ETHIOPIA TOUR D'HORIZON: PM MELES SAYS CITY HALL

UNCLAS SECTION 01 OF 03 ADDIS ABABA 000773

SIPDIS

SENSITIVE
SIPDIS

FOR AF/AS DR. FRAZER, DAS YAMAMOTO AND USAID AA PIERSON

E.O. 12958: N/A
TAGS: PGOV PHUM EAID EFIN ET
SUBJECT: ETHIOPIA TOUR D'HORIZON: PM MELES SAYS CITY HALL
STILL OPEN, GENOCIDE CHARGE TO BE DROPPED, DELAYED WORLD
BANK PACKAGE NEEDED



1. (SBU) Summary and Action request: The Prime Minister
appeared to enjoy the give and take of the conversation with
the EU Troika (Austrian, Finish ambassadors and Pol Counselor
for EC),French ambassador as head of the Ambassadors' Donor
Group and U.S. Charge. Meles was up-beat on the opposition
forming the CUD/P party and even urged the donors to support
the effort financially. In another sign that constructive
engagement is working, Meles said that the genocide charge
and CUD detainees would be dropped, as would charges against
some of those abroad. Even when donor diplomats assured him
that they would continue to push for the release of the CUD
and civil society leaders, the PM remained relaxed, avoiding
"guerrilla mode". Meles agreed to give the elected City
Counselors another month to obtain the minimum 69 verified
signatures needed to take control of City Hall; 63 signatures
had been verified thus far. Meles is concerned by the
possible damage to the economy caused by World Bank slowness
in approving the $200 million "Protecting and Basic Services"
program that will replace the Direct Budgetary Support funds
provided by the Bank and the UK. The French Ambassador
assured Meles that after the recent Development Assistance
Group (DAG) meeting in Paris there was consensus to move
ahead with long-term donor engagement with Ethiopia. Action
request: Post recommends that Department principals
encourage World Bank officials to move the PBS package to the
approval stage. Further large scale disturbances are
unlikely, given the cost of the November riots and aftermath
to the government's image and pocket book. Moreover, the
signs are positive that the government is committed to giving
the opposition political space and the ability to re-register
using its old identity as the CUD. This will prepare the way
for the opposition to be effective in City Hall, Parliament
and eventually in local elections. End Summary.

-------------- ---
Profound Concern over Delayed World Bank Package
-------------- ---


2. (U) President of the ADG French Ambassador Gompertz
explained that the DAG meeting in Paris resulted in:

-- Broad agreement from the donors to engage with Ethiopia on
assistance because of its need and its record of high value
for assistance dollars.

-- Redirecting previous Direct Budgetary Support (DBS)
through a new mechanism called "Protecting Basic Services"
that involved disbursement at the local level; the package
needed to move ahead urgently.

-- Renewed emphasis on a dialogue between the government and
the donors on governance.


3. (U) Meles responded that he was profoundly concerned
about the World Bank's delay in approving the PBS $200
million plus loan. He blamed the delay on donors who are not
fully on board with continuing assistance to Ethiopia. He
said that as a leader of a liberation movement, he had to
look at tactics. In his view the EU Commission (EC),despite
indicating that it was prepared to assist Ethiopia, might be
joining the others to delay the talks. Since Ethiopia was
the junior partner, Meles said, it would be better to cut its
losses now rather than trying to get all the donors on
board. Ambassadors assured Meles that Paris had led to a
change in attitude because the donors recognized the need to
stay engaged. Meles said he feared that the EC agenda was a)
carrot and stick, not a partnership; b) release of the CUD
detainees; and c) governance in the form of micro-management
or a shadow government. This approach prevented
predictability and catered to those who wished to move slowly
on commitment of assistance in order to punish Ethiopia.


