KON TUM: STILL STRUGGLING..... AND GOING NOWHERE FAST

UNCLAS SECTION 01 OF 03 HO CHI MINH CITY 000450

SIPDIS

SENSITIVE

DEPARTMENT FOR EAP/BCLTV, DRL


E. O. 12958: N/A
TAGS: PGOV ECON PHUM PREL SOCI ETRD EINV VM HUMANR ETMIN RELFREE LABOR
SUBJECT: KON TUM: STILL STRUGGLING..... AND GOING NOWHERE FAST


Summary
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1. (SBU) Returning to Kon Tum for the first time in a year, the
Consul General found little changed in the poorest and least
developed of the four Central Highlands provinces. While poverty
continues to be the biggest story in Kon Tum, local officials
seemed hopeful that construction of new highways linking the
province to the outside world would somehow bring an economic
windfall. In ConGenoffs' first meeting with the provincial
Committee on Religious Affairs, the deputy director did not seem
to realize that Protestantism is now a recognized religion in the
rest of Vietnam -- and has been for the last two years. The
ConGen group was not allowed to visit the 15 villagers who had
returned from Cambodia under UNHCR auspices in February 2002.

No Longer the Second Poorest Province - We've Moved up to Twelfth
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2. (SBU) According to People's Committee First Vice Chairman
Huynh Hao, Kon Tum had gone from being the second poorest province
in the country to twelfth poorest. Per capita income is just over
USD$200 for the province's 350,000 inhabitants. Mr. Hao was
realistic in describing current 12-15 percent growth rates,
acknowledging the fact that they were starting from such a low
level. Agriculture accounts for 44 percent of the provincial
economy, down from 70 percent in 1991, but coffee and rubber
production is still on the rise. While the ongoing drought
plaguing the Central Highlands had affected the coffee crop, Kon
Tum is faring better than its neighbors. The service and
industrial sectors account for 37 and 19 percent of the provincial
economy, respectively.


3. (SBU) Director Tran Binh Trong of the Department of Labor,
Invalids and Social Affairs (DOLISA) described several programs
aimed at reducing poverty in the province. Some programs, such as
providing technical advisers to the communes, tried to improve
agricultural methods and encourage cultivation of viable
alternatives to rice, such as "industrial" trees (coffee, pepper,
rubber). Other programs, such as DOLISA-subsidized loans at 0.15
percent interest rates, were intended to spur investment in small
businesses (especially for ethnic minority graduates of certain
training programs). While Kon Tum's 3.2 percent jobless rate is
lower than the national average, the real problem is
underemployment due to lack of skills. Plans are underway to
establish a labor export program once the SARS scare has passed.
Mr. Trong blamed higher fertility rates among ethnic minorities
for their (relatively)greater poverty.


4. (SBU) Despite improvements, most Kon Tum residents remain
poor. The 1-2 month seasonal famine between crop harvests has
become less severe, affecting 22 percent of the population,
mostly ethnic minorities in remote areas. Fifty-nine of 82
villages and communes are linked to reliable power from the
province's own hydropower plant and the national grid. Whereas
only 30 percent of children in Kon Tum were enrolled in school 10
years ago, the province has now met GVN standards for universal
primary school education and basic literacy. Unfortunately, weak
educational infrastructure meant they can only provide secondary
education to 65 villages and communes. There is now at least one
dispensary per village to provide routine health care, but most
lack their own doctors. Still, this expanded access -- including
free care to the indigent and payments equivalent to 35 cents per
day for custodial family members -- has translated into fewer
problems with goiter, malaria, and dysentery. First Vice Chairman
Hao said the province had received adequate guidance to deal with
SARS.

Where the Road to Nowhere Meets the Ho Chi Minh Trail
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5. (SBU) According to Department of Planning and Investment
(DPI) Director Le Quang Chuong, Kon Tum's economic development
prospects are closely linked to two highways currently under
construction: the north-south Ho Chi Minh Highway (following
roughly the path of the old wartime Ho Chi Minh Trail) and the
East-West Highway (linking some of the poorest parts of Vietnam,
Laos, Thailand, and Burma.) Acknowledging the obvious attractions
of the richer provinces to the south, he saw the new highways as
Kon Tum's chance for gaining a competitive edge. However,
additional ODA funding is still needed for both roads. Kon Tum is
upgrading its own 1400 kilometers of road to improve
transportation over some very rough terrain. First Vice Chairman
Hao was enthusiastic about opening an international frontier
crossing into Laos and Cambodia, hoping for an annual turnover of
USD$1.3 million through trade. He was also excited about the
possibility of using Ubon Rachathani in northeastern Thailand as a
conduit for increased trade. According to Mr. Hao, a conference
is planned in Thailand to discuss trade and tourism.


