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Cablegate: Afghan Finance Minister Discusses London Conference

VZCZCXRO8029
PP RUEHDBU RUEHPW RUEHSL
DE RUEHBUL #4210/01 3641305
ZNR UUUUU ZZH
P 301305Z DEC 09
FM AMEMBASSY KABUL
TO RUEHC/SECSTATE WASHDC PRIORITY 4375
INFO RUEHLO/AMEMBASSY LONDON 3903
RUCNAFG/AFGHANISTAN COLLECTIVE

UNCLAS SECTION 01 OF 02 KABUL 004210

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: EAID EFIN ECON PREL AF
SUBJECT: AFGHAN FINANCE MINISTER DISCUSSES LONDON CONFERENCE
PREPARATIONS AND OTHER TOPICS

1. (SBU) Summary: Afghan Minister of Finance Omar Zakhilwal
explained his understanding of Afghan preparations for the January
28-29 London Conference to Coordinating Director of Development and
Economic Assistance Ambassador E. Anthony Wayne and Embassy Staff
December 29, and invited Embassy assistance in preparing development
documents for the conference. Zakhilwal said he was comfortable
with the general direction of preparations but indicated that the
Afghans are still working hard to coordinate and one of his key
advisors said they are very concerned that the British are pushing
too hard for specific development commitments at London. The advisor
said that these commitments are more apt for the subsequent Kabul
conference in March or April. Ambassador Wayne indicated our
support for a well-prepared Kabul conference to address development
issues with more specifics, rather than trying to rush for London.
In a separate meeting on December 30, Afghan Foreign Minister Spanta
told Deputy Ambassador Ricciardone that the Turkish government was
organizing a January 25 Trilateral with the Afghan and Pakistan
sides and a January 26 "regional summit" in Istanbul prior to
London, both attended by President Karzai and aiming to address the
same broad themes (reported septel). END SUMMARY.

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2. (SBU) During a December 29 office call, which also discussed
reforming USG salary support for Afghan officials in the office of
the Presidency and several ministries (septel), Finance Minister
Zakhilwal said that Afghan Government (GIRoA) preparations for the
London Conference are going well despite the short time frame and
the ongoing confirmation process for all cabinet members.

PAPERS FOR LONDON CONFERENCE

3. (SBU) The Afghan Government is preparing a number of documents
for the London Conference being prepared by different ministries.
Defense Minister Wardak and Interior Minister Atmar are preparing a
paper on security topics. This is currently a 4-5 page paper with a
description of the current situation, timelines and goals for
transition and discussion of commitments that both Afghans and
partners should make. Zakhilwal said he has the lead on development
and governance papers covering aid and development. The MFA is
holding a meeting with the UK Embassy and Afghan Ministers on
December 30. In a separate meeting Foreign Minister Spanta
indicated that he would provide a readout a day or two later of that
meeting and Afghan goals.

4. (SBU) The Finance Ministry is preparing two documents for London.
The first document explains the concept of creating clusters of
ministries with a lead ministry/minister in each cluster and talks
about the need to focus assistance and capacity building on the
eight ministries that handle 80% of the development budget. The
second paper, on aid effectiveness, focuses on pressing donors to
deliver more assistance through the Afghan Government. Because
donors doubt GIRoA's technical capacity to receive and utilize USG
funds, Zakhilwal will include a capacity building plan. This plan
aims to utilize the U.S. and multi-donor funded Afghanistan Civilian
Technical Assistance Plan (CTAP) to increase the capacity of GIRoA
ministries. Ambassador Wayne welcomed the idea of additional
funding through GIRoA, but stressed the need to show that funds can
be handled effectively and transparently. He mentioned the
Congressional notification language which Congress included in the
2010 budget for any money going directly to the Afghan government.
Zakhilwal said he welcomed such language as a way to press for
needed reforms. Ambassador Wayne asked that USAID-Afghanistan share
this language with the Ministry of Finance.

5. (SBU) Zakhilwal said he has also prepared a paper on
corruption/service delivery for which he hopes the High Office of
Oversight (HOO) will take ownership and present as an
anti-corruption/good governance initiative in London. The paper
will identify key public services which currently offer big
opportunities for corruption and which can be turned around with
capacity building and assistance. He said he hopes the HOO can take
his draft ideas and add enforcement as part of a larger
anti-corruption package.

6. (SBU) The Foreign Affairs Ministry is taking the lead on regional
cooperation. (Though Zakhilwal did not mention it, it's understood
that the Palace is also preparing a paper on
reconciliation/reintegration.) In a separate meeting on December
30, Foreign Minister Spanta told Ambassador Ricciardone and
Political Counselor Pforzheimer that they would press for a
"Preparatory Committee" to be formed after London to work out the
exact content of the Kabul conference, which is where we would
properly get into details of economic development and governance.

U.S. HELPING GIROA GET READY FOR LONDON

7. (SBU) Minister Zakhiwal expressed concern for getting the
information prepared in time for the January 28 London Conference.
He reported that the documents are too long and the GIRoA offices
are challenged by the efforts to shorten them. The Minister asked
for USG review and assistance with the documents his ministry is

KABUL 00004210 002 OF 002


preparing. Ambassador Wayne responded positively to this,
suggesting that his office and USAID team up to provide such
assistance in reviewing the draft documents.

8. (SBU) One of Zakhilwal's close advisors added that the Ministry
is very concerned that the British are pushing too hard for specific
development outcomes in London. She said that there is not enough
time to do the work needed to do that before London, noting that
ministers are still going through the confirmation process in Kabul.
Echoing Foreign Minister Spanta's views, she said that it would
also make more sense to develop specifics on development, governance
and aid for the Kabul conference planned for March or April.
Ambassador Wayne said he agreed that the goal for London on
development and governance should be to set broad goals and
directions and then specifics including benchmarks should be
developed in the weeks following for the Kabul conference.

9. (SBU) Ambassador Wayne also indicated that the World Bank staff
was on track to issue its judgment of Afghanistan's new mining
regulations in early January, which is the last remaining benchmark
for being granted HIPIC (Highly Indebted Poor Country) debt relief.
While the World Bank may not be able to conduct a board meeting on
HIPC before the London Conference, he said he was still hopeful that
a means might be found to give a positive signal in time for the
conference as Zakhilwal had previously requested. The Ambassador
and Minister agreed to remain in close touch on this and other
issues.

10. (U) SEPTELs will report discussion on other issues, including
steps to reform significantly existing programs that have provided
salary supplements to select Afghan officials and Turkish government
plans to host a January 25 Trilateral with the Afghan and Pakistan
sides and a January 26 "regional summit" in Istanbul prior to
London, both attended by President Karzai and aiming to address the
same broad themes.

RICCIARDONE

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