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PHUM PINR PTER PGOV PREL PREF PL PM PHSA PE PARM PINS PK PUNE PO PALESTINIAN PU PBTS PROP PTBS POL POLI PA PGOVZI POLMIL POLITICAL PARTIES POLM PD POLITICS POLICY PAS PMIL PINT PNAT PV PKO PPOL PERSONS PING PBIO PH PETR PARMS PRES PCON PETERS PRELBR PT PLAB PP PAK PDEM PKPA PSOCI PF PLO PTERM PJUS PSOE PELOSI PROPERTY PGOVPREL PARP PRL PNIR PHUMKPAL PG PREZ PGIC PBOV PAO PKK PROV PHSAK PHUMPREL PROTECTION PGOVBL PSI PRELPK PGOVENRG PUM PRELKPKO PATTY PSOC PRIVATIZATION PRELSP PGOVEAIDUKNOSWGMHUCANLLHFRSPITNZ PMIG PREC PAIGH PROG PSHA PARK PETER POG PHUS PPREL PS PTERPREL PRELPGOV POV PKPO PGOVECON POUS PGOVPRELPHUMPREFSMIGELABEAIDKCRMKWMN PWBG PMAR PREM PAR PNR PRELPGOVEAIDECONEINVBEXPSCULOIIPBTIO PARMIR PGOVGM PHUH PARTM PN PRE PTE PY POLUN PPEL PDOV PGOVSOCI PIRF PGOVPM PBST PRELEVU PGOR PBTSRU PRM PRELKPAOIZ PGVO PERL PGOC PAGR PMIN PHUMR PVIP PPD PGV PRAM PINL PKPAL PTERE PGOF PINO PHAS PODC PRHUM PHUMA PREO PPA PEPFAR PGO PRGOV PAC PRESL PORG PKFK PEPR PRELP PREFA PNG PGOVPHUMKPAO PRELECON PINOCHET PFOR PGOVLO PHUMBA PRELC PREK PHUME PHJM POLINT PGOVPZ PGOVKCRM PGOVE PHALANAGE PARTY PECON PEACE PROCESS PLN PRELSW PAHO PEDRO PRELA PASS PPAO PGPV PNUM PCUL PGGV PSA PGOVSMIGKCRMKWMNPHUMCVISKFRDCA PGIV PRFE POGOV PEL PBT PAMQ PINF PSEPC POSTS PHUMPGOV PVOV PHSAPREL PROLIFERATION PENA PRELTBIOBA PIN PRELL PGOVPTER PHAM PHYTRP PTEL PTERPGOV PHARM PROTESTS PRELAF PKBL PRELKPAO PKNP PARMP PHUML PFOV PERM PUOS PRELGOV PHUMPTER PARAGRAPH PERURENA PBTSEWWT PCI PETROL PINSO PINSCE PQL PEREZ PBS
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### Viewing cable 01HANOI3288, VIETNAM CONSULTATIVE GROUP MEETING: A MEETING OF THE MINDS, AND CONTINUED HIGH LEVELS OF SUPPORT DESPITE A SLOWING WORLD ECONOMY

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Reference ID | Created | Released | Classification | Origin
--- | --- | --- | --- | ---
01HANOI3288 | 2001-12-20 08:53 | 2011-08-25 00:00 | UNCLASSIFIED | Embassy Hanoi

`

    This record is a partial extract of the original cable. The full text of the original cable is not available.

    200853Z Dec 01

     2001HANOI03288 - UNCLASSIFIED

                               UNCLASSIFIED     PTQ9690

    PAGE 01        HANOI  03288  01 OF 05  200859Z
    ACTION EAP-00

    INFO  LOG-00   NP-00    AID-00   AMAD-00  EVG-00   ACQ-00   CIAE-00
          CTME-00  ITCE-00  DOTE-00  SRPP-00  DS-00    EB-00    EXME-00
          E-00     FAAE-00  FBIE-00  UTED-00  VC-00    FRB-00   H-01
          TEDE-00  INR-00   ITC-01   LAB-01   L-00     VCE-00   AC-01
          NSAE-00  OES-01   OMB-01   OPIC-01  PM-00    ACE-00   P-00
          SP-00    IRM-00   STR-00   TEST-00  USIE-00  FMP-00   PMB-00
          DSCC-00  DRL-02   G-00     NFAT-00  SAS-00     /009W
                      ------------------4E2E6D  200859Z /38
    FM AMEMBASSY HANOI
    TO SECSTATE WASHDC 5044
    INFO DEPTTREAS WASHDC
    NSC WASHDC
    USDOC WASHDC
    USDA WASHDC
    DEPTLABOR WASHDC
    SECDEF WASHDC
    AMCONSUL HO CHI MINH CITY
    AMEMBASSY TOKYO
    ASEAN COLLECTIVE

