Cablegate: World Bank Wants Crucial Role in Post-Election

VZCZCXYZ0012
RR RUEHWEB

DE RUEHKI #1857/01 3481251
ZNR UUUUU ZZH (CCY TEXT - MSI5350 - AD5B452E - 555)
R 141251Z DEC 06
FM AMEMBASSY KINSHASA
TO RUEHC/SECSTATE WASHDC 5306
INFO RUEHXR/RWANDA COLLECTIVE
RUCNSAD/SOUTHERN AFRICAN DEVELOPMENT COMMUNITY
RUFOADA/JAC MOLESWORTH RAF MOLESWORTH UK
RUEATRS/DEPT OF TREASURY WASHDC
RHMFISS/HQ USEUCOM VAIHINGEN GE
RUEAIIA/CIA WASHDC

UNCLAS KINSHASA 001857

SIPDIS

SENSITIVE
SIPDIS

TREASURY FOR OWHYCHE-SHAW

//C O R R E C T E D C O P Y - Text in para 4 & 5//

E.O. 12958: N/A
TAGS: EFIN ECON EAID KCOR PGOV CG
SUBJECT: WORLD BANK WANTS CRUCIAL ROLE IN POST-ELECTION
RECONSTRUCTION

REF: KINSHASA 1396

1. (SBU) Summary. The World Bank's (WB) current priorities in
the DRC are to develop a coordinated donor strategy; support
the DRC's balance of payments; to implement short-term, high
impact development projects; and to revive its
nearly-moribund Demobilization, Disarmament and Reinsertion
(DDR) program. Simultaneously, the WB is facing substantial
internal and external scrutiny, including three WB internal
investigations. End summary.

2. (U) Ambassador and EmbOffs met December 11 with World Bank
(WB) officials Pedro Alba, Washington-based Country Director
for South-Central Africa and the Great Lakes, and Jean-Michel
Happi, DRC resident representative. The three main topics
were a proposed governance compact with the DRC, the WB's
near-term funding plans, and recent internal WB
investigations.

GOVERNANCE COMPACT
------------------

3. (U) Over the past few months, some members of the
international donor community, led by the WB, have drafted a
"Governance Compact" that sets out priorities for DRC's
governance reform for 2007-2010. The seven proposed
priorities are security sector reform, transparency, public
finance management, natural resource management, public
administration reform, local governance and investment
climate/public enterprise reform.

4. (SBU) Alba acknowledged the Ambassador's concern that the
WB-initiated document was drafted with no Congolese
participation or involvement and that, as a result, GDRC
officials may perceive it as an effort of the international
community to stand in the shoes of Congolese decision makers.
Alba indicated the WB supports the document's principles,
but would like to convert it to a more technical "note" and
present it as only donors' recommendations. He also said the
WB has not yet decided if it will propose a ceremonial
signing with the GDRC. (Comment: The WB's back-peddling to
repackage the document as a "note" for input is probably good,
but the damage has already been done, as we know GDRC
officials already have a copy of the current document.
End comment.) Happi emphasized that the guiding document
for the DRC's development must still remain the Poverty
Reduction Strategy Paper (PRSP), submitted to the IMF and
WB in July 2006.

EMERGENCY FUNDING
-----------------

5. (SBU) Alba and Happi said the WB plans to disburse USD 100
million as soon as possible in 2007. The WB will give USD 50
million directly to the GDRC to apply against its balance of
payments, with a primary goal of freeing GDRC funds for the
DRC's upcoming debt payments to external multilateral creditors.
The other half is budgeted for a number of small "high-impact,"
rapidly-implemented, labor-intensive development projects in
Kinshasa and Mbuji-Mayi, Eastern Kasai, locations the GDRC
itself suggested. (Comment: It is probably not coincidental
that the Presidency supports immediate WB programming in two
cities in which President Kabila is unpopular. End comment.)
Alba said the WB will soon send teams to the DRC to seek
implementation partners, looking in particular to religious
and NGO communities.

6. (U) Alba also said the WB is trying to restart its program
to support public school teachers' salaries. (Note: The WB's
attempted launch of this school-fees elimination program fell
through in 2005, in part because the GDRC failed to provide
its agreed-upon share of funding for it. End note.) Alba
agreed with Ambassador that one of the primary obstacles is
actually getting the payments into the hands of the teachers.
(Comment: The WB correctly recognizes that the salaries of
teachers and other civil servants is likely to be a
contentious issue the new government will soon have to face.
End comment.)

DEALING WITH ITS PROBLEMS?
--------------------------

7. (SBU) The WB is also trying to reinvigorate its DDR
program, which by its own admission has been plagued by
mismanagement and corruption (reftel). Alba admitted that
the WB and GDRC will not meet the initial December 31, 2006
goal of enrolling the estimated 30,000 to 40,000 who remain

eligible for DDR. (Comment: Post estimates the figure is most
likely even higher, and MONUC believes it is about 60,000 to
65,000. End comment.) Alba and Happi said although
disbursements to the Congolese DDR implementer, CONADER
(National Commission for Disarmament, Demobilization and
Reinsertion), continue, the WB will make management changes
within that body. The WB is also trying to raise additional
funds for DDR, offering to match donor pledges.

8. (SBU) Additionally, the WB's DRC office is grappling with
three internal investigations conducted earlier in 2006. One
investigation focuses on BCECO, the GDRC's primary WB project
implementer, while the other two concern CONADER and the
GDRC's Social Fund. According to a WB official, the BCECO
report should be completed and published soon. However, the
CONADER and Social Fund investigations are not yet complete,
and it is uncertain whether they will result in official
reports. Alba and Happi said they are not yet privy to any
details or findings of the latter two investigations.

COMMENT
-------

9. (SBU) For a variety of reasons, the WB has faced numerous
internal and external problems that have hampered its work in
the DRC. Now it seeks to revitalize its programs, remove
some of its obstacles to progress and take a leading role
among donors. Increasing its international DRC-based staff
and maintaining its current emphasis on internal and external
oversight and monitoring are important steps to realizing
such goals. Further, in the upcoming months, it must be
willing to work openly but cautiously with the new DRC
government, neither being too slow to implement needed
projects nor too hasty to disburse "quick impact" funds
without some due diligence. End comment.
MEECE

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