VZCZCXYZ0012
RR RUEHWEB

DE RUEHTV #0434/01 0550738
ZNR UUUUU ZZH
R 240738Z FEB 10
FM AMEMBASSY TEL AVIV
TO RUEHC/SECSTATE WASHDC 5617
INFO RHEHNSC/NSC WASHDC
RUEHJM/AMCONSUL JERUSALEM 3796

UNCLAS TEL AVIV 000434 
 
SENSITIVE 
SIPDIS 
 
STATE FOR D, F, and NEA/IPA 
 
E.O. 12958: N/A 
TAGS: EAID EINV PREL OECD UNESCO IS PA
SUBJECT: D/Sec Lew Discusses Assistance Cooperation with MFA and 
MASHAV 
 
¶1. (SBU) Summary: Deputy Secretary Jacob J. Lew met February 21 with 
Deputy Foreign Minister Danny Ayalon, and separately with MFA 
Director General Yossi Gal and MASHAV (Israel's foreign aid agency) 
head Haim Divon to discuss bilateral cooperation in development 
assistance and Israel's OECD accession, among other issues.  In both 
meetings, it was agreed that the U.S. and Israel would explore the 
possibility of coordinating our development assistance efforts where 
feasible.  DFM Ayalon also asked for USG assistance in placing an 
Israeli candidate as Assistant Director General for International 
Cooperation at UNESCO. 
MASHAV-USAID Cooperation 
--------------------------------- 
¶2.  (SBU) On February 21, D/Sec Lew met with GOI Deputy Foreign 
Minister Danny Ayalon, MFA Director General Yossi Gal and MASHAV 
(Israel's Foreign Aid agency in acronym) head Haim Divon to discuss 
shared interests in development assistance, Israel's OECD membership 
accession, and Palestinian WTO observership.   Ayalon was 
accompanied by Deputy DG for North American Affairs Barukh Bina; Gal 
was joined by Irit Ben-Abba, Deputy DG of Economic Affairs and 
Gershon Kedar from the North American Department.  D/Sec Lew was 
accompanied by DCM, Deputy Special Envoy for Middle East Peace Mara 
Rudman, and Piper Campbell and Jennifer Butte-Dahl of his staff. 
¶3. (SBU) Divon had just returned from Haiti, and described the 
situation there as dire in humanitarian and infrastructure terms. 
He praised the USG presence and role in Haiti, noting it was an 
essential component that lent some sense of order and security. 
Without the important U.S. military role the situation would be far 
worse.  Israel's own efforts in Haiti in the short term remained 
post-trauma medical care and assistance with water and sanitation to 
avoid post-catastrophe diseases like cholera.  Long term, Israel 
expects to work with capacity building in Haiti's public health 
infrastructure, and agricultural sector, including low pressure 
irrigation systems and other water technologies - areas in which 
Israel specializes. 
¶4. (SBU) Haiti was the first of four areas in which Divon proposed 
the U.S. and Israel work in partnership.  He also noted Indonesia, 
India and Sub-Saharan Africa.  In Indonesia, Israel trains 
practitioners in emergency preparedness, emergency medical services, 
and focuses particularly on Banda Aceh province, which was heavily 
affected by the 2005 tsunami.  Gal noted the quiet, helpful 
assistance of the U.S. in working to strengthen ties between 
Indonesia and Israel.  Divon went on to discuss MASHAV's work in 
India, which presents a desperate need for agricultural outreach and 
new technologies.  MASHAV can offer expertise in tropical fruit 
crops (mangos, pomegranates, olives, citrus) and water management 
tools (irrigation and wastewater treatment).  Because 45% of India's 
people still work in the agricultural sector, this is a priority for 
the Indian government; desperation among farmers has led to a rash 
of suicides.   Sub-Saharan Africa also presents the need for a 
MASHAV Techno-Agriculture Innovation for Poverty Alleviation (TIPA) 
program.   Divon noted that USAID and MASHAV already work jointly on 
agricultural programs in Ethiopia and Kenya. 
¶5. (SBU) Dep FM Ayalon raised a recently signed MOU between Israel 
and Germany laying out specified areas of expertise and noted that a 
similar framework between the U.S. and Israel would be helpful D/Sec 
Lew took note of the potential for USAID and MASHAV cooperation and 
noted Secretary Clinton's personal interest in the idea of 
trilateral cooperation.  Lew agreed with both Ayalon and Gal (in 
separate meeting) that the U.S and Israel share common strategic 
interests and that opportunities for coordination should discussed 
further at the technical level.  Lew pledged to discuss with USAID 
Administrator Shah upon his return to Washington.  Divon also 
brought up the idea of an annual USAID-MASHAV dialogue, which can be 
further discussed at the technical level. 
¶6. (SBU) Divon announced that Israel would host the 27th 
International Women Leaders Conference in 2011.  Although the date 
had not yet been fixed, International Women's Day (March 8th) is one 
option, and the GOI would like to invite the Secretary to be the 
keynote speaker.  Lew said he would convey this invitation to the 
Secretary.  Ayalon asked that if the Secretary were unable to accept 
the invitation, the USG would consider sending another appropriate 
female leader in her stead. 
Towards OECD Accession 
----------------------- 
¶7. (SBU) Gal introduced the OECD accession topic noting that the end 
of the process was near.  Irit Ben Abba detailed the timeline from 
now until May 29, when ideally the OECD Council will announce the 
acceptance of the three applicant countries as members.  Due to the 
recently reached U.S.-Israel IPR agreement, the OECD Trade Committee 
can favor Israeli accession - although the EU now seeks a roadmap 
toward a comparable bilateral IPR agreement of its own.  Ben-Abba 
was confident of Trade Committee approval, however, and also of 
approval from the Anti-bribery Committee at its March 16 meeting. 
The Statistics Committee remained a concern; the GoI had just 
submitted new language for the footnote concerning Israeli 
statistics, which include data from outside of green-line Israel. 
The issue is subject to politicization, which could spread to the 
three sessions of the OECD Membership Council scheduled before the 
 
