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RUEHBJ/AMEMBASSY BEIJING 5115
RUEHRL/AMEMBASSY BERLIN 1981
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RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUEHRC/DEPT OF AGRICULTURE WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEHBS/USEU BRUSSELS
RUCNDT/USMISSION USUN NEW YORK 9298

UNCLAS SECTION 01 OF 10 ISLAMABAD 000902 
 
C O R R E C T E D C O P Y (ADDED MCNS) 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: EAID
SUBJECT: DONORS PLEDGE OVER $5 BILLION IN NEW MONEY AT 
PAKISTAN DONORS' CONFERENCE IN TOKYO 
 
REF: A. (A) SECSTATE 24367 
     ¶B. B) SECSTATE 129615 
     ¶C. C) SECSTATE 124618 
     ¶D. D) RIYADH 590 
 
ISLAMABAD 00000902  001.4 OF 010 
 
 
 ¶1. (SBU) SUMMARY:  International pledges totaled more than 
$5 billion at the Pakistan Donors' Conference in Tokyo on 
April 17.  The Donors' Conference was intended to support the 
implementation of Pakistan's International Monetary Fund 
(IMF) Stand-By Arrangement agreed to in November 2008. 
Special Representative Richard Holbrooke announced the U.S. 
pledge of $1 billion over the next two years, subject to 
Congressional approval. Pakistani President Zardari and 
Japanese Prime Minister Aso opened the conference. Japan and 
the World Bank co-hosted the conference which was attended by 
45 donor countries and multilateral organizations. END 
SUMMARY. 
 
-------------- 
PLEDGE SUMMARY 
-------------- 
 
¶2. (SBU) Donors far exceeded expectations by announcing 
pledges over $5 billion of new funds over two years to 
support the Pakistani government. The conference goal was to 
raise $4 billion in international assistance to support the 
implementation of Pakistan's International Monetary Fund 
(IMF) Stand-By Arrangement agreed to in November 2008 to be 
directed at social safety net and development programs and to 
bolster foreign reserves.  As co-hosts of the conference, the 
World Bank and Japan strictly counted only new pledges of 
support for the final tally, although a number of other 
donors reaffirmed their existing levels of support and/or 
announced consideration of additional pledges.  The list 
below is the unofficial U.S. tally. 
 
NEW TWO-YEAR COMMITMENTS FROM 21 DONORS (unofficial U.S. 
tally) 
 
BILATERAL DONORS        PLEDGE (in millions of USD) 
Australia                     43 
France                        264 
Germany                       155 
Iran                          330 
Italy                         59 
Japan                         1,000 
Kuwait                        49 
Netherlands             80 
New Zealand             .58 
Republic of Korea       40 
Saudi Arabia                  700 
 
ISLAMABAD 00000902  002.3 OF 010 
 
 
Spain                         26.4 
Sweden                        5 
Switzerland             29 
Turkey                        100 
UAE                           300 
USA                           1,000 
 
SUBTOTAL                      4,181 
 
MULTILATERAL ORGANIZATIONS    PLEDGE (in millions of USD) 
 
Asian Development Bank  200 
European Commission           320 
Islamic Development Bank      250 
World Bank                    300 
 
SUBTOTAL                      1,070 
 
TOTAL       5,251.18 
 
---------------------------- 
PAKISTAN STATEMENT OF NEEDS 
---------------------------- 
 
¶3.  (SBU) Pakistan President Asif Ali Zardari urged donors to 
provide assistance as his country continues to combat 
terrorism. Zardari stated that the Pakistani people are 
suffering from a lack of resources.  He also noted that this 
was the first time that Pakistan had received a 
second-tranche of funds from an International Monetary Fund 
program, indicating his commitment to implementing 
politically difficult, yet necessary, economic reforms. 
Shaukat Tarin, Advisor to the Prime Minister on Finance, 
Revenue, Economic Affairs and Statistics, provided a 
description of Pakistan's short-term economic situation. 
Tarin also stated that the long-term cost of the conflict in 
Pakistan from 2001 ) 2009  was  $35 billion. 
 
