Identifier
Created
Classification
Origin
05HANOI1114
2005-05-13 06:38:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Hanoi
Cable title:  

CENTRAL HIGHLAND ETHNIC MINORITIES LEFT BEHIND IN

Tags:  ECON EAID VM ETMIN HUMANR 
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UNCLAS SECTION 01 OF 05 HANOI 001114 

SIPDIS

SENSITIVE

STATE FOR EAP/BCLTV
USDOC FOR 4430/MAC/ASIA/OPB/VLC/HPPHO
STATE PASS USAID FOR CHAPLIN/ANE
BANGKOK FOR USAID

E.O. 12958: N/A
TAGS: ECON EAID VM ETMIN HUMANR
SUBJECT: CENTRAL HIGHLAND ETHNIC MINORITIES LEFT BEHIND IN
VIETNAM DEVELOPMENT IN SPITE OF GOVERNMENT INTERVENTIONS

REF: A) 04 HCMC 001491; B) 04 HCMC 000210; C) 04 HCMC 001493;
D) 04 HCMC 001581; E) Hanoi

This cable contains sensitive information. Please do not post
on the Internet.

UNCLAS SECTION 01 OF 05 HANOI 001114

SIPDIS

SENSITIVE

STATE FOR EAP/BCLTV
USDOC FOR 4430/MAC/ASIA/OPB/VLC/HPPHO
STATE PASS USAID FOR CHAPLIN/ANE
BANGKOK FOR USAID

E.O. 12958: N/A
TAGS: ECON EAID VM ETMIN HUMANR
SUBJECT: CENTRAL HIGHLAND ETHNIC MINORITIES LEFT BEHIND IN
VIETNAM DEVELOPMENT IN SPITE OF GOVERNMENT INTERVENTIONS

REF: A) 04 HCMC 001491; B) 04 HCMC 000210; C) 04 HCMC 001493;
D) 04 HCMC 001581; E) Hanoi

This cable contains sensitive information. Please do not post
on the Internet.


1. (SBU) Summary: Vietnam has experienced rapid economic
development since beginning its Doi Moi (Renovation) reforms in
1986 and achieved rapid poverty reduction throughout the 1990s.
But between 1998 and 2002, while other regions continued to
show reductions in poverty, the Central Highlands showed
virtually no progress. Conditions among the poorest in the
region, mainly ethnic minorities, worsened. The Government of
Vietnam (GVN) has demonstrated a sincere commitment to
alleviate poverty in general and to develop the Central
Highlands in particular. However, an emphasis on
infrastructure over capacity building, a solidly top down
approach, problems with land allocation and communication
barriers caused by language and ethnicity have all impeded
socioeconomic development in the region. The GVN continues to
adhere staunchly to the goal of expanding industrial
agriculture, which it sees as the way to stimulate the region's
growth potential. Land and forest allocation, seen by the
international community and by Vietnamese poverty specialists
as the pivotal challenge to the Highlands' socioeconomic
development, is not an area the GVN has adequately dealt with,
this reflects the GVN's preference to focus on policy intention
rather than on execution. End Summary.


2. (SBU) A separate report, the third in this series, will
explore the outlook of international donors, agencies and NGOs,
as a whole and separately, toward assistance in the Central
Highlands. The report will also highlight some particular
areas of intervention that address some of the gaps identified
in this report and suggest some possible entry points for U.S.
assistance in the region.

A Picture of Poverty
--------------


3. (SBU) With the highest incidence of poverty of any region
in the country, the Central Highlands provinces have shown
almost no progress in poverty reduction over the last four

years and also have developed a growing income gap between
ethnic minority and Kinh populations. According to the
internationally accepted methodology of the General Statistics
Office and the World Bank, the incidence of poverty in the
Highlands is 52 percent compared to 29 percent for the country
as a whole. Poverty is defined as monthly per capita
expenditure for food and necessities of less than about USD
11.50 for 2004. (Note: From 1998 to 2002, the Central
Highlands' share of poverty in Vietnam doubled from five to ten
percent. Across Vietnam, ethnic minorities make up 14 percent
of the population but 29 percent of the poor. Many ethnic
minority groups in the Central Highlands have poverty rates of
80 to 90 percent.

