VZCZCXRO4842
PP RUEHDBU RUEHIK RUEHPOD RUEHPW RUEHYG
DE RUEHBUL #1108/01 1221242
ZNR UUUUU ZZH
P 021242Z MAY 09
FM AMEMBASSY KABUL
TO RUEHC/SECSTATE WASHDC PRIORITY 8701
RUEHC/DEPT OF AGRICULTURE WASHINGTON DC 0125
INFO RUEATRS/DEPT OF TREASURY WASHINGTON DC 0794
RUCNAFG/AFGHANISTAN COLLECTIVE
RUEHZG/NATO EU COLLECTIVE
RUEABND/DEA HQS WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEHBU/AMEMBASSY BUENOS AIRES 0023

UNCLAS SECTION 01 OF 03 KABUL 001108 
 
DEPT FOR SRAP, SCA/FO, SCA/RA, AND SCA/A 
DEPT PASS FOR AID/ANE 
DEPT PASS USTR FOR DELANEY AND DEANGELIS 
DEPT PASS OPIC 
DEPT PASS FOR TDA FOR STEIN AND GREENIP 
USOECD FOR ENERGY ATTACHE 
CENTCOM FOR CSTC-A 
NSC FOR JWOOD 
TREASURY FOR MHIRSON, ABAUKOL, AWELLER, AND MNUGENT 
COMMERCE FOR HAMROCK-MANN, DEES, CHOPPIN, AND FONOVICH 
 
SENSITIVE 
 
SIPDIS 
 
E.O.  12958 N/A 
TAGS: ECON EAID EFIN EAGR ETRD PGOV PREL AF
SUBJECT: Afghanistan -- Eleventh Meeting of the Joint Coordination 
and Monitoring Board 
 
REF: Kabul 1017 
 
¶1. (U) SUMMARY.  The Joint Coordination and Monitoring Board April 
19: 
-- approved the Finance Ministry's requests to set up task forces to 
develop a financing mechanism for the ANDS and to help the GIRoA 
prepare good projects in priority areas; 
-- supported the Agriculture Ministry's priorities under its new 
National Agriculture Development Framework but did not reach any 
decision on an urgent request for aid to procure wheat seeds; 
-- supported the Commerce Ministry's new priorities for promoting 
private sector development; 
-- received GIRoA assurances that August elections would be fair; 
and 
-- approved an increase in the Afghan National Police (reported 
reftel). 
GIRoA presentations, including assistance requests, were 
refreshingly well-prepared and specific.  We expect donors to 
respond positively.  In an encouraging milestone, a representative 
of the private sector attended this JCMB meeting, apparently the 
first time one has been invited.  End Summary 
 
¶2. (U) The eleventh meeting of the Joint Coordination and Monitoring 
Board took place in Kabul April 19, chaired by Afghan Senior 
Minister Hedayat Arsala and SRSG Kai Eide.  Arsala opened the 
meeting by noting that the GIRoA had taken several important steps 
since the Paris aid conference last summer, including appointment of 
new, effective ministers at Finance, Agriculture, Commerce, and 
Interior.  He thanked donors for their support and urged backing for 
what he called a sustainable financing mechanism for the Afghanistan 
National Development Strategy (ANDS).  Eide said recent 
international conferences in Moscow and The Hague showed the 
international community (IC) supports Afghanistan and is focused on 
the right priorities.  He said agriculture and private sector 
development are fundamental to the security and prosperity of the 
Afghan people and that improvements are still needed in how the IC 
works with the GIRoA. 
 
---------------------------- 
ANDS Financing and Alignment 
---------------------------- 
 
¶3. (SBU) Finance Minister Zakhilwal reiterated well-rehearsed 
complaints that the ANDS faces a $22 billion "financing gap," that 
donor assistance is not aligned with GIRoA priorities, that some 
sectors receive "too much" aid while others too little, and that the 
share of aid donors channel through the central budget has declined 
despite GIRoA appeals to increase it.  The JCMB approved four 
proposals to address these issues, all supported by the Standing 
Committee on Development on March 18: 
 
-- Donor Missions are to assign focal points, ideally Afghan, to 
ensure consistency and timely reporting on aid allocation. 
 
-- A task force, led by the Ministry of Finance, will be set up to 
develop a financing mechanism for the ANDS, including a review of 
the "division of labor" among donors. 
 
-- A task force, led by the ministries of Finance and Economy, will 
be set up to develop a strategy to help the GIRoA prepare good 
projects in priority areas. 
 
-- A "peer review mechanism" will be established on a six-month, 
pilot basis by the Ministry of Public Health and the Ministry of 
Agriculture, Irrigation and Livestock.  Its goals are to better 
align donor programs with GIRoA priorities, to enhance donor 
coordination, avoid ill-conceived approaches, and identify gaps in 
donor funding.  Donors stressed they are only approving this concept 
as a pilot at this stage.  SRSG Eide appealed to keep the mechanism 
simple and avoid endless discussion.  Zakhilwal concurred with both 
points. 
 
 
KABUL 00001108  002 OF 003 
 
 
----------- 
Agriculture 
----------- 
 
¶4. (SBU) Minister of Agriculture, Irrigation, and Livestock (MAIL) 
Asif Rahimi said cereal production is expected to increase by 30 to 
50 percent this year (after a sharp drop in 2008), thanks to better 
rainfall.  Agriculture has great potential in Afghanistan, he said, 
and he has developed the National Agricultural Development Framework 
(NADF) to realize this potential.  Rahimi described the five top 
priorities of the NADF (assistance requests in parenthesis): 
 
-- Urgent assistance to buy wheat seeds now for distribution to 
farmers in September ($32.4 million).  Without endorsing Rahimi's 
specific proposal, Charge informed the JCMB that the U.S. hoped to 
be able to make a generous contribution in support of this priority. 
 (Note: Septel will recommend urgent action on one of several USG 
options to support the Agriculture Minister's request, in time for 
an announcement at the May 6-7 Trilateral Summit.) 
 
