IRELAND OKAY WITH COMMISSION ODA COORDINATION

UNCLAS SECTION 01 OF 03 DUBLIN 000334

SIPDIS

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: EAID EFIN MCC KPAO EI
SUBJECT: IRELAND OKAY WITH COMMISSION ODA COORDINATION
PROPOSALS AND WITH EU INFLEXIBILITY ON DOHA

REF: A. STATE 12263

B. STATE 22747

C. LERNER-EU ECON OFFICERS E-MAIL OF 3/3/06

DUBLIN 00000334 001.2 OF 003



1. Summary: In a wide-ranging March 23 discussion prompted
by reftels A and B, officials at Irish Aid (formerly
Development Cooperation Ireland):

-- noted that Ireland contributed euro 59 million in 2005 to
the Multilateral Debt Relief Initiative, raising Irish
overseas development assistance (ODA) to 0.5 percent of GNP;

-- refuted reports that Ireland opposed EU Development
Commissioner Michel's proposals for improved coordination of
Member States, aid programs;

-- argued that developing countries had little to gain from,
and might be harmed by, the terms of the agricultural
component of the Doha trade negotiations;

-- said that Ireland might establish a development bank to
provide credit for entrepreneurs in developing countries who
could not obtain regular bank loans;

-- cited ongoing consultations on Ireland's first-ever ODA
white paper, which had improved Irish Aid's communication
with other Government departments; and,

-- welcomed USAID's efforts in recent years to strengthen
collaboration with other national aid agencies.

Post was disappointed with Irish Aid's views on the WTO
negotiations, which echoed previous Irish Government concerns
about the sensitive domestic agricultural sector and also
standard EU arguments downplaying the potential benefit of a
Doha deal for the least developed countries. As Ireland
faces elections in 2007, the Prime Minister's policy on Doha
can be seen as an attempt to shore up votes among farmers, a
traditional constituency of his party. End summary


2. (SBU) On March 23, emboff used reftels A and B demarche
points as a lead-in to discussion on current development
topics with Irish Aid, the new name for Development
Cooperation Ireland, the aid agency within the Department of
Foreign Affairs. Our interlocutors included Michael Sanfey
and Mairead Creed, Principal Officer and First Secretary,
respectively, for EU Development Policy, as well as Dermot
McLean, Health/HIV specialist. The officials described
reftels, points on debt forgiveness and other aspects of
official development assistance (ODA) as the most
comprehensive information they had seen on any one country's
aid strategy. Sanfey noted that Ireland had not been a
player on debt forgiveness, since its development assistance
was provided entirely in the form of grants. He pointed out,
however, that Finance Minister Cowen had allocated euro 59
million in December 2005 to the World Bank under the
Multilateral Debt Relief Initiative (MDRI),which the Irish
Government counted as raising ODA in 2005 from 0.4 to 0.5
percent of GNP, or roughly euro 734 million. (At the
September 2005 UN High Level Event, Irish Prime Minister
Bertie Ahern pledged that Irish ODA would reach 0.7 percent
of GNP by 2012.)

Ireland Not Opposed to Michel's Coordination Proposals
-------------- --------------


3. (SBU) A March 3 Irish Times report that Ireland had given
a "lukewarm response" to Development Commissioner Michel's
March 2 proposals to enhance EU coordination on development
assistance should be "reasonably dismissed," said Sanfey. He
claimed that the Irish Times had simply recast earlier
reports in the "European Voice" and "Terra Viva Europe" that
Ireland, the UK, Denmark, Sweden, and the Netherlands had
misgivings about Commissioner Michel's proposals (which ref C
had identified as inaccurate). Sanfey acknowledged that the
Commission's goals on development assistance were not
identical in every respect to those of Member States, a
difference that yielded, at worst, creative tension. He
emphasized, however, that Member States and the Commission
"were all in this together" and that Ireland favored
collective efforts to make assistance more effective.

