VZCZCXYZ0005
OO RUEHWEB

DE RUEHHI #0036/01 0100950
ZNR UUUUU ZZH
O 100950Z JAN 08
FM AMEMBASSY HANOI
TO RUEHC/SECSTATE WASHDC IMMEDIATE 6988
INFO RUEHBK/AMEMBASSY BANGKOK 6133

UNCLAS HANOI 000036 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
EAP FOR ASSISTANT SECRETARY HILL FROM THE AMBASSADOR 
F FOR DEPUTY DIRECTOR GREENE FROM THE AMBASSADOR 
 
STATE FOR EAP/MLS 
AMEMBASSY BANGKOK FOR RDM/A CARDUNIER 
 
E.O. 12958:  N/A 
TAGS: EAID VM
SUBJECT:  ALLOCATION OF ADDITIONAL ESF FOR VIETNAM 
 
¶1. (SBU) Summary: The Omnibus Appropriations Bill signed on December 
26 contains the appropriation of $5.0 million in additional ESF for 
Vietnam.  The Senate Report on the 2008 Foreign Operations 
Appropriations Bill contains the following language with regard to 
this appropriation: "The Committee supports judicial and economic 
reform programs in Vietnam which strengthen the rule of law, protect 
human rights, and expand economic opportunities...The Committee 
provides $10,700,000 in ESF assistance for Vietnam, almost double 
the request, to support the STAR program and other activities."  In 
this cable, Mission Vietnam lays out its plans for the allocation of 
these funds, which fulfils the intent of the legislators and Mission 
Strategic Plan goals.  Indeed, our suggested allocation among 
current activities is in line with how we intend to utilize a 
similar increase in funding now contained in our draft FY-2009 
budget request to Congress.  End Summary. 
 
¶2. (SBU) The appropriation of an additional FY 2008 $5 million to 
support judicial and economic reform programs in Vietnam is critical 
to strengthening further the rule of law, protecting human rights 
and expanding economic opportunities in one of the fastest reforming 
economies in the world.  As highlighted in the Senate Report 
language, the success of the USAID "STAR" (Support for Trade 
Acceleration) program has been nothing short of remarkable.  STAR 
and its partner program VNCI (Vietnam Competitiveness Initiative) 
are unique in that they have facilitated a partnership with the GVN 
which has resulted in Vietnamese agencies seeking technical 
assistance from the United States in drafting well over 100 major 
regulations and pieces of legislation.  Current requests for 
technical assistance, many of which could not be met without 
additional funding, include support in redrafting the Criminal 
Procedure Law, redesigning key legal and court procedures, and 
transforming the judiciary.  As such, I believe that a portion of 
the additional funds should best be devoted to the expansion of 
existing programs and to build on public-private partnerships where 
our budget dollars can be stretched farthest.  Programs relating to 
governance, democracy building, and human rights will be further 
reviewed in accordance with the report entitled "Governance in 
Vietnam:  Program Options for USAID," which was received by post in 
January 10.  I suggest that the amount be allocated as follows: 
 
-- (A) $2 million to be allocated to the STAR program to expand its 
focus more vigorously towards supporting the rule of law, 
legislative processes and justice system reform as well as to deepen 
further its assistance for Vietnam's post-WTO and BTA 
implementation.  Examples of new activities that could be supported 
by additional resources include building capacity for the National 
Political Academy (the "party school") to provide training programs 
for key state officials on principles of good governance and market 
economy operations; further strengthening the capacity of the 
National Assembly to create stronger checks and balances in the 
system; enhancing the independence, reliability and transparency of 
the justice system; assisting the resolution of issues raised in the 
implementation of the recently signed bilateral Trade and Investment 
Framework Agreement (TIFA) with a focus on IPR enforcement, 
investment, and labor issues; and enforcing the laws and regulations 
which were recently developed in response to WTO and BTA 
commitments; 
 
-- (B) $750,000 to be used for expanding Vietnam Competitiveness 
Initiative (VNCI)'s efforts in supporting good governance through 
the administrative and regulatory reform process.  This 
far-reaching, radical reform led by the GVN Prime Minister will 
establish a new way of governing the economy with more transparency 
and a mechanism for public participation and consultation, which 
will ultimately create an enabling regulatory environment and pave 
the way for promoting democracy and broader systemic changes.  Some 
of the funds can also be used to leverage the success of the 
Provincial Competitiveness Index (PCI) to support provincial 
governments in seeking innovative ways to tap capital markets for 
infrastructure financing, to link national and provincial reform 
initiatives through a best practice provincial governance tool 
called TIGER and to advocate for a stronger decentralization trend, 
especially in fiscal management; 
 
-- (C) $250,000 for capital markets development with the SEC and 
related institutions, such as NASDAQ and NYSE.  This money will be 
used to support Vietnam's securities regulators in their efforts to 
manage better the recently booming and yet volatile capital markets, 
as well as to enhance financial literacy among the population.  This 
is critical to mobilize private capital market resources for 
economic development and to eliminate the risk of a financial 
turmoil that may erode recent achievements; 
 
-- (D) $300,000 for ICT/rural socioeconomic development programs 
using corporate partnerships with companies such as Intel and 
Microsoft.  USAID estimates that corporate contributions could total 
an additional $2-3 million in services, training, and products if we 
move forward with this additional funding.  These projects are 
designed to greatly expand internet availability throughout the 
nation; 
-- (E) $340,000 to enhance the capacity of the Vietnam Lawyers 
Association (VLA) to effectively promote the rule of law, enhance 
popular participation, and strengthen civil society.  The VLA has 
requested support for this effort to assist VLA to develop codes of 
professional ethics and train its members (legal professionals) to 
become activists in anti-corruption, protectors of the rule of law, 
and advocates for popular participation and civil society 
development. VNAH will partner with the U.S.-based International 
Center for Not-for-Profit Law (ICNL), which has worked with VNAH 
since 2000 on the efforts to develop a sound legal framework for a 
strong civil society; 
-- (F) $550,000 to promote implementation of grassroots democracy 
and mediation legislation at the local level.  The Vietnamese 
government has issued several laws and regulations on Grassroots 
Democracy (GD) (1998, 2003 and 2007) and Community Mediation Groups 
(1998, 1999) that remain poorly understood and implemented at the 
district, commune and town levels.  While falling short of promoting 
a truly representative system, these legal documents provide a 
foundation for increased popular participation in governance, 
strengthened rule of law, and combating corruption through greater 
citizen participation in local government; 
 
-- (G) $200,000 to build the capacity of legal and law enforcement 
agencies at national and local levels, thus strengthening the 
criminal justice responses to prevent and respond to domestic 
violence.  The proposed activities can be implemented in conjunction 
with UNODCs larger project "Building capacity of law enforcement and 
justice sectors to prevent and respond to domestic violence;" and 
 
- (H) $610,000 for continuation and expansion of the current program 
and other socio-economic development programs for the rural poor of 
the Central Highlands area, which aim to improve access to social 
and health services, increase economic opportunities and protect the 
basic rights of ethnic minority and persons with disabilities. 
Activities include agriculture development, sustainable cocoa 
farming, building and strengthening capacity for self-helps groups 
of vulnerable people, promoting people's participations in the local 
decision making and the national socio-economic development planning 
process through community development activities. 
 
¶3. (SBU) Again, given the deep impact, established track record, 
potential to support transformational change of STAR and VNCI, and 
the nature of the earmark, I believe that the bulk of the additional 
allocation should go to these two programs.  Mission Vietnam looks 
forward to working with Washington as we implement an expanded 
program in support of reform in Vietnam. 
 
MICHALAK