VZCZCXRO4315
OO RUEHIK
DE RUEHSM #0660/01 2930629
ZNR UUUUU ZZH
O 200629Z OCT 09
FM AMEMBASSY STOCKHOLM
TO RUEHC/SECSTATE WASHDC IMMEDIATE 4805
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY

UNCLAS SECTION 01 OF 03 STOCKHOLM 000660 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ETRD PREL IZ IR SW
SUBJECT: SCENESETTER FOR ACTING ADMINISTRATOR FULGHAM's OCTOBER 
22-24 VISIT TO STOCKHOLM AND THE EUROPEAN DEVELOPMENT DAYS 
TAGS: ETRD PREL IZ IR SW
 
STOCKHOLM 00000660  001.2 OF 003 
 
 
¶1. (U) Summary and Introduction: The U.S. Embassy in Stockholm 
warmly welcomes your visit to Sweden.  The Government of Sweden is 
focusing its EU Presidency on several global priorities, including 
the financial crisis, climate change and development issues. 
Bilateral US-Sweden relations are close and collaborative.  Sweden 
is the world's largest donor of development assistance measured as a 
percentage of Gross National Income.  Sweden devotes one percent of 
its GNI to development cooperation, totaling $4.8 billion, of which 
nearly $2 billion (45%) is devoted to Africa via multilateral 
organization and Swedish bilateral aid program. 
 
¶2. (SBU) In 2008, Sweden provided some $57.5 million to Afghanistan, 
making the country the largest recipient of Swedish development 
assistance in Asia.  This number will increase by approximately 10% 
each year through 2011.  In addition, Sweden expects to provide 
nearly $17.5 million in humanitarian assistance to Afghanistan in 
¶2009.  In your bilateral meetings with Aid Minister Carlsson and 
SIDA Director General Nordstrom, we recommend you encourage Sweden 
to expand its commitment to Afghanistan and consider doing more in 
Pakistan.  Your interlocutors are also likely to ask for greater 
coordination between USG and GOS aid strategies.  End Summary and 
Introduction. 
 
European Development Days 
------------------------- 
 
¶3. (U) Now in its fourth year, European Development Days (EDD) is 
Europe's foremost annual platform for discussion in key areas of 
governance, climate change, international finance, trade, food 
security, water, energy, the role of the media and human and social 
rights.  Speakers this year include Fredrik Reinfeldt, Swedish Prime 
Minister; Jos-Manuel Barroso, European Commission President; IMF 
chief Dominique Strauss-Kahn; and leaders of the World Bank, Asian 
Development Bank and African Development Bank.  Amr Moussa, 
Secretary General of the Arab League, will also be speaking, along 
with UNDP administrator Hellen Clark, the Presidents of Liberia, 
Sierra Leone, Maldives, Burkina Faso and Micronesia and the Prime 
Ministers of Bangladesh, Kenya and Zimbabwe. 
 
Swedish Development Assistance 
------------------------------ 
 
¶4. (U) Sweden is the world's largest donor of development assistance 
measured as a percentage of Gross National Income.  Sweden devotes 
one percent of its GNI to developing cooperation, totaling $4.8 
billion, of which nearly $2 billion (45%) is devoted to Africa.  In 
addition, Sweden has one of the world's top ten aid programs in 
terms of absolute numbers.  In the 2010 budget bill, the GOS 
proposes a budget for development assistance of continued one 
percent of GNI in 2010.  However, a reduction in real numbers of 
Swedish development is expected as the downturn in the global 
economy has had a negative impact on Swedish growth.  As a result, 
the development assistance budget will drop from $4.8 billion in 
2009 to $4.5 billion in 2010. 
 
Swedish Development Programs 
---------------------------- 
 
¶5. (U) The Swedish International Development Cooperation Agency 
(SIDA) is responsible for most of Sweden's development assistance. 
SIDA reports to the Swedish Ministry for Foreign Affairs (MFA).  The 
Swedish Government sets the budget parameters for SIDA, but gives 
the agency "free hands" to carry out its missions in accordance with 
Swedish development policies.  Of the $4.8 billion budgeted for 
development cooperation, SIDA is responsible for approximately $2.4 
billion.  The rest is distributed through the Ministry for Foreign 
Affairs via multilateral and bilateral programs. 
Swedish Development Policies 
----------------------------- 
¶6. (U) Swedish development policies are based on two pillars. 
Firstly, that all policies should work toward the same goal of 
sustainable development. Secondly, all development assistance should 
work to create conditions for poor people to improve their living 
conditions.  Sweden has made clear that its overarching priorities 
are democracy and human rights, environment and climate, and gender 
equality and the role of women in development.  Sweden is 
prioritizing more tangible results in the cooperation assistance and 
plans to bring to attention, and systemize the follow up of, results 
against goals. 
 
¶7. (U) Sweden believes that the recipient countries' own strategies 
for reducing poverty should be the foundation for the efforts that 
Sweden undertakes within the development cooperation area.   Aid 
should be governed by demand, and decisions on priorities and 
efforts should, to a greater extent, be made in the poor countries 
by the governments and the populations of the countries in question. 
 
 
Geographic Distribution of Swedish Aid 
-------------------------------------- 
 
STOCKHOLM 00000660  002.2 OF 003 
 
 
 
¶8. (U) Most cooperation countries are located in Africa, south of 
the Sahara, as this geographical area has the largest proportion of 
poor people in the world.  Moreover, the countries there are 
furthest from reaching the Millennium goals.  The top five African 
recipients of Swedish aid in 2008 were; Tanzania ($105 million), 
Mozambique ($102 million), Uganda ($54.6 million), Kenya ($53.6 
million) and the Democratic Republic of Congo ($43.7 million). 
 
