Identifier
Created
Classification
Origin
05HOCHIMINHCITY11
2005-01-06 08:44:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Consulate Ho Chi Minh City
Cable title:  

DELTA FACES DIFFICULTIES ON THE ROAD TO PROSPERITY

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UNCLAS SECTION 01 OF 03 HO CHI MINH CITY 000011 

SIPDIS

SENSITIVE

DEPARTMENT PLEASE PASS TO USTR, ELENA BRYAN

E.O. 12958: N/A
TAGS: PGOV ECON EINV PREL SOCI ETRD PHUM VM KCRM SMIG SNAR LABOR HIV AIDS TIP CNARC
SUBJECT: DELTA FACES DIFFICULTIES ON THE ROAD TO PROSPERITY

REF: A) HCMC 1575 B) HCMC 1128

UNCLAS SECTION 01 OF 03 HO CHI MINH CITY 000011

SIPDIS

SENSITIVE

DEPARTMENT PLEASE PASS TO USTR, ELENA BRYAN

E.O. 12958: N/A
TAGS: PGOV ECON EINV PREL SOCI ETRD PHUM VM KCRM SMIG SNAR LABOR HIV AIDS TIP CNARC
SUBJECT: DELTA FACES DIFFICULTIES ON THE ROAD TO PROSPERITY

REF: A) HCMC 1575 B) HCMC 1128


1. (SBU) Summary: Visiting the Mekong Delta, the Ambassador found
that considerable investment in infrastructure, education and
government reform are needed to set conditions for rapid economic
growth. The long, porous border with Cambodia is a challenge for
local officials, who are struggling to combat trafficking in
persons, HIV/AIDS and smuggling. While early efforts are underway
to strengthen border controls, there is much more to be done. The
region's universities are ill equipped to train their students to
meet the demands of industry and a modernizing economy. End
Summary.

WEAK INFRASTRUCTURE HINDERING DEVELOPMENT
-------------- --------------
--------------


2. (SBU) The Ambassador, accompanied by Conoff and Pol/Econ
specialist, traveled to Can Tho and An Giang provinces December 12-

14. In meetings with Can Tho and An Giang People's Committees,
the Ambassador discussed growing competition for investment among
provinces as Vietnam moves into the global economy. He noted the
comparative advantage of the delta in agriculture and aquaculture,
but stressed the need for improved infrastructure. Local
officials, however, seemed satisfied with a steady approach to
modernization controlled from Hanoi.


3. (SBU) The Vice-Chairman of the Can Tho People's Committee, Mr.
Pham Phuoc Nhu, noted that GDP growth in the province this year
reached 15 percent, its highest level ever. He recognized that
lack of infrastructure was the main obstacle to continued growth.
He agreed that the main North-South highway in the region is
inadequate to support industrial development, and confirmed that
commercial operations at Can Tho airport remain suspended. There
are only two modest U.S. foreign direct investment (FDI) projects

in the region: a feed mill in Can Tho City operated by Cargill and
the Mien Tay Plastic Company. Moreover, there have been no new
U.S. FDI projects since 2002. The Can Tho Bridge, financed with
Japanese ODA, is not expected to be completed until 2008. The
airport is currently scheduled to reopen (for the first time since
1975) in 2007 for domestic flights. A new, six-lane national
highway has been discussed, but is not yet in the planning stages.
The Ambassador noted that if the delta region is to keep pace with
the industrial centers of Hanoi, Da Nang and Ho Chi Minh City,
these projects must be pursued more aggressively. In response,
however, Nhu would only affirm that "the [modernization] targets
set by Hanoi are correct, because living conditions are improving
steadily."


4. (SBU) The Director of the Can Tho International Agriculture
Fair, Mr. Nguyen Thanh Son, recognized the obstacles presented by
the region's weak transportation systems, but also focused on the
need to attract advanced technology to increase agricultural
output. Son expressed a strong desire to seek out U.S. companies
that could provide such expertise, especially for the region's
rapidly expanding aquaculture industry. He hopes that the seven
years of cooperation with USDA/FAS at the Fair could be a
springboard for such cooperation. He said that he would like to
enlist the help of the Consulate General in Ho Chi Minh City in
seeking out those companies most suited to providing these
technologies. The Ambassador encouraged Son to take a more
proactive approach, suggesting that he seek the assistance sooner
rather than later.


5. (SBU) In discussions with Mr. Nguyen Hoang Viet, the Chairman
of the An Giang People's Committee, the Ambassador noted
bureaucratic obstacles to growth including difficulties in
obtaining required permits, corruption, and intellectual property
rights (IPR) protection. He said that the lack of a "one-stop
shopping" approach made the province less attractive to investors.
The complex procedures for obtaining government approvals slow the
pace of investment, and foster corruption at every phase of the
process. A single department with responsibility for assisting
foreign companies to invest in the province would help. Finally,
IPR must be protected, the Ambassador emphasized. He said that
Vietnam's poor record in safeguarding IPR has had a direct,
negative impact on foreign investment. If An Giang Province hopes
to attract U.S. companies to provide advanced technologies, it
must find strategies to ensure that those technologies are
protected. Although he agreed that IPR is a fundamental issue
with regard to attracting investment, Viet outlined no specific
measures that the provincial government was taking to combat this
problem.

