VZCZCXRO2689
RR RUEHBZ RUEHDU RUEHGI RUEHJO RUEHMR RUEHRN
DE RUEHKI #1059/01 3360730
ZNR UUUUU ZZH
R 010730Z DEC 08
FM AMEMBASSY KINSHASA
TO RUEHC/SECSTATE WASHDC 8842
INFO RUCNSAD/SADC COLLECTIVE
RUEHXR/RWANDA COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEAIIA/CIA WASHDC
RUZEJAA/JAC MOLESWORTH RAF MOLESWORTH UK
RHMFISS/HQ USEUCOM VAIHINGEN GE

UNCLAS SECTION 01 OF 02 KINSHASA 001059 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ECON EAID EFIN EINV PGOV PREL CH CG
SUBJECT:  FIRST OFFICIAL DONOR MEETING WITH NEW DRC PRIME MINISTER 
MUZITO 
 
REF:  KINSHASA 426 
 
¶1.  (U) Summary: A group of heads of development and cooperation 
agencies from key donor countries met with new Democratic Republic 
of the Congo (DRC) Prime Minister Adolphe Muzito on November 22, 
¶2008. The discussion lasted for approximately 90 minutes and touched 
upon the Prime Minister's new program for the Government of the 
Democratic Republic of the Congo (GDRC), on the multi-billion dollar 
Sino-Congolese agreement concluded in early 2008 (reftel), the 
GDRC's budget situation, and the possibility of donors providing 
direct budgetary support. The meeting was called by the Prime 
Minister to allow him an opportunity to solicit information about 
donor activities in the DRC in advance of a meeting with Ambassadors 
from donor countries, planned for the week of December 1. End 
Summary. 
 
¶2.  (U) Prime Minister Muzito called together the heads of 
development and cooperation agencies from key Coordination 
Assistance Framework (CAF) group donors at his residence for a 
breakfast meeting at 7:30 am on Saturday November 22.  A total of 
twelve representatives were present at the meeting (World Bank, 
African Development Bank, European Union, France, Belgium, Italy, 
Netherlands, United States, United Kingdom, Germany, Sweden, and 
Canada). USAID Officer in Charge, Jeff Bryan, participated for the 
USG. 
 
¶3.  (U) The meeting opened with an introduction from the Prime 
Minister's assistant who explained the purpose of the meeting as an 
opportunity for the Prime Minister (PM) to hear from key donors 
regarding their actual and planned contributions in support of the 
new government program presented on October 31. The PM wanted to 
hear from donors in advance of his meeting with Ambassadors in order 
to have a better understanding of what the various donors were doing 
in the DRC. The PM welcomed the group and provided a few opening 
remarks and then called on a few representatives from the donor 
group to give a presentation of donor assistance. 
 
¶4.  (U) Marie-Francoise Marie Nelly, representative of the World 
Bank for the DRC and the Republic of Congo, opened the presentations 
with an overview of the Coordination Assistance Framework (CAF) 
process and Priority Action Plan (PAP), noting that this was a 
collaborative process with government and that the donor group was 
actively engaged with the GDRC in aligning aid with government's 
development agenda - the Poverty Reduction Strategy Paper. 
 
¶5.  (SBU) Medjomo Coulibaly, the African Development Bank (ADB) 
representative, followed with the most substantial comments from the 
group, raising the issues of performance and transparency as 
limiting factors to donor engagement.  He made it quite clear that 
assistance from the ADB (and by implication donor assistance in 
general) was clearly related to government's ability to perform and 
account for assistance, and that the government could increase 
assistance by being more accountable. 
 
¶6.  (SBU) PM Muzito responded to ADB comments by likening the GDRC 
to a sick person who needs special attention and care in order to 
recover - making the point that donor standards should be less 
stringent for a post-conflict country. He stated that the GDRC's 
poor ability to perform was a direct result of insufficient 
resources, so that budgetary support from donors would be the 
solution.  The PM returned to the budget level for government, 
repeating several times that with a budget of between USD 1-2 
billion per year "for a sub-continent" that there was no way to make 
rapid progress on transparency and governance. He also made a 
reference to the corrupt and ineffective military with regard to 
operations in eastern DRC as a case in point of the effects of 
insufficient resources. 
 