4. (SBU) The donors who provided DBS had agreed in their
previous dialogues that Ethiopia was doing a good job in
using these funds, Meles pointed out. Ethiopia's pro-poor
results, according to Meles, returned 1.3% on every dollar -
an unusually high return. Yet, donors continued to apply
higher standards to Ethiopia. The World Bank was supposed
to be non-political, but it was using political criteria in
the case of Ethiopia. He would like to move forward with the
World Bank while Ethiopia continues to resolve its problems

ADDIS ABAB 00000773 002 OF 003


with the EC. Meles said he was especially appreciative of
British and American continued assistance and partnership.
Finally, the PM agreed would continue its governance dialogue
with the DAG in good faith. Comment and Action Request: Post
recommends that Department Principals engage World Bank
officials to convey the view that Ethiopia is moving ahead on
recreating an environment conducive to political pluralism
and improved governance. This progress reduces the
possibility of internal confrontation other than sporadic
disturbances related to the trial of the CUD leaders. With a
severe drought in the south and high oil prices resulting in
a rising cost of living, World Bank and other donor resources
are critical to preventing a deterioration in economic
conditions and to keeping the GOE on its present, positive
course.

-------------- -
Another Month for CUDP to Take Over Addis Ababa
-------------- -


5. (SBU) Charge Huddleston laid out the case for allowing
the opposition more time to collect the 69 signatures of
elected City counselors so that they can take over the
management of Addis Ababa. Of the 70 who had signed the
petition circulated by the City Council Organizing Committee
in February and March, only 63 could be verified, as some
signatures were invalid and other elected council members had
not shown up to verify their signatures. Unfortunately, the
campaign of the Diaspora (with financial resources and
threats) had hampered Ayele Chamiso's organizing efforts. It
had become increasingly clear that the re-establishment the
Coalition for Unity and Democracy Party (CUD/P) would be
critical to collecting sufficient signatures, and more
importantly, gaining the backing of the citizens of Addis.


6. (SBU) Meles responded that he would present the
situation to the Parliament the week of March 20th. He would
recommend that Parliament allow the City Counselors another
month to collect the needed signatures. This would also
allow them sufficient time to form the new CUD/P. If the
organizers failed in their effort, an alternative solution
for running Addis would be presented to the Parliament at
that time. In reply to a question about the NEB's recent
rejection of an application to recreate the September 2005
CUDP merger, Meles said the NEB denied the request because
neither the constituent parties (e.g. Rainbow, AEUP and EDL)
nor the CUD/P had met the legal requirement of holding
General Assemblies and presenting the needed documentation.
Meles said he does not want the CUD/P to be reconstituted as
attempted in September 2005 because he fears it would be
controlled or influenced by the detained CUD leaders. He is
comfortable, however, with a newly formed CUD/P. He even
suggested that donors offer small-scale funding to support
those seeking to register the CUPD.

-------------- --------------
Genocide and Some Charges Against those Abroad to be Dropped
-------------- --------------


7. (SBU) Ambassador Gompertz asked the PM if thought had
been given to throwing out the genocide or high treason
charges against CUD detainees. Meles replied that there was
no chance at all for the high treason charge being dropped.
Although donors had "already judged us to be guilty", Meles
said, "you will discover that the CUD leaders like Berhanu
are guilty. We have, as I told you in front of Berhanu, a
video of Berhanu calling for treasonous acts." (Comment:
During the referenced meeting several months ago, Meles told
Berhanu that he had proof that he had contemplated
overthrowing the government. Berhanu said that although
someone at a rally had called for storming the palace, it had
not been him. Meles replied that nevertheless, Berhanu had
not contradicted the suggestion.) Meles then acknowledged
that there had been no genocide committed in Ethiopia. He
had thought that the charge filed was "attempted genocide,"
but had recently discovered that prosecutors had indeed
alleged genocide because there is no such charge as
"attempted genocide" in Ethiopian law. Therefore, Meles
concluded, the charge of genocide will be dropped. (Note:
Dropping the genocide large still leaves detainees ineligible
for bail. End note.)


ADDIS ABAB 00000773 003 OF 003



8. (SBU) Meles said that, in his view, most of those
charged would be found guilty; however, because using some
information in a court of law would compromise "sources and
methods," charges against those abroad might be dropped.
(Comment: Meles may have been referring to VOA employees
charged with the CUD group. End comment.) Finally, Meles
added that the prosecution should begin presenting evidence
after the session scheduled for April 22; the trial might
then run for two to three months.
HUDDLESTON