MAXIMIZING THE POTENTIAL OF HUMAN CAPITAL
-------------- --------------
--------------


6. (U) The Ambassador met separately with Can Tho University (CTU)
Vice-Rector Dr. Nguyen Anh Tuan and Dr. Vo Tong Xuan, Rector of An
Giang University (AGU). Both expressed their commitment to
building strong ties with U.S. institutions. The educational
infrastructure in the delta is inadequate to meet demand. Can Tho
had the only university in the delta until 2002, when An Giang was
converted from a teaching college to a university. CTU has 34,000
students and AGU 7,000. However, both institutions accept only
one in twelve applicants. While this ensures the quality of the
students, Dr. Tuan and Dr. Xuan recognized the need to increase
enrollment to keep pace with the economic growth.

7. (U) To meet demand, CTU enrolls 17,000 of its students at the
main campus in Can Tho City, while the remaining 17,000 attend
"satellite" campuses around the region. Dr. Tuan stated that the
long-term goal was to turn these satellites into semi-autonomous
community colleges as in the United States. CTU is also
assisting An Giang University, and is increasing its number of
graduate students to train new faculties for the region. CTU is
working with the Japanese, Dutch and Belgians to upgrade computer
systems, but has yet to exploit CD-ROM and digital video
conferencing to broaden its reach.


8. (SBU) All agreed that exchange programs, particularly with the
United States, had been helpful. Dr. Tuan expressed frustration
that most Fulbright and Vietnam Educational Foundation grant
recipients come from Hanoi and Ho Chi Minh City. He asked that a
quota be set aside for the Delta.

BORDER SECURITY CONCERNS
--------------


9. (SBU) Provincial officials and border security forces in An
Giang drew attention to efforts to strengthen controls along the
border with Cambodia. The Ambassador stressed the need for
stepped-up action on the provincial level in the fight against
HIV/AIDS. People's Committee Vice-Chairman Nhu in Can Tho and
Chairman Viet in An Giang expressed appreciation for Emergency
Plan support for Vietnam. The People's Committees of Can Tho and
An Giang spoke of "programs" and "workshops" to address prevention
and long-term care, but provided no specifics on these programs.
The Ambassador stressed the need for direct involvement by senior
provincial officials and action on the ground to implement Hanoi's
policies on issues like the rights of those afflicted and the need
to combat public misperceptions.


10. (SBU) The Ambassador visited the border crossing at Xuan To in
An Giang Province and discussed trafficking in persons and
narcotics with representatives from the Customs Department, the
Border Defense Army and the District People's Committee. Tinh
Bien Customs Department officials said that narcotics and
trafficking were top priorities but that they understood the need
to stop counterfeit goods as well. An Giang's border with Cambodia
stretches for 100km, with five official crossing points manned by
200 customs officers. The border army makes regular patrols
between points. For much of the year the region is flooded and
passable only by boat. Most of the illicit trade crosses from
Cambodia during these months. UNODC sponsors six Joint Task
Forces in key border provinces to assist GVN with trafficking
issues, but all task force officers in An Giang are seconded on a
part-time basis from their agencies. Officials also complained
about lack of boats, vehicles and adequate training. The
Ambassador stressed the need for greater cooperation between USG
and GVN on all law enforcement issues, especially counter-
narcotics.


11. (SBU) The Ambassador visited an anti-trafficking pilot project
in Nui Sam Ward of An Giang Province. Run by the Women's Union of
the District People's Committee and supported by the Asia
Foundation, the project's 21-member team of volunteers provides
workshops and community outreach aimed at prevention and
reintegration of trafficking victims into their communities.
Since early 2003, they have held 47 meetings, reaching 2,578
participants. The at-risk target population consists of females
aged 13 to 30 with minimal education. Project leaders claimed
that there have been no new cases of trafficking since the project
began. Local officials have only recently begun to focus on
trafficking and little data exists on trends, making it difficult
to measure success. The program also assists victims through
micro-lending projects (supported by the International
Organization for Migration) and training (run through the
province's Department of Labor). Despite the apparent success of
the project in Nui Sam, there are as yet no plans to expand the
project to other wards. The Ambassador suggested a more proactive
approach in assisting neighboring wards to establish similar
programs.


12. (SBU) Comment: Both Can Tho and An Giang are making strides in
the right direction economically. Continuation of rapid growth
requires improvement in governance, rapid modernization of the
transportation infrastructure, and increased access to higher
education. Better control of the border will help address
trafficking, drug smuggling and the attendant spread of HIV/AIDS.
End comment.

WINNICK