¶7.  (SBU) The PM raised the issue of the multi-billion dollar 
Sino-Congolese agreement concluded in early 2008 (reftel), in the 
context of the GDRC's budget dilemma. "We entered the community of 
nations through you, the West", the PM stated, "and we are most 
comfortable together with you." He went on to say that the Congolese 
were new partners with the Chinese and had not yet developed a bond 
of friendship, but rather a business relationship.  If the donors at 
the table were able to bring billions of dollars of investment to 
bear, the PM suggested that the GDRC would prefer to work with 
Western donors.  However, given the DRC's actual budget situation, 
working with the Chinese investment was strictly a business 
proposition. Regarding a planned feasibility study, the PM noted 
that it would be completed by March.  The PM then noted that one of 
his first priorities was to "split" the Chinese investment package 
into a Phase I and a Phase II, which would be intended to help avoid 
the concessionality and debt sustainability questions that have so 
far plagued the deal and distanced the GDRC from reaching the Highly 
 
KINSHASA 00001059  002 OF 002 
 
 
Indebted Poor Countries (HIPC) completion point. The PM noted that 
he hoped to have this completed in time for an upcoming visit by the 
International Monetary Fund (expected on or about December 9). 
 
¶8.  (SBU) The PM then called for comment from a representative of 
the bilateral donors present, and Alessandro Palmero of the European 
Commission made a few comments touching upon the Paris declaration - 
noting that there are provisions in the declaration for making aid 
more effective specifically in post-conflict countries. He also 
noted that with the new government it was unclear in some cases who 
the main interlocutor should be for donor countries - asking that 
there be some clarification to the CAF group regarding the roles 
that new ministers would play. Palmero went on to note that direct 
budget support was highly unlikely in the current environment in the 
DRC.  This brought about a few more comments from the PM on the 
topic of the GDRC's position being unlikely to improve without 
resources.  Finally, Palmero noted that the donor group had no 
problem with the GDRC's decision to work with China on the minerals 
investment package, trying to avoid developing an active split 
between the CAF donor group and China. 
 
¶9.  (U) Belgian cooperation head Paul Cartier made a few comments on 
the functioning - or non-functioning - of Thematic Groups for 
donor-government coordination, noting that they had strayed far from 
the conception in the Paris meetings of November 2007 and are in 
serious need of refocusing as a forum for high-level exchange 
between donors and key ministers. This brought about a comment from 
the PM that he would begin a series of regular meetings with key 
ministers overseeing thematic groups in order to keep them focused 
on priorities and moving forward. 
 
¶10.  (U) Finally, the PM asked for comments from donors on what 
their contributions could be to help bring about peace in Eastern 
DRC. The World Bank and ADB reps commented again here, each noting 
that they were implementing some projects in the east.  This subject 
did not lead to much in-depth discussion, however, and the meeting 
adjourned without further discussion of peace and security issues. 
 
¶11.  (SBU) Comment:  It is an encouraging sign that the new Prime 
Minister requested a consultation meeting with key donors, appearing 
to establish a new engagement with donors that could signal an 
improvement in donor-government coordination. The issue of direct 
budget support will clearly continue to figure in the PM's agenda 
with donors, but his reaction to donor responses that this was 
unlikely suggests that he will adopt a pragmatic approach to 
increasing donor engagement in the DRC's budget process. 
 
¶12. (SBU) With the 2009 set to be presented to parliament within 
days, there are increasing concerns expressed by the GDRC, World 
Bank and IMF that budgetary resources will be insufficient and that 
the GDRC will have difficulty in servicing debts to the World Bank 
and IMF. Failure to reach agreement with the IMF on a new Poverty 
Reduction and Growth Facility (PGRF) would further delay $11 billion 
in debt relief under the Highly Indebted Poor Countries program, 
could impede assistance by the World Bank and other major donors and 
may be economically and politically destabilizing. Post recommends 
support for flexibility in World Bank financing, including 
increasing resources or closer attribution of financing to the GDRC 
budget. Post also supports the IMF's position that debt 
sustainability issues regarding China's loans must be resolved prior 
to approval of a new PGRF. End Comment. 
 
GARVELINK