COUNTERING UNHELPFUL NEW INTERNATIONAL INITIATIVES

UNCLAS PRETORIA 003919

SIPDIS

SENSITIVE BUT UNCLASSIFIED

E.O. 12958: N/A
TAGS: EAID EFIN ECON EINV PREL SF
SUBJECT: COUNTERING UNHELPFUL NEW INTERNATIONAL INITIATIVES
ON ODA

REF: SECSTATE 177369

Sensitive But Unclassified; Protect Accordingly.


1. (SBU) Summary. Econoff met with Sheldon Moulton, head of
the Directorate on Global Economic Organizations, to get
South African reactions to reftel demarche. Moulton
explained that South Africa firmly supported the concept of
an International Finance Facility (IFF) and would continue to
do so. He lauded increases in U.S. and other developed
country official development assistance, but said that it was
still not enough because the need was so great. In general,
he lamented the "sad state of honoring Monterrey pledges on
aid and debt relief" by developed countries. He specifically
mentioned Professor Jeffery Sachs' calculation that the
United States channeled only 0.14% of its GDP to development
aid, far short of the 0.7% of GDP target embodied in the
Monterrey Consensus. End Summary.


2. (SBU) Moulton said that South Africa supported the IFF
concept in writing and would continue to do so. He said that
Finance Minister Trevor Manuel had signed a joint letter in
support of IFF with British Chancellor of the Exchequer
Gordon Brown. On the concept of a global tax to fund
development, Moulton commented that the idea had been around
for a long time and would likely be around for a long time.
He was not sure whether the recent dialogue on the subject
"would bring us any closer."


3. (SBU) Moulton said that President Mbeki would be attending
President Lula's World Leaders Meeting on Financing Hunger
and Poverty Eradication in New York in September "to try and
find a way to advance the dialogue and to give impetus to
meeting the goals of the Monterrey Consensus." He thought
that the Blair Commission (of which Manuel was a member),
Britain's upcoming G-8 chairmanship and EU presidency, and
the OECD's study into official development assistance would
place increasing pressure on developed countries to increase
their foreign assistance in the coming year. He thought that
other European countries would continue to support the IFF
concept along with Britain.


4. (SBU) Moulton argued that no matter how additional
development funds were raised, developing countries would
still have to meet the same criteria for development
assistance that they do now. He thought that good governance
and accountability would remain important, and that the
debate would continue as to how developing countries should
strengthen themselves in these and other areas.
FRAZER