VZCZCXRO5024
RR RUEHDBU RUEHPW RUEHSL
DE RUEHBUL #0619/01 0491246
ZNR UUUUU ZZH
R 181246Z FEB 10 ZDK
FM AMEMBASSY KABUL
TO RUEHC/SECSTATE WASHDC 5691
INFO RUCNAFG/AFGHANISTAN COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC

UNCLAS SECTION 01 OF 02 KABUL 000619 
 
SENSITIVE 
SIPDIS 
 
DEPT PASS USTR FOR DELANEY AND DEANGELIS 
DEPT PASS TDA FOR STEIN AND GREENIP 
COMMERCE FOR DEES, CHOPPIN, AND FONOVICH 
USAID/W FOR TYLER HOLT, MARK KARNS, AND DIANE RAY 
 
E.O. 12958:  N/A 
TAGS: EAID ETRD PGOV PBTS EINV EIND AF
SUBJECT:  SENIOR ECONOMIC ADVISOR TO PRESIDENT KARZAI SHARES VISION 
WITH USAID DIRECTOR FREJ 
 
REF: KABUL 512 
 
¶1. (SBU) Summary:  Senior Economic Advisor to President Karzai Dr. 
Anwarul Haq Ahadi told USAID Mission Director Bill Frej on February 
11 that he planned to set up a functioning structure to advise 
President Karzai on economic affairs and to carry out 
inter-ministerial coordination on economic issues. He asked for 
donors to provide administrative, management, and advisory 
assistance to set up the new structure.  Frej noted the importance 
of the National Economic Advisor role and proposed assistance 
through the Ministry of Finance's Civilian Technical Assistance 
Program (CTAP, which is supported by the United States and other 
donors) or the U.S. Economic Growth and Governance Initiative 
(EGGI).  Ahadi and Frej agreed to identify assistance with clear 
objectives and an end date.  Frej also offered Embassy support to 
facilitate contact with the White House National Economic Advisor's 
office as a model for the new structure.  Ahadi envisions his role 
as economic policy coordinator for GIRoA, and wants to share 
development planning and donor coordination work with the Ministry 
of Finance (MoF).  (NB: We do not know that the Finance Minister 
supports this plan.)  End Summary. 
 
---------------------------------------- 
VISION FOR THE NATIONAL ECONOMIC ADVISOR 
---------------------------------------- 
 
¶2. (SBU) In a February 11 meeting, USAID Mission Director Frej met 
with newly-appointed Senior Economic Advisor to President Karzai, 
Dr. Anwarul Haq Ahadi.  This was a follow up meeting to CDDEA 
Wayne's visit on Sunday, February 7 [reftel].  Ahadi began the 
meeting noting that the Office of the National Economic Advisor 
suffered a loss of personnel and capacity when then Advisor 
Zakhilwal took most of the staff to the Ministry of Finance upon his 
appointment as Minister.  With this move, most functions that were 
previously coordinated by the National Economic Advisor shifted to 
the MoF, including Afghan National Development Strategy (ANDS) work; 
donor coordination; and chairmanship of the Joint Monitoring and 
Coordination Board (JCMB), the donor forum for Kabul-based foreign 
missions.  Ahadi pointed out that the role of donor and ANDS 
coordination is not well thought out, nor is there a written policy 
that appoints MoF as the coordinating entity.  He noted the Ministry 
of Economy would normally play this role but is unable to do so due 
to weak leadership and limited capacity.  Ahadi said he believes 
that the Office of the National Economic Advisor should take the 
lead and perform oversight and policy coordination, with the 
Ministry of Finance leading budgetary reform.  In addition, Ahadi 
claimed that President Karzai had asked him to chair the JCMB and 
the cabinet-level economic committee. 
 
¶3. (SBU) Ahadi planned to meet President Karzai February 13 or 14 to 
discuss his responsibilities and personnel requirements.  (Comment: 
at this time there is no readout on that meeting.  End Comment.) 
Ahadi told Frej he would propose to Karzai an organizational 
structure for the Office of the National Economic Advisor, seek 
salary and budget commitments, discuss the role of economic policy 
analysis, and possibly propose his idea for an improved approach to 
regional and sectoral donor coordination. 
 
