VZCZCXRO1549
OO RUEHDBU RUEHIK RUEHPW RUEHYG
DE RUEHBUL #2554/01 2170657
ZNR UUUUU ZZH
O 050657Z AUG 07
FM AMEMBASSY KABUL
TO RUEHC/SECSTATE WASHDC IMMEDIATE 9517
INFO RUCNAFG/AFGHANISTAN COLLECTIVE PRIORITY
RHEHAAA/NATIONAL SECURITY COUNCIL WASHINGTON DC PRIORITY
RUEAIIA/CIA WASHINGTON DC PRIORITY
RHEFDIA/DIA WASHINGTON DC PRIORITY
RUEKJCS/OSD WASHINGTON DC PRIORITY
RUEKJCS/SECDEF WASHINGTON DC PRIORITY
RUEKJCS/JOINT STAFF WASHINGTON DC PRIORITY
RHMFIUU/HQ USCENTCOM MACDILL AFB FL PRIORITY

UNCLAS SECTION 01 OF 02 KABUL 002554 
 
SIPDIS 
 
SIPDIS 
 
STATE FOR SCA/FO, SCA/A, S/CRS 
STATE PASS TO USAID FOR AID/ANE, AID/DCHA/DG 
NSC FOR AHARRIMAN 
OSD FOR SHIVERS 
CG CJTF-82, POLAD, JICCENT 
RELEASABLE TO NATO/ISAF 
 
E.O. 12958: N/A 
TAGS: EAID KDEM PGOV AF
SUBJECT: STRATEGIC PARTNERSHIP: PROACTIVE AFGHAN GOVERNMENT 
HOSTS QUARTERLY UPDATE ON GOVERNANCE AND PROSPERITY 
 
REF: KABUL 1017 
 
SUMMARY 
------- 
 
¶1. (SBU) The Afghan Government held a Strategic Partnership 
Quarterly Update meeting on Prosperity and Governance with 
Embassy counterparts on July 21.  Organized by the Ministry 
of Finance and co-Chaired by Deputy Minister Shahrani, Afghan 
representatives reported progress on most Prosperity and 
Governance commitments made during the bilateral Strategic 
Partnership meetings held in Kabul in March (ref).  The 
Governance session also highlighted continuing challenges on 
anti-corruption, Ministry of Interior reform, and the Senior 
Appointments Board.  The Prosperity session revealed the 
Afghan Government's concern about electricity generation, 
road maintenance, and obstacles to privatization.  DM 
Shahrani committed to organizing additional Quarterly Updates 
in advance of Bilateral meetings due in Washington early next 
year.  Participants expressed satisfaction at the utility of 
the quarterly update process as a tool for advancing the 
Strategic Partnership.  END SUMMARY. 
 
PROACTIVE, PROFESSIONAL MOF CONVENES REVIEW SESSION 
--------------------------------------------- ------ 
 
¶2. (SBU) The Afghan Government was keen to hold the Strategic 
Partnership Quarterly Update meeting before President 
Karzai's trip to Camp David, and actively encouraged the 
event.  Deputy Finance Minister Wahidullah Shahrani 
co-chaired and organized the Governance and Prosperity 
sessions on behalf of the Afghan Government, which showed an 
increased capacity for collaboration across ministries.  The 
MFA, which has nominal responsibility as the Afghan 
"secretariat" for the Strategic Partnership, was not involved 
in the event. 
 
GOVERNANCE: CORRUPTION, MOI REFORM, SR APPOINTMENTS BOARD 
--------------------------------------------- ------------ 
 
¶3. (SBU) The Governance Working Group was co-chaired by the 
Embassy Political Counselor and Deputy Finance Minister 
Shahrani with representation from the Ministries of Justice 
and Finance, Civil Service Commission, Anti-Corruption 
Commission, Human Rights Commission, and Senior Appointments 
Board.  The session showed progress on most issues.  In a 
candid aside, Ministry of Justice Advisor Kawun Kakar told 
Pol Counselor that while he sees genuine effort to advance 
the Strategic Partnership in most areas, he hoped the U.S. 
would pay particular attention to three issues:  corruption, 
MOI reform, and the Senior Appointments Board. 
 
