VZCZCXRO6179
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DE RUEHHI #1117/01 1660817
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R 150817Z JUN 07
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SUBJECT: VIETNAM: HUMAN RIGHTS TAKES CENTER STAGE AT MID-TERM 
CONSULTATIVE GROUP MEETING 
 
REF: HANOI 1071 
 
(U) THIS CABLE IS SENSITIVE BUT UNCLASSIFIED.  DO NOT POST ON THE 
INTERNET. 
 
SUMMARY AND INTRODUCTION 
------------------------ 
 
¶1. (SBU) The World Bank and the Government of Vietnam (GVN) hosted 
an informal mid-term Consultative Group (CG) meeting on June 1 in Ha 
Long City.  Senior GVN and donor representatives engaged on a 
variety of economic development issues.  The agenda featured an 
overview of the economic situation and post-WTO opportunities and 
challenges.  Vietnam's robust growth continues, but some donors 
cautioned the government about the need to boost its capacity to 
manage a more complex economy and to give due attention to the poor. 
 As in past consultative group meetings, a Business Forum (reftel) 
was held in advance of the CG.  This provided an opportunity for 
foreign and domestic business groups to interact with the GVN. 
 
¶2. (SBU) The Consultative Group meeting was led by James Adams, 
World Bank Vice President for East Asia and the Pacific.  Deputy 
Prime Minister (DPM) Pham Gia Khiem and Minister of Planning and 
Investment Vo Hong Phuc led the Vietnamese side.  The U.S. 
delegation was co-chaired by Ambassador Marine and Olivier Carduner, 
Director of USAID's Regional Development Mission in Bangkok.  The 
session was well attended by bilateral donors, IFI's, UN agencies, 
and the EU.  End summary and introduction. 
 
¶3. (SBU) The GVN addressed the cross-cutting issue of corruption by 
listing the several organizational and procedural steps it has 
taken, namely the June 2006 Anti-Corruption Law and the 
establishment of a Central Steering Committee on Anti-Corruption. 
The donors questioned whether the GVN is paying any attention to the 
culture of petty bribes and if a public administration reform effort 
is necessary to get at the root cause of corruption.  The donors 
also sought concrete results, such as the promised investigations of 
the Ministry of Transport's infamous project management unit (PMU) 
18, not to mention a decrease in the number of operational PMUs 
government-wide. 
 
¶4. (SBU) A session on "Emerging Development Issues" featured Water 
and Sanitation, HIV/AIDS and Road Safety.  The GVN's reports on 
these sectors were a fair assessment of the situation, and the 
donors' responses ranged from concern about reaching the poor (water 
and sanitation) to the need for the government to reverse a trend of 
discrimination and stigmatization of HIV/AIDS victims.  The mid-term 
CG also discussed aid effectiveness/harmonization and the Ministry 
of Planning's monitoring and evaluation (M&E) framework.  The 
government presented its plans to improve aid management and 
coordination and also outlined a pilot M&E program. 
 
¶5. (SBU) Significantly, almost all donors (the IFIs and Asian donors 
excepted) strongly criticized the GVN for its human rights record, 
with some pointedly noting that as Vietnam increasingly integrates 
into the global economy, it should expect continued pressure on the 
issue.  The Government acknowledged the concerns and sought to 
explain its actions as part-cultural and part-legal; DPM Khiem did 
not shut the door and expressed a willingness to continue to 
dialogue on human rights. 
 
¶6. (SBU) Given the length and variety of subjects in this message, 
an abbreviated list of contents follows: 
 
* Overall Development Context, paragraphs 7-12 
* Monitoring and Evaluation Framework, 13-14 
* Human Rights, 15-29 
* Corruption, 30-32 
* WTO: Development Challenges, 33-37 
* Vietnam Business Forum, 38-39 
* Water and Sanitation, 40-42 
* HIV/AIDS, 43-45 
* Road Safety, 46-48 
* Aid Effectiveness and Harmonization, 49-51 
* CG Closing Remarks, 52-53 
* Embassy Comment, 54-56 
 
HANOI 00001117  002 OF 009 
 
 
 
OVERALL DEVELOPMENT CONTEXT, MID-2007 
------------------------------------- 
 
GVN PRESENTATION 
 
¶7. (SBU) Deputy Prime Minister Khiem's opening speech recalled the 
successful conclusion of the December 2006 Consultative Group and 
the many "momentous" events of the past year: Vietnam's WTO 
accession, GDP growth of 8.2 percent, the APEC summit, and 
publication of Vietnam's socio-economic development plan (SEDP), 
covering the 2006-2010 period.  In a refrain that was heard 
throughout the day, Khiem said the post-WTO accession period 
represented challenges and opportunities for Vietnam.  Calling for 
the people and Government of Vietnam to exert greater effort, Khiem 
cited the essential need to accelerate broad reforms in finance, 
banking, and state-owned enterprises. 
 
