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Cablegate: Paris Support Conference On Afghanistan: Donors

VZCZCXRO3020
PP RUEHAG RUEHAST RUEHBC RUEHDA RUEHDE RUEHDF RUEHFL RUEHIK RUEHKUK
RUEHKW RUEHLA RUEHLN RUEHLZ RUEHPOD RUEHROV RUEHSR RUEHVK RUEHYG
DE RUEHFR #1203/01 1771646
ZNR UUUUU ZZH
P 251646Z JUN 08
FM AMEMBASSY PARIS
TO RUEHC/SECSTATE WASHDC PRIORITY 3556
INFO RUEHEE/ARAB LEAGUE COLLECTIVE PRIORITY
RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY
RUEHIL/AMEMBASSY ISLAMABAD PRIORITY 0748
RUEHBUL/AMEMBASSY KABUL PRIORITY 0649

UNCLAS SECTION 01 OF 04 PARIS 001203

SENSITIVE
SIPDIS

SCA/A:TWILDER A/COO:SPIERCE EUR/WE:CPALMER P:TWEST(INFO)
D:EWITTENSTEIN(INFO) EEB:NWEBER S/P:WWOLMAN(INFO)
S:CQUADE(INFO)

E.O. 12958: N/A
TAGS: EAID EFIN PREL PGOV AORC FR AF XB XF XG XR
XD, ZK, CA, MK, UNDP
SUBJECT: PARIS SUPPORT CONFERENCE ON AFGHANISTAN: DONORS
SUPPORT SRSG EIDE AND ANDS, CITE NEED FOR ANTI-CORRUPTION
STEPS, AND PLEDGE OVER $20 BILLION FOR ASSISTANCE

REF: A. A) KABUL 1150
B. B) KABUL 1314
C. C) KABUL 1410

1. (U) Sensitive but Unclassified - not for internet
distribution.

2. (SBU) SUMMARY: International pledges totaled more than
$20 billion at the Paris Support Conference for Afghanistan
on June 12. This amount doubled the pledge total achieved at
the 2006 London Conference and demonstrated the international
community's long-term commitment to Afghanistan. Donors
committed to supporting an Afghan-led development strategy
and putting money behind the plan. First Lady Laura Bush and
Secretary Rice announce the US. pledge of $10.2 billion over
the next two years, clarifying that $7.1 billion of the
pledge is still awaiting Congressional approval.

President Sarkozy, President Karzai, and UN Secretary Ban
Ki-moon opened the conference, announcing key themes that
resonated in each delegation's interventions throughout the
day. These themes included:

-Align international community support with the priorities
identified by the Afghans in the new five-year Afghanistan
National Development Strategy (institution building,
agriculture, energy and rule of law);

-Support UN Special Representative Kai Eide as the lead in
donor coordination; provide resources for successful 2009 and
2010 presidential and parliamentary elections, the next test
of Afghanistan's nascent democracy;

-Commit to a joint civilian-military approach to developing a
secure and stable Afghanistan;

-Pledge to improve aid effectiveness and increase Afghan
ownership of development;

-And support the Government of Afghanistan to take concrete
steps to fight corruption and improve accountability.

Although President Karzai did not announce concrete steps to
fight corruption, the Afghan Government did present its
development priorities and listed key action items to support
a market-based economy. END SUMMARY.

----------------------
POLITICAL COMMITMENTS
----------------------

2. (SBU) THE AFGHAN GOVERNMENT: President Hamid Karzai
expressed the Afghan Government's gratitude to the
international community for its generosity, noting that
Afghanistan would not be where it is today if it were not for
the sacrifices of Afghanistan's partners. He estimated the
cost of Afghanistan's war- only that which could be measured
in money- conservatively at $500 billion. He stated that
with the approved Afghanistan National Development Strategy
(ANDS), the Afghan Government came to the conference with a
development strategy for the international community to
support, a key US. objective for the conference.

3. (U) Karzai said Afghanistan was entering a new phase of
consolidation and sustainable development, and the main
threat remained regional and international terrorism. Karzai
committed the Afghan Government to pursuing regional
cooperation, acceleration of the development of the Afghan
National Security Forces, reconciliation with those who put
down their arms and backed the Afghan Government and its
constitution, fighting the narcotics scourge through a
meaningful commitment to alternative development, and
investing in agriculture to improve food security.

4. (SBU) On corruption, Karzai said a Commission would
address corruption, and that his government would follow
through on its recommendations. (NOTE: In their statements,
UN Secretary General Ban Ki-moon and other donors pushed the
government for a clearer commitment to fight corruption. END
NOTE.) Karzai assured the international community that the
2009 and 2010 elections would be successful and that the
Afghan Independent Election Commission seeks assistance.

