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Cablegate: Ambassador's Tour D'horizon with the Minister of Plan

VZCZCXRO7298
RR RUEHBZ RUEHDU RUEHGI RUEHJO RUEHMR RUEHRN
DE RUEHKI #1168/01 3651400
ZNR UUUUU ZZH
R 301400Z DEC 08
FM AMEMBASSY KINSHASA
TO RUEHC/SECSTATE WASHDC 8979
INFO RUCNSAD/SADC COLLECTIVE
RUEHXR/RWANDA COLLECTIVE
RUEHNR/AMEMBASSY NAIROBI 5234
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEAIIA/CIA WASHDC
RUZEJAA/JAC MOLESWORTH RAF MOLESWORTH UK
RHMFISS/HQ USEUCOM VAIHINGEN GE

UNCLAS SECTION 01 OF 03 KINSHASA 001168

SENSITIVE
SIPDIS

USAID FOR AFR/EA, CMM AND AFR/DP
NAIROBI FOR USAID/EA/RCMG

E.O. 12958: N/A
TAGS: ECON ETRD EAID EINV PGOV PREL CG
SUBJECT: AMBASSADOR'S TOUR D'HORIZON WITH THE MINISTER OF PLAN

1. (SBU) Summary: The Ambassador met with Minister of Plan Olivier
Kamitatu on December 23 to discuss a broad range of challenges
facing the Democratic Republic of Congo (DRC). Kamitatu described
four priorities for the DRC: security, creation of development
corridors, capacity building, and an improved investment climate.
Regional economic integration was highlighted by Kamitatu as a
necessary element to support security and stability in eastern DRC.
Kamitatu requested USG support and leadership in creating a
development corridor for the Great Lakes region to promote economic
integration and increase legitimate trade flows among the DRC,
Uganda and Rwanda. The Ambassador was accompanied to the meeting by
the Acting USAID Mission Director and Economic Counselor
(notetaker). End Summary.

ECONOMIC AND SECURITY CHALLENGES
--------------------------------

2. (SBU) The Ambassador opened the meeting by noting that the DRC
faced difficult times ahead due to the impact of the global
financial crisis. Kamitatu responded that security remained
fundamental; without security, it would be impossible to address
economic and financial challenges. Kamitatu described economic
integration in the Great Lakes region as a key element to support
long-term security and stability in the region. Specifically,
Kamitatu cited the need to reinvigorate existing mechanisms such as
the CEPGL (Communaute Economique des Pays des Grands Lacs or
Economic Community of the Great Lakes Countries, in English) in
areas such as energy, roads, and private investment. To this end,
the Foreign Minister plans to appoint a POC for investment in the
Great Lakes.

3. (SBU) Regional integration and economic growth also remain key
for the restoration of the central state and to address anticipated
population growth in both the DRC and Rwanda, Kamitatu added.
Kamitatu remarked that with Rwanda's population set to increase to
20 million in the coming decades, a key question will be how to
politically organize local Hutu populations. The Ambassador noted
that stronger legitimate trade links would make peace easier for all
parties, and that economic integration and growth in the region
would also reduce Nkunda's legitimacy.

4. (SBU) Kamitatu noted that the GDRC has already initiated a
program of "development corridors" within the DRC, but that there
remained a need to create interest among Rwanda, Uganda and DRC in
developing a corridor that would include the Kivus. Specifically,
this corridor could stretch from Kinsangani in the DRC to the Indian
Ocean ports of Dar-Es-Salaam and Mombassa. Noting international
support for existing development corridors in the DRC, including the
Bas Congo-Angola corridor and the Katanga-South Africa corridor,
Kamitatu asked who might provide leadership to support a Great Lakes
corridor. Acting USAID Mission Director noted regional USAID/East
Africa support for the Northern Transport Corridor, aimed at
facilitating trade within the region through mechanisms such as
customs harmonization, and promised to examine the role of the DRC
in this initiative.

CAPACITY BUILDING ALSO KEY
---------------------------

5. (SBU) Kamitatu highlighted capacity building as another area
where they GDRC needed support, both at the central and provincial
government levels. Acting USAID Mission Director noted that the new
bilateral framework agreement on USG assistance highlights
strengthening capacity and provides for specific agreements in
sectors, with the idea of providing host governments with greater
decision-making authority.