¶8. (U) A Ministry of Planning and Investment (MPI) representative 
then presented a brief summary of economic developments and trends. 
Growth continued at a strong pace in the first half of 2007, with 
GDP increasing 7.9 percent.  Foreign direct investment remained at 
high levels.  While the consumer-price index was also up, inflation 
was not a major concern.  Over the balance of the year, the GVN will 
seek to maintain macro-economic stability.  One threat to the GVN's 
plans is inadequate power supply, and the MPI called for efforts to 
maintain if not increase output. 
 
DONOR RESPONSE 
 
¶9. (U) The IMF's assessment generally concurred with the GVN's, with 
the IMF saying that prospects for 2007 were "broadly favorable." 
The IMF representative did sound a cautionary note on inflation 
("stubbornly high"); he also warned that a global slowdown might 
expose weaknesses in the balance sheets of financial institutions 
and large SOEs.  The IMF also called for a more cautious fiscal 
stance and a more restrained monetary policy.  Worried about 
containing the fiscal deficit, the IMF urged GVN authorities to curb 
expenditure growth, boost non-oil revenues and improve tax 
administration.  The IMF said bank reform was key to protecting 
financial stability; the IMF also endorsed plans to make the State 
Bank of Vietnam a modern central bank. 
 
¶10. (U) There was little dissent from the other donors. 
Switzerland, while impressed by Vietnam's economic performance, 
noted that growth was uneven and that minority groups were 
particularly lagging.  The Swiss statement also cited lack of 
attention to the environment as an additional problem area. 
Switzerland was likewise discouraged by the "slow" process in public 
administration reform, and reform of the banking sector.  Korea 
zeroed in on infrastructure as a growing constraint to sustained 
economic growth.  Vietnam must upgrade its infrastructure, 
particularly its road network and ports.  Korea echoed Switzerland 
as well, warning that concentrating FDI in certain geographic areas 
was contributing to uneven development. 
 
¶11. (U) The ADB took exception to the GVN's relatively passive 
attitude on inflation.  In the ADB's view, there is substantial 
upward pressure on prices.  The ADB also urged Vietnam to develop a 
human resources plan, given that increasing FDI was in turn making 
skilled labor a relatively scarce commodity. 
 
¶12. (U) The World Bank (WB) representative endorsed all the above 
remarks.  He noted two risks that might confront Vietnam on its path 
to middle-income country status: financial stability and attraction 
of FDI.  The Bank urged Vietnam to strengthen its legal framework 
(note: the USAID STAR project is heavily engaged in this).  The Bank 
also said GVN authorities should favorably consider a role for 
strategic investors as banks go through the equitization process. 
 
MONITORING AND EVALUATION FRAMEWORK 
----------------------------------- 
 
GVN PRESENTATION 
 
¶13. (U) MPI presented a Monitoring and Evaluation Framework (MEF) 
 
HANOI 00001117  003 OF 009 
 
 
for the 2006-2010 Socio-Economic Development Plan.  The MEF as 
presented was long on theory and methodology, but short on 
specifics.  MPI clearly sees the monumental tasks involved in 
determining measurable indicators, data collection and analysis and 
then turning all this into revising strategy.  For the 2006-2010 
period, the MEF will be a pilot effort. 
 
DONOR RESPONSE 
 
¶14. (U) ADB ("a bold step"), UNDP and the WB were all broadly 
supportive of the MEF - indeed, they have been providing technical 
assistance to this effort.  Nevertheless, they and other donors 
signaled potential problems of institutional capacity and the need 
to carefully think through data collection issues and to choose the 
right indicators so that planners get a good sense of progress or 
the lack thereof.  Several donors and the international NGO 
representative called for a labor force survey to be folded into the 
MEF as a partial way of measuring stakeholder-level progress. 
 
