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Viewing cable 07RANGOON782, VIETNAM PM DISCUSSES TRADE WITH BURMA - TALK, NO MUCH

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Reference ID Created Released Classification Origin
07RANGOON782 2007-08-24 06:05 2011-08-25 00:00 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Rangoon
VZCZCXRO8752
RR RUEHBZ RUEHCHI RUEHDT RUEHHM RUEHNH
DE RUEHGO #0782/01 2360605
ZNR UUUUU ZZH
R 240605Z AUG 07
FM AMEMBASSY RANGOON
TO RUEHC/SECSTATE WASHDC 6398
RUCNASE/ASEAN MEMBER COLLECTIVE
RUEHGG/UN SECURITY COUNCIL COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 1484
RUEHBY/AMEMBASSY CANBERRA 0449
RUEHKA/AMEMBASSY DHAKA 4583
RUEHLO/AMEMBASSY LONDON 1980
RUEHNE/AMEMBASSY NEW DELHI 3988
RUEHUL/AMEMBASSY SEOUL 7543
RUEHTC/AMEMBASSY THE HAGUE 0642
RUEHKO/AMEMBASSY TOKYO 5099
RUEHCN/AMCONSUL CHENGDU 1169
RUEHCHI/AMCONSUL CHIANG MAI 1038
RUEHCI/AMCONSUL KOLKATA 0032
RUEATRS/DEPT OF TREASURY WASHDC
RHHMUNA/CDR USPACOM HONOLULU HI
RUEHGV/USMISSION GENEVA 3246
RHEHNSC/NSC WASHDC
RUCNDT/USMISSION USUN NEW YORK 0894
RUEKJCS/SECDEF WASHDC
RUEHBS/USEU BRUSSELS
RUEKJCS/JOINT STAFF WASHDC
UNCLAS SECTION 01 OF 03 RANGOON 000782 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR EAP/MLS, EB/TRA 
PACOM FOR FPA 
TREASURY FOR OSIA:SCHUN 
 
E.O. 12958:N/A 
TAGS: PGOV PREL ECON ETRD EINV ENRG BM
SUBJECT: VIETNAM PM DISCUSSES TRADE WITH BURMA - TALK, NO MUCH 
ACTION 
 
 
RANGOON 00000782  001.2 OF 003 
 
 
1.  (SBU) Summary.  During a two-day visit to Burma, Vietnamese 
Prime Minister Nguyen Tan Dung, accompanied by a delegation of 47 
Vietnamese businessmen, met with Senior General Than Shwe, Acting 
Prime Minister General Thein Sein, and the Chamber of Commerce. 
During the meetings, the Burmese leaders emphasized the need for 
closer ties between the two countries and discussed ways to enhance 
trade and investment.  Although the Burmese Minister of Energy and 
PetroVietnam signed a memorandum of understanding for oil and gas 
cooperation, the Vietnamese Embassy expressed doubt that Vietnamese 
companies would invest in Burma in the near future.  Trade between 
Burma and Vietnam has improved significantly over the past three 
years, with Burmese exports to Vietnam up 250 percent since 2004 and 
Burmese imports of Vietnamese products up 50 percent during the same 
period.  Bilateral investment from both countries, however, is 
virtually nonexistent.  End Summary. 
 
Burmese Seek Vietnamese Investment 
---------------------------------- 
 
2.  (U)  During his August 14-15 trip to Burma, Senior General Than 
Shwe and Acting Prime Minister General Thein Sein wined and dined 
Prime Minister Nguyen Tan Dung and invited him to plant a tree 
during his tour of the new capital, Nai Pyi Taw.  Emphasizing the 
historical similarities between Burma and Vietnam, the Burmese 
senior leadership and Prime Minister Dung on August 14 discussed 
bilateral economic relations and ways to improve trade and 
investment between the two countries.  Acting Prime Minister Thein 
Sein noted that Burma should follow Vietnam's example for economic 
development, and expressed his ardent wish for Vietnamese investment 
in the areas of oil and gas, transportation, and general trade. 
Upon returning to Rangoon the evening of August 14, Than Shwe hosted 
an elaborate dinner and reception in the Prime Minister's honor, 
with more than 100 people in attendance.  On August 15, the Prime 
Minister and his delegation met with the Chamber of Commerce to 
discuss further how to improve bilateral economic relations. 
 
MOU on Petroleum the Only Deliverable 
------------------------------------- 
 
3.  (SBU)  Le Hai Chau, Vietnamese Commercial Counselor, categorized 
the Prime Minister's trip to Burma, which lasted less than 36 hours, 
as short but "somewhat successful."  Despite a plethora of 
high-level meetings, the Burmese only secured one deliverable:  the 
August 14 signing of a Memorandum of Understanding for strategic 
cooperation in the petroleum sector, signed by Burmese Energy 
Planning Department Director General Soe Myint and PetroVietnam 
Chief Executive Officer Tran Ngoc Canh.  Mr. Chau informed us that 
the MOU did not specify any detailed cooperation, but rather was 
more of an invitation by the Burmese for Vietnamese investment in 
the oil and gas sector.  Although the Burmese Government touted the 
MOU as a clear win for the regime, Mr. Chau noted that no Vietnamese 
companies are interested in investing in Burma's petroleum sector, 
nor any other sector, at this time. 
 