end of May.  There is also a question whether the PA will take some 
action to deter approval. While the GoI expects political 
statements, it may want some help from the U.S. to contain them. 
¶8. (SBU) Lew observed that until now the accession process had not 
been politicized, and he hoped it would not become so.  He assured 
the Israelis that the U.S. was following the issues carefully. 
Addressing Palestinian Issues 
------------------------------ 
¶9.  (SBU) DFM Ayalon said that Israel would like to intensify its 
cooperation with the U.S. on Palestinian economic development.  He 
noted that Israel would like to strengthen Israeli-Palestinian 
business to business contacts and work to further integrate the 
Palestinian and Israeli economies through the introduction of a 
private sector model where Israeli businessmen and experts could 
talk directly to their Palestinian counterparts.  This made sense 
since eventually Israel would be the largest market for Palestinian 
goods and services. 
¶10.  (SBU) D/Sec Lew noted that Palestinians needed an easier flow 
of goods and greater predictability, since they did not know on a 
daily basis what Israeli-imposed restrictions would allow them to 
do.  Stressing that "uncertainty is a barrier to business 
investment," Lew noted that the biggest need was for economic 
development that created jobs.  Improved security conditions were 
the prerequisite for economic development.  Ayalon said that Israel 
had expected Saudi Arabia to make a significant financial investment 
- perhaps $10 billion - to help the Palestinians develop an 
industrial base in the West Bank but was disappointed that instead 
the Saudis mostly supported Palestinian expenditures.  Ayalon then 
claimed that Palestinians receive per capita double what Europeans 
received under the Marshall Plan, in adjusted dollars. 
¶11.  (SBU) Lew noted the challenges inherent in working in Gaza, 
highlighting the recent Israeli changes in visa rules. Ayalon 
claimed that Israel's policy of limiting Gaza access and isolating 
Hamas had been vindicated, since polling showed that if a democratic 
election were held in Gaza today, Hamas would receive only 18 
percent of the vote.  Ayalon said that there was no lack of food or 
medicine in Gaza, and that Israel was trying to loosen restrictions 
on the entry of construction material.  Israel had two special 
concerns about the entrance of goods into Gaza:  first, that there 
needed to be an effective monitoring mechanism, and secondly, that 
Hamas didn't get credit for items that get in.  In response to a 
question from the D/Sec about Hamas's income from the tunnels, 
Ayalon said that Hamas was flush with shekels and had tried to use 
Israeli banks to convert them to dollars in order to do business 
with Iran; Israel "had not allowed" the currency conversion. 
¶12.  (SBU) Gal and Ben-Abba expressed frustration at the lack of 
direct MFA-PA contact.  There has been no meeting of the Joint 
Economic Committee (JEC) since September 2009 to discuss issues of 
concern, although this was one of the Oslo Accord's best legacies. 
Instead, Gal said, the PA brings up issues with Mitchell or the 
Quartet.  Deputy SEMEP Rudman noted the difficulties former PA 
Minister of National Economy Bassem Khoury faced as a result of the 
last JEC meeting, and suggested that the PA appeared open to 
re-establishing the dialogue provided that assurances were 
forthcoming from the GoI that politicization of the meetings would 
not reoccur.  Gal and Ben Abba surmised this would be possible. 
¶13.  (SBU) Ben-Abba criticized the PA boycott of Israeli products, 
noting this was not behavior that merited giving the PA WTO observer 
status.   Gal said that Fayyad claims it is a boycott only against 
West Bank Jewish settlement exported goods, not a full boycott.  Lew 
asked about the ability to distinguish between them, and Gal agreed 
it was problematic.  Nonetheless, Gal said a formal policy of 
boycotting imports is incompatible with WTO member responsibilities. 
 D/Sec observed that exposure to WTO disciplines would be valuable 
for the PA and assist in facilitating positive resolution of these 
types of issues.  He suggested that issues such as the boycott and 
bureaucratic constraints to economic progress would best be 
addressed at the working level through the JEC. 
¶14. (SBU) Before closing the meeting, Gal said the PA needs to share 
its long-term vision for its economy and how it intends to attract 
more investment and R & D.  The AHLC is the venue for discussions to 
pursue this, and he hoped for improved contact in the future.  Lew 
noted that he was indeed struck by the depth of the PA's strategic 
vision and their often-expressed desire to gradually reduce their 
need for outside assistance. 
 
