NATIONAL ASSEMBLY CONCLUDES SESSION, CONTINUES TO

C O N F I D E N T I A L SECTION 01 OF 03 HANOI 003012

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SUBJECT: NATIONAL ASSEMBLY CONCLUDES SESSION, CONTINUES TO
SHED RUBBER STAMP REPUTATION

REF: A. A) HANOI 2434

B. B) HANOI 2617

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Classified By: POLITICAL COUNSELOR MARC KNAPPER FOR REASONS 1.4 (B) AND
(D)

Summary and Comment
--------------


1. (C) During its recently concluded session, the National
Assembly approved Vietnam's WTO-entry Protocol and debated
and passed 11 laws and one resolution. These included a
controversial new Law on Gender Equality and a Law on
Residence. However, a long-standing draft Law on
Associations was withdrawn from the legislative agenda by the
GVN, which reportedly feared that such a law would facilitate
the establishment of new political parties. The problem of
corruption and the GVN's efforts to address it figured
prominently in the session, giving Prime Minister Nguyen Tan
Dzung a likely highly scripted opportunity to shine in a
televised Q&A session. Furthermore, following a trend from
previous sessions, the National Assembly continues to make
efforts to move beyond its past and well-deserved reputation
for being a rubber stamp for the government. National
Assembly deputies grilled several cabinet members with
"sensitive" questions on malfeasance in government housing
allotments and the poor quality of judges. End Summary and
Comment.

WTO-Entry Protocol and New Budget Approved, But Concerns
Remain
--------------


2. (C) The National Assembly (NA) met for a relatively short
fall session October 17-November 29, with a nine-day break
because of the November APEC Leaders' Meeting. On November
28, the NA approved Vietnam's WTO-entry Protocol with more
than 91 percent of the votes cast. Speaking at a public
forum in Hanoi, Dr. Nguyen Sy Dzung, Vice-Chair of the Office
of the National Assembly (ONA),observed that the WTO vote,s
high approval "represents Vietnam's willingness to make
law-making a transparent process, which in fact is mandated
by its WTO entry." The NA also approved a new budget for
2007, designed to further facilitate the country's current
economic reform efforts. The new budget includes a boost in
the education budget and a reform plan that gives more
educational spending authority to the central government and
less to local authorities.


3. (C) However, during the session, a number of deputies
expressed concern about Vietnam's competitiveness and ability
to adapt to a post-WTO accession economy. Some of these
concerns included: balancing social welfare with the economic
development that WTO will provide; the quality and
sustainability of Vietnam,s recent economic development;
expected job losses; the pressure anticipated from WTO
regulations; and currently inadequate labor force training.
Several pointed out that the country,s high growth rates
have been largely attributable to foreign investment and not
really to a rise in labor productivity. A number also
questioned how dependent Vietnam had become on foreign
investment, which "has yet to boost Vietnam's productivity,
institutional capacities and technology base."

Controversial Laws on Gender Equality and Residence Pass
--------------


4. (C) The new Law on Gender Equality, which incorporates
many current legal provisions with respect to women,
stipulates that the GVN must create an office to deal with
issues related to gender equality (Ref A). It requires that
women be given equal consideration for appointments and
promotions in any and all employment areas, and that an
"appropriate" percentage of female elected members of
provincial People's Councils and the NA be reached. It also
mandates that female and male employees may become eligible
for their retirement pensions at the ages of 55 and 60,
respectively, further bolstering what is already in the
Vietnamese labor code. ONA Social Affairs Vice-Chairman
Luong Phan Cu told the forum that this difference in
retirement age should be seen as a "nice gesture" to female
employees, "given the heavy burdens of family-related and
social work traditionally assigned to women" in Vietnamese
society. "This is what the vast majority of Vietnamese women
want," Dzung added.


5. (C) The new Law on Residence allows the GVN Ministry of
Public Security (MPS) to retain the current system of

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residence registrations, in spite of strong opposition from
many deputies. During the debate on this law, deputies
echoed a common public concern that the residence
registration system violates the freedom of residency
stipulated in Vietnam's Constitution. Many Vietnamese
believe this government practice effectively acts as a
barrier for individuals and families to move within the
country and become legal residents of a new province or city
(and subsequently buy property there),and that it has now
become an infamous example of government red tape. MPS
officials successfully argued that they must maintain this
system for the sake of social order and security.


6. (C) The NA members also debated and passed nine other
laws, including a revised Labor Code, a Law on Labor Export,
a Law on Taxation Management, a Law on Dikes, a Law on Sports
and Physical Training, a Law on Tissue Donation and
Transplant, a Law on Technology Transfer, a Vocational
Training Law and a Notary Law. The NA is expected to pass a
draft law on mutual judicial assistance and an amended law on
organization of the NA in its next session in March 2007. A
much-anticipated draft law on Domestic Violence, still in
comment period, may be debated at the NA,s session in late

2007.

Continued Focus on Corruption
--------------


7. (C) High on the agenda of this NA session were a hearing
and debate on a recent GVN report on the fight against
corruption since the Law on Anti-Corruption took effect on
June 1. Deputies were unhappy that more than 20 GVN
ministries and agencies and 30 (out of 64) provinces had not
reported the current status of their anti-corruption efforts
as directed under the new law. Even without statistics from
those agencies and provinces, the GVN report detailed that
some VND 8,000 billion (roughly USD 500 million) had been
embezzled in the various corruption cases that came to light
in 2006.


