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Viewing cable 05HOCHIMINHCITY143, VIETNAM TO GROW EVEN FASTER SAY HCMC LEADERS

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Reference ID Created Released Classification Origin
05HOCHIMINHCITY143 2005-02-04 09:20 2011-08-25 00:00 UNCLASSIFIED Consulate Ho Chi Minh City
This record is a partial extract of the original cable. The full text of the original cable is not available.

040920Z Feb 05
UNCLAS HO CHI MINH CITY 000143 
 
SIPDIS 
 
 
DEPARTMENT PLEASE PASS TO USTR, ELENA BRYAN 
TREASURY FOR OASIA 
USDOC FOR 4431/MAC/IFP/OKSA/HPPHO 
 
 
E.O. 12958: N/A 
TAGS: ECON EINV ETRD EFIN PGOV VM
SUBJECT: VIETNAM TO GROW EVEN FASTER SAY HCMC LEADERS 
 
REF: Hanoi 256 
 
1. (U) SUMMARY:  Ho Chi Minh City leaders reported to the Consular 
Corps that the Party Central Committee Plenum had endorsed the 
goal of raising Vietnam's GDP from LDC levels by 2010.  Consul 
General observed that this implied a growth rate of about 15 
percent (to raise per capita GDP from just under USD500 to USD900 
by 2010.)  Peoples' Committee Chairman Le Thanh Hai said that 
HCMC's economy grew by 11.6 percent in 2004, well above the 
national average of 7.5 percent, and he discussed plans to 
accelerate growth and development further.  The Chairman's 
statement clearly reiterated an ambitious growth goal put forward 
by Party General Secretary Nong Duc Manh in his address to the 
Central Committee Plenum.  END SUMMARY. 
 
2. (U) On February 3, leaders of the Ho Chi Minh City government 
gathered members of the consular corps and representatives of 
foreign business to make their annual report on HCMC's economic 
progress in the past year and to announce their economic targets 
for the coming year.  According to HCMC People's Committee 
Chairman Le Thanh Hai, HCMC's economy grew by 11.6 percent in 
2004, the highest rate of growth in the last four years.  Almost 
half of all exports from Vietnam last year came from HCMC.  And of 
the $3 billion in overseas remittances to Vietnam in 2004, $1.8 
billion flowed into to the city.  HCMC attracted USD 700 million 
in new foreign direct investment (FDI), and total new investment 
flows in the city reached VND 43 trillion (about USD 2.7 billion). 
Chairman Hai also reported that HCMC exceeded its target for 
contributing revenue to the government budget, raising VND 49 
trillion (around USD 3.1 billion) in 2004.  (NOTE: Experts from 
the HCMC Institute of Economic Research have told us in the past 
that HCMC's revenues generally account for more than half the GVN 
budget.  END NOTE.) 
 
3. (U) Chairman Hai noted that, despite these accomplishments, the 
Ho Chi Minh City still suffers from some "weaknesses."  He said 
the process of doi moi, or economic liberalization, is proceeding 
too slowly, particularly in the area of services.  Only 20 percent 
of HCMC's service sector is "high-end" services like banking and 
insurance.  Hai also criticized the slow pace of infrastructure 
development and administrative reform. 
 
4. (U) Looking ahead, Hai said the city's economy should grow at 
12 percent in 2005.  Hai also echoed the economic growth goal 
announced by Communist Party General Secretary Nong Duc Manh at 
the 11th Plenum of the 9th Party Congress held January 17-25. 
According to Hai, the GVN aims to have Vietnam move off the list 
of least developed countries by 2010.  Vietnam needs to accelerate 
the doi moi process and shorten the period of modernization, Hai 
said. 
 
5. (U) COMMENT:  HCMC's impressive growth and investment numbers 
are what we have come to expect from Vietnam's economic 
powerhouse.  What is notable about Chairman Hai's presentation, 
however, is his making clear an explicit national goal of moving 
beyond least developed economic levels in five years.  While 
Vietnam's human resource base and export diversification keep it 
off of the UN official LDC roster, its per capita GDP of under USD 
500 is well below the USD 900 level which is the official 
graduation point. 
 
 
WINNICK