Dominant Development Priorities for the Central Highlands
-------------- --------------


4. (SBU) Three key themes have dominated the Government's
socioeconomic development approach for the Central Highlands:
resettlement, including the sedentarization of ethnic
minorities and planned in-migration to develop New Economic
Zones (NEZ); land and forest management and allocation; and
hunger eradication and poverty reduction programs.
Resettlement (See ref E) is closely linked to the development
of industrial agriculture, as NEZs were largely organized from
lands the GVN viewed as unused or under utilized into large
state agricultural or forest enterprises. (Note: Industrial
agriculture refers to modern farming methods that depend on
synthetic fertilizers, seed technology, large amounts of
irrigation, and modern processing and transportation systems.
Ideally implemented on a large scale, the principle is to
achieve effective productivity through the use of technology.
End Note.) Since 1993, as part of forest protection policy,
the GVN has attempted to transfer forest land to households to
manage. The GVN also began to reallocate arable land to poor
and ethnic minority households as a part of its poverty
alleviation strategy. According to poverty experts at the
World Bank and Asian Development Bank, resolving disputes over
land use determination, borders and land allocation is the most
significant challenge to resolving ethnic minority tensions and
barriers to socioeconomic development.

Major Government Interventions
--------------


5. (SBU) With the growing attention to poverty reduction in
the 1990s, the GVN created a series of National Targeted
Programs (NTP) which were intended to reach the poor in
different ways. The following section outlines the chief GVN
socioeconomic development interventions that affect the Central
Highlands.

--Hunger Eradication and Poverty Reduction Program (HEPR).
Begun in 1998, this program coordinates and integrates nine
sectoral anti-poverty projects directed at poor households,
including targeted support to ethnic minorities. This program
includes targets in infrastructure, special subsidies,
sedentarization and resettlement, agricultural extension,
credit, health and education, and job creation. Executed by
the Ministry of Labor, Invalids and Social Affairs (MOLISA);
HEPR expenditure in 2003 was estimated at USD 60 million. The
GVN is currently drafting a new HEPR plan through 2010.

--Support for the Most Difficult and Remote Communes (Program
135). Launched in 1998, Program 135 focuses on improving
village and communal infrastructure and was intended to work in
conjunction with projects in other sectors. Executed by the
State Committee for Ethnic Minorities (CEM),its expenditure in
2003 was estimated at USD 95 million. Currently, about 10
percent of total investments in HEPR and Program 135 are
directed to the five provinces of the Central Highlands.

--Central Highlands Program. In 2001, Decision 168 called for
a long-term regional policy for socioeconomic development of
the Central Highlands and set specific targets for economic
development, poverty reduction, infrastructure and social
services. It also addressed the need to open markets and
called for teachers and health workers to learn local
languages. Total expenditure for Program 168 in 2003 was
estimated to be USD 18.2 million.

--Health and Education. In 2002, the Prime Minister's Decision
139 established province-level health care funds for the poor
to provide health cards for ethnic minority and poor
individuals, which entitle them to free medical treatment. The
GVN has also waived school tuition and construction fees for
disadvantaged children and has subsidized boarding schools for
ethnic minorities in remote locations.

--Land for Ethnic Minorities. In 2001, Decision 132 created
the Land Allocation Program for the Central Highlands, which
was intended to provide poor indigenous communities with arable
land by reclaiming new land and buying existing land from
larger landholders. Because of difficulties in reclaiming land
and land disputes, the GVN readjusted land reallocation
regulations in Decision 134 in July 2004. Decision 134 sets a
policy to give production land, residential land, housing and
clean water for all poor ethnic minority households, with a
deadline of 2006. While reducing the amount of land to be
allocated to each household, this decision also extended these
benefits to poor ethnic minorities in regions other than the
Central Highlands and attempted to streamline procedures for
provincial authorities who are responsible for managing
allocation.