¶9. (U) Sweden's military supports international efforts to stabilize 
Africa.  Until September 15 of this year, Sweden provided three Navy 
vessels (two corvettes and a support ship) with a total of 152 crew 
and maintenance personnel to protect ships carrying food and other 
urgent supplies in the Gulf of Aden off Somalia.  The EU recently 
extended the mandate for Operation Atlanta until December 2010, and 
Sweden is currently preparing legislation to extend its naval 
mission there.  Sweden has also increased its commitment to sending 
support to conflict areas, where people are especially vulnerable. 
Lack of democracy, human rights, peace and security make the 
preconditions especially difficult for aid, but the need there is 
also the greatest. 
 
Afghanistan 
----------- 
 
¶10. (U) In 2008, Sweden provided some $57.5 million in bilateral 
assistance to Afghanistan, making the country the largest recipient 
of Swedish assistance in Asia and one of the largest in the world. 
The most important sectors were as follows: 
- Democracy, human rights and good governance, 
- Education, 
- Infrastructure (roads), health care, support for the physically 
disabled and mine clearance, 
- Humanitarian assistance.  Sweden also provided an additional $22.5 
million through grants to major international organizations, such as 
the UN, EU and World Bank. 
 
¶11. (U) Since the summer of 2007, Sweden has earmarked 15-20% of 
total bilateral assistance funds to the four Northern provinces that 
Sweden is responsible for (Balkh, Samangan, Jowzjan, Sar-e-Pul).  In 
the new Swedish strategy, this will increase to 20-25%, and the 
number of civilian development advisers will rise from one to four. 
In addition, in 2009 Sweden expects to provide nearly $17.5 million 
in humanitarian assistance to Afghanistan. 
 
¶12. (U) Aside from financial aid, Sweden assists Afghan efforts with 
military assistance.  There are currently about 450 troops in 
Afghanistan and the forces are likely to increase to 500 by the end 
of the year.  The Swedes have donated a C-130 for use by ISAF HQ 
command.  Sweden has contributed two "Operation and Mentoring 
Liaison Teams" (OMLTS), of which the second just arrived in 
Afghanistan.  The annual Afghanistan bill is currently making its 
way through Parliament, and expectations are that Sweden will at 
least maintain its current military commitment and increase its 
development aid. 
 
¶13. (SBU) In your bilateral meetings in Stockholm,, you may wish to 
urge Sweden to consider expanding further its assistance activities 
in Afghanistan and to broaden its miniscule program in Pakistan. 
You may also wish to ask about what Sweden is doing as EU President 
to guide EU efforts, including through its efforts to lead the 27 
Member States in drafting a new Afghanistan-Pakistan strategy. 
 
Recent Developments 
------------------- 
 
¶14. (U) Sweden recently contributed $14.5 million to combat the food 
crisis and the impact of the financial crisis in the poorest 
countries.  The GOS has given an additional grant to the 
International Fund for Agricultural Development (IFAD), which is to 
be used primarily to support small-scale agriculture in developing 
countries.  Up to 25% is to be used by IFAD, in cooperation with the 
United Nations Food and Agriculture Organization (FAO), to pay for 
technical expertise to support small-scale agricultural projects. 
 
¶15. (U) Development Minister Carlsson recently told journalists she 
was upset with the proposed voting changes in the World Bank. Sweden 
is one of the largest contributors to the World Bank and is unhappy 
to see its influence reduced.  Carlsson has stated that someone 
(Sweden) needs to be there to look after the poor countries of the 
world. 
 
Carlsson on Corruption in Aid Programs 
-------------------------------------- 
 
¶16. (U) Earlier this year Carlsson approached Swedish media to speak 
about the corruption scandal in Zambia.  She did so, after being 
concerned by the silence in Swedish media on the issue.  At the 
beginning of the summer, a corruption scandal was uncovered in the 
Zambian Ministry of Health.  An investigation carried out by the 
 
STOCKHOLM 00000660  003.2 OF 003 
 
 
Zambia Audit Office revealed that approximately $7.2 million had 
been embezzled during the period January 2008 - 31 May 2009, $3.8 
million of which had been embezzled from a "basket fund" to which 
donors such as Holland, Canada and Sweden contribute.  The remaining 
money was embezzled from the Global Fund, and from funds in the 
Zambian state budget.  Sweden contributes to the Global Fund and the 
state budget through its general budget support, thus Swedish funds 
were also embezzled there.  There are indications that 
irregularities have existed since the early 2000s. 
 
¶17. (U) The Zambian scandal caused Carlsson to rethink corruption 
and aid in general, as she has been known for her "zero tolerance on 
corruption."  For example, Carlsson is not convinced that 
development assistance per se never feeds corruption in the 
environments in which it operates.  She now believes that, in 
today's world of development assistance, it is impossible to achieve 
zero tolerance against corruption.  The best we can do now, Carlsson 
has said, is limit it. 
 
Managing Corruption 
------------------- 
 
¶18. (U) Sweden has now established processes for handling corruption 
cases and set up an investigation team to look into any allegations 
of corruption.  SIDA's own anti-corruption regulation was revised in 
December 2008 and is based on the approach to never accept, always 
act and always inform when corruption is suspected.  Early in 2007, 
the Government had already tasked SIDA to report the measures taken 
to prevent the occurrence of corruption in initiatives financed by 
Swedish development assistance.  In addition, the Swedish Agency for 
Development Evaluation (Sadev) was instructed in July 2007 to carry 
out an evaluation of the work done by the Ministry for Foreign 
Affairs and SIDA to prevent corruption in connection with Swedish 
funding in development cooperation.