OECD PROGRAMS ON GOOD GOVERNANCE AND INVESTMENT IN

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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.
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Good Governance for Development Program
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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.)
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Investment for Development Program
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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

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supporter of the initiative.
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Future of the Initiative
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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