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Cablegate: Maldivian Deputy Fm Asks Us to Reconsider Ldc

This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 02 COLOMBO 000186

SIPDIS

SENSITIVE

E.O. 12958: N/A
TAGS: ECON MV
SUBJECT: MALDIVIAN DEPUTY FM ASKS US TO RECONSIDER LDC
GRADUATION STANCE

REF: A) 2003 State 348197 B) 2003 New York 3228

This telegram is Sensitive but Unclassified. Please handle
accordingly.

1.(SBU) Summary: Maldivian Deputy Foreign Minister Shihab
delivered a copy of FM Jameel's response to Secretary
Powell on the issue of LDC graduation for the Maldives.
The GORM believes the US offer of a two year adjustment
period is insufficient, and asks the US to consider a
recent UNCTAD study on the effects of graduation and to
review its position. Post said the US unlikely to change
its position, but hopes to work with the GORM to address
specific concerns. End summary.


2.(SBU) GORM Deputy Minister of Foreign Affairs Hussain
Shihab delivered a copy of FM Jameel's response (full text
at para 5 below) to Secretary Powell's December 29 letter
(Ref A) on LDC graduation during a courtesy call with the
Ambassador on February 2. Shihab indicated the original
had been sent directly to Washington. The letter outlines
the GORM's continued concern over the prospect of
graduating from LDC status. While Jameel assures the
Secretary the Maldives is not opposed in principle to

SIPDIS
graduation, it has yet to outgrow the "need for the kind of
assistance and preferences made available to countries on
the LDC list." It refers to a recent UNCTAD study that
outlines particular preferences that should be extended and
asks that the UNCTAD study be given due consideration by
the members of the ECOSOC. The letter further complains
that the US offer of up to a two-year adjustment period is
insufficient and requests the US reconsider its position on
GORM graduation.


3.(SBU) Shihab reiterated the main points of the letter,
highlighting the GORM's desire for an "expert group" to be
appointed to consider the affects of graduation on the
Maldives' economy and to advise the GORM during the interim
period. The Ambassador recounted US concerns about the
integrity of the graduation process and asked if the GORM
had a specific timeframe for adjustment in mind. Shihab
made no specific proposal, but indicated two years was too
short. Econchief said the US position was firm and based
solely on the integrity of the process, but that the US
would like to discuss specific issues with the GORM to see
if there was any scope for helping allay specific concerns.

4. (SBU) Comment: We understand the ECOSOC meeting on
December 19 (Ref B) took up the graduation issue and that
the chair announced its intent to name a facilitator for
the issue. It appears the GORM recognizes our concerns
regarding the integrity of the graduation process but would
like to find a means of extending some of the privileges it
receives as an LDC to privileges based on its special
circumstances (small, remote islands, not diversified,
etc). We continue to ask if there are specific areas of
concern that we can help address, but the GORM continues to
push for a study of the potential outcomes of graduation.
It is in our interest to protect the integrity of the
graduation process, but also to ensure that graduates
succeed (or at least have every opportunity to succeed).
GORM MFA Permanent Secretary Dr. Ahmed Shaheed is
reportedly in New York for the upcoming ECOSOC meeting. If
possible, we would urge USUN to engage Shaheed and discuss
options and timeframes that would make the GORM more
comfortable with the graduation process. End Comment.

5. (SBU) Full text of FM Jameel's letter to Secretary
Powell. Begin Text:

Excellency,

Thank you for your letter dated 29 December 2003 on
the subject of graduation of the Maldives from the list of
least developed countries.

I would reassure you that the Maldives has no
intention of remaining on the list of least developed
countries longer than its(sic) is absolutely necessary for
it do so(sic). We agree that those countries that have
outgrown the need for special status can be graduated in
accordance with the procedures and processes laid out for
that.
The Maldives is in no way opposed to the principle of
graduation, but the issue we are raising is that we have
not outgrown the need for the kind of assistance and
preference that are made available for countries on the LDC
list. The specific preferences that need to be continued
for the Maldives have been identified by a study carried
out by UNCTAD as required by the UN to assess the
qualification of Maldives for graduation. The report is
now available as a UN document for use by the upcoming
resumed session of the ECOSOC. We believe it is imperative
that the recommendations made in this document, which have
e
been formulated upon the express request of the ECOSOC and
the General Assembly, are given due consideration by Member
States when they decide to graduate the Maldives. Our
view, and that of UNCTAD, is that far from having outgrown
the need for special assistance, there are certain
categories of preferences that are essential if the
Maldives is not to suffer serious economic damage.

We are convinced that a two year period is too short
to adjust to the loss of LDC benefits, for an economy with
a GDP of only about 600 million dollars and with no
immediate prospect of expansion or diversification. I have
no doubt that the flexible and pragmatic approach inherent
in the US position expressed in your letter would be
translated to a really practical time-frame and sequence
for graduation. If the question of graduation is
approached in a manner fully consistent with the rules and
procedures stipulated by the General Assembly, the ECOSOC
and the CDP, rather than on a selective basis, we believe a
fair and workable outcome would be possible.

We have received in the past the support of the US
delegation to the ECOSOC in convincing the Council that
graduation does not take place before a proper assessment
of the costs of graduation is made and ways to address them
are determined.

I would, therefore, like to humbly request you to
reconsider the current US position on our graduation from
the list of LDCs.

I trust that this request would receive your
considerate action.

Please accept, Excellency, the assurances of my
highest consideration.

Fathulla Jameel

End Text

LUNSTEAD
EAD

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