` `

    UNCLAS SECTION 01 OF 05 HANOI 003288

    SIPDIS

    STATE FOR EAP/BCLTV, EB/IFD/OMA AND EB/IFD/ODF
    STATE PASS USAID FOR ANE: DMCLUSKEY
    STATE PASS USTR FOR ELENA BRYAN
    TREASURY FOR OASIA
                           UNCLASSIFIED

    PAGE 02        HANOI  03288  01 OF 05  200859Z
    USDOC FOR 4431/MAC/IFP/OKSA/HPPHO
    USDA FOR FAS/FAA/STEVE HUETE
    SECDEF FOR ABLAGG

    E.O. 12958: N/A
    TAGS: EAID EFIN ETRD ECON PREL VM FINREF SOE HUMANR HIV AIDS
    SUBJECT:  VIETNAM CONSULTATIVE GROUP MEETING: A MEETING OF THE MINDS, AND CONTINUED HIGH LEVELS OF SUPPORT DESPITE A SLOWING WORLD ECONOMY

    REF:  HANOI 3269

    ¶1.  SUMMARY: THE VIETNAM CONSULTATIVE GROUP OF DONORS
    (CG) MEETING WAS HELD IN HANOI, DECEMBER 7-8, 2001.  CO-
    CHAIRED BY THE WORLD BANK AND THE GOVERNMENT OF VIETNAM,
    THIS CG WAS CONSIDERABLY MORE UPBEAT THAN PREVIOUS
    MEETINGS.  THERE WAS MUCH UNANIMITY AMONG THE DONOR AND
    INTERNATIONAL NGO ATTENDEES CONCERNING VIETNAM'S
    ACHIEVEMENTS OVER THE PAST 5 YEARS AND THE CHALLENGES
    THAT LIE AHEAD.  MAJOR THEMES THAT ECHOED THROUGHOUT THE
    MEETING INCLUDED THE NEED TO STEP UP THE PACE OF REFORMS
    OF STATE-OWNED ENTERPRISES (SOE) AND STATE-OWNED
    COMMERCIAL BANKS (SOCB), AND STAY THE COURSE IN MACRO-
    ECONOMIC REFORMS AND DOMESTIC PRIVATE SECTOR DEVELOPMENT.
    CERTAIN DONORS ALSO RAISED CONCERNS REGARDING HUMAN
    RIGHTS, HIV/AIDS, EQUITY, GOOD GOVERNANCE, ADMINISTRATIVE
    AND LEGAL REFORM, CORRUPTION, AND THE NEED FOR
    TRANSPARENCY.

    ¶2. THE U.S. DELEGATION LED BY USAID/AA/ANE, LORI FORMAN,
    MADE STRONG, YET WELL-RECEIVED INTERVENTIONS CONCERNING
                           UNCLASSIFIED

    PAGE 03        HANOI  03288  01 OF 05  200859Z
    VIETNAM'S NEED TO HARNESS THE ENERGIES OF ALL ITS PEOPLE
    REGARDLESS OF GENDER, RELIGION, OR ETHNICITY, THE
    IMPORTANCE OF DE-STIGMATIZING VICTIMS OF HIV/AIDS IN
    ORDER TO STEM ITS SPREAD, AND THE CRITICAL NEED TO ASSURE
    THAT STATE INVESTMENT CREDITS ARE PROVIDED IN A WAY THAT
    DOES NOT DISADVANTAGE THE PRIVATE SECTOR VIS-A-VIS
    THESTATE-OWNED ENTERPRISE SECTOR.  IN THE FINAL SESSION,
    THE USG PLEDGED $32.8 MILLION IN ASSISTANCE TO VIETNAM
    CONTINGENT ON FUNDS AVAILABILITY.

