PRESIDENTIAL COUNCIL REPRESENTS WATERSHED IN

UNCLAS SECTION 01 OF 02 DAKAR 001268

SIPDIS

SIPDIS
SENSITIVE

STATE FOR AF, EB, AF/EPS AND AF/W

E.O. 12958: N/A
TAGS: ECON EAID EIND KMCA SOCI SG
SUBJECT: PRESIDENTIAL COUNCIL REPRESENTS WATERSHED IN
SENEGAL'S COMPACT DEVELOPMENT

REF: DAKAR 1204 (NOTAL)

DAKAR 00001268 001.2 OF 002



1. (SBU) SUMMARY: On March 2, Senegalese President
Abdoulaye Wade convened an extraordinary Presidential
Council to review the status of Senegal's Millennium
Challenge Account (MCA) proposal. Prime Minister Macky
Sall, most Ministers, heads of major independent
agencies, representatives of multilateral donors, private
sector and civil society leaders, media, then Charge,
USAID/Senegal Director and EconOff attended. The four
and one-half hour meeting was remarkable for its
transparency and underscored President Wade's
determination to move the MCA project forward.
Subsequent meetings with Wade, Millennium Challenge
Corporation (MCC) staff; Director General of the Agency
for the Execution of the Diamniadio Platform (AMPMD)
Habib Mbaye; and the Ministers of Finance, Industry, and
Urbanism have highlighted some of the issues that must
still be addressed as we work with the GOS to finalize
the Compact for the complex and potentially
transformative industrial platform. However, it appears
that the March 2 meeting represents a watershed and has
energized the Senegalese. AMPMD is certainly hiring
staff and making progress on the list of things that must
be done before the Compact can be signed. END SUMMARY.


2. (U) On March 2, President Wade convened an
extraordinary presidential council to examine the status
of Senegal's MCA proposal. Opening the meeting, Wade
stressed that the proposed MCA Compact is an integral
part of Senegal's Poverty Reduction and Accelerated
Growth Strategies (PSRP and AGS). He stated that the
Diamniadio Platform is expected to have a positive impact
on the GDP growth. Wade was also clear that the
Government of Senegal (GOS) has not moved fast enough.
Acknowledging the MCC's concerns about inaction, Wade
assured the assembly that all required actions would be
completed by March 17, which they were. Wade also tied
Diamniadio to other projects, including new sources of
energy, the toll road from Dakar to Diamniadio, increased
agricultural exports, revitalization of Senegal's fishing
sector, a new airport, expanded tourism, literacy,
education, training and land reform. Wade underscored
that the real issues are creating jobs, adding value to
Senegal's exports, and decentralizing industry to move it
beyond the "Cap Vert" Peninsula on which Dakar, 30
percent of the population and 80 percent of Senegal's
industry are located.


3. (U) Addressing specific MCC concerns, Wade discussed
the moratorium on land transfers and development within
the 2,600-hectare site, acknowledging that 112 hectares
is already occupied. He publicly agreed to the
appointment of an independent land observatory as well as
to the appointment of a local implementation committee
that would ensure a participative development process.
Wade concluded his opening remarks by stressing that the
objective of the MCA Diamniadio Industrial Platform is to
improve the living conditions of Senegalese.


4. (U) Following presentations by Minister of Industry
and Handicrafts Bienta Ba Samb, former Minister of
Agriculture Habib Sy and Senior Minister of Maritime
Economy and Maritime Transport Djibo Ka, Senior Minister
of Economy and Finance Abdoulaye Diop and Director
General of Senegal's Investment Promotion Agency (APIX)
Aminata Niane discussed the need for more private
investment. Diop said public investment continues to
exceed private investment even though there has been a
three-fold increase in private investment over the last
six years.


5. (U) Mbaye and other AMPMD staff reviewed projected
financing and employment, stressing that the GOS hopes to
attract more than 1,000 industries to the site over tenyears. In addition to agro-industry, a new Coca-Cla
bottling plant, a new Colgate-Palmolive manufcturing
facility, an "Indi-Park that would assemle Tata buses, a
"gold counter," an artists' village, and an Iranian car
assembly plant are alread planned.


6. (U) President Wade, noting that n Senegalese are
currently investing in the tourim sector, then turned to
the private sector reprsentatives and appealed to them
to become involved in every aspect of the Platform. Mor
Talla Kane of the National Confederation of Senegalese
Employers (CNES) responded by urging the GOS to keep the

DAKAR 00001268 002.2 OF 002


private sector apprised and involved. Dakar Chamber of
Commerce President Mamadou Lamine Niang said the
platform's energy and transport needs must be urgently
addressed, stressing that the railway needs to be
upgraded and extended. Niang also encouraged the
Government to stop land speculation and ensure that other
projects do not conflict. The Mayor of Diamniadio and
various civil society representatives discussed poverty
reduction and enhanced mobility.


7. (U) Then Charge, USAID/Senegal Director Carduner, the
IMF and World Bank representatives spoke about the
viability of the project and stressed our conviction that
it can create employment and reduce poverty. Charge
noted our excellent bilateral relations and highlighted
that Senegal was one of the first 16 countries to be
eligible for the MCA. Charge also noted that if
concluded, the Compact would more than double U.S.
assistance from its current level of approximately USD 40
million per year to over USD 100 million per year for the
five years of the Compact. Carduner encouraged a
coherent, common strategy and a focus on export
promotion, highlighting the need for public-private
partnerships.


8. (U) Prime Minister Sall and Senior Minister for
Foreign Affairs Cheikh Tidiane Gadio noted that Senegal
is eligible for the MCA because of its record of good
governance, respect for human rights and economic reform.
They assured the assembly of the GOS' commitment to a
participatory process. Sall also assured everyone that
AMPMD's funding problems had been resolved.


9. (U) President Wade closed the four hour and 30 minute
meeting by calling for continued dialogue among all
actors. He assured everyone that the necessary decrees
would be put in place (and they have been). He promised
to address Senegal's very serious energy problems.
Finally, he thanked President Bush for his vision, his
frankness and his faith in Senegal, saying that the
Diamniadio Industrial Platform would be a big success for
everyone.


10. (SBU) COMMENT: Subsequent meetings with Minister of
Industry Samb and APIX Director General Niane highlighted
Senegal's desire to attract new types of industry in
addition to the call centers that have represented a
significant percentage of recent investment and are more
appropriate for Dakar than for Diamniadio. Meetings with
MCC and AMPMD staff, as well as with the Ministers of
Finance and Urbanism, have highlighted the issues that
must still be addressed as we work with the GOS to
finalize the Compact for this complex and potentially
transformative industrial platform. MCC staff recently
commented on the new dynamic and new AMPMD staff. It
appears, therefore, that the March 2 meeting represented
a watershed and has energized the Senegalese. In fact,
on May 29, President Wade told a visiting American that
the MCA Compact remains his highest priority. END
COMMENT.

JACOBS