VZCZCXRO7099
RR RUEHAG RUEHDF
DE RUEHDL #0334/01 0891455
ZNR UUUUU ZZH
R 301455Z MAR 06
FM AMEMBASSY DUBLIN
TO RUEHC/SECSTATE WASHDC 6702
INFO RUCNMEM/EU MEMBER STATES
RUEHBL/AMCONSUL BELFAST 0334
RUCNDT/USMISSION USUN NEW YORK 0128
RUEHBS/USEU BRUSSELS

UNCLAS SECTION 01 OF 03 DUBLIN 000334 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: EAID EFIN MCC KPAO EI
SUBJECT: IRELAND OKAY WITH COMMISSION ODA COORDINATION 
PROPOSALS AND WITH EU INFLEXIBILITY ON DOHA 
 
REF: A. STATE 12263 
     ¶B. STATE 22747 
     ¶C. LERNER-EU ECON OFFICERS E-MAIL OF 3/3/06 
 
DUBLIN 00000334  001.2 OF 003 
 
 
¶1.  Summary: In a wide-ranging March 23 discussion prompted 
by reftels A and B, officials at Irish Aid (formerly 
Development Cooperation Ireland): 
 
-- noted that Ireland contributed euro 59 million in 2005 to 
the Multilateral Debt Relief Initiative, raising Irish 
overseas development assistance (ODA) to 0.5 percent of GNP; 
 
-- refuted reports that Ireland opposed EU Development 
Commissioner Michel's proposals for improved coordination of 
Member States, aid programs; 
 
--  argued that developing countries had little to gain from, 
and might be harmed by, the terms of the agricultural 
component of the Doha trade negotiations; 
 
-- said that Ireland might establish a development bank to 
provide credit for entrepreneurs in developing countries who 
could not obtain regular bank loans; 
 
-- cited ongoing consultations on Ireland's first-ever ODA 
white paper, which had improved Irish Aid's communication 
with other Government departments; and, 
 
-- welcomed USAID's efforts in recent years to strengthen 
collaboration with other national aid agencies. 
 
Post was disappointed with Irish Aid's views on the WTO 
negotiations, which echoed previous Irish Government concerns 
about the sensitive domestic agricultural sector and also 
standard EU arguments downplaying the potential benefit of a 
Doha deal for the least developed countries.  As Ireland 
faces elections in 2007, the Prime Minister's policy on Doha 
can be seen as an attempt to shore up votes among farmers, a 
traditional constituency of his party.  End summary 
 
¶2.  (SBU) On March 23, emboff used reftels A and B demarche 
points as a lead-in to discussion on current development 
topics with Irish Aid, the new name for Development 
Cooperation Ireland, the aid agency within the Department of 
Foreign Affairs.  Our interlocutors included Michael Sanfey 
and Mairead Creed, Principal Officer and First Secretary, 
respectively, for EU Development Policy, as well as Dermot 
McLean, Health/HIV specialist.  The officials described 
reftels, points on debt forgiveness and other aspects of 
official development assistance (ODA) as the most 
comprehensive information they had seen on any one country's 
aid strategy.  Sanfey noted that Ireland had not been a 
player on debt forgiveness, since its development assistance 
was provided entirely in the form of grants.  He pointed out, 
however, that Finance Minister Cowen had allocated euro 59 
million in December 2005 to the World Bank under the 
Multilateral Debt Relief Initiative (MDRI), which the Irish 
Government counted as raising ODA in 2005 from 0.4 to 0.5 
percent of GNP, or roughly euro 734 million.  (At the 
September 2005 UN High Level Event, Irish Prime Minister 
Bertie Ahern pledged that Irish ODA would reach 0.7 percent 
of GNP by 2012.) 
 
Ireland Not Opposed to Michel's Coordination Proposals 
--------------------------------------------- --------- 
 
¶3.  (SBU) A March 3 Irish Times report that Ireland had given 
a "lukewarm response" to Development Commissioner Michel's 
March 2 proposals to enhance EU coordination on development 
assistance should be "reasonably dismissed," said Sanfey.  He 
claimed that the Irish Times had simply recast earlier 
reports in the "European Voice" and "Terra Viva Europe" that 
Ireland, the UK, Denmark, Sweden, and the Netherlands had 
misgivings about Commissioner Michel's proposals (which ref C 
had identified as inaccurate).  Sanfey acknowledged that the 
Commission's goals on development assistance were not 
identical in every respect to those of Member States, a 
difference that yielded, at worst, creative tension.  He 
emphasized, however, that Member States and the Commission 
"were all in this together" and that Ireland favored 
collective efforts to make assistance more effective. 
 
