Identifier
Created
Classification
Origin
01HANOI2151
2001-08-31 07:29:00
CONFIDENTIAL
Embassy Hanoi
Cable title:  

STAFFDEL HEARS VOICES OF REFORM FROM WITHIN

Tags:  PGOV ECON PHUM VM SOE FINREF DPOL 
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310729Z Aug 01


 2001HANOI02151 - CONFIDENTIAL
 
 
 
 CONFIDENTIAL PTQ8839

PAGE 01 HANOI 02151 01 OF 03 310844Z 
ACTION H-01 

INFO LOG-00 NP-00 DS-00 EAP-00 TEDE-00 SS-00 DSCC-00 
 DRL-02 SAS-00 /003W
 ------------------193EA3 310844Z /38 
FM AMEMBASSY HANOI
TO SECSTATE WASHDC 3828
INFO AMEMBASSY BEIJING 
AMCONSUL HONG KONG 
AMEMBASSY CANBERRA 
AMEMBASSY TOKYO 
ASEAN COLLECTIVE
NSC WASHDC
SECDEF WASHDC
USCINCPAC HONOLULU HI
DIA WASHDC
C O N F I D E N T I A L SECTION 01 OF 03 HANOI 002151 

SIPDIS

STATE FOR EAP/BCLTV
STATE ALSO FOR DRL
SECDEF FOR ISA/LSTERN

E.O. 12958: DECL: 08/29/11
TAGS: PGOV ECON PHUM VM SOE FINREF DPOL
SUBJECT: STAFFDEL HEARS VOICES OF REFORM FROM WITHIN


C O N F I D E N T I A L SECTION 01 OF 03 HANOI 002151

SIPDIS

STATE FOR EAP/BCLTV
STATE ALSO FOR DRL
SECDEF FOR ISA/LSTERN

E.O. 12958: DECL: 08/29/11
TAGS: PGOV ECON PHUM VM SOE FINREF DPOL
SUBJECT: STAFFDEL HEARS VOICES OF REFORM FROM WITHIN



1. (U) CLASSIFIED BY CHARGE D'AFFAIRES ROBERT PORTER.
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PAGE 02 HANOI 02151 01 OF 03 310844Z
REASON: 1.5 (B) AND (D).


2. (C) SUMMARY: STAFFDEL REES AND GUNDERSON MET SEPARATELY
ON AUGUST 10 AND AUGUST 14 WITH TWO MEMBERS OF THE
PRESIDIUM OF THE FATHERLAND FRONT - PHAN DINH DIEU IN HANOI
AND NGUYEN XUAN OANH IN HCMC. ALTHOUGH NEITHER BELONGS TO THE
COMMUNIST PARTY, BOTH HAVE ACTIVELY PARTICIPATED IN PARTY
AND GOVERNMENT AFFAIRS DURING THEIR CAREERS AND REPORTEDLY
CONTINUE TO BE INFLUENTIAL. BOTH ARE STRONG ADVOCATES OF
REFORM, ECONOMIC AS WELL AS POLITICAL. END SUMMARY.

MEETING WITH PHAN DINH DIEU
--------------


3. (C) JOSEPH REES (COUNSEL TO THE HOUSE COMMITTEE ON
INTERNATIONAL RELATIONS) AND BRIAN GUNDERSON (CHIEF OF
STAFF TO HOUSE MAJORITY LEADER),ALONG WITH CONGENOFF, MET
WITH PROF. PHAN DINH DIEU ON AUGUST 10 AT HIS HOME IN
HANOI. DIEU WAS A NATIONAL ASSEMBLY DELEGATE IN THE
1970'S. CURRENTLY HE IS DEPUTY CHAIRMAN OF THE STEERING
COMMITTEE OF THE NATIONAL PROGRAM ON INFORMATION TECHNOLOGY
AND, ALTHOUGH NOT A MEMBER OF THE COMMUNIST PARTY, IS A
MEMBER OF THE CENTRAL PRESIDIUM OF THE PARTY'S NATIONAL
FATHERLAND FRONT.


