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04HANOI2908 2004-10-27 10:26:00 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Hanoi
Cable title:  

VIETNAM: PRIME MINISTER KHAI'S SPEECH TO THE

Tags:   ECON ETRD PGOV VM WTO DPOL 
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					  UNCLAS SECTION 01 OF 02 HANOI 002908 

SIPDIS

SENSITIVE

STATE FOR EAP/BCLTV
STATE PASS USTR FOR EBRYAN
TREASURY FOR IA/Asia Office
USDA FOR FAS/ITP/SHIEKH
USDOC FOR 4431/MAC/AP/OPB/VLC/HPPHO

E.O. 12958: N/A
TAGS: ECON ETRD PGOV VM WTO DPOL
SUBJECT: VIETNAM: PRIME MINISTER KHAI'S SPEECH TO THE
NATIONAL ASSEMBLY



1. (SBU) Summary and Comment: On October 25, the Ambassador
attended Prime Minister Phan Van Khai's address at the
opening of the Sixth Session of the National Assembly's
Eleventh Legislature. The PM's lengthy speech focused
largely on economic issues, outlining socio-economic targets
for the upcoming year and calling for a breakthrough in the
country's economic growth in 2005. PM Khai focused on the
challenges ahead (speeding up growth, fighting corruption,
WTO accession), but failed to mention human rights,
religious freedom or HIV/AIDS. The legislature's session
earlier this year was a lively one, with the body taking a
number of government ministers to task for corruption and
mismanagement. To what extent the National Assembly (NA)
will continue to carve out a meaningful role for itself
during this session will bear watching. End Summary and
Comment.



2. (U) In his introductory remarks, PM Khai noted that 2005
would be the final year of the current five-year socio-
economic development plan. He acknowledged that the four-
year economic results are lower than planned, increasing
pressure on the country to step up the pace in 2005 in order
to meet the goals of the plan. He called for stronger GDP
growth in 2005 as well as improvements in productivity and
competitiveness of domestic enterprises and said that the
GVN's efforts to make progress in these areas have not been
adequate.

Ambitious GDP Target and Goals for 2005


--------------------------





3. (U) PM Khai stated that Vietnam's GDP is expected to grow
7.6 percent this year (0.4 percent below the planned target)
and announced an ambitious target of 8 to 8.5 percent growth
for 2005, well above the rates of the four previous years.
The GVN's other stated goals for 2005 include boosting total
social investment, capping consumer price index (CPI) growth
at no more than ten percent, maintaining the current
population growth rate (1.47 percent according to GVN
statistics) and creating more jobs. (Note: According to
numerous press reports, the goal for total social investment
is VND300 trillion, or US$19 billion, an increase of 17.7-
19.5 percent from 2004. Creating 1.6 million more jobs would
reduce the unemployment rate to 5.5 percent. End Note.)

Achieving the Goals


--------------------------





4. (U) PM Khai identified several actions the GVN must take
to meet its economic goals for 2005. The GVN needs to
improve the investment environment and enhance Vietnam's
competitive edge, issue policies that will facilitate
development in the private business sector and mobilize
investment resources for socio-economic growth. The GVN
must also speed up the equitisation of state-owned
enterprises (SOEs), increasing the number of private
enterprises from 150,000 to 500,000 by 2010. This will make
private enterprise a strong source of economic development
and job creation. The GVN must work to create stronger
linkages between farmers and their domestic and export
markets. PM Khai noted that achieving this goal would
represent an important step toward rural and agricultural
industrialization and modernization for Vietnam. He also
called for Vietnam to develop policies and plans to
encourage growth of the services sector, focus on boosting
exports and accelerate the nation's international economic
integration.


5. (U) Other themes of the speech included WTO accession
and corruption. Vietnam should push hard to join the WTO,
PM Khai said, but warned that this would bring challenges as
well as benefits to the country. He urged GVN agencies to
adjust their rules now to fit within WTO guidelines and
Vietnamese businesses to improve their competitiveness. PM
Khai blamed the slow development of public services such as
education, healthcare, science and technology, culture and
sports on the dominance of state-owned agencies in these
fields. He also called on the NA to drive back widespread
government corruption. He stated that authorities at all
levels must understand and fully implement NA resolutions
and the Prime Minister's directive on the issue of
complaints and denunciations. In his final comments, PM
Khai expressed strong dissatisfaction with GVN failures such
as delays in issuing documents which guide the
implementation of laws and ordinances, lack of close
monitoring of law enforcement and policy implementation and
failure to reduce corruption.



6. (U) This session of the NA will continue until December
4, 2004. NA deputies are scheduled to spend six days
discussing socioeconomic issues, seventeen days working
through the legislative agenda, and another eleven days
focusing on other important issues. The NA plans to pass
six new laws: (1) the Law on Electricity; (2) the Law on
Promulgation of Legal Instruments by People's Councils and
People's Committees; (3) the Amended Law on Publications;
(4) the Law on Protection and Development of Forests; (5)
Law on National Security; and (6) the Law on Competition.
Currently, there are nine draft laws scheduled for
discussion during this session, including the Commercial Law
(Amended) and the Civil Code (Amended).



7. (SBU) Comment: The Prime Minister's frank assessment of
the GVN's shortcomings and tasks ahead was perhaps a nod to
the NA's growing role in taking the Government to task for
corruption and mismanagement. During this year's spring
session, for example, legislators chided government
ministers for policy and management failures -- all on live
television. While the NA is far from an independent branch
of government, it is also no longer a rubber stamp. How
much autonomy the legislature will show during this session
bears watching. We will report on the results of the
session in December. End Comment.

MARINE