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Cablegate: Estonian International Aid and Democracy Promotion

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RR RUEHAG RUEHAST RUEHDA RUEHDBU RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA
RUEHLN RUEHLZ RUEHPOD RUEHROV RUEHSR RUEHVK RUEHYG
DE RUEHTL #0543/01 2331107
ZNR UUUUU ZZH
R 211107Z AUG 07
FM AMEMBASSY TALLINN
TO RUEHC/SECSTATE WASHDC 0093
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE

UNCLAS SECTION 01 OF 02 TALLINN 000543

SIPDIS

SENSITIVE
SIPDIS
FOR EUR/NB -- KATHERINE GARRY AND EUR/ACE -- JENI WASHELESKI

E.O. 12958: N/A
TAGS: PGOV PREL PHUM ECON EAID EN
SUBJECT: ESTONIAN INTERNATIONAL AID AND DEMOCRACY PROMOTION

REF: TALLINN 432

1. (SBU) SUMMARY: Given its success with rapid democratic
and economic reform, Estonia enjoys a high level of
credibility and influence with developing countries seeking
assistance. As part of the Government of Estonia's (GOE)
larger plans to promote democracy and market-based
development, development assistance is playing a more
important role in Estonian foreign policy. Although
Estonia's development assistance is focused on four
priority countries (e.g., Afghanistan, Georgia, Ukraine,
and Moldova), the GOE continues to expand its internal
assistance budget to promote democracy and development in
the region and around the world. End summary.

Overview of Estonian Foreign Assistance
---------------------------------------

2. (U) As Estonia does not have a separate development aid
ministry, the Ministry of Foreign Affairs (MFA) coordinates
all Estonian aid. In 2006, the GOE spent $15.29 million on
disaster relief, public sector institution building, and
support to multilateral and international organizations'
development assistance programs. A breakdown of the GOE's
2006 assistance reveals the following: 86% for multilateral
and international organizations ($13.15 million) and 14%
for bilateral assistance ($2.14 million).

3. (U) In a July editorial in Eesti Express, Estonia's
leading weekly current affairs newspaper, Foreign Minister
Urmas Paet wrote that development assistance and democracy
promotion will play an increasingly important role in
Estonian foreign policy. "We are setting ever higher
targets in international development cooperation," FM Paet
wrote, "after all, it is embarrassing for us that cows in
Europe receive a subsidy of [$2.62] per day while half of
the world earns less." In 2006, Estonia devoted 0.084% of
its Gross Domestic Product (GDP) to development co-
operation (up from 0.08% in 2004), and has pledged to
steadily increase its contribution to 0.1% by 2010. For
2007, the MFA has set for itself a goal of spending $15.62
million (0.094% of GDP) on humanitarian aid and cooperation
development. (Note. The MFA is responsible for over 90%
of the GOE's total foreign assistance budget. End Note.)

4. (U) The MFA has made supporting new democracies in their
reforms the main objective for Estonian assistance. This
involves supporting initiatives that provide peace,
democracy, protect human rights, promote economic and
social stability, and eradicate poverty in accordance with
internationally approved principles of sustainable
development. Estonia's own example of creating stable and
democratic public institutions and a vibrant economy so
quickly after five decades under the Soviet system have
given it enormous credibility within the region and the
wider world. Nenad Kolev, Macedonian Minister-Counselor to
Estonia, told us "Bigger and richer countries provide us
with more assistance, but we see Estonia as a model and
example that we can learn from" to explain Macedonia's
rationale for establishing a diplomatic mission in Tallinn.

5. (U) As NGOs are still relatively new to Estonian
society, the MFA has made it a priority to promote them
through consultations with the Estonian Development Co-
operation Roundtable. This MFA initiative has helped the
Estonian NGO community coordinate amongst themselves better
and allowed the GOE to outsource some of its projects to
the NGOs. For example in 2006, in response to the
expulsion of Belarus university students from their home
country for publicly supporting pro-democracy opposition
parties, the MFA set up scholarships for 10 of them to
continue their studies in Estonian universities and tasked
the Open Estonian Foundation (OEF), an NGO specializing in
democracy promotion in the region, with implementing the
project. Kelly Grossthal, Project Manager for the OEF's
Support Group for a Free Belarus, told us the partnership
has been successful and hopes to see further collaboration
of this type.