6. (SBU) While DPI Director Chuong deferred to the central
government's overall economic strategy, he said Kon Tum was
working directly with neighboring provinces to evaluate
opportunities. Streamlined investment procedures and planned
industrial zones are expected to attract foreign and domestic
investment, but there is a crying need for vocational training for
the future work force. Mr. Chuong seemed genuinely interested in
hosting HCMC American Chamber of Commerce visits to the province
and meeting with the American business community in HCMC. He
acknowledged that most investors "see only problems when they
think about Kon Tum. We have to market ourselves more as 'virgin
territory' to make ourselves attractive." There are no industrial
parks in the province, and the Bilateral Trade Agreement has had
no impact. One setback this year is that the once promising
USD$350 million Dak Tho paper pulp processing plant is currently
on hold for an environmental impact study. The original
projections for processing 130,000 tons of pulp the first year,
and 260,000 the second, had not taken into account the effect on
limited forest resources, nor an increased interest in ecotourism
as a promising route for growth. Straying from his brief at the
end of the meeting, DPI Director Chuong admitted that "ethnic
tensions have had a negative effect", but the differences in the
standards of living between ethnic minorities and ethnic
Vietnamese Kinh are longstanding.

"Kon Tum is not perfect (but others are worse)."
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7. (SBU) First Vice Chairman Hao downplayed the ethnic minority
"problem" in Kon Tum, saying that Vietnam cared about its ethnic
minorities but needed time to recover from the effects of war.
Reading from notes, he asked the CG to convey to the U.S. Congress
his unhappiness over the reintroduction of the Vietnam Human
Rights Act. He spoke matter-of-factly about how close cooperation
with individual border provinces in Laos and Cambodia will prevent
"bad people" from luring Kon Tum's ethnic minorities across the
border and will help "break up any rebellious plots." A border
agreement signed between Kon Tum and Ratanakiri provides for the
return of illegal immigrants. Mr. Hao described the ethnic
minorities who fled the unrest/crackdown in 2001 --and
subsequently returned under UNHCR auspices -- as economic
migrants. He said Kon Tum was working on programs to distribute
land for coffee and rubber production, and provide industrial jobs
to those in need. He noted that his province had "greater
political stability" than Dak Lak or Gia Lai provinces. Mr. Hao
acknowledged that Kon Tum "is not perfect, but other provinces are
worse. I have travelled to the North and I have seen them."


8. (SBU) According to Kon Tum authorities, ethnic minorities had
also benefited from the GVN's Decision 168, which raised living
standards in the Central Highlands by providing clothing, iodized
salt, medical care, and electricity subsidies. Provincial
government efforts to encourage the ethnic minorities to resettle
near transportation links had left only 12 percent still living in
remote areas. Kon Tum's goal is land for everyone by 2004 and
improved housing by 2005. Facing a shortage of trained ethnic
minority teachers, the province relies on a corps of ethnic
Vietnamese Kinh trained in local languages. The ethnic minority
boarding school, presumably the source of future teachers, was
described as still relatively undeveloped. Schools and school
materials are free for ethnic minorities (and the poorest of the
poor). Ethnic minority students take the national university
entrance exam for free and compete on a separate point scale.
According to First Vice Chairman Hao, 70-80 percent of Kon Tum's
USD$32.5 million budget is devoted to 24 different programs aimed
at improving the living standards of the ethnic minorities.


9. (SBU) First Vice Chairman Hao turned down the CG's request to
visit 15 villagers (the original February 2002 UNHCR returnees)
with whom Ambassador Burghardt and/or ConGenoffs had met on two
previous occasions. He said that "so many groups have been
publicizing and reporting on the villagers that various
misinterpretations have arisen. This has upset the villagers'
lives and the People's Committee as well. Also, since it is
planting season, the returnees would lose work hours if they are
called in from the fields to meet with outsiders." Mr. Hao
assured ConGenoffs that Ia Sia village was stable, and the
returnees had been well cared for. They now realized they had
been "lured" to Cambodia and promised never to flee again. At a
later dinner, provincial External Relations Office escorts
explicitly stated that other villagers were jealous of all the
attention the returnees were getting.