4. (C) SPEAKING MOSTLY IN ENGLISH, BUT OCCASIONALLY RELYING
ON AN INTERPRETER, SIXTY-FOUR-YEAR-OLD DIEU DESCRIBED
HIMSELF TO THE STAFFDEL AS A MATHEMATICS AND COMPUTER
SCIENCE RESEARCHER. HE TOLD THEM THAT HE WAS A NATIONAL
ASSEMBLY DELEGATE IN THE 1970'S BOTH BEFORE AND AFTER
REUNIFICATION. HE DESCRIBED THE FATHERLAND FRONT AS AN
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PAGE 03 HANOI 02151 01 OF 03 310844Z
UMBRELLA ORGANIZATION FOR VARIOUS ORGANIZATIONS AND
SOCIETIES, BUT NOTED THAT HE PARTICIPATED IN THE FRONT AS
AN INDIVIDUAL AND AS A SCIENTIST. "I AM NOT A POLITICIAN,"
HE CLAIMED, "I AM A CITIZEN AND A PATRIOT."


5. (C) DIEU SAID HE STUDIED IN THE SOVIET UNION IN THE
1960'S. HE SAID THAT ALTHOUGH HE BELIEVED IN THE SOCIAL
AND HUMANITARIAN GOALS OF COMMUNISM, HIS YEARS IN THE
SOVIET UNION TAUGHT HIM THAT THOSE GOALS COULD NOT BE
REACHED THROUGH THE POLITICAL AND ECONOMIC MECHANISMS HE

SAW THERE. HE SAID THAT VIETNAM'S COMMUNIST PARTY HAD MADE
GREAT CONTRIBUTIONS TO THE COUNTRY, BUT THAT HE FELT THE
COMMUNIST ORGANIZATION OF SOCIETY THAT WAS EFFECTIVE IN
WARTIME COULD NOT BE EFFECTIVE FOR DEVELOPMENT IN
PEACETIME. "I SAID THAT OPENLY IN THE NATIONAL ASSEMBLY IN
THE LATE 1970'S, AND I STILL SAY SO TODAY QUITE OPENLY AND
PUBLICLY," HE DECLARED.


6. (C) IN 1980, HE SAID, PRIME MINISTER PHAM VAN DONG
REQUESTED HIM TO PREPARE A PAPER CLARIFYING HIS IDEAS AND
SUGGESTIONS. HE SAID HE CRAFTED A LONG STATEMENT ON
ECONOMIC DEVELOPMENT BASED ON SCIENTIFIC METHODS, MARKET
MECHANISMS, AND A LOOSENING OF CENTRAL PLANNING AND
CONTROL. HE SAID HE PARTICULARLY CRITICIZED THE IDEA OF
VIETNAM'S MILITARY BEING IN CHARGE OF MANAGING PEACETIME
BUSINESS ENTERPRISES. IN 1980, DIEU SAID, THE LEADERS WERE
NOT PREPARED TO ACCEPT THESE IDEAS, BUT BY 1986, THEY
RECOGNIZED THE NEED FOR CHANGE. HE SAID HE ENCOURAGED THEM
TO ACCEPT THE IDEA OF GRADUAL REFORMS, BEGINNING WITH THE
INTRODUCTION OF LIMITED MARKET MECHANISMS IN THE ECONOMY.

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PAGE 04 HANOI 02151 01 OF 03 310844Z

7. (C) HE SAID HE WAS WITH PARTY SECRETARY GENERAL DO MUOI
IN 1989 DURING THE EVENING THE COUP TOOK PLACE IN THE
SOVIET UNION. THAT EVENT HAD A PROFOUND EFFECT ON THE
SECRETARY GENERAL, DIEU SAID. AFTERWARDS, DIEU SAID HE

SIPDIS
ADVISED DO MUOI TO ACCEPT CHANGE BECAUSE IT WAS INEVITABLE,
AND FURTHER ADVISED THAT CHANGE COULD OCCUR STEP BY STEP,
RATHER THAN AS A CATACLYSMIC EVENT SUCH AS WHAT OCCURRED IN
THE SOVIET UNION AND OTHER COMMUNIST STATES IN EASTERN
EUROPE.


8. (C) REES INTERJECTED THAT WHAT DIEU SUGGESTED SOUNDED
LIKE "PEACEFUL EVOLUTION." DIEU REPLIED THAT ALTHOUGH THE
PARTY DETESTS THE PHRASE "PEACEFUL EVOLUTION," THAT IN FACT
IS WHAT HAS BEEN OCCURRING FOR THE PAST TEN YEARS.


