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Cablegate: Open Channels: Goe Seeks Usg Assistance in Key Sector

VZCZCXYZ0000
PP RUEHWEB

DE RUEHQT #2585/01 3391113
ZNR UUUUU ZZH
P 051113Z DEC 07
FM AMEMBASSY QUITO
TO RUEHC/SECSTATE WASHDC PRIORITY 8128
INFO RUEHBO/AMEMBASSY BOGOTA 7153
RUEHCV/AMEMBASSY CARACAS 2783
RUEHLP/AMEMBASSY LA PAZ DEC LIMA 2189
RUEHGL/AMCONSUL GUAYAQUIL 3090

UNCLAS QUITO 002585

SIPDIS

SENSITIVE
SIPDIS

STATE FOR: USAID (ROBIN BRINKLEY, SARAH-ANN LYNCH, CARL DERRICK,
TULLY CORNICK) AND F (ERNESTO URIBE AND CHARLES NORTH)

E.O. 12958: N/A
TAGS: EAID EFIN EINV SENV PREL EC
SUBJECT: Open Channels: GOE Seeks USG Assistance in Key Sector
Reforms

Ref: Quito 2237

1. (SBU) Summary. The USG and GOE are successfully working
together on policy reform in areas of mutual interest. The GOE has
sought or accepted technical assistance from USAID in competition
policy, investment, finance, decentralization, environment, and on
other issues. End summary.

2. (U) The GOE is planning to pursue comprehensive reform across
the public sector, with changes at the constitutional and
legislative levels (reftel and previous). It intends to submit
draft reform proposals to the Constituent Assembly, which was
inaugurated on November 29 and will have up to six months to draft a
new constitution. Having suspended the Congress for the duration of
its mandate, the Assembly is concurrently serving as Ecuador's
legislative body. In this context, several agencies have sought
USAID assistance to review legislative changes that they are
drafting.

Competition Policy and Competitiveness
--------------------------------------

3. (SBU) Veronica Sion, head of the GOE's competitiveness
commission, requested funding from USAID for an international
consultant to review the draft competition law (akin to U.S.
anti-trust law) prepared under the commission's auspices. USAID has
agreed to fund this request to help establish much needed
anti-monopoly laws in Ecuador.

Investment Attraction
---------------------

4. (SBU) In another instance, USAID met with Coordinating Minister
for Production Mauricio Davalos to discuss adding an investment
attraction strategy to the USAID competitiveness program. The
Minister expressed support for the proposal to have the regional
development committee (Ecuadorian Committee for Economic Territorial
Development) serve as a conduit between international investors and
municipal governments and local businesses. Davalos mentioned that
this strategy falls in line with the GOE's internal investment and
productivity goals, particularly with respect to SMEs and more rural
areas. Davalos was replaced over the weekend by Susana Cabeza de
Vaca (septel), the former Executive Director of the USG Fulbright
Commission. USAID expects shortly to reconfirm with Cabeza de Vaca
the GOE's continued interest. Future meetings with high-level GOE
officials are planned to explore how the GOE and USAID can jointly
support a new investment strategy.

Financial Sector
----------------

5. (SBU) USAID sponsored a trip for Central Bank officials to visit
the U.S. Federal Deposit Insurance Corporation (FDIC) and the
Salvadorian Institute of Deposit Insurance in an effort to better
understand successful deposit insurance systems, which is currently
lacking in Ecuador. Before proceeding with the trip, the Central
Bank sought and received President Correa's blessing for this trip.
The two Central Bank participants, Mauricio Martinez and Victor
Campoverde, were subsequently appointed General Manager and Deputy
Manager of the Central Bank by the Central Bank board. Since that
time, the Central Bank, again with the support of President Correa,
has requested technical assistance from USAID to help form financial
sector reform policy and review legislation that would merge the
Central Bank and Superintendency of Banks. The IDB is also
supporting this work. The Mission supports creation of an efficient
and independent regulatory body.

Training for People with Disabilities
-------------------------------------

6. (U) USAID and the Office of the Vice-President of Ecuador
partnered with the private sector to finance and implement a pilot
program that will teach computer skills to 270 people with
disabilities nationwide. This training will make them more
competitive and improve their chances of securing better-paying
jobs. It will also support compliance with Ecuadorian law that
requires private firms to employ at least one person with
disabilities per 100 employees.

Justice Reform
--------------

7. (U) The Justice Network NGO, a USAID-supported civil society
group, drafted a set of key justice sector reforms to be added to

the new constitution. Elected Constituent Assembly members from
Alianza Pais, President Correa's political movement, participated in
dissemination events and committed to promote the Network's reform
proposals in the Assembly.

Decentralization
----------------

8. (U) Through its Local Governance program, USAID provided
assistance to the GOE's Planning and Development Secretariat,
SENPLADES, by supporting a symposium which brought together experts
from Latin America and the U.S. to discuss decentralization and
regionalization experiences in the hemisphere. Another co-sponsor
of the symposium was the Latin American Center for Social Sciences
(FLACSO). Members-elect of the Constituent Assembly, academicians
and the press were invited.

Environment Sector
------------------

9. (SBU) USAID is also discussing technical assistance in preparing
a constitutional proposal and implementing language for the Ministry
of Environment, the Consejo Nacional de Desarrollo Sostenible
(CNDS), and the Governor of the Galapagos. CNDS is a government
body with NGO and private sector representation charged with
organizing the GOE's recommendation for reforms in the environmental
sector.

10. (SBU) Comment. Post is carefully reviewing USG policy benefits
of assistance in the high profile and sensitive work of the
Constituent Assembly to ensure that USG support focuses on
constructive areas of convergence, avoids the risks of
politicization or being misconstrued as an attempt to
inappropriately influence Ecuador's political process. USAID's
current work with the GOE on sensitive policy reforms to date offers
an encouraging validation of this approach as the GOE is not only
willing to receive help, but are actively seeking it as well in
several sectors. End Comment.

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