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OO RUEHLH RUEHPW
DE RUEHIL #1311/01 1661111
ZNR UUUUU ZZH
O 151111Z JUN 09
FM AMEMBASSY ISLAMABAD
TO RUEHC/SECSTATE WASHDC IMMEDIATE 3248
INFO RUEHBUL/AMEMBASSY KABUL PRIORITY 0498
RUEHLO/AMEMBASSY LONDON PRIORITY 0662
RUEHNE/AMEMBASSY NEW DELHI PRIORITY 5100
RUEHKP/AMCONSUL KARACHI PRIORITY 1846
RUEHLH/AMCONSUL LAHORE PRIORITY 7448
RUEHPW/AMCONSUL PESHAWAR PRIORITY 6395
RUEAIIA/CIA WASHINGTON DC PRIORITY
RUEHRC/DEPT OF AGRICULTURE WASHINGTON DC PRIORITY
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC PRIORITY
RUEATRS/DEPT OF TREASURY WASHINGTON DC PRIORITY
RHEBAAA/DEPT OF ENERGY WASHINGTON DC PRIORITY
RHMFISS/HQ USCENTCOM MACDILL AFB FL PRIORITY
RUEKJCS/JOINT STAFF WASHINGTON DC PRIORITY
RHEHNSC/NSC WASHINGTON DC PRIORITY
RUEKJCS/SECDEF WASHINGTON DC PRIORITY
RUMICEA/USCENTCOM INTEL CEN MACDILL AFB FL PRIORITY

UNCLAS SECTION 01 OF 02 ISLAMABAD 001311 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: EAID EFIN ECON PGOV PREL PK
SUBJECT: ADDITIONAL DETAILS ON GOP PRIORITIES FOR U.S. 
ASSISTANCE 
 
¶1. (SBU) Summary: Minister of State for Economy Hina Rabbani 
Khar told USAID Director June 11 that the GOP has started 
making $312 payments to what it believes is a well-vetted 
list of some 1.8 million IDPs.  Assistance for IDP 
sustainment and economic recovery in the area of conflict is 
estimated at $1 billion.  While sympathetic to donors' urgent 
need for credible information on reconstruction, Rabbani Khar 
was firm that the GOP, assisted by the World Bank and the 
Asian Development Bank, would develop meaningful assessments 
and that this will take time.  She requested that the $400 
million of FY 09 portion of the Tokyo pledge be directed 
towards existing platforms like the Benazir Income Support 
Program (BISP), the Pakistan Poverty Alleviation Fund (PPAF), 
and the Higher Education Committee and the National 
Vocational and Technical Education Commission (NAVTEC) for 
maximum impact and to supplement ongoing GOP efforts.  She 
emphasized with USAID Director that mid- to long-term 
infrastructure projects could also be high impact, and 
highlighted large unmet demands for credit for small and 
medium enterprises.  End Summary. 
 
Recovery/Reconstruction Assistance 
---------------------------------- 
 
¶2. (SBU) Minister of State for Economy Hina Rabbani Khar told 
USAID Director and ECON June 11 that Pakistan has estimated 
the funds necessary to meet the immediate, medium and longer 
term needs of internally displaced persons (IDPs).  NADRA 
continues to verify new applicants, but has largely scrubbed 
the existing list of IDPs; the dollar amounts are calculated 
against NADRA's figures of 1.8 million IDPs (260,000 
families).  Rabbani Khar stressed, however, that the 1.8 
million (and the dollar amounts derived from it) is a rolling 
figure: while some IDPs will undoubtedly return home in 
coming weeks and months, others may be displaced by upcoming 
or continued military action in their areas.  Specifically, 
the GOP has calculated: 
      - $110 million to provide $312 (Rs. 25,000) per family: 
the first 5,000 grants are being issued June 11 via 
programmed magnetic strip cards that can be used to withdraw 
funds at any of 250 kiosks in the affected areas, both in 
camps and in urban areas.  United Bank of Pakistan (UBL) is 
the umbrella organization through which the Ministry of 
Finance is channeling money; NADRA is the vetting agency that 
verifies the identities of individuals submitted by UNHCR and 
others who are registering IDPs. 
      - $500 million for six months sustainment: will provide 
returnees with approximately $1.25/per person for the first 
six months to re-establish themselves at home. 
      - $500 million for livelihoods recovery: longer-term 
maintenance for returnees to include seeds, tools, orchard 
rehabilitation, support to enterprises, etc., for up to two 
years. 
 
