EWEC CONFERENCE PROVIDES VENUE FOR PRESS TO QUESTION

UNCLAS SECTION 01 OF 02 HO CHI MINH CITY 000921 SIPDIS SENSITIVE SIPDIS STATE FOR EAP/MLS STATE PASS USTR FOR DAVID BISBEE COMMERCE FOR HPPHO E.O. 12958: N/A TAGS: PREL PGOV ECON ETRD ELNT VM SUBJECT: EWEC CONFERENCE PROVIDES VENUE FOR PRESS TO QUESTION LEADERS HO CHI MIN 00000921 001.4 OF 002 ¶1. (SBU) SUMMARY. One of the most interesting developments at a recent Vietnamese-hosted conference to promote the East-West Economic Corridor (EWEC) linking Vietnam, Laos, Thailand and Burma was not so much the keynote address from Vietnamese Deputy Prime Minister Pham Gia Khiem to the 500 international attendees but the questions posed by some members of the Vietnamese press. GVN officials and conference presenters appeared somewhat caught off-guard by aggressive questions pressing for specific examples of how the EWEC has benefited people in Vietnam as well as by implications that the project's real benefits have been modest. In addition to policy-level speeches, the conference covered topics from the nuts and bolts of border controls to business networking. While China lies well north of the EWEC, delegates from Guanxi and Yunnan provinces seemed omnipresent (from the 'business match-up' session to photos with Vietnamese leaders),upstaging everyone else, including the leader of the Burmese Delegation Deputy Minister of Foreign Affairs U Maung Myint, who was virtually ignored by delegates intent on finding commercial opportunities. Government and business delegates alike agreed that further simplification of paperwork and visa rules would greatly benefit provinces along the EWEC. End summary. FROM IDEA TO REALITY - THE PRESS ASKS AGAIN -------------- ¶2. (SBU) Vietnam's Ministry of Foreign Affairs Economics Department hosted the August 27-31 EWEC Week Conference at the corridor's eastern terminus in Danang. Most government and business delegation leaders spoke about variations on the conference theme "EWEC - From Idea to Reality," citing a 16 percent increase this year in tourist transit at the Vietnam/Laos border over the same period in 2006 and a similar increase in cargo traffic. Leaders announced that recent discussions will resolve issues of right- versus left-hand drive, improve border crossing/law enforcement cooperation, and simplify paperwork at the borders. ¶3. (SBU) At the plenum's question and answer session, business delegates repeatedly complained that onerous visa procedures and burdensome paperwork are still preventing tourism from really �A;taking off along the EWEC. The catchphrase "Four Countries One Destination" obviously rang hollow not only with tourist industry representatives but also with members of the Vietnamese press, including the influential national newspaper Thanh Nien, who took the panel to task. The reporters asked for concrete information on any specific investment projects being planned, reforms that will promote private sector, and plans to develop Vietnam's human resources capacity. In response, a clearly agitated Deputy-Minister of Planning and Investment Cao Viet Sinh insisted that with the infrastructure now in place, investors would look favorably on the region. In the concluding press conference, a more polished Deputy Minister of Foreign Affairs Vu Dung also fielded barbed questions about the organization of the EWEC event from a Vietnam Chamber of Commerce and Industry Magazine reporter. LOOKING AROUND THE NEIGHBORHOOD -------------- ¶4. (SBU) By virtue of location, the Vietnamese hosts dominated the conference, with local small and medium-sized enterprises searching for sources of raw materials from northeast Thailand or Laos. Burma's meager representation at the conference and the trade exposition suggested superficial involvement at best. In contrast Chinese goods were everywhere at the exposition, and the government delegations from Guanxi and Yunnan were nearly as active as their business delegations, posing for pictures with Vietnamese notables during the conference. FACT CHECKING ON THE STREETS OF DANANG -------------- ¶5. (SBU) Following the conference, Danang-based industry, NGO, and government managers privately echoed the concerns raised by the press. While the EWEC has improved Danang's infrastructure significantly, most large investments have been in tourism and real estate development rather than creating jobs and boosting the local economy. Simplifying border procedures and promoting the private sector are crucial, most agreed. Danang "equitized" (transformed 100 per cent State-owned enterprises into joint-stock or limited liability companies subject to the Enterprise Law, to help restructure, upgrade and enhance efficiency) nine of 14 municipally-owned enterprises (five others are in the process) and some of the proceeds have helped fund the development of industrial parks. The Port of Danang is growing at a modest but steady eight percent over 2006, but only HO CHI MIN 00000921 002.2 OF 002 captures a fraction of the region's container traffic because of the port's low volume. Phuoc Tien seafood processing said it ships through Ho Chi Minh City Port because the busier port can land products in Japan in six or seven days as opposed to up to 13 days through the Danang Port. COMMENT -------------- ¶6. (SBU) The press events at EWEC conference demonstrate that Vietnam's press is capable of challenging leaders in certain contexts. While most of the reporters pitched softballs, it was encouraging to see some stand up in front of Deputy Prime Minister Khiem and call for answers on questions of development strategy and the role of the private sector. The conference also provided a clear reminder that China continues to make commercial inroads throughout Southeast Asia. While Danang is benefiting from significant investment in infrastructure and tourism, additional reforms will be necessary to diversify the city's economy. ¶7. (U) This cable was coordinated with Embassy Hanoi. FAIRFAX