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Cablegate: Afghanistan/Pakistan: Austr Delaney Raises Reconstruction

VZCZCXRO4133
RR RUEHDBU RUEHPW RUEHSL
DE RUEHKO #2606 3140925
ZNR UUUUU ZZH
R 100925Z NOV 09
FM AMEMBASSY TOKYO
TO RUEHC/SECSTATE WASHDC 7449
INFO RUEHIL/AMEMBASSY ISLAMABAD 2195
RUEHBUL/AMEMBASSY KABUL 0698
RUCNAFG/AFGHANISTAN COLLECTIVE

UNCLAS TOKYO 002606

STATE PLEASE PASS TO SRAP
STATE PLEASE PASS TO USAID/ASIA - CNORTH AND LDOLAN

SENSITIVE
SIPDIS

E.O.12958: N/A
TAGS: ETRD EAID EINV AF PK JA
SUBJECT: AFGHANISTAN/PAKISTAN: AUSTR DELANEY RAISES RECONSTRUCTION
OPPORTUNITY ZONES WITH JAPANESE OFFICIALS

1. (SBU) SUMMARY: Senior Government of Japan (GOJ) officials told
Assistant U.S. Trade Representative for South Asia (AUSTR) Michael
Delaney November 2 that Japan's development assistance strategy in
Afghanistan and Pakistan would in principle complement U.S.-proposed
Reconstruction Opportunity Zones (ROZ). While GOJ assistance has
not focused specifically on trade capacity-building, Foreign
Ministry (MOFA) and Japan International Cooperation Agency (JICA)
officials noted Japan is investing heavily in related infrastructure
and job creation activities in both countries. END SUMMARY.

2. (SBU) In response to AUSTR Delaney's overview of the state of ROZ
legislation in the U.S., JICA Director General for South Asia
Masataka Nakahara said Afghanistan and Pakistan are high priorities
for Japan's overseas development assistance (ODA), and that job
creation is fundamental to GOJ strategy in both countries. Nakahara
reviewed JICA's framework for assistance to build Pakistan's
industrial base, which focuses on three outcomes: (1) more
consistent and effective policy implementation; (2) improved
governance to create a high-value added market based on fair
competition; and (3) strengthening manufacturing capabilities and
productivity in specific sectors, including the automotive industry.


3. (SBU) Nakahara noted Japan has dispatched several advisors to
provide technical assistance on trade policy and small and medium
enterprise management, centered on the Karachi area. Delaney said
Pakistan's industrial base is in urgent need of modernization and
export diversification, and he encouraged JICA officials to
coordinate future assistance efforts to improve the business
infrastructure in both countries with the opportunities created by
the ROZs. Nakahara also suggested Delaney follow-up with Japan's
Embassy in Islamabad.

4. (SBU) Foreign Ministry Deputy Director General for Southwest
Asian Affairs Kazuo Sunaga said Japan has reached a "critical
moment" as senior policymakers are currently deliberating the future
of Japan's assistance to Afghanistan and Pakistan; however, the
creation of job opportunities will no doubt remain a "pillar" of
Japan's efforts. Sunaga noted the creation of ROZs would be an
"interesting input" that would factor into Japan's future
decision-making on the scope of its assistance. Sunaga added
Japan's aid efforts in Afghanistan center on infrastructure creation
(in addition to agriculture, health, and police support), noting
that a lack of basic essentials such as water and power hinder
further economic growth. However, the unstable security situation,
including a recent bombing just 500 meters from Japan's Embassy in
Kabul, has complicated these efforts, he observed. Delaney said the
security situation in southern Afghanistan where the ROZs are being
contemplated appears to be improving, with less Taliban influence.
Civil society in that region is in critical need of support, he
added. High unemployment, he said, is a major factor fueling the
insurgency as the Taliban is frequently the only employer.

5. (SBU) Sunaga said Japan has yet to disburse any of the $1 billion
pledged at the Tokyo Pakistan Donors Conference in April. Sunaga
said the Government of Japan has allocated $300 million for a World
Bank poverty reduction program pending completion of World Bank
survey mission. Sunaga thanked AUSTR Delaney for his visit and for
sharing what he called "very timely" information on the current and
prospective trade development situation in Afghanistan-Pakistan.
(Note: $123 million of Japan's $1 billion pledge at the April
Donor's Conference has been obligated but not yet disbursed. End
note.)

6. (SBU) Sunaga also noted the Chinese presence in Pakistan appears
to be increasing, citing Chinese renovation of port facilities in
Karachi as an example.

7. (U) AUSTR Delaney cleared this message after his departure from
Tokyo.

ROOS

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