CANADA'S RESPONSE TO LETTER FROM UNDER SECRETARIES

UNCLAS OTTAWA 001250

SIPDIS

E.O. 12958: N/A
TAGS: ECON EAID EFIN PREL AF CA
SUBJECT: CANADA'S RESPONSE TO LETTER FROM UNDER SECRETARIES
LARSON AND TAYLOR ON FILLING THE AFGHAN GOVERNMENT'S
FINANCING GAP

REF: A. OTTAWA 1168


B. STATE 105217


1. Hau Sing Tse, Vice-President of Canada's International
Development Agency has responded on behalf of the GOC to the
letter conveyed in Ref b. Following is the faxed text of the
letter.


2. Begin text

2003-05-02


Mr. John B. Taylor
Under Secretary of Treasury
for International Affairs
U.S. Department of the Treasury

Mr. Allan Larson
Under Secretary of State for Economic,
Business and Agricultural Affairs
U.S. Department of State



Dear Sirs:

Thank you for your letter of 25 April regarding the
international community's support for Afghanistan's
reconstruction. We too were encouraged by the show of
support through the participation of so many bilateral donors
and International organizations representated at the
Afghanistan High-Level Strategic Forum in Brussels.

In reference to Finance Minister Ghani's request for
predictability of funding, Canada responded by pledging
financial support for the operating and development budgets
beyond this solar year. As you know, Canada pledged CDN $250
million in new aid to Afghanistan for the next two years. We
have also heeded the Afghanistan Transitional Authoritiy's
request that funding be directed to their priorities. This
is a fundamental principle of CIDA's Interim Assistance Plan
for Afghanistan as approved by the Minister for International
Cooperation, the Honourable Susan Whelan.

In this respect, our program will support three areas from
the National Development Framework (NDF) and Budget: rural
livelihoods and social protection; natural resources
management, with an emphasis on agreculture; and security and
the rule of law, and we will continue to make significant
contributions to the operating budget. We informed Afghan
representatives in Brussels that CDN $23.5 million would be
provided for the operating budget for the current year
through the Afghanistan Reconstruction Trust Fund (ARTF).
That contribution has already been forwarded to the ARTF.

CIDA is continuing its dialogue with the Afghan Aid
Coordination Authority and with line ministries to determine
specific areas for program and project support within the
three NDF programs. We will consider an additional
contribution to this year's operating budget as part of the
deliberations with our Minister, and these deliberations will
also take into account the unallocated portion of our pledge.

In closing I would like to highlight the excellent
communication between our CIDA officials and your
representatives in the United States Embassy here in Ottawa.
I look forward to the continuation of our close cooperation
in assisting in the reconstruction of Afghanistan.

Yours Sincerely,

Hau Sing Tse
Vice-President Asia Branch

cc: Jonathan Fried, Senior Deputy Minister, Department of
Finance
David Mulroney, Assistant Deputy Minister, Asia-Pacific,
DFAIT

End text


3. As noted in Ref A, CIDA staff expect Minister Whelan to
make final decisions ("deliberations with our Minister") on
allocation of aid to Afghanistan in June.
CELLUCCI