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R 211734Z MAR 06
FM AMEMBASSY NOUAKCHOTT
TO RUEHC/SECSTATE WASHDC 5278
INFO RUEHEE/ARAB LEAGUE COLLECTIVE
RUEHZK/ECOWAS COLLECTIVE
RUEHRL/AMEMBASSY BERLIN 0211
RUEHBY/AMEMBASSY CANBERRA 0242
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RUEAIIA/CIA WASHDC
RUEKDIA/DIA WASHDC
RUEKJCS/SECDEF WASHDC
RUEHNO/USMISSION USNATO 0154
RHMFISS/CDR USEUCOM VAIHINGEN GE
RUEATRS/DEPT OF TREASURY WASHDC

C O N F I D E N T I A L SECTION 01 OF 02 NOUAKCHOTT 000322 
 
SIPDIS 
 
SIPDIS 
 
DEPT FOR AF/W AND EB/IFD (A. BESMER) 
 
E.O. 12958: DECL: 03/21/2016 
TAGS: PREL PGOV BBSR EINV EPET ECON EFIN EAID MR
SUBJECT: UPCOMING IMF BOARD MEETING--USG SUPPORT FOR 
MAURITANIA REQUESTED BY COL. FAL AND PRIME MINISTER 
 
 
Classified By: Ambassador Joseph LeBaron, Reasons 1.4 (b),(d) 
 
-------------- 
(C) KEY POINTS 
-------------- 
 
-- The Prime Minister called in Ambassador March 20 to press 
for USG support at an IMF Board Meeting in Washington next 
week, on Monday, the 27th. 
 
-- The IMF Board is to consider waiving or delaying an $18 
million reimbursement by Mauritania for non-complying 
payments to the IMF, according to the Prime Minister. 
 
-- Mauritania wants the USG to support waiving the $18 
million reimbursement.  The non-complying reimbursement stems 
from Mauritania's misreporting in 2002. 
 
-- Military Council leader Col. Fal made a similar request in 
a message passed to Ambassador, through the Foreign Minister, 
also on March 20. 
 
-- Col. Fal and the Prime Minister also asked that the USG 
support, at an IMF Board Meeting scheduled for June 21, the 
immediate cancellation of Mauritania's debt under the G8 
initiative. 
 
-- Both Col. Fal and the Prime Minister said that the 
Mauritanian public perceives the IMF decision to delay debt 
cancellation as "sanctions," and IMF insistence on immediate 
repayment of non-complying disbursements would only add to 
that perception.  Col. Fal asked that Mauritania's progress 
on the democratic transition also be taken into consideration. 
 
------------ 
(C) COMMENTS 
------------ 
 
-- Mauritania has, in fact, made significant progress, both 
in its macroeconomic policies and in its transition toward 
democracy. 
 
-- Much, of course, remains to be done.  A presidential 
election is still 12 months away, and Mauritania still has a 
way to go to fully comply with IMF conditions, including 
improving public finance management and budgetary 
transparency. 
 
-- But Embassy believes USG support at the March 27th meeting 
would be a useful tool in encouraging the Mauritanians to 
continue working hard on the ambitious transition timetable 
they have set for themselves. 
 
-- Moreover, Mauritania is under an IMF Staff Monitored 
Program, so there is far less chance of Mauritania 
backsliding now. 
 
End Key Points and Comments. 
 
¶1. (C) Prime Minister Sidi Mohamed Ould Boubacar called in 
Ambassador on March 20 to seek USG support for Mauritania's 
efforts to convince the IMF Board to waive or delay any 
reimbursement of non-complying payments because of 
Mauritanian misreporting in 2002.  The Board is scheduled to 
take up the matter on March 27.  The Prime Ministers also 
requested USG support in canceling Mauritania's debt under 
the Multilateral Debt Reduction (G-8) Initiative at a 
scheduled June 21 Board session.  Also attending the meeting 
was Foreign Minister Ahmed Ould Sid'Ahmed and Central Bank 
Governor Zeine Ould Zeidane. 
 
¶2. (C) The Prime Minister noted that in its December 21 
session, the IMF Board delayed the cancellation of 
Mauritania's debt pending demonstration of sound 
macroeconomic policies over a period of six months as well as 
well as other transparency measures, including providing 
corrected data to the Fund.  During its discussions with an 
 
NOUAKCHOTT 00000322  002 OF 002 
 
 
IMF mission in January for a Staff Monitored Program, the 
transitional government had pressed to have the IMF consider 
the period to be the last quarter of 2005 and the first 
quarter of 2006 rather than to wait for the results of the 
SMP in June. 
 
¶3. (C) The Prime Minister's other concern was that the Board 
was to meet on March 27 to discuss repayment of non-complying 
disbursements for 2002 totaling 12 SDR or about $18 million. 
The Prime Minister asked for USG support to have the 
repayment waived entirely, and failing that have some or all 
of the repayment delayed until after June, at which time it 
would become part of the debt cancellation. 
 
¶4. (C) The Prime Minister said that the Mauritanian public 
viewed the delay in debt cancellation as "sanctions" against 
Mauritania and not as the result of the practices of the 
previous government.  Requiring immediate repayment of 2002 
non-complying disbursements would only add to tensions inside 
Mauritania, a situation that would be unwelcome at this 
delicate time in the transition. 
 
¶5. (C) Ambassador replied he would convey the transitional 
government's request to Washington. 
 
¶6. (C) The Central Bank Governor later told DCM he is 
confident that Mauritania will be close to meeting IMF 
conditions when a mission comes in April to review 
Mauritania's progress and that the Board will be able to vote 
to cancel Mauritania's debt in June. 
 
¶7. (C) He remained concerned, however, of the Director 
General's decision to recommend to the Board on March 27 to 
have Mauritania repay 2 million SDR within 30 days and 10 
million SDR by June 15.  If the Board agreed, then at the end 
of the SMP in June Mauritania will have only nine days cash 
reserves vice 21 days reserves at the start of the SMP in 
January, which would be an odd result.  On the other hand, if 
the IMF delayed repayment until after June (rather than 
waiving outright the repayment, a rare occurrence), the 
repayment would be cancelled along with the other debt, but 
only after the IMF is satisfied with Mauritania's 
transparency and other macroeconomic policies, and that the 
monies will go to decrease poverty. 
LeBaron