OECD PROGRAMS ON GOOD GOVERNANCE AND INVESTMENT IN

UNCLAS SECTION 01 OF 02 ABU DHABI 001437 SIPDIS SENSITIVE SIPDIS STATE FOR NEA/ARP, EB, IO E.O. 12958: N/A TAGS: OECD ECON EFIN AE SUBJECT: OECD PROGRAMS ON GOOD GOVERNANCE AND INVESTMENT IN MIDDLE EAST AND NORTH AFRICA (MENA) ¶1. (U) Summary: On April 9, Ambassador met with Richard Hecklinger, Deputy Secretary General of the Organization for Economic Cooperation and Development (OECD),to discuss the MENA-OECD Initiative on Governance and Investment for Development. The initiative, which began in February 2005, is a regional effort that promotes broad reforms to enhance the investment climate, modernize governance structures and operations, strengthen regional and international partnerships, and promote sustainable economic growth throughout the MENA region. The initiative consists of two programs: 1) Good Governance for Development, and 2) Investment. Both programs work in close cooperation with the World Bank, Arab League, European Union, and other international and regional organizations. Each program is divided into sub-committees, chaired by a MENA country and co-chaired by an OECD country. Ambassador Hecklinger told Ambassador the MENA initiatives have made significant progress in the first year. End Summary. -------------- Good Governance for Development Program -------------- ¶2. (SBU) The Good Governance for Development Program builds upon ongoing reform efforts to modernize public governance in the MENA region. By improving the environment for entrepreneurs and investors and by creating jobs, the program builds sustainable development in the region. This program strengthens civil servants, capacity to design, implement and monitor public governance reforms; creates a network for dialogue between policy makers from MENA and OECD countries; designs innovative solutions tailored to the specific policy environment of each MENA country; assists ministries and government agencies to coordinate their work; and reinforces development initiatives supported by international, regional and bilateral donors. ¶3. (SBU) There are six working level groups in the Good Governance Program: 1) civil service and integrity, 2) e-government and administration simplification, 3) governance of public finance, 4) public service delivery, public-private partnerships and regulatory reform, 5) role of the judiciary and enforcement, and 6) civil society and the media. Each group is chaired by a MENA member and co-chaired by an OECD member. Dubai has been the chair of the e-government and administration simplification committee for the past year. However, the UAE Ministry of Governmental Sector Development headed by Sultan bin Saeed Al Mansouri will take over chairing this group. (Note: Hecklinger told Ambassador that both Al Mansouri and Sheikha Lubna Al Qasimi, Minister of Economy, asked Hecklinger if the UAE can join the OECD. End note.) -------------- Investment for Development Program -------------- ¶4. (U) The key objective of the Investment Program is to mobilize investment--foreign, regional, and domestic--as a driving force for economic growth and employment throughout the MENA region. The program supports reform efforts by MENA governments to enhance their investment climate by: strengthening country capacity for designing, implementing and monitoring investment policy reforms; creating a network for policy dialogue among investment policy makers from MENA and OECD countries; creating a favorable environment for employment creation through financial sector development towards an entrepreneurial culture; improving intra-governmental policy coordination and cooperation between ministries; and reinforcing the impact of development initiatives supported by international, regional and bilateral funds. ¶5. (U) There are five working level groups under this program: 1) general investment climate, 2) investment promotion, 3) tax policies and incentives, 4) economic diversification/financial sector and enterprise development, and 5) corporate governance. Currently, Dubai chairs the investment promotion sub-committee. However, Sheika Lubna will soon take over as the head of the committee. ¶6. (U) Hecklinger told Ambassador the good governance programs are well funded, but the OECD needs funding for the investment group. Hecklinger also said that Jordan is currently the OECD,s &closest8 partner in these initiatives. Jordan has chaired the steering committees for both the Good Governance for Development Program and the Investment Program since their inception last year. Egypt is set to take over the leadership of both programs. The private sector from both MENA and OECD countries actively participates in the investment sub-committee and is a strong ABU DHABI 00001437 002 OF 002 supporter of the initiative. -------------- Future of the Initiative -------------- ¶7. (U) Each of the MENA countries is drawing up a national reform action plan listing concrete, time-bound objectives. Many of the MENA countries also want to expand the work of the initiative. The OECD says that -- with additional resources -- it could do more work on key issues such as anti-corruption, women in the economy, and tax policy. The primary focus of the initiative for 2006 is development and implementation of the national action plans. A high priority will be placed on matching national action plans with OECD and non-governmental organization assistance programs. SISON