WELL-PLACED VIETNAMESE CONTACTS DOWNPLAY PROSPECTS

C O N F I D E N T I A L SECTION 01 OF 02 HANOI 001217

SIPDIS

E.O. 12958: DECL: 10/29/2018
TAGS: ECON ETRD PGOV PHUM VM
SUBJECT: WELL-PLACED VIETNAMESE CONTACTS DOWNPLAY PROSPECTS
FOR LEADERSHIP CHANGES

REF: A. HANOI 783

B. HCMC 714

HANOI 00001217 001.2 OF 002


Classified By: Pol. Counselor Brian Aggeler for Reasons 1.4 (B and D)


1. (C) Summary: The Communist Party of Vietnam's 181 Central
Committee (CC) members met October 2-4 to hash out "guidance"
for the government on Vietnam's current economic situation.
This was the third plenum to take place this year.
Well-placed contacts told us CC members came together to
promote the image that they are tackling the concerns of
ordinary Vietnamese such as high inflation. These contacts
voiced skepticism that a "leadership crisis" looms, citing
the fact that businessmen and their Party friends continue to
do well despite recent economic bumps in the road. End
Summary.


2. (C) A note on sources: This cable draws from conversations
October 2-15 with Nguyen Van Hung, Party External Relations
Commission officer; Tran Nhung, former editor of the
military's mouthpiece, "Quan Doi Nhan Dan";
Le Kien Thanh, a prominent businessman and son of former
Party Secretary General Le Duan; and, Tran Bat, Chairman of
InvestConsult (protect all).

The Central Committee Meets
--------------


3. (SBU) The Communist Party of Vietnam's (CPV) 181 Central
Committee (CC) members (including 21 non-voting alternates)
convened in Hanoi from October 2-4 to discuss the impact of
the global financial crisis on Vietnam, curbing inflation and
the then upcoming National Assembly (NA) sessions. This was
the third CC plenum in 2008; on average, the CC meets only
two times per year. Some international press accounts
characterized the most recent plenum as an "emergency
session" that exposed major divisions within the Party
hierarchy over the path Vietnam should follow. One press
piece speculated that a "leadership crisis" looms if these
divisions further widen.

Contacts Weigh In
--------------


4. (C) Several Embassy contacts, who have been frank with us
in the past about leadership wrangling, told us that CC
members aired different opinions about the causes and
consequences of high inflation and the global economic
crisis. However, these contacts took pains to note that the
most recent plenum was not a hastily arranged "emergency
session." Party External Relations Commission's Nguyen Van
Hung and former editor of the military's mouthpiece Tran
Nhung separately told us that, while the plenum was an
unusually short three days, it may actually have been
precedent setting in that CC members may now meet regularly
before NA sessions. (Note: The current NA session started on
October 16 and is continuing. End Note). This is because
the Party wants to "guide" discussions within the NA, they
explained.


5. (C) It also makes sense for CC members to get together to
discuss "guidance" given the current economic climate, Hung
and Nhung said. CC members want to show that they are taking
domestic inflation and the global economic situation
seriously and are pushing corrective measures, Hung stated.

Looming Leadership Changes?
--------------


6. (C) Hung, Nhung, InvestConsult's Tran Bat and Le Kien
Thanh (a prominent businessmen and son of former Party
General Secretary Le Duan) each told us in separate
conversations that different Party factions' business
interests remain generally happy with how they are doing.
These Party factions do not want the economic applecart to be
knocked off course by personnel reshuffles at the highest
levels, Nhung and Thanh told Poloff. Vietnam has not been as
greatly impacted by the global financial crisis as other
countries and Vietnam's inflation rate has come down a bit of
late, Colonel Nhung added. Recent economic developments also
provide evidence that no major personnel changes loom, Nhung
assessed.


7. (C) Thanh added that he is deeply frustrated with Prime
Minister Nguyen Tan Dung for not allowing he and his business
partners to open a bank. He stressed, however, that most
Party members do not have the same level of frustration with
the current regime. In fact, businessmen and their Party and
Government friends are getting richer every day and are
working to preserve the status quo, he added. The only way
Vietnam would experience a "leadership crisis" before the

HANOI 00001217 002.2 OF 002


next Party Congress would be if the "interest groups" behind
Vietnam's top leaders stop making money, Thanh declared.

Comment: Discussing Important Matters of State
-------------- -


8. (C) What was new about this most recent plenum was its
short duration. However, given the current economic climate,
it would have been odd if CC members decided to project a
"business as usual" attitude and not meet to discuss the
bread and butter concerns of ordinary Vietnamese. That
differences over which path Vietnam should follow were aired
does not necessarily mean a "leadership crisis" is on the
horizon. The economic rationale for leadership stability
presented by our interlocutors closely parallels reftel
analysis of leaders using and/or abusing SOEs to solidify
political support by distributing patronage and graft to all
CPV segments. End Comment.


9. (U) This cable was coordinated with ConGen Ho Chi Minh
City.
MICHALAK