--------------------- 
WORLD BANK TRUST FUND 
--------------------- 
¶4.  (SBU)  The Government of Pakistan announced their 
intention to request a Trust Fund to be administered by the 
World Bank to provide targeted assistance to the regions of 
Balochistan, Northwest Frontier Province, and the FATA. 
Pakistan stated a need  to raise $3 billion over the next 
three years to support the Fund's activities. No explicit 
pledges were announced at the Tokyo Conference for the trust 
fund but a majority of delegations expressed support for the 
creation of the trust fund as well as a desire for the trust 
fund to focus on the border regions. 
 
ISLAMABAD 00000902  003.3 OF 010 
 
 
 
 
------------ 
U.S. PLEDGE 
------------ 
 
¶5. (SBU) U.S. Special Representative to Afghanistan and 
Pakistan Richard Holbrooke announced a $1 billion pledge over 
a two-year period to support Pakistan's International 
Monetary Fund (IMF) Stand-By Arrangement. The final details 
of the assistance package will be coordinated closely with 
Congress and will include project and budget assistance and 
project sector grants. Assistance will be directed to 
agriculture, education, health, poverty alleviation, and 
energy.  This $1 billion is a down payment on President 
Obama's commitment to support a bipartisan bill in the U.S. 
Congress, co-sponsored by Senators John Kerry and Richard 
Lugar, which authorizes $1.5 billion in direct support to the 
Pakistani people every year over the next five years. 
 
--------------------------- 
OTHER BILATERAL COMMITMENTS 
--------------------------- 
 
¶6. (SBU) Below is a brief description of the statements from 
the 28 donor countries at the conference, in alphabetical 
order. Pledged commitments are expressed in two-year 
commitments, unless otherwise noted. 
 
AUSTRALIA.  Delegation head: Mr. Stephen Smith, Minister of 
Foreign Affairs.  Announced a doubling of current assistance 
to add an additional $120 million Australian dollars (US 
$43.2 million).  Reaffirmed ongoing military and police 
training as well as their broad support for security and 
economic development in Pakistan. 
 
CANADA.  Delegation head: Mr. Jim Abbott, Parliamentary 
Secretary to the Minister of International Cooperation. 
Announced no new monetary pledge but affirmed his 
government's  decision to select Pakistan as a focus country 
and review the current Pakistan strategy with a view towards 
informing Pakistan of new future commitments. 
 
CHINA.  Delegation head: Mr. Cui Tiankai, Ambassador of China 
to Japan. Announced no new monetary pledge but affirmed his 
government's intention to continue to provide assistance 
through bilateral investment. Noted the establishment of the 
first industrial park and overseas investment company, with 
additional support for  the telecom sector, highways, and 
development cooperation. Committed to strengthening 
agricultural exchanges to improve rice production. Stated 
 
ISLAMABAD 00000902  004.4 OF 010 
 
 
intention to provide professional training in the 
agricultural and professional sector for 1000 students in 
2009, up from 800 last year. Acknowledged $500 million USD in 
foreign exchange lending provided to Pakistan in fall 2008. 
 
DENMARK.  Delegation head: Mr. Carsten Damsgaard, 
Under-Secretary for Political Affairs, Ministry of Foreign 
Affairs.  Announced no new monetary pledge but affirmed his 
government's intention to launch an assistance program in 
Pakistan for the first time, details of which will be 
released at a later date. 
 
FINLAND.  Delegation head: Mr. Rauli Suikkanen, Deputy 
Director of Ministry of Foreign Affairs. Announced no new 
monetary pledge but affirmed that Finland was exploring new 
additional assistance beyond their $3 million euro overseas 
development assistance for 2009. Finland reaffirmed Euro 10 
million in Earthquake support for Azad Jammu Khasmir and Euro 
12 million in  support for the internally displaced persons 
(IDPs) through the International Committee of the Red Cross 
plus an additional 1 million euro to support civil society 
organizations. 
 