4.  (SBU)  Mr. Chau expressed his surprise that the Burmese senior 
leaders and the Prime Minister did not talk about the Greater Mekong 
Sub-region East-West Economic Corridor, which will connect the South 
China Sea with the Bay of Bengal.  The six countries involved -- 
Burma, China, Cambodia, Laos, Thailand, and Vietnam -- fully support 
the construction of the corridor road, he noted, but lack of 
financing impedes construction.  Perhaps the reason the project was 
not discussed, Chau opined, is because the Vietnamese Government 
already declined the GOB's request for financial assistance. 
Instead, the GOB will seek funding from thee Japanese for the 
construction of the road that will connect Mae Sot at the Thai 
 
RANGOON 00000782  002.2 OF 003 
 
 
Border to Mawlamyine. 
 
New Investment Not Likely 
------------------------- 
 
5.  (SBU)  According to the Chamber of Commerce, Vietnamese 
investment in Burma totals $3.65 million, accounting for 0.03 
percent of total foreign investment.  Mr. Chau confirmed this 
investment, which is in the medical equipment sector, but noted that 
there has been no new Vietnamese investment in Burma for more than 
10 years.  While the visiting Vietnamese business delegation made 
important contacts with the Burmese business sector, he explained, 
Vietnamese businesses continue to be concerned about Burma's poor 
investment climate.  Companies may be willing to invest in joint 
ventures with other foreign companies, but even that, he noted, 
would be unlikely. 
 
6.  (SBU)  The Chamber of Commerce depicted a different picture: U 
Aung Myint, Consultant and member of the Chamber of Commerce, told 
us that during the August 15 meeting, many Vietnamese companies 
expressed interest in investing in Burma.  The Chamber of Commerce 
acknowledged that it plans a reciprocal visit to Vietnam in 
September, with a delegation of more than 20 businessmen, to 
investigate investment opportunities in Vietnam. 
 
Trade On the Rise 
----------------- 
 
7. (SBU)  Mr. Chau confirmed that trade between Burma and Vietnam 
continues to increase annually, although the value of Burmese 
exports to Vietnam is much greater than imports. Between FY 2004 and 
FY2006, Burmese exports increased from $16,606,648 to $58,166,325, 
an increase of 250 percent.  In the last year alone, exports to 
Vietnam rose more than 50 percent, with the largest increases 
occurring in the sale of minerals and timber products.  In FY 2006, 
the export of timber and forest products to Vietnam totaled almost 
$36 million, up from $19.5 million in FY 2005.  The export of 
minerals, primarily copper, was $13 million in FY 2006, an increase 
of 123 percent from $5.8 million in FY 2005.  The export of both 
timber and mineral products accounted for almost 85 percent of total 
exports to Vietnam in FY 2006. 
 
--------------------------------------------- --------- 
            Vietnam-Burma Trade, FY2004-Present 
                    In US Dollars 
--------------------------------------------- ---------- 
Fiscal  Burmese      Percent       Burmese      Percent 
Year    Imports      Change        Exports      Change 
--------------------------------------------- ---------- 
2004     8,640,333     --         16,606,648      -- 
2005     9,859,118    14.1        38,610,118     132.5 
2006    12,917,754    31.0        58,166,325      50.5 
2007*    6,746,190                21,965,291 
--------------------------------------------- ---------- 
*Through June 30, 2007 
Source:  Business Information Group (BIG), August 2007 
Note:  The Burmese fiscal year (FY) runs from April 1 to March 31. 
 
8. (SBU)  Burmese imports of Vietnamese products also increased 
during the past three years, although not at the same rate as 
exports.  Between FY 2004 and FY 2006, Vietnamese exports to Burma 
increased almost 50 percent, from $8.6 million to $12.9 million. 
Vietnamese exports to Burma consist primarily of medicines, 
plastics, textiles, and other commodities.  Mr. Chau noted that 
between FY 2005 and FY 2006, there was an increased demand for 
 
RANGOON 00000782  003.2 OF 003 
 
 
medicines and other commodities, which increased 204 percent and 107 
percent respectively.  The Vietnamese Embassy predicts that imports 
of Vietnamese products will continue to rise in the future, as the 
demand for plastic products, textiles, and medicines rises. 
 
9. (SBU)  FY 2007 trade data shows an increase in trade between 
Burma and Vietnam over last year's levels.  According to Mr. Chau, 
overall bilateral trade has increased 35 percent since last year. 
He expects both import and export values to exceed last year's 
amounts by between 20-30 percent. 
 
Comment 
------- 
 
10.  (SBU)  The GOB continues to try to improve economic relations 
with the rest of Asia, in order to reduce their dependence on China 
and Thailand.  The Burmese Government sees Vietnam as an example of 
what Burma can be in the future -- and seeks to strengthen ties in 
order to learn how to best move forward.  The Burmese clearly want 
more investment, but fail to understand that until the investment 
climate improves, no Vietnamese companies, nor any foreign 
companies, will commit.  Instead, they will only talk generally 
about plans for investment.  The Burmese leaders do not show any 
comprehension that their greediness and mismanagement repels, rather 
than attracts, investment, despite the country's rich resources. 
 
VILLAROSA