VIETNAM PARTY CONGRESS: HCMC REACTIONS

UNCLAS SECTION 01 OF 02 HO CHI MINH CITY 000503

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SENSITIVE
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E.O. 12958: N/A
TAGS: PHUM PREL ECON SOCI PGOV VM
SUBJECT: VIETNAM PARTY CONGRESS: HCMC REACTIONS


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1. (SBU) Summary. HCMC-based businessmen, bureaucrats and
journalists are disappointed, but realistic about the results of
the Party Congress. Despite the strong push from the reform
wing, in their view, conservatives and supporters of the status
quo prevailed. They are uncertain about the orientation of
Prime Minister-select Nguyen Tan Dzung. While decisive, they
fret that he draws his strength from Mekong Delta conservatives
and the security establishment. Our contacts report that the
Party has begun to close ranks after intense pre-Party Congress
maneuvering. The Party has made it clear to HCMC-newspaper
editors that it wants a "soft landing" on the PMU-18 corruption
scandal. While unenthusiastic about the results of the
Congress, our contacts see little prospect of significant
backsliding in areas where there has been progress. They look
to Vietnam's WTO accession as the external push that the Party
needs to catalyze further socio-economic reform. End Summary.

Early Views Of The Party Congress
--------------


2. (SBU) Over the past few weeks, ConGenOffs have pulsed
journalists, key businessmen and city bureaucrats on their views
of the Party Congress, leadership changes and the role of the
media post-Congress as an agent of change and corruption
watchdog. All these contacts generally self-identified as being
associated with the reform wing of the Party. They were
disappointed: status quo at best, perhaps one step back, one
journalist told us. HCMC business leaders didn't see anything
coming out of the Congress that would accelerate economic
growth. The reform camp was particularly disappointed that the
Party Congress political report didn't push for an overhaul of
the state-owned sector. Despite strong reform entreaties, the
State Owned Enterprises remain the "leading force" in the
economy.

Inside Baseball
--------------


3. (SBU) A leading HCMC-based journalist posted to Hanoi for the
Party Congress said that the outcome of the Party's personnel
debate was in doubt until the last possible moment. A number of
senior Party leaders continued to oppose Nong Duc Manh's
reselection as General Secretary. The Saturday immediately
before the Party Congress, Party elders, including former Party
Secretary Le Kha Phieu, launched a drive to draft outgoing

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National Assembly Chairman Nguyen Van An as an alternative to
Manh. Our contact told us that An came under intense pressure
not to accept the challenger mantle. Reporters who were
covering the story were warned by security services to be
"extremely careful" about how and what they reported on the An
story. Within 24 hours, An formally declared that he was
retiring. Two other well-placed HCMC business contacts told us
that HCMC's Party Secretary Nguyen Minh Triet also decided not
to challenge Manh for the top Party slot, despite internal
balloting in which Triet reportedly placed higher than Manh.


4. (SBU) This press contact said that the Politburo was focused
purely on internal politics when it made the decision (which it
later reversed) not to install new GVN leaders until after the
APEC leaders meeting. Party leaders did not consider the optics
of lame duck leaders meeting the President and other world
leaders a few weeks before they left office. Our contact did
not know what led the Politburo to reverse that decision.
However, Vo Viet Thanh, Senior Advisor to the Prime Minister for
the South told the Consul General on May 8 that the Central
Committee will meet shortly to put forward formally a new
leadership slate to the National Assembly for confirmation.
According to Thanh, the National Assembly will vote on the slate
in mid-June.


5. (SBU) Our press contact confirmed that Central Vietnam got
short shrift in key personnel decisions; the Party did not
consider leaders from the Center such as Danang Party Secretary
Ba Thanh sufficiently talented to be promoted. Reemphasizing
political control over the military was also a preoccupation at
the Party Congress. This, our contact said, helps explain why
the political report called for reinvigoration of the political
commissar system in the military. Our contact added that the
Party decided not to promote Nong Duc Manh's son to the Central
Committee because of concerns that it would signal that dynastic
politics was a factor in personnel selection.