FRANCE.  Delegation head: Mr. Pierre Lellouche, Special 
Representative for Afghanistan and Pakistan. Announced a 
pledge of 300 million euros over three years ($264 million 
over two years) to support capacity building in Pakistan's 
public sector, and an emphasis on energy efficiency. 
 
GERMANY.  Delegation head: Mr. Bernd Mutzelburg, Special 
Envoy for Afghanistan and Pakistan. Announced $155 million 
USD focused on project assistance, education,  skill 
development with a particular focus on refugees  and in the 
Northwest Frontier Province (NWFP). 
 
INDONESIA. (observer) Delegation head: Mr. Triyono Wibowo, 
Vice Minister of Foreign Affairs.  Announced intention to 
provide capacity building technical assistance to Pakistan 
through the Australian-based Law Enforcement Center. 
 
IRAN.  Delegation head: Mr. Manouchehr Mottaki, Minister of 
Foreign Affairs. Announced $330 million in assistance -- $320 
million in loans and a $10 million grant of overseas 
development assistance. Iran also reaffirmed its desire to 
move forward with bilateral discussions on a natural gas 
pipeline with Pakistan. 
ITALY.  Delegation head: Ambassador Massimo Iannucci, 
Director General for Asia, Oceania, the Pacific and 
Antarctica/Special Envoy for Afghanistan and Pakistan. 
Announced new assistance to Pakistan of 42 million euro ($59 
million USD). Assistance is comprised of a $40 million soft 
 
ISLAMABAD 00000902  005.6 OF 010 
 
 
loan in microfinance directed to Balochistan, NWFP and FATA 
region, and an additional 2 million euro program to 
development rural cultivation of olive trees and olive oil 
production. Reaffirmed existing soft loan of $20 million euro 
to provide vocational training. 
 
JAPAN.  Delegation head: Mr. Taro Aso, Prime Minister. 
Announced a pledge of $1 billion in assistance, premised on 
continued Pakistani implementation of its IMF program. The 
assistance will be directed at poverty alleviation and 
capacity building to facility the implementation of economic 
reforms. Reaffirmed April 7 announcement of a $5 million USD 
contribution to assist the internally displaced people of 
Pakistan. 
 
KUWAIT.  Delegation head: Mr. Abdul-Rahman Al Otaibi, 
Ambassador to Japan. Announced a $49 million USD loan from 
the Kuwait Fund for Arab Economic Development for the 
Reconstruction of Higher Education Institutions Projects in 
the earthquake affected areas of Azad Jammu Kashmir. Kuwait 
also announced its consideration of participation in the 
financing of the Neelum Jhelum Hydropower project. Kuwait 
reaffirmed existing support totaling $323 million from 14 
loans issued since 1976 in the sectors of transportation ($96 
million), agriculture ($29 million), industry ($6 million), 
energy ($177 million), and water and sanitation ($15 
million). 
 
MALAYSIA.  (observer) Delegation head: unknown. Reaffirmed 
intention to provide technical assistance by training 500 
officials in public administration, information technology, 
and agriculture this year. 
 
NEW ZEALAND.  Delegation head: Mr. Ian Kennedy, Ambassador to 
Japan. Announced a new pledge of NZ $1 million ($ 580,000 
USD)in humanitarian assistance to Pakistan. Specific 
multilateral delivery mechanism to be determined. 
 
NORWAY.  Delegation head: Mr. Haakon Gulbrandsen, State 
Secretary for International Development.  Announced no new 
monetary pledge but reaffirmed existing commitments of $100 
million in grants (focused on primary education, good 
governance, cultural programs, institution building, and the 
environment and energy programs); $25 million in humanitarian 
assistance to the UN and ICRC; and, $80 million in post-05 
earthquake assistance. 
 