HUMAN RIGHTS: ON THE DONORS' AGENDA, NOT THE GOVERNMENT'S 
--- --------------------------------------------- -------- 
 
¶15.  (SBU) Nearly all donors used their interventions in the 
preceding two open sessions to strongly criticize the GVN's recent 
adverse actions on human rights (paragraphs 16-20).  Human rights 
also dominated a luncheon hosted by the DPM for the heads of 
delegation (paragraphs 21-29). 
 
¶16.  (SBU) Speaking for the EU, Germany led off by expressing 
concern over recent arrests and the harsh punishment meted out to 
some individuals.  Germany cautioned that substantive progress and 
development went hand in hand with a free flow of information and 
ideas.  Acknowledging that it was not always easy to strike a 
balance between security and freedom of expression, Germany cited 
its own experience for this month's G-8 summit: "Germany is building 
a fence to protect people; we are not building a fence to keep ideas 
out." 
 
¶17.  (SBU) Canada weighed in on behalf of New Zealand, Switzerland, 
Norway and itself (the so-called "G-4") by suggesting that Vietnam 
better align its domestic laws with international human rights 
obligations.  Canada's closing advice was that Vietnam's human 
rights performance has "a very heavy bearing on Vietnam's 
international reputation." 
 
¶18.  (SBU) For the United States, Ambassador Marine reflected that 
his six CG meetings on Vietnam had been marked by real dialogue and 
that the world has consistently applauded Vietnam's record of 
economic growth.  However, he considers it vital that Vietnam expand 
the room available for political discourse.  The Ambassador 
acknowledged that Vietnam frequently defended its human rights 
record by saying that a step-by-step approach was the preferred 
approach, but warned that freezing the process would not be to 
Vietnam's advantage. 
 
¶19.  (SBU) Finland, Denmark, and Luxembourg also made brief 
interventions on the human rights issue. 
 
¶20.  (SBU) DPM Khiem forthrightly addressed the donors' human rights 
concerns as expressed in the open session.  He said each country has 
its own path and "Vietnam has chosen the right path as shown by our 
success in economic growth, poverty reduction, and supporting ethnic 
minorities."  Adding that human rights issues are often discussed, 
he said human rights and democracy are being realized in accord with 
Vietnam's laws and regulations.  He blamed the recent arrests of a 
"handful of people" on violations of Vietnam's laws.  Concluding his 
remarks to the plenary, he pledged to continue to work in an "open 
and constructive manner" to continue the dialogue on human rights. 
 
THE HUMAN RIGHTS DIALOGUE CONINUES OVER LUNCH 
 
¶21.  (SBU) At a luncheon for the heads of delegation, DPM Khiem 
responded to World Bank VP Adams' invitation to comment on the human 
rights issue by noting that donors have a history of raising "hot 
issues" at the mid-term CG meetings, referring to the topics of red 
tape and corruption in recent years. 
 
HANOI 00001117  004 OF 009 
 
 
 
¶22.  (SBU) Turning to human rights, Khiem expanded on his open 
session remarks.  "From the bottom of my heart, I recognize what you 
said was designed to help Vietnam.  I took many notes and will 
consider carefully what you all said.  What we find appropriate, we 
will take action on.  We all have different ways of thinking.  Every 
citizen should follow the laws and constitution of his/her country; 
this is true in Vietnam, just as it is in America.  The question of 
whether specific laws are appropriate for Vietnam can be reviewed. 
However, if the majority does not see need for change, there will be 
no change.  You asked why we arrest people for expressing their 
opinions.  I think the key is that they did so in ways that are not 
constructive.  This violates Vietnamese law.  Of course, they can 
hire lawyers to defend themselves in court.  The use of open, public 
courts of law is a change from past practice.  The vast majority of 
Vietnam's citizens support the verdicts handled down in these 
cases." 
 
¶23.  (SBU) He then referred to the case of Le Thi Cong Nhan (the 
female lawyer convicted on May 11 for violating Article 79 and 
sentenced to four years in prison):  "All the people in my ward 
voiced complaints about her activities and asked for action.  Should 
we support one percent of the population or 99 percent?  There are 
proper channels to raise one's view, through the press, the National 
Assembly (NA), or even in a letter to the President.  But, she did 
not choose to use these.  She and others refused to recognize 
Article 4 of the Constitution, which specifies the role of the 
Party." 
 