    ¶3. IMPRESSIVELY, THE DONOR COMMUNITY AS A WHOLE PLEDGED
    $2.4 BILLION IN ASSISTANCE TO VIETNAM FOR THE COMING YEAR
    - THE SAME AMOUNT AS LAST YEAR, DESPITE THE GLOBAL
    ECONOMIC SLOW-DOWN.  THIS WAS SEEN AS A VOTE OF
    CONFIDENCE IN VIETNAM'S REFORM EFFORTS.  END SUMMARY.

    ¶4.  VIETNAM WAS REPRESENTED BY DEPUTY PRIME MINISTER CAM,
    MINISTER OF PLANNING AND INVESTMENT GIA, AND OFFICIALS
    FROM SEVERAL OTHER MINISTRIES.  THE MEETING OPENED WITH A
    STATEMENT FROM THE WORLD BANK COUNTRY DIRECTOR, ANDREW
    STEER, WHO DESCRIBED THE EVOLUTION THAT HAS TAKEN PLACE
    SINCE THE FIRST VIETNAM CG IN 1997.  HE NOTED THAT FOUR
    YEARS AGO WHEN VIETNAM'S GOVERNMENT (GVN) AND DONORS MET
    IN TOKYO, VIETNAM'S ECONOMY WAS CHARACTERIZED BY SERIOUS
    STRUCTURAL PROBLEMS.  THERE WERE NO PLANS FOR
    DEREGULATION OF THE DOMESTIC PRIVATE SECTOR, NO IMF AND
    WORLD BANK AGREEMENTS, NO SOE OR BANKING REFORM.  THREE
    YEARS AGO AT THE CG IN PARIS, STRUCTURAL REFORM BEGAN TO
    BE CONSIDERED.  TWO YEARS AGO IN HANOI, THE CG FOCUSSED
    ON POVERTY ALLEVIATION; AND LAST YEAR IN HANOI, THE CG
    CONSIDERED A STRATEGIC REFORM AGENDA AND VIETNAM'S OWN
                           UNCLASSIFIED

    PAGE 04        HANOI  03288  01 OF 05  200859Z
    DRAFT 10-YEAR SOCIO-ECONOMIC PLAN WHICH WAS LATER
    APPROVED AT THE NINTH PARTY CONGRESS LAST MAY.

    ¶5.  STEER THEN HIGHLIGHTED THE REMARKABLE PROGRESS THAT
    THE CG HAS TO CONSIDER THIS YEAR:  THERE ARE NOW IMF AND
    WORLD BANK AGREEMENTS IN PLACE; A DRAFT COMPREHENSIVE
    POVERTY REDUCTION AND GROWTH STRATEGY HAS BEEN DEVELOPED;
    SOE AND BANKING REFORM PROGRAM HAVE BEEN AGREED TO AND
    ARE BEGINNING TO BE IMPLEMENTED; AND THE DOMESTIC PRIVATE
    SECTOR HAS GROWN, WITH 70% MORE WORKERS THAN 2 YEARS AGO
    (ALBEIT FROM A VERY SMALL BASE).  IN ADDITION, THE
    BILATERAL TRADE AGREEMENT (BTA) WITH THE UNITED STATES,
    WHICH WILL REQUIRE VIETNAM TO MAKE SIGNIFICANT CHANGES IN
    LEGAL, TRADE AND COMMERCIAL REGULATIONS, HAS BEEN
    RATIFIED BY BOTH COUNTRIES..

    ¶6.  STEER WENT ON TO SAY THAT THE REALLY HARD WORK IS NOW
    JUST BEGINNING: THE WORLD ECONOMY IS LESS FRIENDLY NOW
    THAN IN THE PAST TWO DECADES, AND THE DIFFICULT PROCESS
    OF SOE AND SOCB REFORMS HAS YET TO BE INITIATED IN
    EARNEST.  IT WAS INCUMBENT ON VIETNAM TO TAKE ADVANTAGE
    OF THIS "BREATHING SPACE" CREATED BY ITS CONTINUED
    ECONOMIC GROWTH IN A PERIOD OF GLOBAL ECONOMIC DOWNTURN
    TO PRESS AHEAD WITH REFORMS AND POSITION ITSELF FOR THE
    EVENTUAL GLOBAL RECOVERY