Protestant Catch-22
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10. (SBU) Despite frequent references to Vietnam's
constitutional provisions on freedom of religion, Deputy Director
Pham Van Long of the Committee on Ethnic Minority and Religious
Affairs was clearly not up to speed. Pointing to the number of
Catholic churches and Buddhist pagodas as proof that religion was
thriving in Kon Tum, he put on the brakes when it came to
Protestants. Mr. Long was unfamiliar with the Southern
Evangelical Church of Vietnam (SECV),the umbrella organization
for registered Protestant churches which was legally established
two years ago. He persisted in calling Protestantism "illegal"
and none of the three other Committee members disputed this.


11. (SBU) Describing the "different characteristics" of Kon Tum,
Mr. Long noted that Protestant believers are free to worship in
their homes. They are not, however, allowed to gather in worship
until they registered as legal churches -- which they are only
allowed to do if they can prove that they regularly gather
together to worship. Believers are also required to show that
they have a physical church and a legal pastor -- despite the fact
that they could not legally have either until they were
registered. Mr. Long then pointed out the government's conversion
of most pre-1975 Protestant churches to other uses, such as health
clinics. While he claimed to have staff available to respond to
requests for registration, it is difficult to see how any
congregation can meet these Catch-22 requirements. Deputy
Director Long seemed to have missed completely the GVN's
recognition of the SECV and the subsequent implementation of a
system for registering Protestant "associations" and "sub-
associations." (Post Note: In contrast, both Gia Lai and Dak Lak
provinces have been visited by SECV representatives and their
respective Committees on Ethnic Minority and Religious Affairs
have started processing Protestant registration requests.)

No Social Evils, But Plenty of Dioxin
--------------

12. (SBU) DOLISA Director Tran Binh Trong noted that Kon Tum had
fewer problems than other provinces with prostitution, drugs, and
HIV/AIDS. With such small numbers of prostitutes (50-60) and drug
users (21),it was more economical to send them to a
rehabilitation center in neighboring Gia Lai province, than build
one in Kon Tum. Most current HIV/AIDS cases are attributed to
migrants from the north. Regarding trafficking in persons, Mr.
Trong nodded and said preventive measures are being considered to
coincide with the opening of the international frontier pass and
the two highways.


13. (SBU) At the meeting's end, Director Trong made an almost
apologetic plea for assistance with the nearly 2400 children
believed to have been affected by chemical agents during the war.
Saying he "didn't care about the politics, he just wanted to help
the children," he lamented the central government's lack of funds
to assist Kon Tum in caring for its disabled. He seemed sincerely
embarrassed to be asking a foreign government for support.
(Post Note: Two NGOs, including U.S.-based Vietnam Assistance for
the Handicapped - VNAH, carry out a few scattered programs
centered mostly on education and the disabled.)


14. (SBU) Comment: After a year's hiatus, it was a new set of
interlocutors in Kon Tum. Vice Chairman Ha Ban, whose portfolio
includes socio-cultural and educational affairs, and with whom
ConGenoffs have met on three previous occasions, was on official
business in Hanoi. First Vice Chairman Hao, while more senior,
was not quite in command of his brief. Still, his matter-of-fact
acknowledgement that local Lao, Cambodian, and Vietnamese
authorities were cooperating to prevent "illegal" immigrants from
crossing the border and to "break up rebellious plots" was new to
us. Likewise, Kon Tum's apparent decision to cast its economic
lot not with the burgeoning economies of Ho Chi Minh City and
Hanoi, but with other poor provinces in Laos, Burma and Cambodia -
- where they might be the first among equals. The Committee on
Ethnic Minority and Religious Affairs' ignorance of or deliberate
denial of the SECV's existence was troubling. While on previous
trips, ConGenoffs had found Vice Chairman Ban willing to engage on
sensitive issues, on this trip the only bright lights were DPI's
Director Chuong and DOLISA's Director Trong.
YAMAUCHI