PARIS 00001203 002 OF 004


President Karzai Minister Ahadi, and Economic Advisor Naderi
all said that the international community channel more money
through the Afghanistan Reconstruction Trust Fund and the
Afghan budget in order to improve aid effectiveness and
increase Afghan ownership of development. Minister Ahadi
claimed the Afghan Government is able to absorb more
resources and deliver services, contrary to what many donors
believe.

5. (U) Minister Ahadi also announced the Afghan Government's
prioritization of development needs and its commitment to
economic reform, revenue generation, and progress towards
fulfilling the International Monetary Fund's requirements.
He highlighted building and reforming state institutions to
serve the Afghan people as the number one priority. In
economic development, Ahadi prioritized agriculture and
energy, then roads and education. He said the Ring Road
would be completed by 2009 and a focus on connecting
districts to markets was critical. Ahadi also committed the
Afghan Government to a long list of economic reforms,
including development a credit-investment bureau and a bank
training institute, maintaining macro economic stability and
a moderate monetary policy, increasing supervision of the
banking sector, raising the percentage of revenue to gross
domestic product to ten percent by 2013 (currently seven
percent), working with the National Assembly on the stalled
tax bill, reducing the losses in customs duties, asking
parliament to raise the cost of government services,
reforming the energy sector, privatizing state owned
enterprises, and disengaging from the provision of goods and
services that the private sector can provide. He noted that
the government had already executed two of the three IMF
prior actions (related to correcting for the Afghan
government's missing a 2008 IMF program revenue target) and
was making progress on the third.

6. (U) Afghan National Security Advisor Rassoul discussed the
Afghan Government's commitment to improving governance,
public administration and human rights, noting they were key
factors to meeting economic development goals. He said the
Afghanistan National Development Strategy was built through
significant participatory consultation, and highlighted the
steady progress of the National Justice Program in creating
the human resources necessary to provide stable and
predictable justice. He committed the Afghan Government to
embarking on increased specialization and diversification of
justice, reform of public administration, implementing the
National Action Plan for Women, providing a definite
mechanism to provide for participation of private sector,
NGOs, women, and youth in governance, and creating a disaster
preparedness and response system. Rassoul highlighted the
creation of the Independent Directorate of Local Governance
(IDLG) as a key vehicle to delivering good governance at the
local level. He said the Afghan Government's main objective
is to create an accountable state that can respond to their
needs is the goal of the Afghan people.

----------------
UNITED STATES
----------------

7. (U) FIRST LADY LAURA BUSH: In her opening remarks, the
First Lady announced the USG's $10.2 billion pledge to
support the five-year Afghanistan National Development
Strategy. Mrs. Bush made a compelling case for robust
continuing international support, particularly for the
education of Afghanistan's women and children. She also
noted the progress that previous donations have made in the
lives of the Afghan people, drawing on examples from her
visits to Afghanistan and her meetings with Afghans visiting
the United States.

8. (U) SECRETARY RICE: Secretary Rice specified that the
United States is committing $10.2 billion to reconstruction
and security assistance over the next two years, $7.1 billion
of which is awaiting Congressional approval. She noted that
the pledge included $201 million for the 2008 and 2009
elections. The Secretary highlighted the tremendous progress
Afghanistan has made since the Taliban were removed from
power- its nascent and emerging local governance, strong
security forces, and stable currency - and explained how
these successes are a clear sign of political will to

PARIS 00001203 003 OF 004


develop. She also warned that many challenges remain, and
the US. pledge is meant to put money behind an Afghan-led
strategy to address these challenges.

------------------------
INTERNATIONAL COMMUNITY
------------------------

9. (U) UN SPECIAL REPRESENTATIVE KAI EIDE: After listing the
remarkable successes the international community and Afghan
Government had already achieved, he noted that challenges
remain: corruption undermines the success of governance and
the international community has not invested as much as it
should have in energy and agriculture. Where success has
happened, Eide created strong political leadership had been
strong.

He described his vision for an enhanced partnership, which he
called the "New Deal" between Afghan Government and the
international community, with five main goals, namely:

-1- The Afghanistan National Development Strategy must be a
common road map for Afghanistan and donors, and the Afghan
Government must take full responsibility for implementation;

-2- The international community must align its commitments to
the strategy and make the Afghan Government's priorities its
priorities;

-3- The international community must deliver aid more
effectively and channel as much as possible through the
Afghan Government in order to improve its capacity;

-4- The Afghan Government must improve administration and
combat corruption; and

-5- The international community must improve its
communication with the Afghan Government by ensuring that it
speaks with one voice when providing advice. Eide observed
that every province needs to see the benefits of working with
the international community, not just those where the
international community has a security interests (e.g.,
poppy-producing provinces).

