PHU YEN PROVINCE: PROMISING OR PROBLEMATIC?

UNCLAS SECTION 01 OF 03 HO CHI MINH CITY 001222

SIPDIS

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: PHUM PINR SOCI PREL KIRF PGOV PREL VM
SUBJECT: PHU YEN PROVINCE: PROMISING OR PROBLEMATIC?


HO CHI MIN 00001222 001.2 OF 003



1. (SBU) Summary: Phu Yen province in Central Coastal Vietnam
has promise -- especially in aquaculture, light industry and
tourism -- but is being held back by a rigid and insular
government. Despite the relatively orthodox approach to
economic development, the province appears to be implementing
the legal framework on religion, particularly with regard to the
recognition and registration of Protestant churches. Our
September visit also indicated some unrest in at least one
ethnic minority area in the province; provincial officials are
concerned about the spread of ethnic minority separatist
ideology in areas bordering the Central Highlands. However, we
have not seen any evidence to corroborate allegations of
government-orchestrated violence against ethnic minorities in
the province. Unless the province's leaders show greater
leadership and initiative, particularly in promoting the private
sector and foreign investment, the province will remain a poor
backwater. End Summary.


2. (SBU) From September 13 to 15, ConGenOffs traveled to the
coastal province of Phu Yen to assess economic, human rights and
religious freedom conditions in the province. This was our
first visit since 2002 and comes after the province declined a
number of our requests to visit. Relatively unspoiled and
isolated, Phu Yen borders the Central Highlands provinces of Gia
Lai and Dak Lak with the more economically vibrant provinces of
Khanh Hoa and Binh Dinh to the south and north, respectively.
Phu Yen, population 860,000 ranked 21 out of 63 ranked provinces
in the 2006 Vietnam Provincial Competitiveness Index (VVCCI),
which measures the effectiveness of government support for
business.

A Very Provincial Provincial Government
--------------


3. (SBU) Phu Yen People's Committee Vice-Chairman Le Kim Anh
opened our discussion by noting that, while the province wanted
economic development, it must be pursued under the banner of
"social justice, security and national defense." The
Vice-Chairman said that Phu Yen's three industrial zones
attracted 27 FDI projects with a total licensed capital of USD
200 million. Thus far, ten projects have begun operations. The
province also has 1,000 small, domestic private enterprises.
The Vice-Chairman said that Phu Yen is trying to develop tourism
and was open to U.S. investment in this sector. He noted that
transportation and communication infrastructure shortcomings
were an obstacle for investment, but did not offer any
solutions. Similarly, he stated that the province offered
attractive concessions for foreign investment but did not
mention specifics. In his presentation, Vice-Chairman Anh
remarked that Phu Yen was heavily affected by the Vietnam War
and Agent Orange, claiming that there were 10,000 victims in the
province. (Phu Yen's per capita GDP was USD 400 in 2006, well
below the national average of USD 640.)


4. (SBU) Visits to two FDI projects -- shrimp and automotive
assembly -- showed the modest scale of FDI investment in the
province. The shrimp farm, owned by Asia Hawaii Ventures
Company (AHV),is a joint-stock venture with American and
Taiwanese investors. The 50-hectare farm represents a USD two
million investment and employs 150 workers. The Phu Yen plant
appeared to be an expansion of other AHV operations further up
the coast in Binh Dinh and Thua Thien Hue provinces.


5. (SBU) JRD Manufacturing Automobiles Joint Venture Company,
technically is a 100 percent-owned Malaysian-invested venture.
General Manager Jackson Cheong said that the USD two million
factory would assemble up to 300 SUVs, trucks and mini-vans per
month, with major components imported from China and South-East
Asia. The cars will be sold domestically as well as exported to
Malaysia, China and Thailand. The plant currently employs 100
local workers and five mainland Chinese engineers. JRD intends
to transport vehicles overland to HCMC and use the Saigon port
for export. Cheong would not specify why JRD invested in Phu
Yen province -- especially as the major domestic market and port
was a day's travel away in HCMC -- other to note that the
company had received favorable terms from the province.

Religion
--------------


6. (SBU) Nguyen Van Linh, head of the Phu Yen Committee for
Religious Affairs (CRA) told us that the province respects
religious freedom and implements Vietnam's legal framework on
religion. He noted that, before the implementation of the legal
framework on religion in early 2005, the province had "security
issues" with some Protestant groups, but none since. He also
noted that the province has seen a spillover from "separatist
problems" in the Central Highlands, but did not elaborate. The
CRA Chairman told us that, in addition to the GVN-recognized
Southern Evangelical Church of Vietnam (SECV),a number of house
church organizations including the Baptists, Presbyterians,

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Seventh Day Adventists, the Unified Gospel Outreach Church
(UGOC) and Assembly of God were active in the province. The
house church organizations were allowed to operate without
interference and the province was working to legalize their
status in accordance with the law.