    ¶7.  THE IMF REPRESENTATIVE TOLD THE CG PARTICIPANTS THAT
    WHILE THE WORLD ECONOMIC DOWNTURN HAS AFFECTED VIETNAM BY
    DEPRESSING COMMODITY PRICES, ECONOMIC GROWTH SHOULD
    REMAIN RELATIVELY ROBUST (AN ESTIMATED 4.7% IN 2001, WITH
    CONTINUING LOW INFLATION AND A STRENGTHENING OF THE
    EXTERNAL POSITION) WITH THE IMPLEMENTATION OF POLICY
    REFORMS AND A REVIVAL IN INVESTMENT.  CRITICAL STEPS
    INCLUDE ACCELERATING IMPLEMENTATION OF THE BTA REFORMS
    AND STAYING THE COURSE ON MACRO-ECONOMIC REFORMS.

    ¶8.  THE IMF REP NOTED THAT VIETNAM HAD IMPORT RESERVES OF
    10 WEEKS, AND THAT ALTHOUGH THE COUNTRY'S DEFICIT COULD
    BE WIDENED SLIGHTLY TO ACCOMMODATE NEEDS, VIETNAM MUST
    STABILIZE REVENUE PERFORMANCE AND ACCELERATE CRITICAL SOE
    AND SOCB REFORMS.

    ¶9.  WORLD BANK CHIEF ECONOMIST FOR VIETNAM KAZI MATIN
    REPORTED THAT TRADE POLICY AND NON-STATE BANKING REFORMS
    ARE ON TRACK, BUT WITH REGARDS TO SOE REFORM, ONLY 130
                           UNCLASSIFIED

    PAGE 03        HANOI  03288  02 OF 05  200859Z
    SOES HAVE BEEN EQUITIZED, SOLD, OR LIQUIDATED OUT OF THE
    PLANNED 400 FOR FY 2001.  TO MEET CURRENT TARGETS, THIS
    MEANS THAT 270 REMAIN TO BE DONE IN A 6-MONTH PERIOD.

    ¶10. BILATERAL DONORS CONGRATULATED THE GVN ON ITS
    ACHIEVEMENTS THUS FAR IN AREAS SUCH AS ECONOMIC GROWTH,
    PRIVATE SECTOR DEVELOPMENT, POVERTY REDUCTION, HUMAN
    RESOURCE DEVELOPMENT, AND ADOPTION OF ECONOMIC AND PUBLIC
    ADMINISTRATION REFORM PROGRAMS AND ENCOURAGED THE GVN TO
    CONTINUE TO PRESS AHEAD AND AVOID THE TEMPTATION TO SLOW
    THE PACE OF PROGRESS

    ¶11. THE DONOR INTERVENTIONS REPEATED MANY SIMILAR
    CONCERNS REGARDING THE SLOW PACE OF REFORM IN THE SOE AND
    BANKING SECTORS.  THEY ALSO DISCUSSED THE CRITICAL ROLE
    THE DOMESTIC PRIVATE SECTOR WILL PLAY IN VIETNAM'S
    TRANSITION INTO THE GLOBAL ECONOMY.  DONORS RECOGNIZED
    THE IMPORTANCE OF THE GVN'S CONTINUED IMPLEMENTATION OF
    1999'S ENTERPRISE LAW WHICH PERMITS MOST DOMESTIC PRIVATE
    ENTERPRISES TO BE ESTABLISHED VIA A STREAM-LINED
    REGISTRATION PROCESS, REPLACING A LENGTHY, NON-
    TRANSPARENT LICENSE APPROVAL REGIME.   BUT DONORS URGED
    THE GOVERNMENT TO CONTINUE TO IMPROVE THE ENVIRONMENT FOR
    THE DEVELOPMENT OF THE DOMESTIC PRIVATE SECTOR.   THE
    ASIA DEVELOPMENT BANK REPRESENTATIVE STRESSED THE NEED
    FOR THE GVN TO PLAY A SUPPORTING OR CATALYTIC ROLE IN THE
    ECONOMY, NOT A COMMANDING ROLE.  HE NOTED THE NEED FOR A
    PARADIGM SHIFT IN THE GVN'S APPROACH; A GOVERNMENT
    STEEPED IN A CULTURE OF INTERVENTION NOW NEEDS TO LEARN
    TO MOVE OUT OF THE WAY.