--Reforestation. Two Prime Ministerial Decisions, 327 (in
1993) for the Re-Greening of Barren Hills, and 661 (in 1998)
beginning the "5 Million Hectare Reforestation Program" (5MHRP)
have guided efforts to rehabilitate degraded forest lands.
Project 327 provided direct payment to households in exchange
for forest protection and for state forest enterprises to
establish forest plantations. Because of weaknesses in Program
327, the 5MHRP was created in 1998 to run until 2010 to
increase nation-wide forest coverage to up to 43 percent of the
total land cover, provide job opportunities to the rural poor
and ethnic minorities, and increase the supply of forest
products.

--Grassroots Democracy. Decree 79 of July 2003 clarified and
set up a legal framework for increasing community participation
at the local level, as described in Decree 29 of May 1998. The
principles of grassroots democracy at the commune level
established through these decrees are: "People know, people
discuss, people implement, people monitor" the activities of
the local government. According to the decree, the people
should be fully informed of land use planning, socioeconomic
development plans, budgets and expenditures. They should
discuss things such as the budget, expenditures and
construction of infrastructure, and they should participate
directly or through elected representatives or mass
organizations.

Gaps in Translating Policy into Practice
--------------


6. (SBU) Most poverty specialists and donors agree that while
the GVN has made progress in overall poverty reduction, results
have been meager for the level of investments poured into the
Central Highlands. Observers attribute this gap between policy
and practice to a number of factors in two broad categories,
the first questioning the appropriateness of the measures or
priorities pursued in the Central Highlands and the second
identifying weaknesses in policy execution and implementation.
(Ref A describes examples of GVN initiatives at work in Dak Lak
Province.)

Construction over Human Capacity Building
--------------


7. (SBU) Three leading strategies in boosting socioeconomic
development have been industrial agricultural development,
rural infrastructure development and social services subsidies.
However, within these broad areas, national priorities heavily
favor building rural infrastructure over human capacity
building. Thus, money has gone to material improvements such
as schools and commune health centers, but has not translated
into improved service delivery in health and education. At the
same time, resources go to build irrigation systems or create
seed subsidies rather than to train farmers. Investment in
infrastructure has meant improved facilities in the region, but
the benefits have not effectively reached the rural poor.
Instead, urban based Kinh and government staff tend to benefit
most from projects that largely favor commune centers and those
who are better off.

Industrial Agriculture Aggravates Conditions
--------------


8. (SBU) The economic development priority of industrial
agriculture has emphasized growth targets over sustainable
development. The aggressive push to develop coffee plantations
in the 1980s and 1990s brought in more Kinh migrants and
exacerbated historical ethnic tensions, increased the
vulnerability of the poor who invested in coffee, and increased
the value of land which added to competition for land use
rights (LURs). New immigrants, both Kinh and ethnic minorities
from other regions, have come in and accumulated cultivated
land, in part by purchasing land from local ethnic minorities.
Over time, however, local minorities, who lack the skills to
compete with the new immigrants, have become increasingly
marginalized.

Addressing Ethnic Dislocation
--------------


9. (SBU) Successive regimes and periods in Vietnam have in
turn promoted self-awareness, autonomy and division between
Kinh and ethnic minorities in the Central Highlands. There is
wide agreement in the international community and in the
Vietnamese research community that in this context, the
confounding issues of ethnicity, culture and tradition can
cause social and economic problems to become political
conflicts. Development interventions that do not recognize
ethnic minority traditions or belief systems, even while they
are trying to change them, risk further isolating ethnic
minorities rather than helping them find alternative ways to
adapt to the demands of a market society.


10. (SBU) In discussions with GVN and other Vietnamese
counterparts, the most common perception of ethnic minorities
in the Central Highlands is that they cling to "backward"
farming practices that lead to food poverty and environmental
degradation and that they lack the work ethic and motivation to
take advantage of rich natural resources and government
subsidies. The general solution according to this view is that
they must be taught the correct Kinh lifestyle. Another view
is that the historical changes in social structure and land
ownership have broken communal safety nets and forced ethnic
minorities to struggle at a subsistence level, while their
social and linguistic dislocation has made it more difficult
for them to access benefits of the National Targeted Programs.
(Ref B details ethnic minority disadvantages in land and
employment opportunities in a village in Lam Dong Province.)
Shared by most of the academic and NGO community, this view has
yet to influence GVN policy. A third outlook suggested by
poverty specialists is that many local government officials are
either carpetbaggers or corrupt, and are not interested in
relinquishing their control over state agricultural and
forestry enterprises or in alleviating ethnic minority
problems.