-- MAIL will establish a one-stop window to facilitate lease of 
government land for productive purposes ($3 million). 
 
-- Increasing access to farm credit ($2.3 million). 
 
-- "Change management" and reform at MAIL ($3.5 million in the first 
of a three-year program. 
 
-- The Comprehensive Agricultural and Rural Development (CARD) 
facility, which aims to improve coordination among MAIL and the 
Ministries of Rural Rehabilitation and Development, 
Counter-narcotics, and Finance.  CARD would start in the provinces 
of Nangarhar, Balkh, and Badakhshan ($81 million over three years). 
 
¶5. (SBU) The U.S. and other donors all supported Rahimi and the 
priorities he has set for agricultural development.  The Charge 
noted that President Obama has placed emphasis on agriculture in the 
new U.S. strategy for Afghanistan and that the U.S. had invited 
Rahimi to Washington in May.  The UK pledged aid to agriculture 
valued at BPS 35 million in support of the NADF.  The EC announced 
aid valued at 60 million euros.  And the ADB said it would fund 
another irrigation project valued at $300 million and an agriculture 
marketing infrastructure project valued at $30 million.  Rahimi 
thanked donors for their support and urged donors unable to pledge 
new aid to reprogram already pledged assistance to align with the 
priorities of the NADF. 
 
-------------------------- 
Private Sector Development 
-------------------------- 
 
¶6. (U) Minister of Commerce and Industries (MOCI) Wahidullah 
Shahrani said the private sector must be the engine of economic 
growth in Afghanistan.  He described his five priorities for 
promoting private sector development (PSD) and their associated 
assistance requests: 
 
-- Enhancing Afghan competitiveness by improving border management, 
liberalizing trade policy, and reaching a new transit trade 
agreement with Pakistan.  Assistance request: $44.1 million for 
feasibility studies and detailed design for upgrading of six border 
ports. 
 
-- Streamlining licensing and registration procedures to promote 
private investment.  Request: $2.5 million to establish a 
comprehensive database for licenses and registrations. 
 
-- Increasing value-added industrial processing.  Request: $7.1 
million for feasibility study and detailed design for industrial 
parks, export processing zones, or reconstruction opportunity zones 
in six potential locations. 
 
 
KABUL 00001108  003 OF 003 
 
 
-- Improving the legal and policy framework to promote private 
investment, especially by SMEs.  Request: $2.5 million to support 
drafting regulations for commercial laws, and industrial policy, and 
an investment policy. 
 
-- Reforming and building capacity at MOCI and other GIRoA 
institutions involved in PSD.  Request: $2.6 million to reform MOCI 
structure, to support the Afghan Chamber of Commerce and Industries 
(ACCI), and to provide trade-related training to private 
businesses. 
 
¶7. (SBU) Shahrani noted that the GIRoA hoped to involve ACCI in all 
major policy decisions affecting the business community and that, 
for the first time, a representative of the private sector (though 
not from ACCI) was attending this JCMB meeting.  Gholam Hassanzada, 
representing the Private Sector and Civil Society Enabling Council, 
said Shahrani's approach was a step forward but that additional 
effort to support PSD is needed.  He said PSD has been neglected, 
and businessmen are leaving Afghanistan and investing in other 
countries because the climate here is poor.  Hassanzada also 
appealed to the IC to involve the Afghan private sector more in 
their aid projects. 
 
¶8. (SBU) The few donors who spoke supported Shahrani and his 
priorities for PSD.  The Pakistani representative said the GOP 
realizes the importance of a new transit trade agreement and would 
facilitate the process to negotiate one.  He said bilateral Af-Pak 
discussions on this issue would be held on the margins of the 
Regional Economic Cooperation Conference to be held May 13-14 in 
Islamabad.  Co-chair Arsala closed this agenda item, saying the JCMB 
has approved MOCI's priorities and the inter-ministerial committee 
on PSD will work to develop projects to implement them.  Shahrani 
has called donors to a meeting on May 2 to follow up on his 
assistance requests. 
 
---------------- 
Elections Update 
---------------- 
 
¶9. (SBU) Independent Election Commission (IEC) Chief Technical 
Officer Najafi said all four phases of voter registration for the 
August presidential election have taken place and preparations for 
the 7,000 polling centers are continuing.  Bids are being accepted 
to produce voting materials.  The GIRoA has submitted a budget for 
the election to donors, with only an $18 million financing gap, 
which they hope to cover soon.  IEC is building public awareness and 
consulting with political parties on ways to ensure transparency. 
The GIRoA has invited international observers and accredited 44 
national and international entities so far.  Najafi noted 
election-related training of police is not the IEC's responsibility 
but would be coordinated with IEC.  Arsala added that the members of 
the Electoral Complaint Commission have been nominated and that 
comprehensive efforts are underway, involving close cooperation 
between the GIRoA and IC, to ensure fair elections. 
 
------- 
Comment 
------- 
 
¶10. (SBU) Most observers agreed that GIRoA preparations, including 
its specific assistance requests, for this JCMB meeting were 
considerably more focused than at other recent JCMB's.  In 
Zakhilwal, Atmar (reftel), Rahimi, and Shahrani donors interacted 
with the best and the brightest in the cabinet.  We expect donors 
will follow through and support many if not most of the assistance 
requests floated at this JCMB. 
 
RICCIARDONE