¶3. (SBU) Rabbani Khar said the GOP is also considering 
housing reconstruction grants of up to $2500 per family 
(depending on the level of damage) in order to reconstruct 
their homes.  If an individual has already received a $312 
grant, that amount will be deducted from the total amount 
made available for home reconstruction. 
 
¶4. (SBU) Rabbani Khar was sympathetic to donors' urgent need 
for information on reconstruction costs, but was clear that 
these estimates are still too rough to be genuinely useful. 
No one, including the GOP, is yet able to enter the conflict 
areas to conduct physical assessments, although training is 
underway for NWFP and other officials who will carry out that 
work.  The $1.06 billion figure mentioned by GOP officials is 
based solely on knowledge of what infrastructure was in an 
area prior to the military action combined with a rough 
assessment of the level of damage (severe, moderate, etc.) 
that area is believed to have sustained. 
 
Structuring the Tokyo Pledge 
 
ISLAMABAD 00001311  002 OF 002 
 
 
---------------------------- 
 
¶5. (SBU) Turning to the USG Tokyo pledge, Rabbani Khar 
strongly recommended that the USG put "measurable amounts" of 
money into projects; the GOP wants to help the U.S. improve 
its image among Pakistanis and scattering money into a large 
number of smaller programs lacks punch.  For the $400 million 
from FY 09, Rabbani Khar hoped the U.S. would supplement GOP 
social safety platforms and projects, thereby freeing up GOP 
money to fund other essential programs.  Even though 
development spending has been increased by 40 percent in the 
new budget, many important projects have been left off. 
 
¶6. (U) Rabbani Khar said several existing GOP programs would 
be excellent vehicles for USG cash transfers.  Rabbani Khar 
said that the GOP is concerned that any assistance be 
sustainable and build up Pakistani institutions; she 
encouraged the U.S. to work in and through existing 
institutions. 
      - Benazir Income Support Program (BISP): the GOP has 
committed approximately $866 million to fund BISP in the FY 
09-10 budget.  Rabbani Khar called BISP transparent and, with 
World Bank involvement, a vehicle to move money in a targeted 
manner, as well as easily track/audit the results. 
      - Pakistan Poverty Alleviation Fund (PPAF): the GOP has 
allocated approximately $1 billion.  If the USG provided cash 
transfers to cover even a portion of that, the GOP could 
reallocate funds elsewhere. 
      - Higher Education Committee (HEC)/National Vocational 
and Technical Education Commission (NAVTECH).  Rabbani Khar 
did not specify a dollar amount but stressed that job 
creation is a goal the GOP and USG shared; NAVTEC in 
particular could be used to tie training to actual job needs. 
 
 
Infrastructure and Credit 
------------------------- 
 
¶7. (U) Rabbani Khar emphasized to the USAID Director that 
medium to long term infrastructure projects such as roads, 
hydropower, railways, storage facilities, power lines, etc., 
were excellent in terms of impact and visibility.  People 
want electricity, roads (access to markets) and schools for 
girls, Rabbani Khar said, and these local needs are not 
always priorities of budget-makers in the capital.  She said 
there are some 10-12 small to medium dam projects, costing 
$80-$100 million each, in Sindh and NWFP.  Rabbani Khar also 
pointed out that the need for credit for small and medium 
enterprises is immense.  The GOP has allocated some $2.5 
billion in the new budget to meet credit demands; the actual 
demand is estimated at $7.5 billion.  The UK (DFID) is 
running a credit program, but the amount of funding is too 
small to make an appreciable difference across the Pakistani 
economy. 
 
¶8. (SBU) Comment: The GOP clearly wants as many funds as 
possible channeled into existing programs so that it can 
redirect its own urgently needed resources elsewhere. 
Rabbani Khar stressed that the GOP was offering what it felt 
were transparent, credible programs that would "not cause the 
U.S. any embarrassment" and that could be easily audited. 
PATTERSON