CG'S INITIAL MEETING WITH HCMC PLANNING AND INVESTMENT DEPARTMENT

UNCLAS SECTION 01 OF 02 HO CHI MINH CITY 001314

SIPDIS

DEPARTMENT FOR EAP/BCLTV (LANGLAND/THORIN)

E.O. 12958: N/A
TAGS: ECON ETRD PREL PGOV VM
SUBJECT: CG'S INITIAL MEETING WITH HCMC PLANNING AND INVESTMENT DEPARTMENT



1. SUMMARY: CG YAMAUCHI, ACCOMPANIED BY DPO AND POLOFF, PAID A
NOVEMBER 20 COURTESY CALL ON MR. TIN HUU NGUYEN, ACTING DIRECTOR
OF THE HCMC DEPARTMENT OF PLANNING AND INVESTMENT (DPI). TIN
STATED THAT THE BILATERAL TRADE AGREEMENT (BTA) WOULD INCREASE
ECONOMIC GROWTH IN HCMC. TIN VOWED DPI WOULD STRIVE TO ENSURE
VIETNAMESE BUSINESSES CAN SUCCESSFULLY COMPETE IN U.S. MARKETS.
HE IS EQUALLY COMMITTED TO MAKING SURE AMERICAN INVESTORS AND
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BUSINESSES IN VIETNAM FACE LESS BUREAUCRACY AND MORE OPENNESS.
END SUMMARY.


2. AFTER WELCOMING CG TO VIETNAM, TIN PROVIDED A BRIEF OVERVIEW OF
BUSINESS ACTIVITY IN HCMC. CITING HMCO'S PROMISING DOUBLE-DIGIT
ECONOMIC GROWTH RATE IN THE EARLY 1990S, TIN ADMITTED THAT THE
REGIONAL ECONOMIC CRISIS HAD TAKEN ITS TOLL -- THE CITY'S ECONOMIC
GROWTH RATE IS NOW BELOW 10%. TIN, HOWEVER, PAINTED AN OPTIMISTIC
PICTURE OF ECONOMIC GROWTH IN THE CITY: HCMC HAS INVESTORS FROM 42
NATIONS; U.S. INVESTORS ARE AMONG THE TOP FOREIGN INVESTORS; AND
FOREIGN DIRECT INVESTMENT (FDI) CONTINUES TO CONTRIBUTE
SIGNIFICANTLY TO ECONOMIC GROWTH. TIN ADDED THAT DPI WILL
CONTINUE TO PROMOTE POLICIES TO ENSURE AN EVEN ECONOMIC PLAYING
FIELD EXISTS BETWEEN STATE-OWNED ENTERPRISES (SOWS),THE PRIVATE
SECTOR, AND FOREIGN-INVESTED ENTERPRISES, BUT DID NOT ELABORATE
UPON THE MECHANISMS DPI WOULD EMPLOY.


3. TIN WELCOMED RATIFICATION OF THE BTA. AS BUSINESS COOPERATION
PROGRESSED, HE SAID, BOTH THE U.S. AND VIETNAM WOULD BENEFIT.
CITING THE RESPONSIBILITY OF GOVERNMENT TO CREATE FAVORABLE
CONDITIONS, TIN STATED THAT DPI WAS CONCERNED WITH HOW BEST TO
HELP VIETNAMESE BUSINESSES PENETRATE THE AMERICAN MARKET,
SPECIFICALLY CITING A NEED FOR VIETNAMESE BUSINESSES TO BETTER
UNDERSTAND U.S. BUSINESS LAWS.


4. PURSUING TIN'S STATEMENT THAT VIETNAMESE BUSINESSES REQUIRED
MORE EDUCATION, THE CG INQUIRED WHETHER VIETNAMESE GOVERNMENTAL
AGENCIES AND BUSINESSES POSSESSED SUFFICIENT ACCESS TO THE
SUBSTANTIVE DETAILS OF THE BTA. TIN RESPONDED THAT DPI IS NOT
RESPONSIBLE FOR EDUCATING THE BUSINESS COMMUNITY ABOUT THE BTA'S
DETAILS--THAT RESPONSIBILITY RESTS WITH THE DEPARTMENT OF TRADE
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AND INVESTMENT AND THE NEWLY-RENAMED INVESTMENT AND TRADE
PROMOTION CENTER (ITPC). WHEN CG ASKED WHETHER POST COULD PROVIDE
INFORMATION TO HELP DPI ASSIST BOTH U.S. AND VIETNAMESE
BUSINESSES, TIN STATED THAT HE LOOKED FORWARD TO A COOPERATIVE
RELATIONSHIP AND STATED THAT DPI WAS WORKING ON A LIST OF PROJECTS
THAT WOULD EDUCATE VIETNAMESE BUSINESSES AND ENCOURAGE FOREIGN
INVESTORS. HE LOOKED FORWARD TO CG'S COOPERATION IN THE FUTURE
AND SAID HE WOULD PROVIDE MORE SPECIFIC PROPOSALS ON AREAS FOR
COOPERATION AT A LATER DATE.