9. (C) DIEU SAID PARTY LEADERS ARE AFRAID OF THE POTENTIAL
FOR INSTABILITY THAT A CHANGE OF LEADERSHIP WOULD ENTAIL.
HE SAID HE HIMSELF BELIEVES A CHANGE OF LEADERSHIP IS NOT
NECESSARY FOR THE DEVELOPMENT OF THE COUNTRY; INSTEAD, A
CHANGE IN THE WAY OF THINKING WAS ESSENTIAL. VIETNAM HAS
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PAGE 02 HANOI 02151 02 OF 03 310844Z
NEVER HAD A HISTORY OF DEMOCRACY, HE STATED, AND THERE ARE
TIMES IN A COUNTRY'S DEVELOPMENT WHEN A MULTI-PARTY SYSTEM
IS INAPPROPRIATE.


10. (C) DIEU SAID HE BELIEVED VIETNAM WOULD EVENTUALLY
DEVELOP A FREE MARKET ECONOMY AND A DEMOCRATIC SOCIETY. HE
QUICKLY ADDED THAT A COUNTRY MIGHT TAKE MANY DIRECTIONS ON
THE ROAD TO A MULTI-PARTY SYSTEM, HOWEVER. HE SAID HE
WOULD NOT ATTEMPT TO PREDICT WHAT VIETNAM'S NEXT STEPS
WOULD BE, BUT ADDED, "WE ARE ALREADY EMBARKED ON A NON-
REVERSIBLE TREND TOWARD ECONOMIC AND POLITICAL REFORM." HE
SAID THE GREATEST HOPE FOR FURTHER REFORM IN VIETNAM IS THE
FRESH OUTLOOK AND DYNAMISM OF VIETNAM'S YOUTH.

MEETING WITH NGUYEN XUAN OANH
--------------


11. (C) REES, GUNDERSON AND CONGENOFF MET WITH NGUYEN XUAN
OANH AT HIS OFFICE IN HCMC ON AUGUST 14. OANH WAS DEPUTY
PRIME MINISTER FOR ECONOMY AND FINANCE IN SOUTH VIETNAM
FROM 1963-67, AND WAS ACTING PRIME MINISTER FOR A SHORT
TIME IN 1965-66. IN THE LATE 1970'S HE RE-EMERGED AS AN
ADVISOR FOR TO VO VAN KIET. CURRENTLY, HE IS PRESIDENT OF
N.X. OANH ASSOCIATES, A BUSINESS, MANAGEMENT & FINANCE
CONSULTING AGENCY IN HCMC. OANH, WHO IS IN HIS LATE 70'S
OR EARLY 80'S, RECEIVED A BA IN ECONOMICS AT THE KYOTO
IMPERIAL UNIVERSITY IN JAPAN IN 1949 AND A PH.D. FROM
HARVARD UNIVERSITY IN 1954. LIKE PHAN DINH DIEU, OANH IS
NOT A COMMUNIST PARTY MEMBER, BUT IS A MEMBER OF THE
CENTRAL PRESIDIUM OF THE PARTY'S NATIONAL FATHERLAND FRONT.

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PAGE 03 HANOI 02151 02 OF 03 310844Z

12. (C) OANH TOLD THE STAFFDEL THAT AFTER 1975, THE NEW
GOVERNMENT PLACED HIM UNDER HOUSE ARREST FOR NINE MONTHS
UNTIL THEY DECIDED HE WAS A "HARMLESS TECHNOCRAT." HE SAID
HE IMMEDIATELY BEGAN WRITING FOR THE "TIN SANG" ("MORNING
NEWS") NEWSPAPER, AND THAT MANY OF HIS ARTICLES WERE
CONSTRUCTIVE CRITICISMS OF THE BANKING SYSTEM AND OF
GOVERNMENT ECONOMIC POLICIES. HE SAID THAT IN 1978, VO VAN
KIET (THEN COMMUNIST PARTY SECRETARY FOR HO CHI MINH CITY)
SUMMONED HIM TO HIS OFFICE. OANH RECOUNTED THAT KIET
ORDERED HIM TO STOP HIS PUBLIC NEWSPAPER CRITICISMS, BUT
ALSO SAID HE FOUND THE IDEAS IN OANH'S ARTICLES THOUGHT
PROVOKING AND WISHED TO DISCUSS THEM FURTHER. ACCORDING TO
OANH, THUS BEGAN A CONFIDENCE THAT CONTINUED AS OANH
ADVISED KIET ON MONETARY AND FISCAL MATTERS EVEN AFTER KIET
WENT TO HANOI IN 1988, EVENTUALLY BECOMING PRIME MINISTER.