                           UNCLASSIFIED

    PAGE 04        HANOI  03288  02 OF 05  200859Z
    ¶12.  DESPITE THE IMPORTANT STEPS VIETNAM HAS TAKEN TO
    DEVELOP THE PRIVATE SECTOR AND, AT LEAST ON PAPER, PUT IT
    ON MORE EQUAL FOOTING WITH STATE-OWNED ENTERPRISES
    (SOE'S), PRIVATE ENTERPRISES, DOMESTIC AND FOREIGN,
    CONTINUE TO FACE DIFFICULT PROBLEMS.  THESE PROBLEMS WERE
    DISCUSSED IN DETAIL AT THE IFC HOSTED BUSINESS FORUM HELD
    SEVERAL DAYS EARLIER AND REPORTED TO DONORS AT THE CG.
    MACRO-LEVEL PROBLEMS INCLUDED: DIFFICULTY IN ACCESSING
    CREDIT; CONTINUED BIAS AGAINST PRIVATE ENTERPRISE BY
    OFFICIALS AND THE GENERAL PUBLIC; THE NEED FOR TIMELY AND
    CONSISTENT IMPLEMENTATION OF EXISTING REFORMS; IMPROVED
    TRANPARENCY IN GOVERNMENT REGULATION OF BUSINESS; AND
    COMPLETION OF LEGISLATIVE AND REGULATORY CHANGES NEEDED
    TO PROVIDE EQUAL TREATMENT TO DOMESTIC PRIVATE
    ENTERPRISE, SOE'S AND FOREIGN-INVESTED ENTERPRISE.
    PRIVATE SECTOR REPRESENTATIVES AGREED HOWEVER, THAT THE
    BUSINESS CLIMATE IN VIETNAM HAD IMPROVED AND INDEED WAS
    NOW BETTER THAN MOST OUTSIDE OF VIETNAM WERE AWARE.
    THEREFORE, IN ADDITION TO CONTINUING TO IMPROVE THE
    CLIMATE FOR PRIVATE BUSINESS, BUSINESS REPRESENTATIVES
    AND DONORS URGED VIETNAM TO BETTER ADVERTISE THE CHANGES
    THAT HAVE BEEN MADE.

    ¶13.  BILATERAL DONORS EMPHASIZED OTHER THEMES AND
    CONCERNS AS WELL: THE NEED TO PURSUE GROWTH WITH EQUITY
    TO ENSURE THAT ALL VIETNAMESE REAP THE BENEFITS OF
    VIETNAM'S ECONOMIC PROGRESS, THE PRESSING NEED FOR
    TRANSPARENCY IN BUDGET MANAGEMENT AND A LEGAL FRAMEWORK,
    RECURRENT COST IMPLICATIONS OF ITS PUBLIC INVESTMENT PLAN
    (PIP), DISPARITIES IN GVN AND MULTILATERAL DONOR
    STATISTICS, INDUSTRIAL GROWTH AT THE EXPENSE OF
    AGRICULTURE AND ENVIRONMENT, AND THE SPREAD OF HIV/AIDS
    IN VIETNAM.  THE U.S., SWEDISH, DANISH, FINNISH,
    AUSTRALIAN, NEW ZEALAND, AND BELGIUM DELEGATIONS ALL MADE
    STATEMENTS REGARDING LINKAGES BETWEEN GOOD GOVERNANCE,
    HUMAN RIGHTS, CORRUPTION,TRANSPARENCY AND THE SUCCESS OF
    THE GVN'S ECONOMIC REFORM AND POVERTY ALLEVIATION
    POLICIES. (SEE REFTEL FOR A REPORT ON THE DISCUSSION OF
    HUMAN RIGHTS.)  NOTING THAT TRANSPARENCY INTERNATIONAL
    HAD RATED VIETNAM VERY POORLY WITH RESPECT TO CORRUPTION,
    THE CANADIANS ARGUED THAT CORRUPTION AND LACK OF
    TRANSPARENCY ARE IMPEDIMENTS TO FOREIGN INVESTMENT AND
    ECONOMIC GROWTH. THE SWEDISH MADE A WELL-RECEIVED
    ANNOUNCEMENT THAT THEY WOULD FINANCE A DIAGNOSTIC STUDY
    ON CORRUPTION, ITS CAUSES AND EFFECTS. THE ADB
                           UNCLASSIFIED