¶4. (SBU) Ahadi is looking for advisory assistance to set up a 
functioning structure to advise President Karzai on economic affairs 
and carry out inter-ministerial coordination.  Frej noted the 
importance of the National Economic Advisor role and proposed 
assistance in identifying advisors through the MoF Civilian 
Technical Assistance Program (CTAP) or USAID's Economic Growth and 
Governance Initiative (EGGI).  Ahadi and Frej agreed to identify 
assistance that is demand driven with clear objectives and an end 
date.  Frej also suggested that Ahadi speak with the White House 
National Economic Advisor office about the U.S. model and how it 
might inform Afghanistan's structure at this juncture.  He said the 
Embassy could facilitate this exchange.  After his meeting with 
Karzai, Ahadi said he will define his responsibilities and outline 
his advisory needs to USAID, clearly articulating how the needs 
would be complemented by CTAP personnel and other assistance. 
 
------------- 
SALARY REFORM 
------------- 
 
¶5.  (SBU) Ahadi attributed the lack of Afghan capacity and progress 
in governance to insufficient government salaries.  He noted that 
current salaries of $200 a month do not attract qualified staff. 
While salaries of $500 might result in successful recruitment in 
Kabul, more would be needed to attract staff in many districts, 
especially remote and insecure locations (he referenced a figure of 
$1,000).  Ahadi is nevertheless concerned that while donor salary 
 
KABUL 00000619  002 OF 002 
 
 
support might attract qualified employees, when the government takes 
funding responsibility after five years, it will not be able to meet 
the payroll, noting "not even India and Pakistan, middle-income 
countries, pay that much.  How will we?"  (NB: USAID is currently 
consolidating its salary support to all ministries of the GIRoA into 
one direct support mechanism with the Ministry of Finance (MoF). 
This will provide GIRoA with the control and oversight necessary to 
gradually rationalize government salaries to a more sustainable 
level and to determine where donor assistance may be required.) 
 
¶6.  (SBU) Regarding hiring at the district level, Ahadi expressed 
concern the GIRoA will not find qualified and committed employees. 
Frej said donors will help the GIRoA address this (including through 
the District Delivery Program), but ultimately the GIRoA must pick 
up the responsibility. 
 
------------------------------------------ 
CONCERN FOR CLUSTERS AND ANDS COORDINATION 
------------------------------------------ 
 
¶7.  (SBU) As in his meeting with Ambassador Wayne, Ahadi voiced 
arguments against the "clusters" concept presented at the London 
Conference.  To counter the potential backlash, Ahadi proposes to 
manage the ANDS and maintain participation by each ministry in 
overall development planning and implementation. 
 
¶8.  (SBU) Regarding ANDS implementation, Ahadi said that there are 
too many sub-committees, thus making effective coordination 
difficult for the MoF and donors.  He suggested a more sectoral 
approach with only three to five sub-committees, but did not 
indicate which.  Ahadi added that the role of budgeting should stay 
with MoF, but monitoring and evaluation and policy should fall under 
the Office of the National Economic Advisor.  (Comment: Ahadi noted 
that, realistically, monitoring and evaluation should fall under the 
Ministry of Economy, but due to the lack of capacity and leadership 
this function should be transferred to his office.  End Comment.) 
Additionally, he suggested that ANDS implementation should give 
greater attention to linking policy and development assistance by 
improving economic analysis and communications with the MoF. 
 
------- 
COMMENT 
------- 
 
¶9.  (SBU) Ahadi is highly capable of articulating various flaws 
within GIRoA.  He is also clearly uncomfortable with Parliament's 
rejection of his nomination as Minister of Economy, intent on his 
competition with Zakhilwal, and focused on identifying a 
constructive role for himself.  It remains to be seen whether over 
the short-term this role evolves into a function which facilitates 
GIRoA decision making and execution or simply delays improved GIRoA 
organization on economic and development assistance.  Embassy Kabul 
will seek opportunities to direct Ahadi and other Afghan officials 
in a more productive direction. 
 
EIKENBERRY