OMAN.  Delegation head Mr. Al Muslahi Khalid, Ambassador of 
Oman to Japan. No pledge or statement made. 
 
QATAR.  (observer)  Delegation head: unknown. No pledge or 
 
ISLAMABAD 00000902  006.3 OF 010 
 
 
statement made. 
 
REPUBLIC OF KOREA.  Delegation head: Mr. Yu Myung Hwan, 
Ministry of Foreign Affairs. Announced new assistance of $200 
million over the next 3 years of which $40 million consist of 
new grants.  Korea's assistance is directed at human resource 
development, capacity building, strengthening public 
institutions, and infrastructure development. 
 
RUSSIAN FEDERATION.  (observer)  Delegation head: Mr. Alexey 
Ovchinnikov, Counsellor, Embassy of Russian Federation in 
Japan. No pledge or statement made. 
 
SAUDI ARABIA.  Delegation head: Mr. Yousef Al-Bassam, Vice 
Chairman and Managing Director of the Saudi Fund for 
Development. Announced new assistance of $700 million, of 
which $300 million would finance infrastructure development 
projects, $200 million to finance and guarantee Saudi non-oil 
exports to Pakistan, and $200 million deposit to the 
Pakistani Central bank with terms and conditions to be 
agreed.  Saudi Arabia reaffirmed its existing assistance of 
more than $500 million, highlights of which area $133 million 
grant to finance projects in earthquake-damaged areas and an 
$80 million concessional loan to help finance the 
Neelum-Jhelum Hydropower Project.  Comment:  Embassy Riyadh 
reported on April 20 that the Saudi Deputy Foreign Minister 
for Economic and Cultural Affairs Yousef Saadoun explained 
that the Saudi Development Fund will retain control of the 
pledged funds and will pick and chose among projects 
submitted by the Government of Pakistan for Saudi financing. 
Deputy Foreign Minister Saadoun further noted that the Saudi 
government will retain the right to fund or not fund any 
particular project proposal. End Comment. 
 
SPAIN.  Delegation head: Mr. Angel Lossada-Quevedo, Secretary 
of State for Foreign Affairs. Announced intention to provide 
$30 million Euro over three years ($26 million USD over 2 
years) and hoped to direct funds to the World Bank Trust 
Fund. He also reaffirmed an Euro 8 million commitment to the 
United Nations Development Fund's Trust Fund as well as 
400,000 euro pledge of humanitarian relief to the UNHCR and 
UNICEF. 
 
SWEDEN.  Delegation head: Ms. Anna Karin Enestrom, Special 
Envoy to Afghanistan and Pakistan. Announced new humanitarian 
assistance of $5 million. Reaffirmed existing commitment of 
$30 million in assistance through the Food and Agriculture 
Organization to support the agricultural system. 
 
SWITZERLAND.  Delegation head: Mr. Pierre Combernous, Head of 
Political Affairs Division II of Asia-Pacific, Ministry of 
 
ISLAMABAD 00000902  007.5 OF 010 
 
 
Foreign Affairs. Announced a new pledge of 50 million Swiss 
francs over 3 years ($29 million USD). Reaffirmed existing 
pledge of 20 million Swiss francs this year in midterm 
development programs, directed to poverty alleviation and 
governance as well as support for the reconstruction and 
preparedness in the region struck by the 2005 earthquake. 
 
THE NETHERLANDS.  Delegation head: Mr. Albert Gerard 
Koenders, Minister of Development cooperation, Ministry of 
Foreign Affairs. Announced a 120 euro pledge over three years 
($80 million USD over two years) with a focus on the 
Northwest Frontier Province and FATA region through water 
management, education, strengthening civil society and 
improving the role of women. 
 
TURKEY.  Delegation head: Dr. Mehmet Aydin, State Secretary. 
Announced a new  pledge of $100 million and its intention to 
host the next Friends of Democratic Pakistan ministerial. 
Reaffirmed ongoing trilateral cooperation with Pakistan and 
Afghanistan through the Ankara process. 
 
