VZCZCXRO0194
RR RUEHDBU RUEHFL RUEHKW RUEHLA RUEHROV RUEHSR
DE RUEHRA #0526 1870754
ZNY CCCCC ZZH
R 060754Z JUL 06 ZDK
FM AMEMBASSY RIGA
TO RUEHC/SECSTATE WASHDC 3114
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE

C O N F I D E N T I A L RIGA 000526 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: DECL: 07/06/2011 
TAGS: EAID ECON PREL PGOV GG MD LG
SUBJECT: LATVIA LOOKS TO MAJOR INCREASE IN DEVELOPMENT 
FUNDING 
 
 
Classified By: Ambassador Catherine Todd Bailey.  Reason: 1.4 (d) 
 
 ¶1. (C) SUMMARY  Latvia is shifting from being a recipient 
of foreign aid to being a donor.  Their recently published 
development cooperation policy plan for 2007, envisions a 
roughly four-fold increase in development assistance, 
focused on Georgia and Moldova, with additional assistance 
to Ukraine, Belarus, Afghanistan and Kosovo.  Although the 
funding remains small in comparison with large donors and 
will not be fully approved until later in the year, the 
plan is evidence that Latvia is reorienting its foreign 
policy perspective outward and is beginning to think of a 
foreign policy commensurate with its EU and NATO 
membership.  END SUMMARY 
 
¶2. (U) BACKGROUND 
In 2006, Latvia's development budget was 150,000 Lats, with 
80% of those funds going to Moldova.  Latvia's recently 
published foreign policy strategy notes that, "Latvia has 
demonstrated its readiness to become actively involved in 
the resolution of global problems: eliminating poverty, 
strengthening democracy, limiting the spread of disease, 
ensuring sustainable environmental development, and 
promoting gender equality and the universal availability of 
education."  The EU's commitment to progressively increase 
financing for developmental cooperation is binding for 
Latvia, and the country considers itself to be in a 
position to transfer its reform experience to the countries 
of Eastern Europe.  By 2010, Latvia would like 0.1% of its 
GDP to go towards foreign development assistance in 
accordance with EU 
guidelines. 
 
¶3. (U) SPENDING BREAKDOWN FOR 2007 
The proposed budget for 2007 earmarks 770,000 Lats 
(approximately US$1.44 million) for development cooperation 
projects.  This is an increase of 620,000 Lats (roughly 
US$1.1 million) over 2006.  Moldova, Georgia, Belarus and 
Ukraine are the key targets for this assistance.  The goals 
for this funding in recipient countries are: Reforming 
public administration, municipal, and defense systems; 
enhancing integration with the European Union and NATO; 
stimulating the development of democratic and civil 
society, health, environmental protection; and, 
implementing development assistance projects where Latvia 
participates in peace-keeping missions. 
 
¶4. (U) In allocating the proposed 2007 development funding, 
the GOL is looking to spend about 77,000 Lats ( US$140,000) 
in a new initiative to finance micro projects in Georgia, 
Ukraine, and Moldova.  The Latvian Embassies in these 
countries will decide which projects to select, in a 
program similar to the USG's Ambassador's Self-help Fund. 
The GOL would also like to finance projects in Belarus; 
however, last year they were unable to find reliable 
partners and suspect GOB restrictions will continue to 
preclude this cooperation. 
Another 663,000 Lats (roughly US$1.2 million) will be used 
for grant and technical assistance projects in Moldova, 
Georgia, Belarus, and Ukraine focused on the above goals. 
Given the relatively small amount of money available to the 
GOL, they will look to continue cooperative efforts with 
the UK and Canada to co-fund projects where it makes sense 
to do so.  Another 30,000 Lats ( US$55,000) are marked for 
civil assistance projects in Afghanistan and Kosovo in 
cooperation with the Ministry of Defense.  These are 
entirely civilian projects to be conducted by the MFA to 
build goodwill where Latvian troops are located, but there 
is a "firewall" between military and development projects 
and the military cannot be directly involved in spending 
this money. 
 
¶5. (C) COMMENT:  We recognize that the amounts are 
small but this proposal highlights Latvia's shifting role 
from recipient to donor of development funds and is 
commensurate with its obligations as a member of the EU and 
NATO.  The Latvians want to be active players, but are 
realistic about the impact they can have given their small 
size.  They have wisely targeted countries of greatest 
interest to 
them for their assistance. 
Bailey