    PAGE 03        HANOI  03288  03 OF 05  200900Z
    REPRESENTATIVE NOTED THAT THE GVN DOES NOT APPEAR TO BE
    DEDICATING RESOURCES TO LEGAL REFORM. HE POINTED TO THE
    GVNS "WISH LIST" OF ODA INVESTMENT PROJECTS AND NOTED
    THAT OF 300 PLUS PROJECTS, NONE ADDRESSED LEGAL REFORM OR
    CORRUPTION.

    ¶14.  THE FOUR INTERNATIONAL NGO OFFICIALS, REPRESENTING
    OVER 50 OF THE INGO'S OPERATING IN VIETNAM, STRESSED THE
    NEED FOR ENSURING GROWTH WITH EQUITY, POVERTY
    ALLEVIATION, AND CAPACITY BUILDING AT THE GRASSROOTS
    LEVEL TO ENSURE THAT REFORM POLICIES ARE UNDERSTOOD AND
    FULLY IMPLEMENTED AT ALL LEVELS.  NGOS ALSO URGED THE
    GOVERNMENT TO PASS A LONG-AWAITED DECREE ON LOCAL NGOS
    AND ASSOCIATIONS.  (NOTE: BECAUSE VIETNAM LACKS A LAW
    GOVERNING OPERATION OF DOMESTIC NGOS, EXISTING LOCAL NON-
    GOVERNMENTAL ASSOCIATIONS DO NOT HAVE A CLEAR RIGHT TO
    EXIST IN VIETNAM'S CIVIL LAW LEGAL SYSTEM.  OPERATING IN
    A LEGAL TWILIGHT ZONE, THOSE THAT DO EXIST REMAIN SMALL,
    WEAK AND FIND IT DIFFICULT TO RAISE FUNDS. END NOTE.)

    ¶15. DURING THE DISCUSSION ON THE VIETNAM'S PUBLIC
    INVESTMENT PLAN (PIP), SEVERAL DONORS NOTED THAT THE
    GOVERNMENT WAS STILL PLANNING PUBLIC PROJECTS IN AREAS
    WHERE THE PRIVATE SECTOR COULD AND SHOULD OPERATE AND
    WHERE GOVERNMENT INTERVENTION WAS NOT NEEDED.  THE ADB
    REP URGED THE GVN TO FREE UP THOSE FUNDS FOR AREAS WHERE
    PUBLIC INVESTMENT WAS TRULY NECESSARY.  DONORS ALSO
    COMMENTED ON THE REGIONAL AND SECTORAL DISTRIBUTION OF
    PLANNED PUBLIC INVESTMENT, WITH THE MAJORITY OF PROJECTS
    IN THE INDUSTRIAL SECTOR AND/OR IN THE SOUTHERN
    PROVINCES.  SWEDEN COMMENTED THAT THE PIP DID NOT APPEAR
                           UNCLASSIFIED

    PAGE 04        HANOI  03288  03 OF 05  200900Z
    TO HAVE A CLEAR LINKAGE TO VIETNAM'S POVERTY REDUCTION
    STRATEGY, DID NOT TARGET LESS ADVANTAGED REGIONS OR
    MARGINALIZED PEOPLE AND DID NOT ADDRESS THE ISSUES OF
    HEALTH AND EDUCATION IN ANY SIGNIFICANT WAY. WORLD BANK
    REP NOTED THAT VIETNAM HAD ACTUALLY INCREASED THE SHARE
    OF PUBLIC INVESTMENT TO INDUSTRY FROM 28 PERCENT LAST
    YEAR TO 34 PERCENT THIS YEAR. HE QUESTIONED THIS SHARE,
    NOTING THAT IF THE PUBLIC INDUSTRIAL SECTOR IS IN
    TRANSITION AND THE SOE REFORM PLAN CALLS FOR A MORE
    BUSINESS ORIENTED APPROACH IN THE PUBLIC SECTOR, WHY IS A
    GREATER PERCENTAGE OF FUNDS ALLOCATED THIS YEAR.

