READOUT OF THE JANUARY 17-18 MEETING OF THE BLAIR

UNCLAS SECTION 01 OF 03 PRETORIA 000453

SIPDIS

SENSITIVE BUT UNCLASSIFIED

STATE FOR AF/EPS/SDRIANO, EB/EPPD, E/APENCE

E.O. 12958: N/A
TAGS: EAID ETRD EFIN XA SF
SUBJECT: READOUT OF THE JANUARY 17-18 MEETING OF THE BLAIR
COMMISSION FOR AFRICA


(U) This cable is sensitive but unclassified. Please handle
accordingly; not for Internet distribution.


1. (SBU) Summary. At a January 17-18 meeting in Cape Town,
seventeen African ministers of finance grouped with members
of the Blair Commission for Africa to consult on the
Commission's report due February. Chancellor of the
Exchequer Gordon Brown attended the event as the last stop in
a six-day tour of Africa (including Kenya, Tanzania,
Mozambique, and culminating in South Africa). The Commission
for Africa and consulting ministers issued a communiqu that
called for the doubling of official development assistance
(ODA),100% debt service relief, special and differential
trade for African countries, the creation of an International
Financing Facility (IFF),and for rich countries to commit to
Millennium Goals target of 0.7% of Gross National Income for
official development assistance. Both Brown and South
African Finance Minister Trevor Manuel delivered speeches to
open the meeting. End Summary.


2. (SBU) Sixteen African finance ministers joined eight of
seventeen Blair Commissioners for Africa and selected others
to consult on the Commission's report due in February during
a two-day meeting in Cape Town on January 17-18.
Participants included:

-- Abdelatif Benachenou, Finance Minister, Algeria
-- Luisa Dias Diogo, Prime Minister and
Finance Minister, Mozambique
-- Sogue Diarisso, Finance Minister, Senegal
-- El Zubair Ahmed El Hassan, Finance Minister,
Sudan
-- Donald Kaberuka, Finance Minister, Rwanda
-- Khushhal Khushiram, Finance Minister, Mauritius
-- Goodall E. Gondwe, Finance Minister, Malawi
-- Michel Meva'a Meboutou, Finance Minister,
Cameroon
-- David Mwiraria, Finance Minister, Kenya
-- Celestin Bayohgha Nembe, Deputy Finance Minister,
Gabon
-- Ngozi Okonjo-Iweala, Finance Minister, Nigeria
-- Timothy Thahane, Finance Minister, Lesotho
-- Abou-Bakar Traore, Finance Minister, Mali
-- Minister Mekonnen, Advisor to the Prime Minister,
Ethiopia
-- Trevor Manuel, Commissioner and Finance Minister,
South Africa
-- Gordon Brown, Commissioner and Chancellor of the
Exchequer, U.K.
-- Paul Boothe, on behalf of Ralph Goodale,
Commissioner and Finance Minister, Canada
-- Linah Mohohlo, Commissioner and Central Bank
Governor, Botswana
-- Fola Adeloa, Commissioner and Chairman of
Nigeria's FATE Foundation
-- William Kalema, Commissioner and Chairman
of the Uganda Investment Authority
-- K.Y. Amoako, Commissioner and Executive Secretary
of the Economic Commission for Commission (UN)
-- Anna Tibaijuka, Commissioner and
Executive Director of UN HABITAT
-- Koosum Kalyan, Shell International, Business
-- Mass Lo, LEAD, Civil Society
-- T.F. Nkodo, Vice President, African Development
Bank
-- Wiseman Nkuhlu, NEPAD Steering Committee Chairman

Influential Commissioners such as former Senator Nancy
Kassebaum, British Secretary of State for International
Development Hillary Benn, and French President Chirac's
Personal Representative for Africa Michel Camdessus did not
attend the meeting.


3. (SBU) By all accounts, the consultation came off without a
hitch. British High Commission First Secretary Andrew
Millar, who attended much of the meeting, reported to Econoff
that "there was little of the cynicism that dogged other
consultations." Major events included a forward leaning
keynote speech from Chancellor Brown, and an opening address
by South Africa Finance Minister and Blair Commissioner
Trevor Manuel.

Brown Calls for Aid, Trade, and Debt Relief
--------------

4. (U) In his speech to African finance ministers, Chancellor
Brown called on developed countries to provide more aid, more
trade, and more debt relief. Noting that 80% of Africa's
external debt was now held by international financial
institutions (IFI),Brown said that he had already discussed
detailed proposals with participating finance ministers and
commissioners to use IMF gold to write off IFI debt. Brown
also called for a doubling of aid to Africa, the creation of
an "International Financing Facility" to raise $100 billion
in official development assistance, of which $10 billion
would go to primary education and $20 billion to
infrastructure. Brown also said, "Let the Commission for
Africa also be the first official report to call for trade
justice." He further declared that the Commission for Africa
saw its task as mobilizing donor support for NEPAD, the
African Union, and African country development programs.