Lockstep on Irish Opposition to EU Flexibility on Doha
-------------- --------------


4. (SBU) When emboff asked for Irish Aid's views on the
Irish Government's opposition to further EU concessions on
the agricultural market access component of the WTO

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negotiations, Creed said that the USG should keep in mind
recent hardships faced by Irish farmers as well as their
domestic political influence. She pointed out that CAP
reforms had affected farm income, while changes in the EU
sugar regime were likely to close down Ireland's sugar
industry. She also claimed that the EU had lost the
"propaganda war" in the debate on which WTO members were to
blame for the current impasse in the Doha negotiations, as
the United States, Japan, and the EU were "equal offenders"
in agricultural subsidization. She added that the most
impoverished developing countries, the focus of Irish ODA,
apparently had little to gain from the currnt agricultural
terms discussed in the Doha Roun. Moreover, these countries
already enjoyed 100percent duty/quota-free access to the EU
agriculural market. Creed also expressed concern that
further erosion of agricultural floor prices in the U under
a Doha deal would harm developing countres, which currently
benefited from the same pric supports. In reply, emboff
cited voluminous stdies that the more liberal agricultural
market access regime envisioned under a Doha deal could
potentially lift hundreds of millions in the developing world
out of poverty, and he offered to share these studies with
Irish Aid.

An Irish Development Bank and the ODA White Paper
-------------- --------------


5. (SBU) Irish Aid was considering proposals to establish an
Irish development bank to provide easier access to credit for
entrepreneurs in developing countries who could not obtain
loans from mainstream banks, observed Sanfey. The bank would
recover its money on a non-profit basis and recycle the
capital to its locale of operation, along the lines of
existing Dutch and Norwegian development banks. (The March 2
Irish Times reported that Irish Minister of State for
Development, Conor Lenihan, had received two proposals for a
development bank: one from a partnership of Citibank and an
Irish venture capitalist, and another from an executive of
German Depfa Bank, which operates in Dublin's International
Financial Services Center.) Sanfey noted that the proposals
had not yet worked their way to technical experts at Irish
Aid, who would be interested in their compatibility with
regular assistance programs.


6. (SBU) Proposals for a development bank would be folded
into Ireland's first ever white paper on ODA, which Irish Aid
expected would be published this summer, said Sanfey. Irish
Aid was consulting with other government agencies on the
paper, and Development Minister Lenihan was conducting town
hall meetings around the country to invite public input on
the initiative. The white paper consultations, according to
Sanfey, were a means to compel other agencies to focus on
Irish development strategy, including its Government-wide
budgetary ramifications. The white paper also offered entre
for Irish Aid into the policy discussions of those agencies.
Sanfey noted, for example, that Irish Aid aimed to weigh in
more effectively with the Department of Defense on Irish
peacekeeping operations and also with the Department of
Enterprise, Trade, and Employment on trade policy. Regarding
that latter, Creed asked for more information on USAID's
aid-for-trade programs.

USAID's Collaborative Efforts Welcome
--------------


7. (SBU) Irish Aid welcomed USAID's efforts in recent years
to strengthen coordination on development programs with other
national aid agencies, said McLean. He elaborated that
Ireland and other European donor countries typically funneled
assistance funds through the governments of recipient
countries, whereas USAID's long-standing policy was to fund
programs through non-government channels. These contrasting
approaches underlay previous challenges in cooperation
between USAID and other aid agencies. McLean said that
USAID's collaboration on the ground with other agencies in
recent years had helped to improve the effectiveness of
donors, collective efforts. Sanfey added that Development
Cooperation Ireland had, in fact, chosen the name "Irish Aid"
to capitalize on the positive branding associated with USAID.

Comment: Disappointing Views on Doha
--------------


8. (SBU) Post was disappointed with the views expressed by
the Irish Aid officials on the WTO negotiations. We had
heard similar comments over the past year about domestic
political sensitivities on agriculture from the Department of
the Prime Minister and key economic ministries, but we had

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hoped that at least mid-level Irish Aid officials would
understand the potential for poverty alleviation presented by
a more liberal international agricultural trade regime.
These officials, arguments that the Doha negotiations
offered little to, and might even harm, the most impoverished
developing countries were standard EU fare. Irish Aid's
sympathy with the Irish Government's opposition to a more
flexible EU approach to the Doha talks stands in contrast
with the agency's long-standing advocacy for increased
international ODA to developing countries.
KENNY