¶24.  (SBU) Khiem concluded by stating that development of human 
rights will be a long process that must respect Vietnam's history 
and cultural norms.  He said the Vietnamese are not conservative - 
there have been improvements and there will be more, as the target 
is a rich, stable country.  He then repeated that the Vietnamese 
leadership is willing to have a real dialogue on human rights. 
 
¶25.  (SBU) Adams then opened the issue up to comments from the floor 
and one after another, the donors repeated or expanded on their open 
session comments.  Those who spoke included: Sweden ("our Parliament 
is asking tough questions about the direction Vietnam is headed"; 
continued support for development assistance is at risk); Denmark 
(Vietnam is hurting its image around the world; change will take 
time, but you need to move in the right direction now); UK (hope 
that Vietnam can take positive steps in the next few weeks); 
Germany, Finland, Australia and Norway. 
 
¶26. (SBU) Ambassador Marine summed up the discussion, saying that as 
the DPM has heard, we donors have growing concerns about human 
rights and see the situation as being quite serious.  But, our 
message is also that we are here to help Vietnam with this and all 
of its other developmental issues.  While we recognize that change 
will take time, we leave this meeting hoping that the GVN will 
consider carefully our concerns and take concrete steps to address 
them.  The Ambassador added that he often uses the word pragmatic to 
describe the Vietnamese people.  In that vein, he hopes that the 
Party and the Government will examine their position carefully and 
weigh the consequences of their actions.  In a spirit of pragmatism, 
the Party should find ways to allow more space for political change. 
 
 
¶27.  (SBU) The EC Ambassador asked what role the National Assembly 
(NA) could play.  The DPM answered that the NA is Vietnam's "highest 
authority" and that in the future, the NA will pay more attention to 
"supervision." 
 
¶28.  (SBU) Adams asked what more can or should the donors do.  The 
DPM called for more help in capacity building.  He then repeated his 
"bottom of his heart" line and reminded the group that "emerging 
issues" are addressed and improved upon after each CG meeting.  "We 
will do this again." 
 
¶29.  (SBU) Adams offered a good review/wrap-up and closed by saying 
that it would be enormously helpful to see progress on the human 
rights issue in the short run.  Khiem summarized by saying, "The 
feelings you have provided reflect wholehearted and sincere 
comments; we are also focused on the corruption issue, and there is 
 
HANOI 00001117  005 OF 009 
 
 
strong determination in 2007 to combat corruption, which is one of 
the GVN's top three tasks.  Anyone discovered to be corrupt will be 
punished severely."  He thanked the group for a frank and sincere 
dialogue over lunch and repeated that regarding whatever was said 
that is correct, the government will do what it can when it agrees. 
When there is not agreement, dialogue should be the course of 
action. 
 
CROSS-CUTTING ISSUE - CORRUPTION 
-------------------------------- 
 
GVN PRESENTATION 
 
¶30.  (U) The report from the GVN's Government Inspectorate 
highlighted the many procedural and strategic steps that have flowed 
from the June 2006 Law on Anti-Corruption.  These steps include a 
number of implementing decrees (e.g., asset declaration, gifts), an 
action plan, establishment of a Central Steering Committee on 
Anti-Corruption and (soon) monthly press briefings on the 
Committee's work.  The Inspectorate also cited the GVN's "timely and 
forthright" measures in dealing with notorious cases such as PMU 18, 
Petrolimex, and quota trading in the Ministry of Finance.  Finally, 
the GVN is elaborating a long-term (through 2020) anti-corruption 
strategy. 
 
DONOR RESPONSE 
 
¶31.  (U) Sweden, which has carved out a leading role in working with 
the GVN on anti-corruption issues, offered a comprehensive response. 
 Sweden urged improved coordination between GVN agencies involved in 
the anti-corruption effort.  Welcoming the long-term anti-corruption 
strategy, Sweden requested that the draft strategy promised for 
September be shared with donors for discussion and comment.  Sweden 
would look for the strategy to emphasize prevention and would also 
want to see attention given to monitoring and measurement 
mechanisms.  Finally, Sweden recalled that the GVN had promised to 
publish the results of its own investigation into PMU 18.  Donors 
are keen to see this so that a full picture of PMU 18 can emerge. 
 