Manuel Builds on Monterrey
--------------

5. (U) In his opening speech, South African Finance Minister
Trevor Manuel was upbeat in his assessment of Africa. He
claimed that Africa was strengthening its regional economic
institutions to fulfill the role assigned to them by NEPAD.
Africa had more democracy, fewer conflicts, more stable
economies, and more growth now than ten years ago. As a
consequence, investment flows were improving. He cited World
Bank studies concluding that Africa's absorptive capacity had
improved. Development partners, he said, should support
Africa by ensuring that official and private finance was
sufficient to fund national development programs. Referring
several times to the Monterrey Consensus, Manuel said that
the international community had arrived at a basis for
partnership. While the Monterrey Consensus had offered
strong principles, however, it had not offered much action.
He lamented the fact that the Paris Club provided more debt
relief to Iraq in one day than it had to all Heavily Indebted
Poor Countries (HIPC) combined. Manuel also spoke to role of
domestic financing strategies, policy reform, and taking
advantage of trade opportunities. He said that African
finance ministers should see the Commission for Africa as an
opportunity to voice specifics as to what would move WTO
negotiations along as well as create economic benefits for
Africa.

The Communiqu
--------------

6. (U) At the close of the meeting, the consultative group
issued a communiqu. It stressed the need for urgent action
and welcomed the Commission's broad approach, which included
peace and security, governance, human development and
inclusion, voice and accountability, and the economic issues
of growth and poverty reduction, trade, and financing
development. The communiqu supported the Commission's call
for an infrastructure financing facility to fund NEPAD and
other infrastructure plans. It also said that in July G-8
Summit leaders should commit to specific, monitorable, and
time bound agreements in the build up to the UN Millennium
Summit in September. The communiqu urged the G-8 to begin
immediately and, in particular, for G-7 Finance Ministers to
reach agreement on 100% multilateral debt relief at their
February 4 meeting in London.


7. (U) The communiqu declared that the Blair Commission
should call for at least a doubling of foreign aid, arguing
that Africa's capacity to absorb aid had substantially
increased. The group welcomed the idea of an "International
Financing Facility as the most advanced and technically
feasible" of the proposals to provide more aid, and
encouraged the examination of special levies and
international taxes as possible sources. Ministers felt that
more aid should be delivered to Africa in the form of budget
support and grants, and that it should be more predictable,
longer-term, and better coordinated to support country
development plans. Policy conditionality should be improved,
with greater focus on building accountability to Africa's
citizens. Further, donor countries should set timetables to
meet the 0.7% ODA/GNI target as promised in the Millennium
Development Goals.


8. (U) The communiqu urged the Commission to propose a 100%
multilateral debt service relief for HIPC -- and other --
countries, and for such relief to be shaped by development
needs and levels of poverty rather than by "the narrow
consideration of export to debt ratios." In addition,
special needs of post conflict countries and middle-income
indebted countries ought to be considered.


9. (U) On trade, the communiqu demanded that the Doha
Development Agenda WTO negotiations afford African countries
better access to the markets of rich countries. The
communiqu encouraged the Commission to make specific and
time related proposals for action by rich countries to break
down their barriers and end their subsidies, particularly in
agriculture. Africa would require "Special and Differential
Treatment" and transitional assistance to help it compete in
the global economy, including fiscal reform. During this
period, the communique said, preferential access must work
better and nontariff barriers, including rules of origin
restrictions, reduced. Help must be provided to meet
barriers such as international health and safety standards.

Press Coverage
--------------

10. (U) The event garnered good press coverage by South
African media. This included a radio interview with Nick
Sterne, Blair Commission for Africa Director for Policy and
former World Bank Senior Economist. During the interview,
Sterne commented that Europeans had already agreed that the
"injustices of the existing trading system" needed to be
redressed. Further, he said that Britain was looking to
provide 100% debt service relief wherever possible. In
answer to a leading question as to whether countries like
Equatorial Guinea should qualify, Sterne replied that the
"net should be cast as wide as possible," even to countries
that might not meet HIPC standards. Sterne confirmed that
the Blair Commission for Africa Report would be made final at
the third and final Commission meeting, chaired by PM Blair,
on February 24, and then published by the end of February or
beginning of March. He said that the three-month period to
follow would be important to gather momentum for the G-8
Summit at Gleneagles Scotland.


11. (U) In her press conference with foreign journalists on
January 27, British High Commissioner Ann Grant picked up on
Sterne's theme. She said that while Britain was under no
illusion that it could deliver the G-8 on all Commission for
Africa recommendations, PM Blair would lobby for the maximum
acceptance of Commission recommendations in the three months
leading up to the G-8 Summit at Gleneagles, Scotland. Grant
also said that Nelson Mandela had agreed to meet with G-7
finance ministers in support of the Commission's work and was
flying to London. The G-7 ministers meet in London on
February 4.

On the Margins
--------------

12. (SBU) In a briefing to G-8 diplomats in Pretoria on
January 28, Grant said that G-8 countries needed "to make a
concerted push on trade, aid, and debt issues" in
consultation with NEPAD and the African Union. She said that
both the G-8 and the EU had a heavy set of commitments, in
addition to British priorities on Africa and climate change,
so it was important to take advantage of "unprecedented
coincidence of opportunities for cooperation," including the
UN Millennium Summit in September and the Asian-African
Summit in Indonesia in April.


13. (SBU) On the margins of the Cape Town event, Finance
Minister Manuel commented to reporters that while South
Africa supported the revaluation of IMF gold to pay for debt
relief, it would want to be represented in the decision
making process to make sure that much of it would go for
African debt relief. This comment to the press evoked some
surprise at the National Treasury in Pretoria, which had not
vetted the minister's statement.
FRAZER