VZCZCXYZ0023
RR RUEHWEB

DE RUEHLU #0576/01 1571539
ZNR UUUUU ZZH
R 061539Z JUN 06
FM AMEMBASSY LUANDA
TO RUEHC/SECSTATE WASHDC 2917
INFO RUCNSAD/SOUTHERN AFRICAN DEVELOPMENT COMMUNITY

UNCLAS LUANDA 000576 
 
SIPDIS 
 
SENSITIVE 
 
SIPDIS 
 
DEPT FOR AF/S DMOZENA AND JMALONEY 
 
E.O. 12958: N/A 
TAGS: ECON EFIN PGOV AO
SUBJECT: PDAS Pittman Reviews Angolan Economic Issues with 
High-Level GRA Officials 
 
¶1. (SBU) Summary:  During meetings with the Angolan Minister 
of Finance, Deputy Prime Minister and Director of the 
Angolan Private Investment Agency, DPAS Bobby Pittman 
discussed the availability of US Treasury advisors to offer 
technical assistance to Angola; the state of Angola's 
negotiations with the Paris Club; the high-level of 
transparency demonstrated in Angola's most recent round of 
oil concessions and possible Angolan accession to EITI; how 
best Angola might benefit from AGOA; and exchanged views on 
strengthening the business climate in Angola for US 
businesses, including improving the perception of Angola's 
image in the international community.  End Summary. 
 
¶2. (SBU) PDAS Bobby Pittman met on May 19, 2006, with 
Finance Minister Pedro de Morais, Deputy Prime Minister 
Aguinaldo Jaime and Director of the Angolan Private 
Investment Agency (ANIP) Carlos Fernandes.  PDAS Pittman was 
accompanied by Charge James Knight and Pol/Econ Chief 
(notetaker); for Deputy PM meeting, AIDoff attended as 
notetaker.  Each of Angolan principals met alone with us. 
 
Deputy Prime Minister: Strengthening Angola's Image 
--------------------------------------------- ------ 
¶3. (SBU) PDAS Pittman and DPM Jaime opened with a discussion 
of the business climate in Angola. DPM Jaime said he hoped 
to see more US investment in Angola, but thought many 
investors remained reluctant as they didn't have a clear 
picture of Angola.  He commented that Angola faced an image 
problem.  PDAS Pittman suggested that there were many ways 
to improve a country's business climate; for example, 
shortening the time required to open a business.  He also 
cited elections as a part of the perception that a country 
offered a stable environment for business.  PDAS Pittman 
raised the possibility of US Department of Treasury advisors 
to assist Angola with improving its business environment and 
International Finance indicators. 
 
¶4. (SBU) PDAS Pittman also praised Angola for the high level 
of transparency demonstrated in the April and May round of 
oil concessions.  DPM Jaime responded that he believed 
Angola was taking positive steps on the transparency 
initiative and the GRA intended to adhere to the Extractive 
Industries Transparency Initiative (EITI).  He commented 
that the GRA was already fulfilling the commitments of EITI 
and he intended to advise the Council of Ministers to take 
the next step to formally accede to the initiative.  The 
government would then set up the commission to monitor the 
country's compliance. 
 
ANIP Director: Stimulating Investment and Working with the 
Bretton Woods Institutions 
--------------------------------------------- ------------- 
¶5. (SBU) ANIP Director Fernandes and PDAS Pittman opened 
with assurances that each side was interested in business 
partnering for the future.  Fernandes commented on the 
importance of an international investors' conference in 
Angola and looked for US support.  PDAS Pittman reiterated 
US and international community support for an investors' 
conference. He also mentioned some of the ways in which 
other countries have improved their investment climates by 
simplifying bureaucratic processes. 
 
¶6. (SBU) Fernandes noted PDAS Pittman's former work with 
Bretton Woods institutions and asked for his advice on how 
Angola could improve its relationships with the IMF and 
World Bank.  He also expressed hope the US could assist in 
influencing the World Bank and IMF relationships with 
Angola.  PDAS Pittman recommended that Angola not group the 
two institutions together, but rather, look at them 
separately.  PDAS Pittman noted the linkage between rising 
economic growth rates and increased performance in Angola 
and the Bank's system for allocating funds based on 
performance, signally that this should help Angola 
strengthen its future position.  He also suggested that 
since Angola was able to finance much of its infrastructure 
needs through private lending, it should think about World 
Bank assistance for health and education.  Regarding the 
IMF, PDAS Pittman described the Nigerian model emphasizing 
the need to develop a firm economic basis. 
 
Finance Minister: How Best to Strengthen our Institutions? 
--------------------------------------------- ------------- 
¶6. (SBU) Finance Minister Pedro de Morais opened with a 
query on a new date for A/S Frazer's visit to Angola.  PDAS 
Pittman commented that she would be coming to Angola as 
would many other high-level US visitors.  FinMin de Morais 
thanked us for our assistance in the Financial Planning Unit 
in the Ministry of Finance, noting how valuable this 
 
training is in strengthening the Ministry's technical 
capacity.  He mentioned that his deficit of qualified staff 
was a critical issue and this program helped absorb Angolans 
just graduating from University and providing them with 
practical training.  (Note: FPU training extends beyond 
recent graduates to include senior technical specialists in 
the Ministry of Finance as well as other ministries.) 
 
¶7. (SBU) FinMin De Morais mentioned the Bilateral Investment 
Treaty (BIT) and also asked in what other areas the U.S. 
could help with institution building.  PDAS Pittman 
commented that there was interest in the U.S. to negotiate a 
BIT with the GRA but that our resources were limited and we 
needed to know that the GRA was ready to move forward. 
FinMin de Morais replied that he could mobilize his people 
to work on this.  PDAS Pittman also discussed the 
possibility of providing US Department of Treasury advisors 
to the Ministry but noted that the request for this 
assistance had to originate with the GRA and certain 
assurances were necessary, such as the ability to provide 
office space to the advisors.  FinMin de Morais would like 
to pursue this possibility during his next trip to the U.S. 
(no date set) or with Treasury officials in Luanda. 
 
¶8. (SBU) FinMin de Morais offered that GRA negotiations with 
the Paris Club were moving apace.  He said that the 
proposals Angola received were very demanding in terms of 
early disbursement of total debt, including late fees. 
However, he believes that the GRA and Paris Club members can 
come to an understanding if Angola commits to pay all 
arrears and penalties.  He said Angola owes USD 2.3 billion 
in arrears; 0.4 billion in upcoming payments and 1.8 billion 
in late fees.  PDAS Pittman remarked on the benefits of 
settling with the Paris Club in terms of preferred lending 
terms for future projects. 
 
¶9. (SBU) Comment: Each of our interlocutors was very clear 
in expressing a strong interest in attracting additional US 
business investment in Angola.  All recognize the steps 
still necessary for Angola to improve its image as an 
investment destination, but are looking for continued US 
recognition of GRA improvements in transparency and economic 
reform. Embassy Luanda believes that PDAS Pittman's visit 
was beneficial not only in reinforcing the message that the 
USG is interested in Angola but also in providing practical 
advice on possible next steps for the  GRA to continue 
strengthening its investment climate. 
 
¶10. (U) PDAS Pittman has cleared on this cable. 
 
KNIGHT