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Cablegate: Croatian Ministry of Finance Skeptical of Both

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

070923Z Mar 05

UNCLAS ZAGREB 000356

SIPDIS


E.O. 12958: N/A
TAGS: ECON EFIN EAID HR
SUBJECT: CROATIAN MINISTRY OF FINANCE SKEPTICAL OF BOTH
U.S. AND BRITISH INITIATIVES FOR POOREST COUNTRIES

REF: STATE 31823

1. Econoff passed reftel Fact Sheet to A/M of Finance, Ana
Hrastovic, on February 28, and met to discuss the U.S.
initiative March 3. Hrastovic expressed concerns about
aspects of the U.S. proposal, saying that she believed that
poor countries would ultimately get less money. They would
also go to private markets to finance investment, at
disadvantageous conditions. They might even resort to
raising money unsustainably on domestic markets. She felt
that it would be hard for the international community to
monitor export credit agencies and banks to prevent buildups
of new debt.

2. Hrastovic did not appear to be familiar with the British
IFF (International Finance Facility) initiative. Upon
hearing about the proposal to front-load assistance by
"borrowing" against future aid flows, Hrastovic expressed
skepticism about the poorest countries' ability to absorb
additional aid in a shorter time period. She felt that HIPC
was quite an accomplishment and that, for the time being at
least, the international community should perhaps concentrate
on implementing that program.

3. Note: before returning to the Ministry in 2004, Hrastovic
worked for the World Bank on the HIPC (Heavily Indebted Poor
Countries) initiative. Her first hand experience with
assistance issues obviously influences her opinions.
Hrastovic noted it had been very difficult to keep donors'
attention on HIPC as the process dragged out -- thus she had
a reflexive resistance to introducing new and potentially
complex additional initiatives.
FRANK


NNNN

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