UNITED ARAB EMIRATES.  Delegation head: Mr. Sheikh Abdullah 
bin Zayed Al Nahyan, Minister of Foreign Affairs. Announced 
intention to provide $300 million USD. The Foreign Minister 
urged more Muslim countries to provide support to Pakistan in 
the years to come. He also noted that 800,000 Pakistanis live 
in the UAE. 
 
UNITED KINGDOM.  Delegation head Sir Sherard Cowper-Coles, 
Special Representative for Afghanistan and Pakistan Affairs. 
Announced no new monetary pledge but reaffirmed intention to 
double development aid to Pakistan as part of a ten-year 
partnership strategy totaling 350 pounds ($520 million USD), 
which will be front-loaded for the first few years. 
Components of the assistance include 60 million pounds in 
direct budget support, tied to reform, and 250 million in 
education sector. Additional emphasis will be on health, 
public services, pro-poor growth, and the border areas. 
 
------------------------ 
MULTILATERAL COMMITMENTS 
------------------------ 
 
¶7.  (SBU) Of the 15 multilateral organizations present at the 
conference, four provided new monetary contributions. 
 
ASIAN DEVELOPMENT BANK (ADB).  Represented by Mr. Xiaoyu 
Zhao, Vice President. Announced a new commitment of $300 
million over the next three years of non-concessional lending 
to expand trade finance with guarantees to the Pakistani 
banking sector, subject to a successful General Capital 
 
ISLAMABAD 00000902  008.3 OF 010 
 
 
Increase to be considered at the ADB Annual Meeting in Bali 
in May 2009. The ADB reaffirmed the existing financial 
envelope of around $4.5 billion to fund priority programs and 
projects in the field of (i) energy; (ii) urban services; 
(iii) transport and irrigation; (iv) budget support, tied to 
reforms. Noted the $20 billion of assistance that the ADB has 
provided to Pakistan since 1968. 
 
EUROPEAN COMMISSION.  Represented by Dr. Benita 
Ferrero-Waldner, Commissioner for External Relations and 
European Neighborhood Policy. Announced a 485 million euro 
($640 million) assistance package for the next five years to 
focus on (i) education and rural development in the Northwest 
Frontier Province and Balochistan; (ii) energy and food 
security through a contribution to the World Bank's Global 
Food Facility;  (iii) an increase in the role of the European 
Investment Bank in Pakistan and a commitment to provide 100 
million euro of assistance in renewable energy projects to 
include small and medium hydropower, wind, solar and biomass. 
The European Commission noted that they are Pakistan's most 
important trading partner, with more than $7 billion in 
trade, and noted Pakistan's call  for a long-term free trade 
agreement. 
 
EUROPEAN UNION (Czech Republic Presidency).  Represented by 
Ms. Helena Bambasova, Under Secretary, Ministry of Foreign 
Affairs. Announced that they will host an EU summit on 
Pakistan in June 2009. 
 
EUROPEAN COUNCIL.  Represented by Mr. Ettore Francesco Sequi, 
EU Special Representative for Afghanistan. Noted plans to 
focus on NWFP and FATA for development purposes.  Also noted 
the need to increase donor coordination. 
 
FOOD AND AGRICULTURAL ORGANIZATION.  Represented by Mr. 
Mitsuhiro Yokoyama, Director, Liaison Office in Japan. 
Observer only. 
 
INTERNATIONAL LABOR ORGANIZATION.  Represented by Mr. Li 
Donglin, Country Director, ILO Office in Pakistan. Observer 
only. 
 
INTERNATIONAL MONETARY FUND.  Represented by Mr. Adnan 
Mazarei, Assistant Director. Noted Pakistan's success at 
meeting the first set of benchmarks and encouraged continued 
progress towards fulfilling the remaining targets over the 
short and medium term. Also noted the need to move forward 
with policy reforms. 
 