Lockstep on Irish Opposition to EU Flexibility on Doha 
--------------------------------------------- --------- 
 
¶4.  (SBU) When emboff asked for Irish Aid's views on the 
Irish Government's opposition to further EU concessions on 
the agricultural market access component of the WTO 
 
DUBLIN 00000334  002.2 OF 003 
 
 
negotiations, Creed said that the USG should keep in mind 
recent hardships faced by Irish farmers as well as their 
domestic political influence.  She pointed out that CAP 
reforms had affected farm income, while changes in the EU 
sugar regime were likely to close down Ireland's sugar 
industry.  She also claimed that the EU had lost the 
"propaganda war" in the debate on which WTO members were to 
blame for the current impasse in the Doha negotiations, as 
the United States, Japan, and the EU were "equal offenders" 
in agricultural subsidization.  She added that the most 
impoverished developing countries, the focus of Irish ODA, 
apparently had little to gain from the currnt agricultural 
terms discussed in the Doha Roun.  Moreover, these countries 
already enjoyed 100percent duty/quota-free access to the EU 
agriculural market.  Creed also expressed concern that 
further erosion of agricultural floor prices in the U under 
a Doha deal would harm developing countres, which currently 
benefited from the same pric supports.  In reply, emboff 
cited voluminous stdies that the more liberal agricultural 
market access regime envisioned under a Doha deal could 
potentially lift hundreds of millions in the developing world 
out of poverty, and he offered to share these studies with 
Irish Aid. 
 
An Irish Development Bank and the ODA White Paper 
--------------------------------------------- ---- 
 
¶5.  (SBU) Irish Aid was considering proposals to establish an 
Irish development bank to provide easier access to credit for 
entrepreneurs in developing countries who could not obtain 
loans from mainstream banks, observed Sanfey.  The bank would 
recover its money on a non-profit basis and recycle the 
capital to its locale of operation, along the lines of 
existing Dutch and Norwegian development banks.  (The March 2 
Irish Times reported that Irish Minister of State for 
Development, Conor Lenihan, had received two proposals for a 
development bank: one from a partnership of Citibank and an 
Irish venture capitalist, and another from an executive of 
German Depfa Bank, which operates in Dublin's International 
Financial Services Center.)  Sanfey noted that the proposals 
had not yet worked their way to technical experts at Irish 
Aid, who would be interested in their compatibility with 
regular assistance programs. 
 
¶6.  (SBU) Proposals for a development bank would be folded 
into Ireland's first ever white paper on ODA, which Irish Aid 
expected would be published this summer, said Sanfey.  Irish 
Aid was consulting with other government agencies on the 
paper, and Development Minister Lenihan was conducting town 
hall meetings around the country to invite public input on 
the initiative.  The white paper consultations, according to 
Sanfey, were a means to compel other agencies to focus on 
Irish development strategy, including its Government-wide 
budgetary ramifications.  The white paper also offered entre 
for Irish Aid into the policy discussions of those agencies. 
Sanfey noted, for example, that Irish Aid aimed to weigh in 
more effectively with the Department of Defense on Irish 
peacekeeping operations and also with the Department of 
Enterprise, Trade, and Employment on trade policy.  Regarding 
that latter, Creed asked for more information on USAID's 
aid-for-trade programs. 
 
USAID's Collaborative Efforts Welcome 
------------------------------------- 
 
¶7.  (SBU) Irish Aid welcomed USAID's efforts in recent years 
to strengthen coordination on development programs with other 
national aid agencies, said McLean.  He elaborated that 
Ireland and other European donor countries typically funneled 
assistance funds through the governments of recipient 
countries, whereas USAID's long-standing policy was to fund 
programs through non-government channels.  These contrasting 
approaches underlay previous challenges in cooperation 
between USAID and other aid agencies.  McLean said that 
USAID's collaboration on the ground with other agencies in 
recent years had helped to improve the effectiveness of 
donors, collective efforts.  Sanfey added that Development 
Cooperation Ireland had, in fact, chosen the name "Irish Aid" 
to capitalize on the positive branding associated with USAID. 
 
Comment: Disappointing Views on Doha 
------------------------------------ 
 
¶8.  (SBU) Post was disappointed with the views expressed by 
the Irish Aid officials on the WTO negotiations.  We had 
heard similar comments over the past year about domestic 
political sensitivities on agriculture from the Department of 
the Prime Minister and key economic ministries, but we had 
 
DUBLIN 00000334  003.2 OF 003 
 
 
hoped that at least mid-level Irish Aid officials would 
understand the potential for poverty alleviation presented by 
a more liberal international agricultural trade regime. 
These officials, arguments that the Doha negotiations 
offered little to, and might even harm, the most impoverished 
developing countries were standard EU fare.  Irish Aid's 
sympathy with the Irish Government's opposition to a more 
flexible EU approach to the Doha talks stands in contrast 
with the agency's long-standing advocacy for increased 
international ODA to developing countries. 
KENNY