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Cablegate: Goss Governor's Forum Focuses Tackles State Budgets And

VZCZCXRO0063
PP RUEHROV
DE RUEHKH #0720/01 1291348
ZNR UUUUU ZZH
P 091348Z MAY 07
FM AMEMBASSY KHARTOUM
TO RUEHC/SECSTATE WASHDC PRIORITY 7126
INFO RUCNIAD/IGAD COLLECTIVE

UNCLAS SECTION 01 OF 02 KHARTOUM 000720

SIPDIS

SIPDIS
SENSITIVE

E.O. 12958: N/A
TAGS: PGOV PINR PREF ECON EAID KDEM SU
SUBJECT: GOSS Governor's Forum Focuses Tackles State Budgets and
Security

REF: A) Khartoum 0693 B) Khartoum 0591 C) Khartoum 0211

1. (U) Summary: The Government of Southern Sudan's (GOSS) Fourth
Governors' Forum (the Forum) has brought into sharp focus the budget
crises in the ten southern states. GOSS President Salva Kiir
admonished the governors to put in place good governance practices,
downsize their civil services, promote the census, remain focused on
security, seek non-oil revenue sources, and implement affirmative
action measures to ensure 35 percent participation by women in state
and local government. End Summary.

2. (U) The Forum was held in Juba May 4-6, with the participation
of the governors or deputy governors of all ten southern states,
along with GOSS ministers and commissioners, representatives from
the UN agencies, the World Bank Multi-Donor Trust Fund, and
diplomatic and donor communities. The Forum, held under the theme
"State Planning, Budgeting, Employment in States, and DDR" also
included the state Ministers of Finance. The goal of the Forum is
to facilitate a meeting every three months with the governors and
the president, key ministers and the international community.

From Security to Economic Focus
-------------------------------

3. (U) Kiir addressed the Forum noting that the gathering had moved
from its first preoccupations with security issues, including the
Lord's Resistance Army, Other Armed Groups, and continuing Sudan
Armed Forces' presence in Unity and Upper Nile States, to the
pressing economic issues crippling the states' ability to meet
payrolls, run operations, or implement development programs. While
Kiir noted that there were still security concerns in some states,
he focused his remarks on the need for greater attention to good
governance, accountability and transparency and strengthening the
private sector. He criticized states for misusing public funds and
maintaining bloated payrolls with ghost workers, many inherited from
the war years (reftels). Kiir stressed that oil revenues had been
declining substantially since January and that the inability to meet
the GOSS payroll was extremely serious. Cutting the payroll does
not mean denying people their rights, but was a hard decision that
had to be made and fully explained to the people, Kiir added.

4. (U) Acting Finance Minister Gabriel Changson Chang elaborated
that while Southern oil revenues had been between USD $38 to $40
million a month, the GOSS payroll was USD $60 million a month.
Changson also reported that he had just returned from Khartoum where
he attempted to borrow from the Bank of Sudan to meet the Southern
budget shortfalls and was turned down. He stated that there was
disagreement with Khartoum over whether the GOSS could borrow money
from international sources under the CPA. Changson said that April
salaries would be delayed, but eventually paid.

Support the CPA
----------------

5. (U) Kiir warned the governors against dealing directly with the
Government of National Unity (GNU) and said that was the main reason
the former governor of Warrap State had been removed recently. Kiir
also urged the governors to help implement the CPA by promoting the
upcoming census. He called for the establishment of State
Population Committees and stressed that "without the census we can't
run a meaningful election or referendum." Some states expressed
concerns that the November census date would not be met because of
the lack of roads and the presence of landmines and ongoing
insecurity.

6. (U) The GOSS President reiterated the need to address the
non-implementation of the Abyei Protocol, and indicated that an
agreement with Khartoum on an Interim Administration to provide
essential services was likely to be reached.

7. (U) Gender inequities must be addressed Kiir warned. He
reiterated the SPLM's commitment to ensure 35 percent representation
in all levels of government by women, above the 25 percent called
for in the CPA. He reminded the governors that it was a violation
of the CPA to not strive to meet this target goal.

Shifting From the Central to the State Governments
--------------------------------------------- -----

8. (U) The overall message of the Forum was that the governors had
to seek creative ways to deal with the economic crises in the states
and that there would be no room for excuses. Governors were
directed to: 1) address ethnic conflicts and submit reports on
their actions to the President; 2) create non-oil sources of
revenue; 3) accelerate the return and resettlement of refugees and
internally displaced people; 3) purge the payrolls of ghost workers
and excessive numbers of civil servants and fight corruption (this
was listed as among the highest priorities); and 4) prepare their
state budgets in time for them to be integrated into the GOSS
budget.

KHARTOUM 00000720 002 OF 002

9. (SBU) Comment: The Forum has become a more structured and serious
venue for coordination between the different levels of government in
the South, reflecting the challenges and successes of
democratization since the signing of the CPA. The states are being
told that they must shoulder a larger share of revenue generation
and clean up their houses to eliminate waste - the oil revenue
cushion is no longer available. Decentralized government, though
struggling to take root, is on track, in Southern Sudan. It will,
however, need intense care and feeding to sustain it, but the
process is moving forward. End comment.

BERNSTEIN

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