Top Down and Uncoordinated Planning and Implementation
-------------- --------------


11. (SBU) Many in the international community argue that the
local authorities have learned to rely heavily on both central
policy guidance and budget support, perpetuating a welfare-
based rather than a rights-based approach to socioeconomic
development. This approach has resulted in little local
investment in goals or activities and a high degree of
dependency on external resources. There is also shared
perception in the international community, particularly among
NGO personnel, that the top down delivery has focused on
meeting target numbers rather than addressing local needs. As
a result, assistance has been thinly spread, where some get
water, some get health care, some get education and some get
agricultural extension, without any community receiving a
coordinated approach needed to help lift it out of poverty.


12. (SBU) Asian Development Bank (ADB) and Action Aid poverty
specialists who helped conduct Participatory Poverty
Assessments (PPA) in the Central Highlands in 2003 reported
that with the top down approach, there is a striking gap in
knowledge at the center of actual implementation at the local
level. GVN ministries measure the success of Program 139 by
counting the number of health cards issued. But PPA findings
show that many who have the health care are still forced to
pay, either because the local authorities want to mobilize
local contributions, or because of simple corruption. More
problematic is the failure of top down interventions to ensure
proper service delivery at the grassroots level. As a result,
under the Reallocation of Land Decree, land repurchase was set
at such a low price that no one was willing to sell to the
Government, severely limiting land resources for the program.
Provinces and districts also assigned teachers to ethnic
minority villages who spoke a local ethnic minority language,
but not the same one spoken in the village. Although many
students are exempted from tuition fees, the quality and
relevance of their education has not improved.

Language and Communication Barriers
--------------


13. (SBU) A very serious shortcoming of development
interventions in the Central Highlands is that no program or
project requires the use of local languages. Official GVN
policy asserts that all nationalities in Vietnam should learn
and use the national language. While this is a barrier that
all ethnic minorities face, the Highlands' multi-ethnic
concentration and isolated residential patterns deepen existing
language barriers. Few of our GVN interlocutors were willing
to stray from the party line on the use of Kinh Vietnamese,
even to accelerate preschool education or agricultural
extension training. The refusal by the GVN to deal with the
language and communication barrier directly will continue to
limit the effectiveness of any behavioral change communication
or development activities, and will further intensify the
region's social and economic exclusion.

Consequences of Limiting Foreign Access and Expertise
-------------- --------------


14. (SBU) Donors, UN agencies and NGOs have repeatedly
encountered sensitivity surrounding access to the Central
Highlands mainly by having key staff, including evaluation
consultants, be denied access. Another access issue affecting
capacity is the limited presence of international NGOs. The
lack of these NGOs providing grassroots development in the
Highlands has accentuated the top down approach and its
associated difficulties. More broadly, the highly proscribed
access to the region has helped maintain the region's and, in
particular, the rural poor's isolation and lack of exchange
with outside people and ideas.


15. (SBU) Donors and NGOs have also noted contrasting signals
from the GVN on openness to foreign assistance in the region,
with a gap between the central and provincial positions. Both
the Canadians and the European Union pointed to Deputy Prime
Minister Vu Khoan's frank remarks on the Central Highlands at
the June 2004 mid-year Consultative Group Meeting,
acknowledging the mistakes of the Government in resettling Kinh
people into the region to develop the coffee industry, and
welcoming both visitors to the region and foreign assistance.
Provincial authorities are seen to be far more conservative and
are often the greatest obstacle in planning international
visits and assistance. The Japan International Cooperation
Agency (JICA) reported that Kon Tum officials initially refused
their forest protection assistance and only came around after
strong central level support for the project. NGO
representatives reported having to rewrite project proposals to
assure the provincial GVN that foreign staff would not work
directly in the provinces. Dak Lak's provincial leadership told
us point blank that it was not interested in USG assistance,
although local leaders in Gia Lai and Kontum provinces told us
that they welcomed USG development aid (refs C and D).

MARINE