SPANISH GOVERNMENT STRONGLY SUPPORTS NEW

UNCLAS SECTION 01 OF 02 MADRID 003644

SIPDIS

STATE PASS ROLAND DEMARCELLUS AND JUDY GARBER

E.O. 12958: N/A
TAGS: EAID EFIN ECON EINV PREL SP
SUBJECT: SPANISH GOVERNMENT STRONGLY SUPPORTS NEW
INITIATIVES IN INTERNATIONAL AID

REF: A. STATE 177369

B. MADRID 1691


1. Summary: In a delayed response to ref A demarche,
Technical Advisor Manuel Alhama Orenes in the Cabinet of
Secretary of State for International Cooperation (aid) Leire

SIPDIS
Pajin, defined the new position of the GOS on international
aid as "anything is possible". Spain is now a major
supporter along with Brazil, France and Chile of new
international initiatives to end world hunger and guarantee a
steady, stable increase in international aid to developing
countries. In addition to pushing for greater world aid,
President Zapatero and his Secretary of State for
International Cooperation Leire Pajin intend to revamp the
Spanish aid program, increasing Spanish aid from
approximately .25% of GDP to .50% of GDP, and redirect aid
from Spain's 32 priority countries, mainly middle income
countries in Latin America and North Africa to the world's
poorest countries. End Summary.

GOS Strongly Supports New International Aid Initiatives
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2. We delivered ref A demarche August 30 to several members
of Spain's Agency for International Development and Ministry
of Foreign Affairs. We requested a response in early
September as the GOS began to return from the long August
break. We received a response September 16 from Technical
Advisor Manuel Alhama Orenes in the Cabinet of Secretary of
State for International Cooperation (aid) Leire Pajin.
Alhama's answer did not directly address our concerns, but
provided a general GOS position on international aid issues.


3. Alhama began by pointing out that in recent years
developing countries have not achieved the 3% level of GDP
growth that would alleviate poverty and hunger. Spain is now
one of the chief proponents of new initiatives to provide
more assistance to meet this goal together with Brazil,
France and Chile. The GOS is also willing to consider a tax
on commerce and international arms sales to raise money for
new development initiatives.


4. Alhama said the GOS is interested in ensuring a stable,
predictable flow of international assistance to developing
countries so that governments can plan for development needs.
In this effort, Spain is interested in considering all
options and initiatives that will increase the level of
international assistance and funds flowing to poor countries.
Alhama emphasized that the new initiatives were voluntary
and only those countries wishing to participate in the new
endeavors would do so.


5. Alhama barely touched on specific concerns in our
demarche. He noted that the GOS is also concerned with
transparency of developing governments, but that we should
not allow this issue to cloud the overall debate on aid and
need to ensure greater availability of funds to developing
countries. He described the U.S. concerns on taxation and
fiscal issues as unfounded, and mentioned that these issues
would be studied as possibilities and that the international
system of trade would remain open.

Changes in Spanish Aid Policy
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7. Spain's Socialist government plans a significant increase
in aid disbursements and reorientation of aid to poorer
countries (Ref B). President Zapatero and his Secretary of
State for International Cooperation Leire Pajin have promised
to double Spanish assistance from approximately .25% of GDP
to 0.5% of GDP in the next four years, and to achieve 0.7% if
Zapatero's government is reelected to a second four year
term. Much of this new funding will be granted to the
world's poorest countries, especially those in Sub Saharan
Africa. Spain's aid is currently channeled assistance to 32
priority countries, mostly middle income countries in Latin
America and north Africa where Spain had historical ties or
foreign policy interests.

Comment
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8. The support of the new international aid initiatives by
Spain marks a major change in Spanish aid policy, at least
rhetorically. One of the major drivers of this change is the
new Secretary of State for International Cooperation Leire
Pajin. At twenty-eight, Pajin is the youngest Secretary of
State (Undersecretary equivalent) in the Spanish government.
In 2000, she won a seat in Parliament. She also held the
post of Secretary for Social Movements and Relations with
NGOs on the Socialist Party's Federal Executive Commission,
as well as the presidency of the Spanish NGO Solidarid
Internacional (Solidarity International). She is believed to
be close to President Zapatero. We will be monitoring
closely possible changes Spain might make with respect to
recipient countries and international aid initiatives. The
government's upcoming budget proposal in early October will
also be a concrete indicator of whether the GOS will, in
fact, increase overall aid levels despite fiscal constraints.
ARGYROS