HCMC Bureaucrats and Businessmen
--------------


6. (SBU) In separate discussions, two HCMC business leaders
fretted that HCMC Party Secretary Nguyen Minh Triet's probable
elevation to State President effectively sidelines a reformer
from his powerbase. HCMC People's Committee Chairman Le Thanh
Hai, Triet's likely replacement, is seen as a more pragmatic,
political lightweight. One city bureaucrat noted that Vietnam

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needs a "rejuvenating," new generation of leaders, but such
figures cannot be found. Although disappointed, the two city
administrators we spoke with went on to say that "there will be
no turning back," but progress will be gradual. The two
officials made it clear that they looked to Vietnam's entry into
the WTO to drive further change.


7. (SBU) Our HCMC contacts are undecided about Nguyen Tan Dzung.
They acknowledge that he has a reputation for being decisive
and note that he sent his children to the U.S. for higher
education. (As a result they say, one married a
Vietnamese-American and the other now works for VinaCapital, one
of Vietnam's largest investment funds.) That said, they see
Dzung drawing his strength from more conservative elements deep
in the Mekong Delta and from Hanoi-based security services.
They also see him as more pro-China in his orientation, although
Vo Viet Thanh insisted that this was a reflection of the
specific role that he played as Deputy Prime Minister.

The Media and Corruption
--------------


8. (SBU) A number of press contacts in HCMC confirmed that the
leak of the multi-million dollar PMU-18 corruption scandal
(which embroiled inter-alia the Minister of Transportation) was
the result of the pre-Congress infighting between General
Secretary Manh and DPM Dzung. One press contact said that,

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while the two leaders do not trust each other, they will be able
to work together post-Congress.


9. (SBU) Now that leadership decisions have been made, our press
contacts report that the Party is closing ranks quickly. Beyond
those already implicated in the PMU-18 scandal, other lines of
inquiry on corruption would be closed. Highlighting how this
process is already underway, on May 8, Vo Viet Thanh told us
that the media "misconstrued" the relationship of a Ministry of
Public Security General Cao Ngoc Oanh to central figures in the
PMU-18 scandal. (Note: UN contacts in Hanoi report that the
rehabilitation of General Oanh is underway. He was approved
last week to represent Vietnam at an international law
enforcement conference in Singapore, a decision made personally
by Minister of Public Security Le Hong Anh. End note.) On May
11, Prime Minister Khai issued a public warning to the media,
asking the Ministry of Culture and Information to "take measures
to seriously sanction press agencies and people involved in
writing and publishing untrue information" about the corruption
scandal.


10. (SBU) Various contacts in Tuoi Tre (Youth) and Phap Luat
(The Law) newspapers, two of the HCMC-based newspapers that
spearheaded debate on reform and on PMU-18 before the Party
Congress, told us that the Party now has tightened up access to
information in the Congress' aftermath. They say that Vietnam's
reform-oriented press will not press the reform and
anti-corruption agenda further at this point. One media contact
explained that senior editors of Tuoi Tre, Phap Luat, and the
web-based VietnamNet are under intense scrutiny due to their
pre-Congress pushing on reform. They have no appetite for
further confrontation with Party ideologues at this point. When
one Hanoi-based editor known to have pushed the envelope of
reporting on Party reform pre-Congress was asked if he was
concerned about possible post-Congress pressure, he laughingly
replied, "oh, I bought my plane tickets for the United States
even before the Party Congress. I was expecting pressure."


11. (SBU) Comment: While disappointed that the Party chose
control and the status quo over accelerated reform, our contacts
outside the Party are realists and survivors. Those inside the
Party know when they need to go back "on message." All
understand that the relatively greater openness and debate that
characterized the pre-Congress period is over and that they need
to hunker down until the next opportunity presents itself. End
Comment.
WINNICK