10. (U) INTERNATIONAL FINANCIAL INSTITUTIONS: The World Bank
and International Monetary Fund followed Eide, commending the
Afghanistan National Development Strategy and the
participatory consultation that went into it. They
highlighted the need for financial management improvements
(budget and procurement), better public sectors, and
creations of better linkages to poverty reduction. The Bank
and the Fund both pushed the Afghan Government to focus on
revenue collection. Rio Portugal of the Fun stated that
Afghanistan's Poverty Reduction and Growth Facility would
continue until March 2009, paving the way for debt relief
under the Heavily Indebted Poor Country Initiative.

11. (U) CIVIL SOCIETY AND PRIVATE SECTOR REPRESENTATIVES:
Members of civil society and private sector reported on the
outcomes of the May 24 civil society forum chaired by French
Foreign Minister Bernard Kouchner. The civil society
representative underlined the need for an improved enabling
environment for civil society, noting that authorities must
see a vibrant civil society as an aim unto itself and need to
allocate funds along those lines. The private sector
representative said corruption and insecurity were hindering
private sector partnerships as key to economic growth and
improved aid effectiveness. A member of the human rights
commission also pressed upon the Afghan Government and the
international community the need to maintain respect of human
rights and full participation of women at the center of every
policy for peace to be achieved.

12. (U) DONOR SENTIMENT: Donors generally spoke with a united
voice, noting the tremendous progress made since 2001 and the
many challenges that remain. In announcing pledges, donors
described how their funds would back the Afghan-led strategy.
Several speakers highlighted the 2009 and 2010 elections as
the next benchmarks for Afghanistan's nascent democracy and
the need to support their success. All interventions
expressed support for the leadership of Kai Eide and a
commitment to improving aid effectiveness, while pressuring

PARIS 00001203 004 OF 004


the Afghan Government to improve accountability and take
concrete steps to fight corruption. Many agreed to the
Afghan request for more funding channeled through the Afghan
budget.

-----------------------
FINANCIAL COMMITMENTS
-----------------------

13. (U) US. PLEDGE: In the remarks described above, the First
Lady and Secretary Rice announced the US. $10.2 billion
pledge to support the five-year Afghanistan National
Development Strategy. Secretary Rice specified that the
United States was committing $10.2 billion to reconstruction
and security assistance over the next 2 years ,$7,1 billion
of which is awaiting congressional approval. She noted that
the pledge included $201 million for the 2009 and 2010
elections.

14. (SBU) INTERNATIONAL PLEDGES: Donors far exceed
expectations by tallying another $10 billion in pledges to
support the Afghanistan National Development Strategy on top
of the US. pledge. Pledges included commitments made since
the 2006 London Conference and beyond, ranging in length from
one to five years. Some of the major contributions included
the World Bank at $1.1 billion, the Asian Development Bank at
$1.3 billion, Canada at $1.9 billion, the UK and the European
Commission at over $1 billion, Norway at $775 million,
Germany at $650 million, and Japan at $550 million. A
notable contribution to rural development came from France,
Spain, the United Arab Emirates and Poland, who banded
together to fund a "Marshall Plan for Agriculture." The
United Arab Emirates pledge of $250 million while Saudi
Arabia pledged $148 million. Several new donors, e.g., Malta
and Brazil, made pledges while many of the largest donors
increased their assistance levels.

15. (U) THE FRENCH CONTRIBUTION: President Sarkozy announced
French financial aid would be "more than doubled," with
priority given to agriculture and health, bringing its
assistance up to $165 million over the next two years. The
objective of the aid, Sarkozy said, was "to rid Afghanistan
of terrorists and of drugs." Sarkozy said that "the future
of an Islam of peace and an Islam of tolerance (which) goes
beyond the question of Afghanistan" was at stake. FM
Kouchner stated that the Conference had exceeded the GOF's
expectations, noting that it was "a success because we were
expecting in our dreams 17 billion dollars" noting that more
than 80 countries and international organizations attended
the Conference.

16. (SBU) COMMENT: The 2008 International Support Conference
sent a clear signal of the international community's
long-term commitment to Afghanistan, notably by doubling the
financial contributions achieved at the London Conference.
While President Karzai's failure to deliver a strong,
concrete plan to tackle corruption was disappointing, the
Afghan Government successfully presented a strategy for the
international community to support, announced its development
priorities (institution building, agriculture, energy), and
made clear commitments to economic reform.

17. Deputy Assistant Secretary and Coordinator for
Afghanistan Patrick S. Moon reviewed this cable.

Please visit Paris' Classified Website at:
http://www.intelink.sgov.gov/wiki/Portal:Fran ce

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