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Viewing cable 07HANOI1117, VIETNAM: HUMAN RIGHTS TAKES CENTER STAGE AT MID-TERM
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| Reference ID | Created | Released | Classification | Origin |
|---|---|---|---|---|
| 07HANOI1117 | 2007-06-15 08:17 | 2011-08-25 00:00 | UNCLASSIFIED | Embassy Hanoi |
VZCZCXRO6179
RR RUEHHM
DE RUEHHI #1117/01 1660817
ZNR UUUUU ZZH
R 150817Z JUN 07
FM AMEMBASSY HANOI
TO RUEHC/SECSTATE WASHDC 5656
INFO RUEHHM/AMCONSUL HO CHI MINH 3248
RUEHBK/AMEMBASSY BANGKOK 5797
RUEHGP/AMEMBASSY SINGAPORE 2398
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEHRC/DEPT OF AGRICULTURE USD FAS WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
UNCLAS SECTION 01 OF 09 HANOI 001117
SIPDIS
STATE FOR EAP/MLS, DRL, F
STATE PASS USAID
STATE PASS USTR
TREASURY FOR OASIA
COMMERCE FOR 4431/MAC/AP/OPB/VLC/HPPHO AND EMIKALIS
BANGKOK FOR RDM/A
SINGAPORE FOR REGIONAL TREASURY ATTACHE BAKER
STATE PASS FEDERAL RESERVE SAN FRANCISCO FOR DFINEMAN
SENSITIVE BUT UNCLASSIFIED
SIPDIS
E.O. 12958: N/A
TAGS: EAID ECON EFIN EINV PREL PGOV PHUM VM
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
HANOI 00001117 009 OF 009
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