    ¶16. THE U.S. DELEGATION, CONSISTING OF HEAD-OF-DELEGATION
    LORI FORMAN, CHARGE D'AFFAIRES ROBERT PORTER, REGIONAL
    MISSION DIRECTOR LISA CHILES, VIETNAM OFFICER-IN-CHARGE
    ANTOINETTE FERRARA, ECON COUNSELOR CLAIRE PIERANGELO, AND
    USAID/HANOI COUNTRY MANAGER JEAN GILSON, MADE THREE
    POINTED INTERVENTIONS.  THE FIRST ONE CONGRATULATED THE
    GVN ON ITS RATIFICATION OF THE BTA AND ITS WILLINGNESS TO
    UNDERTAKE THE TOUGH REFORMS REQUIRED UNDER IT AS WELL AS
    ITS SOE AND SOCB REFORM PROGRAMS.  MS. FORMAN REMINDED
    THE GOVERNMENT THAT ITS ABILITY TO ACHIEVE LONG-TERM
    PROSPERITY WILL DEPEND GREATLY ON WHETHER IT HARNESSES
    THE ENERGIES OF ALL OF ITS CITIZENS REGARDLESS OF GENDER,
    RELIGION, OR ETHNICITY, AND MANAGES TO CHANGE THE
    ATTITUDES OF LOCAL AND OTHER OFFICIALS WHO ARE CHARGED
    WITH IMPLEMENTATION OF THE REFORMS.  THE DANISH
    DELEGATION ASSOCIATED ITSELF WITH MS. FORMAN'S REMARK
    REGARDING "ATTITUDE."  THE USG'S WRITTEN STATEMENT WAS
    SUBMITTED FOR THE RECORD.

    ¶17.  THE SECOND INTERVENTION MS. FORMAN MADE CONCERNED
    THE NEED TO ENSURE THAT THE DISADVANTAGED DO NOT GET LEFT
    BEHIND IN THE PROCESS OF ECONOMIC LIBERALIZATION AND
    ACCLELERATING GROWTH.  SHE HIGHLIGHTED THE PLIGHT OF
    HIV/AIDS VICTIMS AND THE NEED FOR DE-STIGMATIZATION OF
    THEIR DISEASE AND INCREASED COORDINATION BETWEEN
    GOVERNMENT AND DONORS IN ORDER TO HALT THE SPREAD OF
    HIV/AIDS IN VIETNAM.  MS. FORMAN NOTED THAT THE USG IS
    SUBSTANTIALLY INCREASING ITS FINANCIAL SUPPORT TO THE
    FIGHT AGAINST HIV/AIDS IN VIETNAM, AND OFFERED TO WORK
    WITH THE GVN IN A NATIONAL COORDINATION EFFORT.

    ¶18. IN HER THIRD INTERVENTION, MADE DURING A DISCUSSION
    ON THE GOVERNMENT'S PUBLIC INVESTMENT PLAN, MS. FORMAN
                           UNCLASSIFIED

    PAGE 03        HANOI  03288  04 OF 05  200900Z
    SPOKE BRIEFLY ON THE IMPORTANCE OF ASSURING THAT THE GVN
    STRICTLY ADHERES TO ITS STATED INTENT TO ELIMINATE
    DISCRIMINATION BETWEEN THE PUBLIC AND PRIVATE SECTORS IN
    THE PROVISION OF STATE INVESTMENT CREDITS.  SHE ALSO
    ASKED ABOUT THE GOVERNMENT'S PLANS TO MOBILIZE
    DEVELOPMENT RESOURCES THROUGH LOCAL, NON-GOVERNMENTAL
    ORGANIZATIONS, COMMUNITY ASSOCIATIONS, AND THE LIKE.  THE
    UK AND FINLAND DELEGATIONS ASSOCIATED THEMSELVES WITH
    THESE COMMENTS.

