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DE RUEHIL #3002/01 3490531
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O 150531Z DEC 09
FM AMEMBASSY ISLAMABAD
TO RUEHC/SECSTATE WASHDC IMMEDIATE 6442
INFO RUEHBUL/AMEMBASSY KABUL PRIORITY 1295
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UNCLAS SECTION 01 OF 02 ISLAMABAD 003002 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ECON EFIN EAID PGOV PREL PK
SUBJECT: ASSISTANCE COORDINATOR BRIEFS FOREIGN MINISTER 
 
Summary 
------- 
 
¶1. (SBU) Ambassador Robin Raphel, Coordinator for Economic 
and Development Assistance in Pakistan briefed Foreign 
Minister Shah Mehmood Qureshi on U.S. plans to channel more 
assistance through the Pakistani government, target USG 
assistance in areas vulnerable to militants, and to focus on 
several "signature" projects to raise the overall profile of 
the USG in a positive way with the Pakistani people on 
December 7.  Qureshi welcomed the shift in focus, and 
suggested that the U.S. focus on water as having the most 
immediate and wide reaching impact in both energy and 
agriculture.  He promised his personal support and offered a 
larger MFA role in coordinating the implementation of U.S. 
assistance.  End Summary. 
 
On the Right Track... 
--------------------- 
 
¶2. (SBU) Ambassador Robin Raphel, Coordinator for Economic 
and Development Assistance in Pakistan (AssistCoord), and 
Acting USAID Mission Director met with Foreign Minister Shah 
Mehmood Qureshi and other Foreign Office officials on 
December 7 to discuss the U.S. assistance strategy for 
Pakistan.  Qureshi expressed his gratitude that MFA input is 
being sought, and welcomed MFA involvement in "developing and 
overseeing implementation" of USG assistance.  He emphasized 
the need to build bridges between the GOP and the USG and the 
importance that the Pakistani people understand that 
assistance money is being well spent. 
 
...But Complaints Persist 
------------------------- 
 
¶3. (SBU) Qureshi reiterated the common GOP refrain, in 
particular calling the USAID process in place until recently 
an opaque, "closed door" system that worked only with NGOs. 
Warming to his theme, Qureshi asserted that, while a great 
deal of money was spent, there was "no impact" in the country 
receiving aid because projects are not prioritized to meet 
the needs of the host nation.  Because USAID funds often are 
given to U.S. based organizations and then subcontracted to 
local organizations, the costs are "two to three times 
higher" than they would otherwise be.  Assistance money is in 
reality being siphoned back to the United States, Qureshi 
said. 
 
MFA Suggested Ways Forward 
-------------------------- 
 
¶4. (SBU) Qureshi suggested that the American-Pakistani 
Foundation be used to raise funds to help in social sectors. 
MFA could assist the Embassy's Assistance Coordination office 
in facilitating the foundation's efforts.  He also announced 
his intention to create an Economic Diplomacy Division. 
Because MFA has neither the people nor the resources to 
create the new section, Qureshi said he is looking to the 
private sector for support. 
 
¶5. (SBU) Qureshi said that the United Arab Emirates (UAE) 
Foreign Minister supported the idea of Public/Private 
Partnerships (PPP), as discussed at the Friends of Democratic 
Pakistan meeting in Istanbul.  The UAE Foreign Minister has 
offered to host a PPP conference in Dubai and had suggested 
January 26, 2010, as a target date, according to Qureshi. 
 
¶6. (SBU) Qureshi complained that the U.S.-Pakistan strategic 
dialogue has not produced meaningful results in recent years. 
Qureshi suggested the dialogue be restructured and welcomed 
Secretary Clifton's willingness to chair the meetings.  The 
first talks could be held in Washington in late January/early 
February. 
 
New Way Forward for USAID 
------------------------- 
 
ISLAMABAD 00003002  002 OF 002 
 
 
 
¶7. (SBU) Ambassador Raphel explained that U.S. assistance 
will now move more funds through the GOP, target vulnerable 
areas where the GOP is not strongly represented in order to 
counter militant attitudes, and begin investing in 
"signature" projects, so that the Pakistani people can see 
directly the results of U.S. assistance.  She also emphasized 
the need for economic reform in Pakistan, including resolving 
the so-called "circular debt," reapportioning the GOP budget 
to better address development needs and emphasized the need 
for greater GOP accountability.  She also highlighted the 
need for the GOP to increase Pakistan's tax-to-GDP ratio, 
adding that American taxpayers need to see that Pakistani 
citizens are paying for services within their own country. 
 
¶8.  (SBU) Qureshi stressed that water projects focusing on 
the energy and agriculture sectors would alleviate poverty, 
create jobs, and stimulate the economy.  Qureshi agreed that 
GOP reforms and increased accountability would be important 
factors as the U.S. implements its new strategy.  He 
recommended that USAID establish a hub in Multan as the best 
means of targeting USAID assistance to southern Punjab and 
northern Sindh.  Multan has more ties to the local population 
than Lahore, is geo-strategically located and is easily 
accessible.  Qureshi offered his personal assistance in 
connecting USAID with contacts in the area to help target USG 
assistance.  (Comment: Qureshi is from Multan and would 
presumably benefit politically by bringing a USAID hub there. 
 End Comment.)  Qureshi stated that the MFA would appreciate 
a donor community meeting to discuss donor activities in 
Southern Punjab. 
 
Assistance Coordination 
----------------------- 
 
¶9. (SBU) Qureshi asked what role MFA is expected to play in 
the U.S. assistance strategy, adding that MFA would like to 
appoint a focal point with whom the U.S. should coordinate on 
assistance.  Ambassador Raphel responded that, to date, the 
America's Desk in the MFA has been the Embassy's main point 
of contact at MFA.  Qureshi requested a meeting with the 
Embassy to coordinate efforts to implement the U.S. 
assistance strategy, once it is finalized, in order to 
"better sell" the strategy to the people of Pakistan and, in 
turn, the United States.  Qureshi offered his own public 
support as necessary. 
 
¶10. (SBU) Comment: Qureshi's support for the new aid 
assistance strategy is no surprise: he was a vocal supporter 
for the Kerry-Lugar bill and its positive implementation will 
be a political win for him to build upon in the future.  His 
enthusiasm for coordinating U.S. assistance via the MFA is a 
less positive development, but one which we have heard (and 
quietly pushed back against) before.  The MFA lacks capacity 
and the GOP already has in place coordination mechanisms, 
such as the Economic Affairs Division (EAD) through which 
donor assistance is directed.  Post will, however, work to 
harness Qureshi's enthusiasm and his offer of public support 
for the better implementation of the overall assistance 
strategy.  Multan as a satellite base for activities in 
southern Punjab, for example, is an idea that Post will 
investigate further.  End Comment. 
PATTERSON