¶32.  (U) Almost all donors offered comments on the GVN's 
anti-corruption drive, with many describing the need for public 
administration reform (and salary reform) as closely linked to 
anti-corruption efforts.  Denmark reflected the views of many by 
citing a pervasive lack of ethics among officials, leading to a 
culture of petty bribes, a phenomenon that is especially felt by the 
poor.  Denmark also called for judicial reform and a more open media 
as critical to anti-corruption efforts.  Canada's lengthy remarks 
included another call for the GVN reports on PMU 18 and another 
admonition against petty corruption.  Ambassador Marine's remarks 
endorsed the other speakers, while specifically calling for an 
overhaul of PMU operations in general. 
 
CROSS-CUTTING ISSUE - WTO: DEVELOPMENT CHALLENGES 
--------------------------------------------- ---- 
 
GVN PRESENTATION 
 
¶33.  (U) The Ministry of Trade and Office of Government (OOG) both 
made presentations.  OOG briefly summarized the genesis of the GVN's 
post-WTO Action Plan and the call for ministries, agencies, and 
provinces/cities to submit detailed plans to the Prime Minister by 
the end of September 2007.  OOG singled out UK, Australia and the 
World Bank for its "Beyond WTO Program," which is aimed at 
maintaining sustainable development and poverty reduction objectives 
through implementation of Vietnam's WTO commitments. 
 
¶34.  (U) Ministry of Trade Vice Minister Le Danh Vinh then outlined 
challenges posed by Vietnam's WTO entry.  The main challenges are 
increased competition in the global market, dealing with the impact 
of unequal development among Vietnam's regions, managing an economy 
that is suddenly more susceptible to global events, serious staff 
shortages, and preservation/maintenance of Vietnam's culture, 
environment and defense capabilities.  In terms of prescriptions, 
the Vice Minister was not terribly specific, e.g., "protect and 
develop national cultural values."  He was on slightly more familiar 
ground in detailing his call for harmonization of Vietnam's legal 
 
HANOI 00001117  006 OF 009 
 
 
system and economic institutions with WTO rules. 
 
DONOR RESPONSE 
 
¶35.  (U) The donors sounded a variety of themes in response. 
Australia said, "The hard work does not stop with WTO accession" and 
went on to share lessons learned from other countries. 
 
¶36.  (U) The EC unleashed a blunt commentary on intellectual 
property rights, calling Vietnam's track record "appalling" and, 
reaching back to the earlier human rights discussion, asking, "How 
can Vietnam vigorously enforce public security laws but not IPR 
infringement?  Vietnam has no track record of being serious in 
enforcing IPR."  Later, the U.S. intervention also cited IPR 
enforcement as a problem, saying that the GVN must "do more and 
quickly." 
 
¶37.  (U) Donors also cautioned Vietnam to pay due attention to 
education, as the rural poor risk being left behind unless the 
primary education system is fixed.  Norway called for strengthened 
industrial relations (they are a donor in this area).  Japan, noting 
that there will inevitably be winners and losers as a result of WTO 
accession, promoted the notion of a social safety net, as did ADB. 
Along the same lines, the NGO community advocated establishment of 
an early warning system for vulnerable populations. 
 
VIETNAM BUSINESS FORUM 
---------------------- 
 
¶38.  (U) The donors also received a briefing on the results of the 
May 30 Vietnam Business Forum (VBF), held in Hanoi (reftel). 
Minister of Education and Training Nguyen Thien Nhan responded on 
behalf of the government with the most forthright and dynamic 
presentation of the meeting which focused on the challenges for 
human resource development as Vietnam integrates into the world 
economy.  Inter alia, he urged a program for "training on demand," a 
kind of rapid-response program to meet the needs of employers 
quickly; low-interest loans for employers to construct training 
facilities (he cited the U.S. firm INTEL); linkages between research 
institutes and universities; establishing advanced "centers of 
excellence" at Vietnamese universities; a talent promotion program; 
and more generally, significant increases in overseas university 
training for Vietnamese and more English-language programs. 
 
¶39.  (U) The Minister's presentation was well received, and Post 
believes there are certainly elements of his vision to which the 
United States can lend support. 
 
EMERGING DEVELOPMENT CHALLENGES 
------------------------------- 
 
¶40.  (U) The mid-term CG then turned to three development challenge 
themes: water and sanitation, HIV/AIDS, and road safety.  Both the 
presentations and donor responses were somewhat brief given time 
constraints. 
 