6. (SBU) The Ambassador noted USG efforts to promote a more
professional military, including plans to train the First Battalion,
totaling approximately 900 soldiers. The hope is for this training
to serve as a model for future training and broader
military-to-military cooperation. Unlike military training from
other Western donors, the USG training will include the donation of
equipment. Results will take time, but we need to start addressing
the issue, added the Ambassador. Kamitatu noted that payment of
salaries remained essential, to which the Ambassador responded that
the USG would need assurances on this issue before undertaking the
training. Kamitatu added that there were simply too many soldiers
currently in the Kivus, which had led to a lack of discipline.
Better to have fewer, but better trained, soldiers. While it is
important for the GDRC to work with international partners, Kamitatu
stressed that the Congolese themselves must solve their own

KINSHASA 00001168 002 OF 003


problems.

DONOR COORDINATION UPDATE
-------------------------

7. (SBU) Turning to donor coordination, Kamitatu noted the first
results of the Aid Management Platform (French acronym PGA), used by
the Ministry of Plan to track and manage assistance flows. According
to Kamitatu, results showed that the DRC received $1.7 billion in
donor assistance from January 2007 through June 2008. (Note:
Kamitatu did not go into detail with regard to which resources are
counted as aid within the PGA; however, USAID assistance is reported
within the platform. End Note.) Kamitatu compared these flows to $1
billion in private investment in Katanga province alone, pointing to
the need to increase private sector investment as a means of
speeding economic growth. Finally, Kamitatu stressed the need to
reinforce the DRC's statistical capacity (particularly within the
National Statistical Institute), noting that information management
was key to effective implementation of the DRC's development agenda.


8. (SBU) Responding to a question from the Acting USAID Director
with regard to any changes that might be anticipated in the Thematic
Group structure, through which donors and the government work
together in 15 work areas, Kamitatu lamented that the Thematic
Groups were not functioning more effectively. Where groups were
functioning well, Kamitatu noted strong engagement directly from the
GDRC Minister with oversight of the group. However, Kamitatu cited
a lack of GDRC leadership and engagement at the Ministerial level
within many of the groups, as well as insufficient operational
budgets. (Comment: The question of operational budgets for the
Thematic Groups has been a point of contention since their
inception. Whether donors would support allocating funding to the
groups remains in question, particularly over concerns that these
resources would be used largely for per diems and other fees to
Congolese participants in the groups. End Comment.) The GDRC,
under the leadership of Prime Minister Muzito, continues to work to
address these issues. According to Kamitatu, the focus of
donor-government coordination must be on sectoral priorities in the
main groups, including infrastructure, agriculture, health and
education.

INVESTMENT CLIMATE KEY
----------------------

9. (SBU) The Ambassador stressed that FDI remained key for the DRC's
long-term development. There must be success stories to attract
investors. Kamitatu concurred and highlighted two potential areas
for investment: energy and the deep sea port in Banana (Muanda).
Over the next five years, the GDRC will place a priority on
electricity and water. In the energy sector, there are plans to
launch a feasibility study shortly on INGA II; however, there must
also be a focus on smaller energy projects, not just INGA.

10. (SBU) Turning to an IMF program and the Chinese agreement,
Kamitatu noted that donors' views on the Chinese agreement had
changed from two years ago, and that the focus now was on more
technical aspects of the deal. He hoped that the IMF would find a
solution-the GDRC needs HIPC to maintain the Poverty Reduction
Strategy Plan (PRSP), Kamitatu added. Kamitatu noted there remains a
need to create more incentives for investment and improve
infrastructure. For example, he noted President Kabila's goal to
connect the port of Matadi to the city of Kisangani within the next
three years. The DRC's projected economic growth for 2009 of 5
percent, however, is not enough to reduce poverty. The Ambassador
noted the USG's desire to support the DRC's development and that
there had been an increase in levels of development, humanitarian
and military assistance.

11. (SBU) Comment. While Kamitatu repeated several familiar themes-
the need for energy sector development, an improved investment
climate, and enhanced capacity to track and manage international
assistance-- his call for greater economic integration in the Great
Lakes to support security in eastern DRC was a new element in our
discussions. Post concurs with Kamitatu that regional economic
integration would play a positive role in promoting the long-term
stability and prosperity of the region. While halting the flow of
illegal trade and the exploitation of natural resources in the Kivus
must continue to be addressed, the positive role that legitimate
trade and regional integration can play in stemming conflict within
the region should not be overlooked. End Comment.


KINSHASA 00001168 003 OF 003


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