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Viewing cable 08HANOI55, ADMINISTRATIVE REFORM - PM AGREES TO "GUILLOTINE" TO CUT

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Reference ID Created Released Classification Origin
08HANOI55 2008-01-16 09:54 2011-08-25 00:00 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Hanoi
VZCZCXYZ0014
OO RUEHWEB

DE RUEHHI #0055/01 0160954
ZNR UUUUU ZZH
O 160954Z JAN 08
FM AMEMBASSY HANOI
TO RUEHC/SECSTATE WASHDC IMMEDIATE 7007
INFO RUEHBK/AMEMBASSY BANGKOK 6144
RUEHGP/AMEMBASSY SINGAPORE 2477
RUEATRS/DEPT OF TREASURY WASHINGTON DC
UNCLAS HANOI 000055 
 
SIPDIS 
 
STATE FOR EAP/MLS 
STATE PASS USTR FOR DBISBEE 
TREASURY FOR SCHUN 
SINGAPORE FOR SBAKER 
AMEMBASSY BANGKOK FOR RDM/A CARDUNIER 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958:  N/A 
TAGS: ECON EAID BEXP ETRD VM
SUBJECT:  ADMINISTRATIVE REFORM - PM AGREES TO "GUILLOTINE" TO CUT 
RED TAPE 
 
 
1.  (SBU) Summary: Prime Minister Nguyen Tan Dung has approved  an 
unprecedented three-year action plan known as "Project 30" to 
implement sweeping administrative and regulatory reforms in Vietnam 
that will affect all 22 national ministries and 64 provinces.  This 
plan, developed by USAID with the Office of Government, is a radical 
and progressive governance change for Vietnam that will require 
active collaboration between the government, the private sector and 
civil society.  Project 30 has the potential to transform and 
streamline Vietnam's regulatory process to increase transparency, 
reduce corruption, sustain economic growth, and benefit both 
citizens and business with improved services at lower cost and lower 
risk.  Billions of dollars previously lost in "red tape" will be 
released to spur economic productivity, as corruption via 
"rent-seeking" behaviors by functionaries is greatly reduced.  The 
PM's action is the culmination of Mission efforts to convince 
Vietnamese leaders of the merits and urgency of advancing good 
governance and adopting WTO principles of transparency and 
democratic processes.  The action plan designates AmCham as one of 
the leading private sector partners, and the Ambassador has strongly 
encouraged AmCham to engage actively in the new Advisory Council 
that the Prime Minister will establish to support project 
implementation.  End Summary. 
 
2.  (U) On January 4, Prime Minister Nguyen Tan Dzung signed 
Decision 7, approving the action plan to implement sweeping 
administrative reforms, including the use of a "regulatory 
guillotine approach."  USAID's flagship programs -- Support for 
Trade Acceleration (STAR) and the Vietnam Competitiveness Initiative 
(VNCI) - were key in formulating decision language and will provide 
substantial technical assistance in developing the plan, known as 
"Project 30".  Project 30, or the Master Plan to Simplify 
Administrative Procedures, will engage 22 ministries and 64 
provinces to inventory, review and recommend simplification of all 
administrative procedures during the period 2008 - 2010.  The 
regulatory "guillotine" involves placing each administrative 
regulation on the chopping block and eliminating any regulation that 
cannot be justified.  If the process finds that a regulation is 
necessary, procedures under that regulations will be whittled it 
down to necessary components to minimize cost and burden and to 
achieve an intended purpose of public policy.  The goal of the 
action plan is to simplify administrative procedures and reduce the 
burden of unnecessary government regulation for both businesses and 
citizens. 
 
3.  (U) Project 30 includes two new institutional mechanisms, which 
are radical changes from previous public administrative reform 
efforts over the past 10 years that have achieved only modest 
results.  The first is the "Special Task Force" reporting to the 
Prime Minister.  Minister Nguyen Xuan Phuc of the Office of 
Government (OOG) will lead this body with the assistance of about 20 
full-time qualified experts to coordinate and manage the reform 
efforts.  The Prime Minister will chair the second mechanism, known 
as the "Advisory Council for Administrative Procedures Reform," with 
15 appointed members, including representatives from the American 
Chamber of Commerce (AmCham), European Chamber of Commerce 
(Eurocham), a Korean business association, and a Japanese business 
association.  The action plan will set up working groups to address 
sectoral and specific issue areas.  The Prime Minister will 
establish these mechanisms with forthcoming separate Decisions. 
 
4.  (U) VNCI will begin initial consultations with AmCham and other 
prospective Advisory Council members this week.  STAR and VNCI will 
host a workshop in February after the February Tet holidays on the 
sixth draft of the Administrative Procedures Law (APL), with 
representatives from the APL drafting committee and from the Law on 
Laws drafting committee to integrate main ideas from OOG Minister 
Phuc's recent administrative reform study mission to the United 
States and South Korea which was sponsored by USAID.  STAR and VNCI 
will provide strategic advice and technical assistance to the OOG to 
set up the task force office, recruit personnel, establish computer 
systems, and design "e-guillotine" project management software. 
USAID will also assist with project branding and coordination of 
additional donor assistance.  The APL is part of the government's 
legal and political strategy to develop a policy coordination 
function at the center of government (similar to our OMB/OIRA, which 
the OOG study mission visited in Washington) to manage effectively 
the regulatory system to achieve a lower cost, lower risk business 
environment in the post-WTO accession period and to create more 
effective democratic processes of consultation, transparency, and 
accountability in governance. 
 
5.  (SBU) Comment: The PM's action can be seen as another feather in 
the cap of VNCI, which has already received wide acclaim for its 
 
Provincial Competitiveness Index.  The Index, a joint effort between 
VNCI and the Vietnam Chamber of Commerce and Industry, rates each of 
Vietnam's 64 provinces on "doing business" issues, and yields a 
numerical score for each jurisdiction.  Leaders do not wish to be 
number 64, and this mechanism has proven extremely effective in 
improving business conditions throughout the nation.  This latest 
initiative promises to be even more significant in enhancing 
governance.  Project 30, if carried out effectively, will improve 
the business climate, create more transparency in policy making and 
policy implementation, and facilitate private sector investment.  In 
his meetings this past week with AmCham, the Ambassador has 
encouraged them to make their active participation in the Advisory 
Council a priority.  While implementing Project 30 may inevitably 
encounter resistance from certain entrenched interests, the Prime 
Minister's willingness to take such a risk is an encouraging sign of 
his commitment to governance reform.  Underscoring the PM's 
commitment, Vietnam Television will be airing a 30 minute program 
about the Index on January 18, publicity that is clearly designed to 
make organizing efforts to undermine the project much more 
difficult.  End Comment. 
 
MICHALAK