Funding for Bi-National Foundations 
----------------------------------- 
¶15. (SBU) D/Sec Lew raised this issue in order to head off any 
potential misunderstanding with Israel.  Israel had put $55 million 
aside to increase the endowments of the three binational 
foundations, including the Binational Industrial Research and 
Development Foundation (BIRD) and had requested that the U.S. do the 
same.  Lew noted that budget constraints would make that very 
difficult for us at this time, since we had just submitted our 2011 
budget to Congress (which did not include additional funding for 
this initiative) and the fiscal environment was also extremely 
tight.  He added that the U.S. was proud of the work of the 
 
foundations and committed to seeking creative collaboration on 
technology issues, perhaps by facilitating private sector 
involvement or through other means.  Ayalon responded that Israel 
understood that the money was not available now and would relay that 
information to his GoI colleagues, but added that he would 
appreciate further discussion of possible U.S.-Israeli cooperation 
in this area. 
 
Israeli candidate for UNESCO ADG 
-------------------------------- 
¶16. (SBU) Ayalon said that Israel was working hard to overcome its 
diplomatic isolation.  He flagged Israel's having recently joined 
JUSCANZ in Geneva and its hope to join JUSCANZ and WEAG in New York 
so that it could present candidates for UN positions. Israel wanted 
to submit a candidate to be Assistant Delegate General for 
International Cooperation and Communication at UNESCO, and asked for 
U.S. intervention with new UNESCO Director General Bokova, who "owes 
you guys her life." 
CUNNINGHAM