7. (SBU) However, the province refused our repeated requests to
meet with the UGOC. The provincial Vice-Chairman explained that
the group was "not stable" and cited a lack of religious texts,
self-appointed pastors, and a shifting following. The CRA
Chairman said that the UGOC in Phu Yen is a breakaway group of
the Assembly of God church and that the province has not yet
decided if it is a "legitimate congregation." That said, the
province is working with the congregation on its registration
application and UGOC can meet freely, the officials claimed. A
phone conversation with Pastor Si, the senior UGOC
representative in the province, seemed to support the official
position. Pastor Si did not report any problems with Phu Yen
officials or interference in UGOC religious practice. He
claimed that the UGOC has been operating in Phu Yen since the
1920s, but did not provide any more specifics.


8. (SBU) In a private meeting, Pastor Thong, provincial
representative of the SECV, told us that the SECV operates 50
places of worship in the province. Progress has been steady
since the legal framework on religion came into effect in early

2005. Ten SECV churches have been recognized. Another fifteen
are in the process of registering. The remaining twenty-five
operate as house churches, but do not face harassment. The SECV
has 4,081 followers, of which 1,098 are ethnic minority. The
SECV currently has only two ordained pastors to serve the
province. Although the SECV is able to operate freely, the
pastor complained that the province has been uncooperative in
resolving the church's outstanding property disputes, even
though some of the confiscated lots now lay vacant and unused.
CRA officials told us that in 1975 the SECV "gave the land" to
Phu Yen and that land used for "public welfare" cannot be
returned.

Ethnic Minorities Issues
--------------


9. (SBU) Provincial Committee for Ethnic and Minority Affairs
(CEMA) Deputy Chief Le Vai Ty told us that there are
twenty-eight ethnic minority groups in Phu Yen. The largest are
the Ede, Cham, Bahnar and Tay. Ty reported there are twenty
Bahnar ethnic representatives in the various branches of the
provincial government, including himself. Other groups did not
appear to have a significant representation in government.


10. (SBU) According to Ty, all of ethnic minority villages have
electricity and access to clean water. He noted that there were
eleven predominately ethnic minority communes (communes can
encompass a number of villages) that are categorized as
extremely poor by the GVN. We raised reports from the
Montagnard Foundation (MF) alleging ethnic minority clashes with
police, confiscations of cell phones and arrests. For example,
in a May press release, the MF claimed that an ethnic Vietnamese
individual "savagely attacked" several ethnic minority
individuals, presumably at the behest of police. Reportedly,
two ethnic minority students were arrested and ethnic minority
victims refused medical treatment. Ty denied any ethnic
minority unrest of clashes between ethnic minority individuals
and ethnic Vietnamese, saying that he only knew of "incidents
stemming from drunkenness."


11. (SBU) A tour of an ethnic Ede village some 40 miles (and
two hours) from the provincial capital showcased a large and
relatively prosperous village. Ly village in Song Hinh District
has 176 households with a population of 916. According to
Village Chief Ma Jom, villagers do not follow a specific
religion. He claimed that poverty has been reduced in their
village thanks an irrigation channel built by the government in

2001. However, only 50 percent of the villagers have land. He
was not aware of any government benefits programs for landless
villagers.


12. (SBU) The village chief said he understood that there was an
incident involving ethnic minority individuals in May, but could
not provide specifics as the affected village was some 25 miles
away. SECV Pastor Thong told us that the May incident was a
personal clash between an ethnic minority individual and an
ethnic Vietnamese. Neither individual was Christian. When
police were called, ethnic minority villagers threw rocks at the
police.


13. (SBU) We also visited an ethnic minority boarding school in
the district government seat of Hai Rieng. The school,
established in 1982, covers grades six to nine. It has 30
teachers for 167 students. Seven ethnic groups are represented,
with Ede and Bahnar comprising the bulk of the students.

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According to Principal Nguyen Chi Thi, the local government sets
quotas for the different ethnic groups in the district.
Students come from ten different communes up to 20 miles away.
The school was relatively large but only had basic facilities.
A much larger and more modern facility being built across the
road was, according to accompanying officials, a new school to
train Communist Party cadres.

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


14. (SBU) Phu Yen is a poor, sleepy backwater. Its wide
boulevards largely are bereft of vehicle traffic or
private-sector commerce. Party and Government leaders here are
politically inbred, more orthodox, and suspicious of outsiders
-- especially the United States. They have a relatively
uncomplicated and comfortable existence and want to keep it that
way. Tuy Hoa, the provincial capital, has a long, wide beach
that has yet to be developed and a decent airport, but the
government hasn't shown the initiative to draw tourists.


15. (SBU) Because Phu Yen still is relatively more rigid than
many other provinces in the consular district, it is encouraging
that -- even here -- efforts to implement the legal framework on
religion in the province generally appear to be moving ahead.
We will seek to overcome provincial resistance to meet with the
local branch of the UGOC church in a subsequent visit. However,
our contacts with the Phu Yen and national branches of the
organization indicate that the province is living up to its
obligation not to harass this or any other Protestant religious
organization operating there. Despite the government's
protestations to the contrary, there appear to be tensions
between the ethnic minorities and ethnic Vietnamese in at least
some rural communities in the province. And the government also
is concerned about spillover from ethnic minority separatism in
the neighboring Central Highlands. That said, we did not find
any evidence to support allegations of wholesale,
government-orchestrated violence against ethnic minorities in
the province. End Comment.
Winnick