WATER AND SANITATION 
 
¶41.  (U) The Ministry of Agriculture and Rural Development was 
straightforward and focused on rural water and wastewater.  By the 
end of 2006, 66 percent of the population had access to clean water, 
and 52 percent had hygienic latrines.  But of those with access to 
clean water, only 30 percent access water sources that are 
considered hygienic.  Further, water quality is generally declining, 
whether due to poor maintenance of existing systems, or intrusion of 
waste, saline, or agriculture chemicals.  Quantity of available 
water is also an issue in some areas. 
 
¶42.  (U) Denmark took the lead in responding by noting that Vietnam 
was falling behind in meeting the targets it had set.  The problems 
were compounded given that the geographic areas not yet covered were 
hard to reach, and costs for water and sanitation systems were 
sometimes three times investment cost in other areas.  Denmark 
concluded by saying that the GVN needed a "pro-poor" water and 
sanitation strategy.  Germany also cited cost concerns, asking for a 
realistic plan and suggesting that the private sector had role to 
 
HANOI 00001117  007 OF 009 
 
 
play. 
 
HIV/AIDS 
 
¶43.  (U) The Ministry of Health's presentation on HIV/AIDS 
prevention and control was a good overview of the situation.  The 
report was also notable in that it was the only GVN report to 
explicitly list the recommendations from the previous CG and report 
actions taken and progress.  The Ministry then tabled the following 
issues: 
 
* The GVN needs continued financial and technical support from 
donors; 
* Donor help is especially needed for information, education and 
communication (IE&C) campaigns for behavioral change; care and 
treatment; institutional strengthening in management, surveillance, 
and monitoring and evaluation; and capacity building for 
provincial-level HIV/AIDS prevention and control programs. 
* The GVN also seeks harmonization of donor procedures for HIV/AIDS 
programs. 
 
¶44.  (U) Ambassador Marine spoke on behalf of the Heads of Agency 
Informal HIV Coordination Group.  He welcomed recent progress on the 
Coordination Action Plan but said the pace needs to be accelerated. 
He repeated the request of all HIV/AIDS donors for regular 
high-level meetings.  Noting that "stigma and discrimination" 
against HIV/AIDS were prevalent in Vietnam, Ambassador Marine called 
for high-level GVN officials to publicly support people at risk or 
living with HIV/AIDS and help them be fully integrated into society. 
 In response to the MOH's plea for continued financial support, the 
Ambassador reported President Bush's $30 billion PEPFAR initiative 
for 2008-2012.  If approved by Congress, this assistance will assure 
U.S. continued support here in Vietnam. 
 
¶45.  (U) All the subsequent donor interventions endorsed Ambassador 
Marine's statement; several singled out the "stigma and 
discrimination" concern, and called for the GVN to exercise 
leadership. 
 
ROAD SAFETY 
 
¶46.  (U) The Ministry of Transport's report on traffic safety 
revealed that annual traffic deaths were in the 12-13,000 per year 
range.  The Ministry described traffic accidents as an "urgent 
social problem."  The Ministry's remedies include driver education 
and enforcement of traffic rules, removal of unsafe vehicles from 
roadways, and addressing elements of the transport infrastructure 
that are not safe. 
 
¶47.  (U) This topic also evoked some colorful language, with Denmark 
referring to Hanoi's traffic as the "law of the jungle."  For the 
World Bank, the traffic situation is a "leading public health issue" 
and people drive badly because they know there is no enforcement. 
By the Transport Ministry's count, motorbikes are involved in 70 
percent of all accidents: many donors suggested that helmet use 
should be mandatory. 
 
¶48.  (U) Japan referred to its own past and their experience of a 
"traffic war."  Their own program of the "Four E's" - enforcement, 
education, emergency medicine, and engineering - reduced fatalities 
by 60 percent. 
 
AID EFFECTIVENESS AND HARMONIZATION 
----------------------------------- 
 
¶49.  (U) The final session of the day was "Aid Effectiveness and 
Harmonization: The Legal Framework for ODA."  MPI presented a report 
on an ODA institutional framework; their report was basically a 
recitation of decrees, circulars and other documents that MPI is 
working on to improve ODA management and utilization.  The donors 
noted the many documents and their projected rollout dates.  Citing 
past problems of inconsistencies between these documents, several 
donors suggested this problem could be avoided by a careful review 
and issuing them all at the same time, even if this meant a delay in 
some. 
 
