loudspeakers blaring propaganda.  A bright 
spot is a USG-funded cocoa project, in which as many as 
2,000 Binh Phuoc farming households, including some ethnic 
minorities, participate.  End Summary. 
 
¶2. (SBU) EconOff visited Binh Phuoc Province January 2-3 to 
attend an investor conference sponsored by the Province. 
The HCMC branch of the Vietnam Chamber of Commerce and 
Industry (VCCI) organized the conference and bused in 
almost 100 HCMC-based businesspeople.  VCCI organizers told 
us they tried to dissuade Binh Phuoc authorities from 
holding a business event the day after New Year's, but 
local officials were determined to hold the event on the 
10-year anniversary of Binh Phuoc's establishment.  (Note: 
Binh Phuoc and Binh Duong provinces were created in 1997 by 
dividing Song Be province.  End note.) 
 
¶3.  (SBU) The conference consisted mainly of provincial 
leaders reading out multi-page reports on the 
accomplishments of Binh Phuoc in the last ten years.  Binh 
Phuoc's annual growth has averaged 9 percent since the 
province was created, but per capita GDP remains at two 
thirds the national average at USD 476.  VCCI reported on 
Binh Phuoc's performance in the 2006 Provincial 
Competitiveness Index, a project of VCCI and the USAID- 
funded Vietnam Competitiveness Initiative (VNCI).  Binh 
Phuoc ranked number 52 out of 64 provinces.  While the PCI 
reported the province well on access to land, it was 
particularly weak in the transparency, legal institutions, 
business establishment costs, labor training and private 
sector development services. 
 
¶4. (SBU) The day after the conference EconOff traveled to 
Bu Dang district in the northeastern part of the province 
to visit the USG-funded cocoa project run by ACDI/VOCA's 
Success Alliance.  Approximately 2,000 farming households 
in the district have embraced the project, which adds cocoa 
plants to plots where cashew trees are already planted. 
The cashew trees protect the cocoa plants from direct 
sunlight, and farmers could earn as much as VND 21 million 
(approximately USD 1,300) more per year per hectare by 
adding cocoa plants to their cashew plantations. 
 
¶5. (SBU) The project started in Binh Phuoc in 2005, and 
farmers expect their first harvest by the end of 2007.  The 
Success Alliance has helped the farmers form clubs to 
facilitate the spread of knowledge.  The head of each club 
receives training on cultivating and harvesting cocoa and 
then shares that expertise with club members.  Two of the 
farmers we visited had received around 100 plants to start 
their ventures, but have since gone on to purchase as many 
as 2,000 more plants as they recognized the potential of 
cocoa farming.  Project participants have had discussions 
with Cargill about selling their cocoa beans once the trees 
bear fruit.  One of the farmers we visited is an ethnic 
minority Stieng.  Dieu Dang owns about five hectares of 
farmland, which he said was valued at VND 140 million 
(approximately USD 8,750) per hectare.  Dang lives in a 
village of 40 households with a small wooden Catholic 
church.  Dang told us that villagers were predominantly 
Catholic or Protestant, and many owned plots of land 
similar in size to his farm. 
 
¶7. (SBU) Comment: Binh Phuoc is clearly the poor cousin to 
Binh Duong Province, which lies between Binh Phuoc and HCMC 
and is one of Vietnam's most prosperous provinces.  Binh 
Phuoc is only a two to three hour drive from central HCMC; 
with the right leadership, it could capitalize on its 
proximity to HCMC and attract investment and industry in 
its own right.  Under the direction of former Provincial 
Party Secretary and current President of Vietnam Triet, 
Binh Duong turned itself into a magnet for investors and 
industrial zones.  Binh Phuoc, however, does not appear to 
have changed since it was created ten years ago. 
Loudspeakers blare announcements during the day and martial 
music at 5 a.m., complete with a recorded voice counting 
out morning exercises.  The investment conference dinner 
appeared to be not so much an opportunity for networking as 
an occasion for the People's Committee Chairman and his 
business and government associates to drink and sing war- 
era karaoke. 
 
HO CHI MIN 00000059  002 OF 002 
 
 
 
¶8. (SBU) Comment cont'd:  Provincial authorities kept a 
close eye on us, particularly when we met with the ethnic 
Stieng cocoa farmer.  We were accompanied by a "technician" 
who could not answer our technical questions and who seemed 
more interested in our question about villagers' religious 
affiliations than our discussion of cocoa farming. 
WINNICK