VZCZCXRO5504
PP RUEHIK RUEHPOD RUEHPW RUEHYG
DE RUEHBUL #3290/01 3631036
ZNR UUUUU ZZH
P 281036Z DEC 08
FM AMEMBASSY KABUL
TO RUEHC/SECSTATE WASHDC PRIORITY 6540
INFO RUEATRS/DEPT OF TREASURY WASHINGTON DC 0712
RUCNAFG/AFGHANISTAN COLLECTIVE
RUEHZG/NATO EU COLLECTIVE
RUEKJCS/SECDEF WASHINGTON DC
RUEABND/DEA HQS WASHINGTON DC
RHMFIUU/HQ USCENTCOM MACDILL AFB FL
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC

UNCLAS SECTION 01 OF 02 KABUL 003290 
 
DEPT FOR SCA/FO, SCA/RA, AND SCA/A 
DEPT PASS AID/ANE 
DEPT PASS USTR FOR DELANEY AND DEANGELLIS 
DEPT PASS OPIC FOR ZAHNISER 
DEPT PASS TDA FOR STEIN AND GREENIP 
USOECD FOR ENERGY ATTACHE 
CENTCOM FOR CSTC-A 
NSC FOR JWOOD 
TREASURY FOR LMCDONALD, ABAUKOL, BDAHL, AND MNUGENT 
OSD FOR SHIVERS 
COMMERCE FOR DEES, HAMROCK, AND FONOVICH 
 
SENSITIVE 
 
SIPDIS 
 
REF: (A) December 20th Micaller-Birdsey, et. al Email 
     (B) KABUL 3277 
 
E.O. 12958 N/A 
TAGS: ETRD ECON EAID EFIN AF
SUBJECT: AFGHAN FINANCE, FOREIGN MINISTRIES SAY RECC STILL "TBD" 
 
SUMMARY 
 
¶1. (SBU) Deputy Finance Minister Wahidullah Sharani (and now acting 
Minister of Commerce and Industry) said dates are "still under 
consideration" for the Regional Economic Cooperation Conference 
(RECC), and the jury is out on just when Kabul might commit to a 
specific time or venue.  Sharani's response to our non-paper (ref A) 
on the RECC focused mainly on problems within the Ministry of 
Commerce and Industry (MOCI), whose Minister, Amin Farhang, is now 
out of a job after being impeached by the Parliament on December 20. 
 Sharani promised a written response to the demarche within the 
first week of the new year, but we do not expect a firm commitment 
to RECC dates in that answer.  Meanwhile, Ministry of Foreign 
Affairs (MFA) Director General Enatullah Nabil suggests that it is 
security, not bureaucratic wrangling, that is delaying an Islamabad 
RECC. End Summary. 
 
COMMERCE MINISTRY WOES CONTRIBUTE TO RECC DELAYS 
 
¶2. (SBU) On December 23, Deputy Econ Counselor delivered the 
non-paper on the RECC to Sharani and stressed USG interest in a firm 
date for the third RECC.  Sharani said that MOCI is responsible for 
major items that will appear on the agenda (notably, transit trade). 
 Unfortunately, MOCI is in the throes of a major reorganization, 
with Minister Farhang removed from office by a parliamentary no 
confidence measure that was one vote shy of unanimous.  Sharani said 
the lack of capacity in MOCI to handle its brief is a major obstacle 
making progress on important economic issues. 
 
¶3. (SBU) Unprompted, Sharani went into detail about the impeachment 
proceedings against Farhang and the reasons for his ouster.  He 
noted that the corruption associated with the Commerce Ministry's 
Fuel and Liquid Gas Enterprise (FLGE) had Parliament outraged, but 
that no one in the Ministry appeared to have the political will to 
dismiss the head of FLGE, Engineer Rozi (ref B).  We now know that 
President Karzai tapped Sharani to be acting Minister of Commerce 
and Industry on December 27, and rumors are the President may 
introduce him to the Parliament as Minister soon. 
 
¶4. (SBU) Our impression is that the Afghan government may be 
reluctant to settle on RECC dates until the dust settles once and 
for all at MOCI.  Sharani said Farhang is optimistic about the 
possibility of being reinstated as Minister, pending an 
investigation of the constitutionality of Parliament's impeachment 
proceeding.  It is not clear how long that investigation will take, 
but in response to our mention of an early April RECC in either 
Islamabad or Lahore, Sharani remained noncommittal. 
 
¶5. (SBU) We also discussed substance of the non-paper with the MFA's 
DG Nabil, who said that the issue for Kabul is security in 
Islamabad, and not internal Afghan politics.  Nabil, fresh out of a 
meeting with Pakistan's DCM in Kabul, said he hinted strongly to the 
Pakistanis that a venue other than Islamabad may be better for the 
RECC.  He stressed, like Sharani (see para 6), the "new chapter" in 
Afghan-Pakistani relations and a desire not to insult Islamabad. 
That said, he told Pakistani DCM Durrani that Kazakhstan may be 
prepared to host a third RECC, and that Pakistan could then host the 
fourth.  He also said that the Ministries of Finance and Foreign 
Affairs both may sign invitations to the RECC and that Presidents 
Karzai and Zardari may be present at opening ceremonies.  It remains 
unclear as to which Ministry will ultimately "lead" on the RECC; 
indications from the Minister's office at Finance are that MFA has 
the chair, while the MFA's Nabil implies it is Karzai himself. 
 
SUBSTANCE FOR THE RECC, WHENEVER. . . 
 
¶6. (SBU) Sharani did mention several specific items of interest in 
general possibly ripe for the RECC.  Specifically, he noted energy, 
roads, and customs "diversion." 
 
KABUL 00003290  002 OF 002 
 
 
 
- Energy: He noted disappointment with the Uzbek position on a 
longer term power purchasing agreement (PPA).  He said GIRoA has 
paid three quarters of the almost USD 20 million owed to Tashkent 
for energy infrastructure on the Uzbek side of the border.  Sharani 
said that Afghanistan would like commitments extending past 2010, 
which appear not to be forthcoming from the Uzbeks.  Sharani also 
expressed concern with the lack of movement on the 
Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline.  We 
promised to provide an update on that issue. 
 
- Roads: Sharani said Afghanistan was pleased with the Indian road 
project near Zaranj and Pakistan's latest commitment of USD 20 
million for infrastructure development.  He specifically mentioned 
Pakistan's Torkham-Jalalabad road project as a model of 
Afghan-Pakistani cooperation.  His take on the Zardari government in 
general was very positive, and he said the Pakistani president will 
likely visit Kabul in early January. 
 
- Customs Diversion: Due largely to the success of BMTF-sponsored 
mentorship at Islam Qala, Sharani said that there are "large 
engineered leakages" taking place at the border crossing in Nimroz 
province near Zaranj. 
 
OFFICIAL RESPONSE FORTHCOMING 
 
¶7. (SBU) We look forward to receiving an official GIRoA response to 
our non-paper in early January.  At the same time, at least until 
significant Afghan cabinet positions related to the RECC are firmed 
up, we do not expect any commitment on dates for this 
often-postponed meeting.  Nabil's comments regarding security in 
Pakistan as a reason for delaying the RECC add a new twist, although 
the suggestion for a change of venue may hold some promise for 
getting the ball rolling. 
WOOD