8. (C) Of particular concern was the "alarming" increase in
corruption cases. Foreign Affairs Vice Chairwoman Ton Nu Thi
Ninh pointed out that VND 8,000 billion is equivalent to more
than two-thirds of the VND 13,500 billion (USD 840 million)
budget deficit anticipated for 2007. NA member Nguyen Duc
Dzung fumed that corruption scandals have now entangled GVN
officials charged with fighting corruption, including
officials at the MPS, the Government Inspectorate and the
Supreme People's Procuracy (the prosecutor's office). A
formal NA report, presented at the hearing, pointed out that
the number of "self-detected corruption cases" in ministries,
agencies and provinces remains low. Despite this, the total
number of cases investigated is "high and serious in nature."


Members Laud New PM for Determination to Tackle Corruption
--------------


9. (C) In his second appearance before the NA as Prime
Minister -- and his first during the NA's regular (and
televised) Q and A session -- Prime Minister Nguyen Tan Dzung
said that any officials failing to deal with corruption will
have to be replaced. "Opportunists" who vocally criticize
others for failing to deal with corruption, while they
themselves do little to tackle their own problems, "will be
dealt with seriously." The Cabinet is fully determined to
combat corruption, the PM stressed.


10. (C) Speaking to the press, several NA deputies stated
that Prime Minister Dzung did a good job presenting himself
to the NA. Many deputies asserted that Dzung has proven
himself very knowledgeable of the problems and issues facing
the country and was precise in discussing possible solutions.
Local newspapers also ran a number of man on the street
interviews that favorably evaluated the PM,s performance.

Cabinet Members Face Tough Questions on Sensitive Issues
--------------


11. (C) In addition to Prime Minister Dzung, six cabinet
ministers and the Presiding Judge of the Supreme People's
Court (SPC) also answered questions from legislators. These
included the Ministers of Transportation, Natural Resources
and Environment, Finance, Agriculture and Rural Development,
Construction and Education. When NA members raised the issue
of possible malfeasance in the allocation of government
housing to ranking GVN officials, both the Ministers of
Finance and Construction failed to provide details on how

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many officials had successfully "purchased" public houses
assigned to them at prices much lower than market value.
Although he admitted that the list of ranking officials using
public housing is not a "secret," Finance Minister Vu Van
Ninh nonetheless begged off answering how many residences
were sold to ranking officials and how much money the
Ministry of Finance received from those purchases. He said
the GVN has "yet to be able to publicize those statistics."
(Note: Just before the NA session, Le Duc Thuy, Governor of
the State Bank of Vietnam, was forced to return a house that
he had bought from the Hanoi People's Committee at a price
reportedly much lower than the market price. End Note.)


12. (C) SPC Presiding Judge Nguyen Van Hien was also on the
hot seat. He admitted that in 2005 his court had to reverse
more than 9,000 legal rulings for various "reasons." He
later disclosed that the court system needed 1,100 additional
judges, and said that it had filled some of these positions
with judicial workers from "the bottom of the barrel." This
comment prompted a heated debate about the judicial system in
general and Hien's approach to improving it.


13. (C) The ONA,s Dzung told us that the questions from
deputies concerning public housing for ranking officials were
among the most "difficult and sensitive" questions he had
ever heard during his tenure. The hearings involving NA
deputies and the SPC Presiding Judge "were an authentic
debate," which was significant. Furthermore, the NA agreed
to adopt changes to current procedures to allow deputies to
ask follow-up questions, which will help to facilitate more
discussions and interactions between NA deputies and cabinet
members in the future, Dzung added. (Note: Earlier in
October, NA Chairman Nguyen Phu Trong said the National
Assembly Standing Committee (NASC) is considering inviting
cabinet members to respond to questions during its regular
monthly meetings. End Note.)

Law on Associations Withdrawn from Legislative Agenda
--------------


14. (C) In October, the GVN announced that it had requested
that the Law on Associations be withdrawn from the
legislative agenda of this NA session, citing "mistakes
concerning procedures." (Note: This law has been in draft
form for the last 15 years (Ref B). End note.) The ONA,s
public position is that the NA simply felt that it "didn,t
have a good draft" and that there was "no consenus."
Privately, the ONA,s Dzung told us that several senior
Politburo and GVN officials were anxious about the
possibility of new political organizations taking advantage
of the law, with some citing the color revolutions in Europe
as cause for worry. "Basically the law is designed to
legalize freedom of assembly," Dzung added. (Note: It is
unclear when the NA will resume debate over the Associations
law; it may not be until next autumn, when the new NA, to be
elected in May 2007, convenes its second session to discuss
its own legislative agenda. End note.)

Comment
--------------


15. (C) This latest session continues the Assembly's efforts
to move beyond its past (and well-deserved) reputation as a
rubber stamp for the GVN (and Communist Party). While the NA
continued to assert itself as a real organ of state, PM Dzung
also took the opportunity to present himself (in what was
likely a highly scripted performance) as a determined leader
dedicated to managing government affairs and tackling
corruption. End comment.
MARINE