Estonian Assistance in more Detail
----------------------------------

6. (U) During 2006-2007, approximately 85% of Estonia's
total foreign aid was in contributions to international and
multilateral organizations on projects focusing on
humanitarian and disaster recovery efforts, and
governmental institution building. The GOE contributed to
the following multilateral and international organizations.

- The International and Estonian Red Cross,
- The UN Development Program (UNDP),

TALLINN 00000543 002 OF 002


- The UN High Commissioner for Refugees (UNHCR)
- The UN Office for the Co-ordination of Humanitarian
Affairs (OCHA),
- The UN Children's Fund (UNICEF),
- The UN Voluntary Fund for Indigenous Populations,
- The UN Voluntary Fund for the International Decade of the
World's Indigenous People,
- The OSCE Voluntary Fund for Activities Related to the
Removal and Destruction of Russian Military Equipment and
Ammunition from Moldova,
- The World Food Program (WFP), and
- The European Commission's Development Assistance Program.

7. (U) A geographical breakdown of Estonia's contributions
to international projects reveals the following: Lebanon
(31%), Sudan (30%), Indonesia (19%), Democratic Republic of
Congo (15%), and Ukraine (5%). In 2008, Estonia will begin
to contribute to the European Commission's "European
Development Fund," which will increase Estonia's total
development assistance expenditures and give it more
influence in how and where EU development assistance is
spent.

8. (SBU) The remaining 15% of Estonian assistance was in
bilateral development assistance. Geographically, during
2006-2007, Estonian foreign aid can be broken down in the
following: 59% for Asia, 35% for Europe, and 6% for Africa.
This breakdown reflects the GOE's foreign assistance
priority countries: Afghanistan, Georgia, Ukraine, and
Moldova. In 2006, the GOE earmarked 52% of its total
bilateral assistance for these four priority countries.
(Note. More detailed information on Estonia's development
assistance for Afghanistan has been reported (reftel) with
a septel report on assistance to Georgia, Ukraine, and
Moldova. End Note.)

9. (U) A relatively small slice of Estonia's bilateral
assistance (less than 10%) was spent on high tech-focused
projects, but these often attract the greatest
international attention and interest from aid recipient
countries (e.g., the "Deer Leap" program to provide
internet access in Georgian schools and the E-Governance
Academy's efforts to help regional Egyptian authorities
create a "paperless government"). According to Marje Lupp,
MFA Director for Development Cooperation and Assistance,
"There are many other countries with an IT reputation as
good as or better than Finland, but Estonia had to create
its IT/high tech industry from nothing in just over 16
years...which is why people want our expertise."

10. A full accounting of the MFA's assistance, including
project specific details, is available on the MFA's
website:
http://www.vm.ee/eng/kat_178/3463.html

The Future of Estonian Assistance
---------------------------------

11. (SBU) The MFA is currently at work drafting a new
development assistance strategy to succeed its 2003-2006
strategy. Our MFA interlocutors who were involved in the
drafting have informed us that Estonia will continue to
focus on sharing its experience in the areas of political
and economic reform. While Belarus may be added as a
priority country in the future, in the short- to mid-term
Afghanistan, Georgia, Ukraine, and Moldova will continue to
remain the GOE's priority countries. The GOE will keep its
0.1% of GDP assistance budget target, but MFA interlocutors
have told us that their long term goal is 0.17% (which is
the EU target for member states that joined in 2004) and
they will continue to lobby the cabinet for the EU target.

12. (U) Since Estonian foreign assistance is modest in
absolute terms, the GOE is seeking ways to promote more
trade between itself and its priority countries. However,
with a population of just 1.3 million, MFA interlocutors
have told us that Estonia is actively lobbying within EU
fora for the EU to open up the much larger EU market for
developing states. In the July Eesti Express editorial, FM
Paet wrote that development aid by itself is not enough to
reduce poverty. He called on the EU to reduce and/or
simplify its import tariffs on goods from developing
countries to the EU market.

13. (SBU) Comment. In just over 16 years, Estonia has gone
from an aid recipient to being a donor nation. Estonia is
a model of political and economic transformation, which
gives it a much higher level of influence and credibility
with countries seeking its assistance. End Comment.

PHILLIPS

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