VZCZCXRO4931
PP RUEHDBU RUEHIK RUEHPOD RUEHPW RUEHSL RUEHYG
DE RUEHBUL #1732 1831208
ZNR UUUUU ZZH
P 021208Z JUL 09
FM AMEMBASSY KABUL
TO RUEHC/SECSTATE WASHDC PRIORITY 9917
INFO RUEATRS/DEPT OF TREASURY WASHINGTON DC 0826
RUCNAFG/AFGHANISTAN COLLECTIVE
RUEHZG/NATO EU COLLECTIVE
RUEABND/DEA HQS WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC

UNCLAS KABUL 001732 
 
DEPT FOR SRAP, SCA/FO, SCA/RA, AND SCA/A 
DEPT PASS FOR AID/ANE 
DEPT PASS USTR FOR DELANEY AND DEANGELIS 
DEPT PASS OPIC 
DEPT PASS FOR TDA FOR STEIN AND GREENIP 
USOECD FOR ENERGY ATTACHE 
CENTCOM FOR CSTC-A 
NSC FOR JWOOD 
TREASURY FOR JCASAL, ABAUKOL, AWELLER, AND MNUGENT 
COMMERCE FOR HAMROCK-MANN, DEES, AND FONOVICH 
 
SENSITIVE 
 
SIPDIS 
 
E.O. 12958 N/A 
TAGS: ECON EAGR EAID EFIN AF
 
SUBJECT: Signing of USDA Food for Progress Agreement 
 
COORDINATING DIRECTOR FOR DEVELOPMENT, ASSISTANCE AND ECONOMIC 
AFFAIRS (CDEDA) MEETS FINANCE MINISTER ZAKHILWAL 
 
¶1. (SBU) On June 30 with Afghan Minister of Finance Zakhilwal and 
Ambassador Wayne, Coordinating Director for Economic and Development 
Affairs signed a USDA-sponsored program agreement (PL 480) for the 
monetization of soybean oil.  Deputy Agriculture Minister Kunduzi 
was also in attendance.  Totaling some USD 17.5 million, 
implementation of the agreement should assist GIRoA in 
capacity-building efforts at a critical time. 
 
¶2. (SBU) In a pre-signing conversation, Minister Zakhilwal expressed 
his thanks for the USDA donation, and noted how the capacity of 
traders had been increased by the auctions of previous PL 480 
programs, as well as the fact that the U.S. soy introduced a higher 
quality cooking oil into Afghan markets and gave the Agriculture 
Ministry more money for its development budget.  Zakhilwal said that 
the economic activity generated not only provides a boost to 
capacity building efforts in Afghanistan versus Pakistan, but also 
creates the possibility of expanding GIRoA's ability to deliver 
services.  He said that current efforts of GIRoA, understandably, 
are focused on simply expanding governance.  However, the delivery 
of services and development at the sub-national level are also 
important. 
 
¶3. (SBU) Ambassador Wayne acknowledged the need for good governance. 
 He also raise the wage issue as it related to capacity building 
efforts, noting that some of Afghanistan's best and brightest get 
donor-funded training to assist GIRoA, but then are hired away at 
salaries the government cannot begin to match. Zakhilwal agreed and 
said that capacity building efforts will fail unless the salary 
issue is dealt with.  He noted that even harmonizing government 
salaries has been difficult, with disparities creating incentives 
for corruption. 
 
¶4. (SBU) Zakhilwal also mentioned efforts by donors, notably BMTF, 
to modernize customs facilities at border ports, and emphasized a 
particular need to revamp facilities at Zaranj, where a planned 
Iranian railhead will connect with the sea port of Char Bahar.  He 
noted the new facilities at the ports of Torkham and Islam Qala as 
great examples of the USG's support for his ministry. 
 
PRESS CONFERENCE ON AG DONATION 
 
¶5. (U) Following the meeting, Ambassador Wayne and Minister 
Zakhilwal signed the Food for Progress agreement.  At a press 
conference following the signing, Ambassador Wayne noted that since 
2003, the United States has donated over USD 200 million in 
bilateral food assistance to Afghanistan and additional aid through 
multilateral organs. He said that this latest USD 17.5 million 
contribution would provide agricultural products to Afghanistan and 
allow the Ministry of Finance and the Ministry of Agriculture to 
work together to strengthen the agricultural capacities of 
Afghanistan.  Ambassador Wayne added that this agreement was just 
part of a broader effort to strengthen the rural economic and 
agricultural sectors.  This effort would also include education, 
building of infrastructure, and training.  We would also work to 
strengthen market linkages so that Afghan farmers could produce 
better products and have better access to markets.  Ambassador Wayne 
concluded by saying "our mutual goal will be to create more jobs, 
better jobs, and a better life for the people of Afghanistan." 
EIKENBERRY