UNCLAS SECTION 01 OF 02 HO CHI MINH CITY 000059
SIPDIS
USDOC
SENSITIVE
SIPDIS
DEPT FOR EAP/MLS
USDOC FOR 4431 (MAC/AP/OPB/VLC/HPPHO)
E.O. 12958: N/A
TAGS: ECON, EAID, EINV, PGOV, VM
SUBJECT: LOST OPPORTUNITIES IN BINH PHUOC PROVINCE
1. (SBU) Summary: Binh Phuoc Province, located north of Ho
Chi Minh City, is a backwater that could do more to take
advantage of its proximity to HCMC. Provincial leaders
used a recent investor conference to wine, dine and sing
martial karaoke with their cronies. In many respects, a
visit to the province is stepping back to the bad old days,
complete with loudspeakers blaring propaganda. A bright
spot is a USG-funded cocoa project, in which as many as
2,000 Binh Phuoc farming households, including some ethnic
minorities, participate. End Summary.
2. (SBU) EconOff visited Binh Phuoc Province January 2-3 to
attend an investor conference sponsored by the Province.
The HCMC branch of the Vietnam Chamber of Commerce and
Industry (VCCI) organized the conference and bused in
almost 100 HCMC-based businesspeople. VCCI organizers told
us they tried to dissuade Binh Phuoc authorities from
holding a business event the day after New Year's, but
local officials were determined to hold the event on the
10-year anniversary of Binh Phuoc's establishment. (Note:
Binh Phuoc and Binh Duong provinces were created in 1997 by
dividing Song Be province. End note.)
3. (SBU) The conference consisted mainly of provincial
leaders reading out multi-page reports on the
accomplishments of Binh Phuoc in the last ten years. Binh
Phuoc's annual growth has averaged 9 percent since the
province was created, but per capita GDP remains at two
thirds the national average at USD 476. VCCI reported on
Binh Phuoc's performance in the 2006 Provincial
Competitiveness Index, a project of VCCI and the USAID-
funded Vietnam Competitiveness Initiative (VNCI). Binh
Phuoc ranked number 52 out of 64 provinces. While the PCI
reported the province well on access to land, it was
particularly weak in the transparency, legal institutions,
business establishment costs, labor training and private
sector development services.
4. (SBU) The day after the conference EconOff traveled to
Bu Dang district in the northeastern part of the province
to visit the USG-funded cocoa project run by ACDI/VOCA's
Success Alliance. Approximately 2,000 farming households
in the district have embraced the project, which adds cocoa
plants to plots where cashew trees are already planted.
The cashew trees protect the cocoa plants from direct
sunlight, and farmers could earn as much as VND 21 million
(approximately USD 1,300) more per year per hectare by
adding cocoa plants to their cashew plantations.
5. (SBU) The project started in Binh Phuoc in 2005, and
farmers expect their first harvest by the end of 2007. The
Success Alliance has helped the farmers form clubs to
facilitate the spread of knowledge. The head of each club
receives training on cultivating and harvesting cocoa and
then shares that expertise with club members. Two of the
farmers we visited had received around 100 plants to start
their ventures, but have since gone on to purchase as many
as 2,000 more plants as they recognized the potential of
cocoa farming. Project participants have had discussions
with Cargill about selling their cocoa beans once the trees
bear fruit. One of the farmers we visited is an ethnic
minority Stieng. Dieu Dang owns about five hectares of
farmland, which he said was valued at VND 140 million
(approximately USD 8,750) per hectare. Dang lives in a
village of 40 households with a small wooden Catholic
church. Dang told us that villagers were predominantly
Catholic or Protestant, and many owned plots of land
similar in size to his farm.
7. (SBU) Comment: Binh Phuoc is clearly the poor cousin to
Binh Duong Province, which lies between Binh Phuoc and HCMC
and is one of Vietnam's most prosperous provinces. Binh
Phuoc is only a two to three hour drive from central HCMC;
with the right leadership, it could capitalize on its
proximity to HCMC and attract investment and industry in
its own right. Under the direction of former Provincial
Party Secretary and current President of Vietnam Triet,
Binh Duong turned itself into a magnet for investors and
industrial zones. Binh Phuoc, however, does not appear to
have changed since it was created ten years ago.
Loudspeakers blare announcements during the day and martial
music at 5 a.m., complete with a recorded voice counting
out morning exercises. The investment conference dinner
appeared to be not so much an opportunity for networking as
an occasion for the People's Committee Chairman and his
business and government associates to drink and sing war-
era karaoke.
HO CHI MIN 00000059 002 OF 002
8. (SBU) Comment cont'd: Provincial authorities kept a
close eye on us, particularly when we met with the ethnic
Stieng cocoa farmer. We were accompanied by a "technician"
who could not answer our technical questions and who seemed
more interested in our question about villagers' religious
affiliations than our discussion of cocoa farming.
WINNICK