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Cablegate: Minister of Plan Welcomes Cas and Highlights Need For

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RR RUEHBZ RUEHDU RUEHGI RUEHJO RUEHMR RUEHRN
DE RUEHKI #0812/01 2731417
ZNR UUUUU ZZH
R 291417Z SEP 08
FM AMEMBASSY KINSHASA
TO RUEHC/SECSTATE WASHDC 8505
INFO RUCNSAD/SADC COLLECTIVE
RUEHXR/RWANDA COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEAIIA/CIA WASHDC
RUZEJAA/JAC MOLESWORTH RAF MOLESWORTH UK
RHMFISS/HQ USEUCOM VAIHINGEN GE

UNCLAS SECTION 01 OF 02 KINSHASA 000812

SENSITIVE
SIPDIS

STATE PASS TO USTDA FOR LFITTS
USAID FOR AFR/EA AND AFR/DP

E.O. 12958: N/A
TAGS: ECON ETRD EAID EINV PGOV PREL CG
SUBJECT: MINISTER OF PLAN WELCOMES CAS AND HIGHLIGHTS NEED FOR
PRIVATE SECTOR ENGAGEMENT

1. (SBU) Summary: Minister of Plan Olivier Kamitatu told USAID
Director, DCM and Econcouns on September 18 that he welcomed the new
Country Assistance Strategy (CAS) and hoped to engage international
partners to improve DRC's investment climate and increase private
sector development. Kamitatu identified the energy and river
transport sectors and development of Lake Tanganyika as specific
priority areas for increased private sector development.
Decentralization was described by Kamitatu as the greatest risk to
the country after the situation in Eastern Congo. Kamitatu
acknowledged the need for improved statistical information to better
coordinate and target development programs. End Summary.

COUNTRY ASSISTANCE STRATEGY WELL RECEIVED
------------------------------------------

2. (SBU) USAID Director outlined the vision of the CAS,
highlighting the priority areas of peace and security, governance,
economic growth, health and education. The significant increase in
U.S. bilateral assistance to the DRC was also noted by USAID
Director and DCM. Kamitatu expressed support for the general
objectives of the CAS and noted he was pleased that our vision
aligned well with the GDRC's development priorities as outlined
under the Poverty Reduction Strategy Paper (PRSP) and "Cinq
Chantiers" or five pillars of the GDRC development strategy.

BUT CHALLENGES REMAIN
----------------------

3. (SBU) Turning to broader donor engagement and coordination, the
Minister stated that his Ministry was developing a matrix to better
evaluate international assistance and identify beneficiaries.
However, limited capacity, weak statistical information and
differing methodologies for data collection remain challenges. For
example, Kamitatu noted concerns over the most recent Demographic
and Health Survey (DHS), which measured national HIV prevalence rate
in DRC at 1.5%, lower than previous surveys. As a result, some
could believe that HIV/AIDS no longer represented a significant
concern for the country. USAID Director noted that an HIV/AID
survey will be conducted as part of PEPFAR programming, which will
provide additional statistical information.

4. (SBU) Decentralization was described by Kamitatu as highly
sensitive and the greatest risk for stability after the situation in
the East. (Note: The DRC's 2005 Constitution requires provinces to
transfer 40 percent of their revenues to the federal treasury.
Implementation of this requirement has been slow, however,
reflecting both limited capacity at the provincial level as well as
politically sensitivities. End Note.) Kamitatu stated there needed
to be more results, reforms, and efficiency to ensure the benefits
of economic growth are distributed broadly. Kamitatu prioritized
security, followed by the judicial sector, food prices and energy as
key challenges for development.

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

5. (SBU) Kamitatu stated that he hopes to work with international
partners to encourage private sector development. The need for a
strategic vision with the private sector is needed, according to
Kamitatu. He lamented that there had been few success stories since
the 2006 elections. Energy and river transport (including river
ports) were identified by Kamitatu as key areas for potential
development. The potential development and exploitation of Lake
Tanganyika was also highlighted.

6. (SBU) On energy, Kamitatu noted the need for a clearly defined
policy for the short, medium and long-term. He told emboffs that the
restructuring of the state-owned electricity utility, "Societe
Nationale d'Electricite," (SNEL) and an international tender for the
rehabilitation of the INGA I/II hydroelectric facility are slated by
the end of the year. Kamitatu also expressed strong interest in
working to develop the country's river transport sector, the
traditional principal means for transportation of both goods and
people. Increasing the capacity of ports, including river ports,
would also help to open the country to international trade.

7. (SBU) Comment: With the DRC once again ranked dead last in the
World Bank's Doing Business survey, Kamitatu's expressed interest in
increasing private sector development to improve the DRC's
investment climate is encouraging. Kamitatu rightly identifies both
the energy and river transport sectors as key priorities for the
development of the DRC's woefully inadequate infrastructure. Post

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appreciates USTDA support for SNEL and would welcome additional
USTDA support in the area of river transport as part of broader USG
efforts to promote U.S. commercial opportunities in the DRC and the
country's economic development. End comment.

BROCK

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