5. SHIFTING GEARS, CG ASKED HOW IMPLEMENTATION OF DIRECTIVE 28 --
A RECENTLY PASSED ADMINISTRATIVE REFORM -- WAS PROGRESSING. TIN
STATED THAT ALL VIETNAMESE AGENCIES WELCOMED DIRECTIVE 28, BECAUSE
IT AIMS TO REDUCE THE BUREAUCRACY FACED BY FOREIGN INVESTORS.
ACCORDING TO TIN, THE DIRECTIVE REQUIRES DPI TO PROVIDE FOREIGN
INVESTORS WITH INFORMATION ABOUT LAND AVAILABLE FOR RENT IN HCMC,
AND TO REDUCE THE AMOUNT OF TIME IT TAKES FOR FOREIGNERS TO
RECEIVE PERMITS TO SET UP BUSINESSES. WHEN QUESTIONED, TIN
ACKNOWLEDGED THE DPI WOULD NOT RECEIVE ADDITIONAL STAFF/RESOURCES
TO ACCOMPLISH ITS NEW ACCELERATED ROLE AS A SERVICE PROVIDER. HE
SAID DPI - AND OTHER CITY DEPARTMENTS -- WOULD INSTEAD RESTRUCTURE
THEMSELVES AND OFFER A WEBSITE TO HELP DISSEMINATE INFORMATION.
TIN PROMISED THAT DPI WOULD CONTINUE TO CREATE MORE OPEN
CONDITIONS IN HCMC TO ATTRACT AMERICAN INVESTMENT.


6. ASKED IF DIRECTIVE 28 WOULD REQUIRE DPI TO WORK MORE CLOSELY
WITH OTHER GOVERNMENTAL AGENCIES, TIN RESPONDED THAT THE HCMC
PEOPLE'S COMMITTEE REQUIRED ALL AGENCIES, IN LIGHT OF DIP'S NEW
MISSION, TO RESTRUCTURE THEMSELVES AND COOPERATE WITH DPI. TIN
STATED THAT REPRESENTATIVES FROM DIFFERENT GOVERNMENTAL AGENCIES
MEET WEEKLY TO DISCUSS POTENTIAL PROBLEMS, AND THAT ANY CONFLICTS
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THAT CANNOT BE RESOLVED ARE THEN REFERRED TO THE HCMC PEOPLE'S
COMMITTEE FOR RESOLUTION. TIN DECLINED TO CITE ANY SPECIFIC
DISAGREEMENTS AMONG GOVERNMENTAL AGENCIES, BUT SUGGESTED THEY
RELATED TO HOW TO MAKE DECISIONS ABOUT SPECIFIC PROJECTS. HE
ADDED THAT THERE WERE ALWAYS SUCH CONFLICTS, BUT THEIR NUMBER AND
SERIOUSNESS HAD DECLINED SINCE GENERAL AGREEMENT HAD BEEN REACHED
ON THE NEED TO CREATE BETTER CONDITIONS FOR FOREIGN BUSINESS.
DPI'S CLEARER COORDINATING ROLE HAS ALSO HELPED.


7. TIN CLOSED THE 45-MINUTE MEETING BY HANDING OUT DPI'S SLICK NEW
ENGLISH-LANGUAGE BROCHURE -- COMPLETE WITH A CD ENTITLED "A CITY
OF OPPORTUNITY & PROSPERITY: TEN REASONS WHY HO CHI MINH CITY
SHOULD BE YOUR INVESTMENT DESTINATION."


8. NOTE ON DPI: TIN WAS JUST NAMED ACTING DIRECTOR OF DPI AT THE
BEGINNING OF OCTOBER, HAVING SERVED AS THE DEPUTY DIRECTOR. DPI
TRADITIONALLY IS A VERY POWERFUL BODY. FOR EXAMPLE, IN DECEMBER
1999, NEW PEOPLE'S COMMITTEE OFFICERS WERE SELECTED IN ALL OF
VIETNAM'S PROVINCES. OF THE NEWLY-SELECTED PROVINCIAL PEOPLE'S
COMMITTEE CHAIRMEN, MORE HAD SERVED AS DIRECTOR OF THEIR
RESPECTIVE DPIS JUST PRIOR TO THEIR PROMOTION THAN ANY OTHER
DEPARTMENT OR AGENCY. END NOTE.



9. COMMENT: THIS MEETING WAS ONE OF SEVERAL POST HAS HAD RECENTLY
TO ASSESS THE LIKELY IMPACT OF DIRECTIVE 28. THE "STREAMLINED"
PROCEDURES ARE A POSITIVE STEP, BUT TIN'S COMMENTS SUGGEST DPI IS
STILL FEELING ITS WAY. PERHAPS CAUTIOUS BECAUSE OF HIS VERY
RECENT APPOINTMENT, TIN SEEMED MORE RIGID, STRAIGHT BY-THE-BOOK,
"NOT IN MY JOB DESCRIPTION" THAN OTHER HCMC OFFICIALS WE HAVE MET.
DESPITE A SLICK OPENING PRESENTATION, WE EXPECT CONTINUED
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INCREMENTAL PROGRESS -- RATHER THAN A VAST SEA CHANGE -- IN THE
CLIMATE FOR DOING BUSINESS IN HCMC. YAMAUCHI

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