 
HANOI 00001117  008 OF 009 
 
 
¶50.  (U) Separately, the World Bank reported on the status of aid 
harmonization and effectiveness efforts.  The World Bank statement 
was a progress report on the five pillars of the 2005 Hanoi Core 
Statement.  The Harmonization pillar evoked the most discussion. 
The EC cited a voluntary "Code of Conduct on Division of Labor in 
Development Policy," issued by EU Ministers on May 15.  The EU 
members present in Hanoi are still digesting this, but the present 
intent of the local EC office is to invite all donors to participate 
in the Code of Conduct.  The UN Resident Coordinator reported on the 
status of the "One UN" initiative. 
 
¶51.  (U) ADB summarized the results of the bi-annual Joint 
Performance Portfolio Review carried out in May 2007 by the GVN and 
five development banks (ADB, AFD, KfW, JBIC, World Bank).  The Joint 
Review praised the overall excellent development results of the 
combined $19 billion in total commitments, but faulted "notoriously 
slow implementation" and noted that disbursement performance lagged 
far behind other countries in the region.  This poor performance was 
cast in human terms, as the Joint Review suggested a one-percent 
increase in the disbursement rate would generate an additional $500 
million of investment over the plan period, thereby allowing about 
one million additional people to be lifted out of poverty.  The ADB, 
Japan and the World Bank used their remarks to call for urgent 
implementation of the twelve "ODA Fast Track" recommendations. 
 
CG SESSION'S CLOSING REMARKS 
---------------------------- 
 
¶52.  (U) The wrapups by MPI Minister Phuc, WB Vice President Adams 
and DPM Khiem were brief but balanced assessments of the day's 
discussions.  Phuc reasserted the GVN's three goals of high growth, 
administrative reform (this includes WTO implementation) and 
battling corruption and noted the issues raised would be valuable in 
furthering the GVN's efforts.  Adams commended Vietnam for its rapid 
economic and social progress but also summarized the future 
challenges as financial sector stability, attracting private sector 
investment for infrastructure and mitigating the potential adverse 
social effects of global integration. 
 
¶53.  (U) Both Khiem and Adams referred to the human rights 
discussions earlier in the day, with Adams acknowledging a definite 
"lack of space" for expression of alternate views.  Khiem thanked 
the donors for the "frank, candid and sincere" remarks and pledged 
that the government would take them seriously.  He closed by 
iterating the government's willingness and preference to address 
human rights through dialogue. 
 
EMBASSY COMMENT 
--------------- 
 
¶54.  (SBU) The one-day mid-term CG was a useful exchange on the 
SEDP, WTO implementation initiatives, corruption and some key 
development issues.  The human rights issues tabled by individual 
donors were probably expected by the government but the strong 
concern raised by so many countries no doubt took the government by 
surprise.  While neither the press nor the World Bank's press 
release on the CG meeting referenced the exchanges on human rights, 
the GVN certainly received a loud and clear message that what the 
GVN does in this area is being watched by the rest of the world and 
in some instances could influence assistance levels. 
 
¶55.  (SBU) As with all such meetings, the real test is how well the 
GVN heeds the donors' admonitions and advice over the coming cycle 
and how quickly it implements further reforms.  The track record is 
mixed.  A reading of the Embassy's report of the December CG 
indicates varying progress in some areas (banking reform, public 
administration reform, corruption, aid harmonization, e.g., project 
management units still abound).  Last December's CG made the same 
points about the unfortunate stigma attached to HIV/AIDS victims. 
Progress has been made in some areas and clearly, the World Bank's 
caution last December about avoiding an anti-climatic effect of 
post-WTO accession has been heeded. 
 
¶56.  (SBU) The clear theme of almost every presentation in the 
one-day mid-term CG was that Vietnam's accomplishments are genuine 
but to maintain that momentum even further efforts are needed: in 
 
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more sophisticated economic management, more capital market 
development, better infrastructure, especially in ports, and 
probably most important of all in raising the human resource skills 
to reap the advantages of joining the global economy. Through the 
USAID portfolio and other efforts, we are supporting those efforts. 
 
 
MARINE