13. (C) OANH SAID THAT DURING THE 1980'S, HE ADVOCATED
PRIVATE OWNERSHIP OF CAPITAL AND OF ENTERPRISES. HE
RECOUNTED THAT PARTY SECRETARY GENERAL DO MUOI ONCE ASKED
HIM, "BUT HOW CAN PRIVATE INDIVIDUALS OWN A BANK?" OANH
SAID THAT CURRENT LEADERS STILL SUFFER FROM THE OLD
COMMUNIST MINDSET, AND THAT IS WHY THE SCOPE OF THE PRIVATE
SECTOR IS STILL LIMITED IN VIETNAM. AS AN EXAMPLE, HE
NOTED THAT THREE YEARS EARLIER, THE GOVERNMENT DISBANDED
THE MINISTRY OF HEAVY INDUSTRY AND REPLACED IT WITH SEVERAL
CORPORATIONS. "BUT THE CAPITAL FOR THESE CORPORATIONS
STILL COMES FROM THE GOVERNMENT," HE SAID, "AND THE
MANAGEMENT IS STILL DIRECTED BY THE GOVERNMENT." HE SAID
VIETNAM SHOULD GIVE UP ALTOGETHER THE NOTION OF STATE-OWNED
ENTERPRISES IF IT WANTS ITS ECONOMY TO WORK.

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PAGE 04 HANOI 02151 02 OF 03 310844Z

14. (C) REES ASKED OANH IF HE THOUGHT ECONOMIC REFORM COULD
PROGRESS WITHOUT POLITICAL REFORM. OANH SAID HE BELIEVED
POLITICAL REFORM HAD ALREADY "COME IN THROUGH THE BACK DOOR
OF ECONOMIC REFORM," ALBEIT AT A VERY SLOW PACE. HE NOTED
THAT SEVERAL NATIONAL ASSEMBLY DELEGATES ARE NON-PARTY
MEMBERS. HE SAID HE KNEW MANY PEOPLE, PARTICULARLY
UNIVERSITY PROFESSORS, WHO WOULD LIKE TO SEE THE
DEVELOPMENT OF A "LOYAL OPPOSITION, AS IN ENGLAND." HE
FURTHER SAID, "WE ALL, INCLUDING NONG DUC MANH AND THE
OTHERS, BELIEVE THERE WILL BE A MULTI-PARTY SYSTEM IN
VIETNAM IN 10-15 YEARS." THEN HE ADDED THAT THE COMMUNIST
PARTY WOULD MANAGE THE TRANSITION SO THE RESULTING MULTI-
PARTY SYSTEM WOULD NOT BE WHAT OUTSIDERS MIGHT EXPECT. IT
WILL BE A POLITICAL SYSTEM UNIQUE TO VIETNAM, HE CONCLUDED.


15. (C) REES NOTED THAT MANY OF THE THINGS OANH SAID
SOUNDED SIMILAR TO THINGS DISSIDENT NGUYEN DAN QUE HAD SAID
IN THE PAST, BUT QUE ENDED UP IN PRISON FOR HIS COMMENTS.
OANH ADMITTED THAT THE BOUNDARY BETWEEN WHAT YOU CAN AND
CANNOT SAY IS VERY FUZZY. OANH SAID HE NEVER ADVOCATED
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PAGE 02 HANOI 02151 03 OF 03 310844Z
OVERTHROWING THE GOVERNMENT, BUT INSTEAD CRITICIZED
POLICIES IN A CONSTRUCTIVE WAY. "IF ONE CRITICIZES, ONE
SHOULD ALSO OFFER PRACTICAL SOLUTIONS. IT IS AS IMPORTANT
HOW YOU SAY THINGS, AS IT IS WHAT YOU SAY," HE EXPLAINED.


16. (U) THE STAFFDEL DID NOT HAVE AN OPPORTUNITY TO CLEAR
THIS MESSAGE BEFORE DEPARTURE.

PORTER

CONFIDENTIAL