    ¶19.  IN THE FINAL SESSION, DONORS WERE INFORMED OF
    VIETNAM'S EXTERNAL FINANCING NEEDS.  DONORS COLLECTIVELY
    ANTED UP WITH $2.4 BILLION IN ASSISTANCE, A SUM EQUALLING
    LAST YEAR'S PLEDGE LEVELS.  JAPAN SURPRISED THE CG BY
    ANNOUNCING THAT ALTHOUGH TOTAL JAPANESE ODA WOULD
    DECREASE BY 10 PERCENT IN NOMINAL TERMS NEXT YEAR, JAPAN
    WOULD INCREASE ITS PROGRAM FOR VIETNAM BY 8 PERCENT IN
    NOMINAL TERMS TO 96.5 BILLION YEN. MPI MINISTER GIA NOTED
    THAT ABOUT 85 PERCENT OF ODA TO VIETNAM WAS IN THE FORM
    OF CONCESSIONAL LOANS AND 15 PERCENT WAS IN THE FORM OF
    GRANTS.

    ¶20.  MS. FORMAN INDICATED THE USG'S INTENTION TO PROVIDE
    $32.8 MILLION IN ASSISTANCE TO VIETNAM, SUBJECT TO
    CONGRESSIONAL APPROVAL AND AVAILABILITY OF FUNDS.  THE
    ASSISTANCE WILL COMPRISE TECHNICAL SUPPORT AND
    HUMANITARIAN ASSISTANCE PROVIDED THROUGH USAID AND THE
    U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES; TECHNICAL
    ASSISTANCE AND TRAINING THROUGH THE U.S. DEPARTMENT OF
    LABOR, AS WELL AS EDUCATIONAL PROGRAMS THROUGH THE
    DEPARTMENT OF STATE, FOOD ASSISTANCE THROUGH THE U.S.
                           UNCLASSIFIED

    PAGE 04        HANOI  03288  04 OF 05  200900Z
    DEPARTMENT OF AGRICULTURE, AND THE PROVISION OF TECHNICAL
    EXPERTISE BY OTHER U.S. GOVERNMENT AGENCIES.  MS. FORMAN
    BEGAN HER REMARKS BY UNDERSCORING THE SIGNIFICANCE OF THE
    RECENT RATIFICATION OF THE BTA IN SOLIDIFYING A NEW AND
    GROWING RELATIONSHIP WITH VIETNAM, AND THE USG'S PLEASURE
    IN HOSTING THE LARGE PUBLIC AND PRIVATE SECTOR DELEGATION
    FROM VIETNAM THAT WOULD BE IN WASHINGTON D.C. THE
    FOLLOWING WEEK.

    21.IN SUM, THIS YEAR'S VIETNAM CG WAS A REFLECTION OF THE
    INCREASING UNANIMITY AND GOOD WILL AMONG DONORS TOWARDS
    VIETNAM AS A RESULT OF THE GOVERNMENT'S WILLINGNESS TO
    UNDERTAKE A NUMBER OF CRITICAL REFORMS.  WHILE PROGRESS
    ON SOME OF THESE IS UNEVEN, DONORS SEEMED INCLINED TO
    GIVE VIETNAM CREDIT FOR GOOD INTENTIONS AND SOME
    SIGNIFICANT STEPS FORWARD.  THE GOVERNMENT RESPONDED
    GRACIOUSLY, WITH ACCEPTANCE OF MANY OF THE CRITICISMS AND
    ANNOUNCEMENTS OF ITS INTENTION TO REDOUBLE ITS EFFORTS AT
    REFORM.

    ¶22. FOR ITS PART, THE USG DELEGATION WAS WARMLY WELCOMED.
    AA/ANE FORMAN'S PRESENCE CONFIRMED A STRENGTHENING OF
    RELATIONS BETWEEN THE US MISSION (AND ESPECIALLY USAID)
    AND THE GOVERNMENT OF VIETNAM.  IT SHOULD ALSO BE NOTED
    THAT A USG SUGGESTION MADE AT LAST YEAR'S CG - TO PROVIDE
    COPIES OF THE PREVIOUS YEAR'S CHAIRMAN'S CLOSING
    STATEMENT IN ORDER TO HIGHLIGHT PROGRESS MADE OR LACKING
    ON KEY ISSUES - WAS ADOPTED FOR THIS CG, AND THE WORLD
    BANK CO-CHAIRMAN REFERRED TO IT ON SEVERAL OCCASIONS
    DURING THE SESSIONS.
    BURGHARDT

                           UNCLASSIFIED

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