¶4. (SBU) The Afghan Government has made progress on 
commitments toward transparency and accountability, standards 
for use of donor funds, and provincial and programmatic 
budgeting.  The Ministry of Finance described plans to 
increase the accountability of provincial governors by 
implementing the $6 million Governors' Outreach Fund for 
communication, travel, and hospitality in lieu of the 
operational funds some governors previously received for 
security-related expenses.  (NOTE: The U.S. has pledged 
$500,000 through the ARTF for this purpose.  END NOTE.) 
Shahrani noted the high fiduciary ratings the MOF has 
received from the IMF and asked that donors consider direct 
budget support, with the ARTF as a second-best option.  The 
Afghan Government continues to expand programmatic and 
provincial budgeting, covering seven ministries and 10 
provinces in FY 1387, and estimating coverage of all 
ministries and provinces in three to five years. 
 
¶5. (SBU)  Shahrani, a member of Supreme Court Chief Justice 
Azimi's anti-corruption commission, said that the commission 
plans to complete its report and submit it to President 
Karzai "within two weeks," or by the first week in August. 
President Karzai will decide how to implement the 
recommendations.  Ministry of Justice advisor Kawun Kakar 
said that the UN Convention Against Corruption (UNCAC) has 
 
KABUL 00002554  002 OF 002 
 
 
been translated and submitted to the Assembly for the third 
time, and is near the top of the agenda for the Assembly's 
current session.  The Human Rights Commission representative 
Farid Hamidi, one of the five members of the Senior 
Appointments Board, said the Board had considered only five 
candidates since it began meeting ten months ago.  He said 
President Karzai has not yet signed the Terms of Reference 
for the Board.  They text submitted to the President eight 
months ago were recently reviewed by the Cabinet and returned 
to the and the MOJ for further consideration and likely 
revision. 
 
¶6. (SBU) The group discussed a variety of other issues. 
Shahrani expressed the hope that there would be expanded 
opportunities for high level bureaucrats to participate in 
exchange and training programs.  He said the Afghan 
Government was prepared to establish criteria for the 
selection of nominees.  A representative of the Independent 
Election Commission was not present, so Shahrani promised an 
elections update at the next Quarterly Update.  Pol Counselor 
emphasized our interest supporting a feasible, affordable, 
sustainable electoral system.  The Ministry of Interior has 
established a liaison department with PRTs, and the Tashkil 
at the MOI includes 34 liaison officers  -- one for each 
province, and four at the ministry itself. 
 
PROSPERITY: CONCERNS WITH ENERGY, ROADS, PRIVATIZATION 
--------------------------------------------- --------- 
 
¶7. (SBU) The Prosperity Working Group was co-chaired by the 
in-coming USAID Mission Director and Deputy Finance 
Minister Shahrani, with representatives from the Ministries 
of Finance, Commerce and Industry, and Public Works and the 
Central Bank.  The participants reviewed progress on eight 
action items from the March Plenary, and focused on the Kabul 
Generator Sets, the development of a master plan for road 
maintenance, and impediments to privatization. 
 
¶8. (SBU) The discussion revealed the need for a policy and 
institutional approach for budgeting and mobilizing funds for 
the fuel, operations, and maintenance costs associated with 
the planned Kabul Generator Sets.  The Afghan Government is 
working with donors to develop a consensus on energy sector 
funding gaps that will be presented at the Inter-Ministerial 
Commission on Energy (ICE) in August.  The Afghan 
representatives also acknowledged the magnitude of the road 
maintenance challenge and inadequacy of the funds budgeted 
for this purpose.  Embassy complimented the Afghans on their 
proposal to outsource road maintenance and expressed interest 
in continuing to work with them on these challenges. 
 
¶9. (SBU) The group discussed the need for a long-term customs 
strategy and a tax regime that meets the Afghanistan Compact 
benchmarks.  USG participants expressed concern that 
commissions are not being established to review proposals for 
privatization of state-owned enterprises, stifling the 
privatization process at a critical stage.  DM Shahrani 
candidly explained the chilling effect of investigations by 
the Attorney General, suggesting that any procedural misstep 
might lead to prosecution.  However, he described IRoA 
interest in finding ways to mitigate this risk, perhaps by 
expanding the number of participants appointed to the 
commissions, and thereby get the privatization process back 
on track. 
DELL