ISLAMIC DEVELOPMENT BANK.  Represented by Dr. Walid 
Abdelwahab, Director, Asia Department. Pledged $200 million 
 
ISLAMABAD 00000902  009.3 OF 010 
 
 
in new assistance with details to be forthcoming. 
 
UNITED NATIONS.  Represented by Mr. Jean Arnault, Assistant 
Secretary-General for Political Affairs, a.i. Affirmed that 
the UN will support of the Government of Pakistan in its 
coordinating responsibilities. He emphasized the importance 
of robust partnership and effective implementation of 
assistance. 
 
UNITED NATIONS POPULATION FUND. Represented by Ms. Kiyoko 
Ikegami, Director, Tokyo office. Observer only. 
 
UNITED NATIONS INTERNATIONAL CHILDREN'S FUND (UNICEF). 
Represented by Ms. Junko Kunigi, Director, Tokyo office. 
Observer only. 
 
UNITED NATIONS DEVELOPMENT PROGRAM.  Represented by Mr. 
Fikret Akcura, UN Resident Coordinator in Pakistan. Observer 
only. 
 
UNITED NATIONS HIGH COMMISSIONER FOR REFUGEES (UNHCR). 
Represented by Dr. Johan Cels, Representative in Japan. 
Observer only. 
 
UNITED NATIONS OFFICE ON DRUGS AND CRIME (UNOCR). 
Represented by Mr. Bernard Frahi, Deputy Director, Division 
for Operations. Observer only. 
 
WORLD FUND PROGRAM.  Represented by Mr. Anthony Banbury, 
Regional Director/Asia Bureau. Observer only. 
 
WORLD BANK.  Represented by Ms. Isabel Guerrero, Vice 
President, South Asia Region and Mr. Yusupha Crookes, Country 
Director in Pakistan. Announced a new pledge of $300 million 
in the form of an International Bank for Reconstruction and 
Development loan, conditional upon Pakistan's continued 
stabilization and credit worthiness. Reaffirmed $1.4 billion 
of total assistance to be disbursed to Pakistan by the end of 
June 2009. 
 
----------- 
OTHER ITEMS 
----------- 
 
¶8. (SBU) The April 13 announcement of the decision to impose 
Sharia law in the SWAT valley of Pakistan prompted statements 
by the French, Germans, Netherlands, Sweden, and the Czechs 
(as president of the European Commission) calling for 
improved governance and the establishment of the rule of law. 
 Foreign Minister Quereshi  noted that he felt there was a 
"general misunderstanding of the Sharia policy" and invited 
 
ISLAMABAD 00000902  010.7 OF 010 
 
 
the Special Representatives to Islamabad to participate in a 
briefing on the legal developments in the SWAT valley. Other 
reoccurring themes which were repeated by several delegations 
included the need to develop effective donor coordination, 
promote regional trade by improving bilateral 
Pakistan-Afghanistan transit trade, and a re-convening of the 
Pakistan Development Forum soon. 
 
------- 
COMMENT 
------- 
 
¶9. Comment. The success of the donors' conference 
exceeded expectations. Of particular importance was the $1 
billion contribution from the Gulf States -- Saudi Arabia 
($700 million) and the United Arab Emirates ($300 million). 
The World Bank's decision to limit the final pledge figure to 
new assistance totaling $5.2 billion was helpful in adding 
some rigor to the pledging process.  Donors' statements of 
conditioned assistance was strategically important to 
encourage further Pakistani progress on needed economic 
reforms.  These reforms, more than donor assistance, will 
ultimately determine Pakistan's financial stability. The 
combined total of existing and new assistance announced at 
the conference was more than $13.6 billion USD.  The next 
step will be to ensure that donors follow through on their 
pledges to meet Pakistan's most urgent social, economic, and 
welfare needs. End Comment. 
FEIERSTEIN