20 MINISTERS SWORN IN; WOLESI JIRGA REVIEWS THE

C O N F I D E N T I A L SECTION 01 OF 03 KABUL 001976

SIPDIS

SIPDIS

DEPT FOR SA/FO, S/CT, SA/A,
NSC FOR AHARRIMAN, KAMEND
CENTCOM FOR POLAD, CG CFC-A, CG CJTF-76
TREASURY FOR LMCDONALD, WBALDRIDGE, APARAMESWARAN, ABAUKOL
STATE PLEASE PASS USAID
USAID FOR AID/ANE, AID/DCHA/DG
SAN JOSE FOR JANAE COOLEY
REL NATO/ISAF, AUS, NZ

E.O. 12958: DECL: 09/04/2015
TAGS: PGOV PREL PINR KDEM AF
SUBJECT: 20 MINISTERS SWORN IN; WOLESI JIRGA REVIEWS THE
BUDGET

REF: A. METRINKO EMAIL 5/1/06

B. KABUL 1791

Classified By: POLITICAL COUNSELOR ANGUS SIMMONS FOR REASONS 1.4 (B) AN
D (D)


1. (SBU) SUMMARY. On May 1 and 2, the lower house of the
Afghan Parliament reviewed the GOA budget, posing extensive
questions to Minister of Finance Ahadi about the government's
finances. During debate, the Wolesi Jirga (WJ) emphasized
two points: first, it has the right to closely review the
budget and expects more consultation from the government next
year, and second, it is frustrated with the lack of control
by the Afghan government over its own budget. It is unclear
whether, and what kind of, changes the WJ may want to make to
the budget, which is not likely to be passed until next week.
In addition, The 20 ministers confirmed by Parliament in
April were sworn in May 2. END SUMMARY.

Three Ministers Confirmed by Supreme Court
--------------


2. (SBU) Ending a week-long debate over whether three
Ministers with close confirmation votes were approved by
Parliament (REF A),the Supreme Court ruled on April 30 that
a parliamentary majority consists of the majority of votes
cast yes or no, not including abstentions. This cleared the
way for the final confirmation of three Ministers who
received a majority of yes or no votes, but not a majority of
all votes cast. While debate on this issue had been heated
in Parliament, the Supreme Court decision was accepted by
voice vote with minimal debate at the end of the Wolesi Jirga
session on May 1. The 20 Ministers confirmed by Parliament
April 20 (REF B) were sworn in at a joint ceremony on May 2.
The GOA has yet to nominate new candidates for the five
remaining Ministerial positions.

Parliament Speaks Out on the Budget
--------------


3. (SBU) The Wolesi Jirga began debating the GOA budget on
Wednesday April 26, with MPs expressing displeasure over the
small size of the budget and confusion over its presentation.
After reviewing the relevant sections of the budget in each
committee, the WJ summoned Minister Ahadi, accompanied by
Deputy Minister Shahrani and the budget director to answer
questions and justify the budget on May 1 and 2. Ahadi's
presentation skipped over most of the details of the budget
and focused on basic economic principles and realities for
Afghanistan. He was frank in his explanation that
Afghanistan does not control most of its budget, both because
the GOA budget is dwarfed in size by international donations
and because of restrictions put in place by international
financial institutions.


4. (SBU) MPs reacted negatively, and sometimes emotionally,
to the budget. While many asked highly specific or technical
questions, most questioned the process by which the budget
was approved and the international role in Afghanistan's
budget. Most stressed that the Parliament has a legitimate
constitutional role in passage of the budget, and were
displeased that they had not be consulted in its drafting.
Some, such as Mohammed Sarwar Jawadi from Bamyan, asserted
authority over international projects as well, stating that
the international community is obliged to consult with
Parliament. Ahadi responded that he intends to consult more
closely with Parliament during the next fiscal year
(promising to report to them every two months) and reiterated
the importance of the international community in
Afghanistan's finances. Several questions also focused on

KABUL 00001976 002 OF 003


civil service salaries and benefits, which Ahadi deflected by
stating that the cap on salaries was imposed by the
international community. Of all the impositions of the IC on
the budget, this was the most disliked. While MPs stated
that they support the "free market," several stated that more
government investment in industry is needed to support
Afghanistan's economy. The idea of providing food or other
vouchers to government employees was also raised repeatedly.
MPs noted that it is difficult for them to vote on the budget
when they do not have the "tashkil" - the structure of
government including the number of civil service jobs for
each Ministry and a description of the Ministries' functions.
They pointed to proper exploitation of Afghanistan's natural
resources as one solution to Afghanistan's dependency on the
international community. Unusually, the Budget Committee
waived its right to question Ahadi, stating that all of its
points had already been raised.


5. (SBU) The Wolesi Jirga plans tQdiscuss revisions to the
budget in committee sessions May 3, and then gather the
suggested changes together to determine a course of action
May 4. It remains to be seen whether, or how, they would
amend the budget. Given that Parliament does not appear to
be debating a law containing the budget, but instead a series
of spreadsheets submitted by the government, the WJ's
revisions may come as informal suggestions to the government
rather than formal amendments. Speaker Qanooni led the
debate in a conciliatory fashion, with both him and Ahadi
noting that Parliamentary oversight of the budget is a new
concept and it will take time to get it right. In
conversations with POLOFF, several MPs stated that while they
disliked the budget process and their lack of input into it,
they saw no option aside from passage of the budget.

Overall Budget Process Delayed and Confused
--------------


6. (U) The Afghan Constitution states that the budget should
be presented to Parliament 45 days before the end of the
fiscal year (in other words, around February 5). The
Meshrano Jirga is given 15 days to comment on the budget, and
it then submits the budget to the Wolesi Jirga with its
comments. The Wolesi Jirga then has thirty days to vote on
the budget. If the Wolesi Jirga does not act within thirty
days, the budget is considered passed.


7. (SBU) The budget process got off to a late start this year
when the Ministry of Finance presented it to parliament on
March 6. The process after that demonstrated some confusion
by MPs as to their roles and responsibilities. The Meshrano
Jirga reviewed the budget and suggested 13 amendments, which
they sent to the Ministry of Finance rather than the Wolesi
Jirga. The Meshrano Jirga did, however, submit the budget to
the Wolesi Jirga on the Afghan New Year (March 21). In
mid-April, the leadership committee of the WJ (made up of the
chairs of all committees) discussed the budget and decided to
return it to the Ministry of Finance. They requested a
budget that reflected the actual number of MiniQries (now
numbering 25 rather than the 27 Ministries in the submitted
budget) and that was accompanied by the "tashkil." The GOA
did not respond to either the comments by the Meshrano Jirga
or the request by the Wolesi Jirga for a new budget.


8. (SBU) While according to the Constitution the budget
should have been passed by April 21, this deadline passed
without comment. With the Wolesi Jirga engrossed in debate
on Cabinet confirmations for most of April, earlier
discussion was impractical, and all sides appear to have
agreed that sticking to tight deadlines was to no one's
advantage.

KABUL 00001976 003.2 OF 003



Assistance Efforts Focus on the Basics
--------------


9. (SBU) Efforts by MPs to exert true oversight over the
budget are hampered by their lack of experience with and
exposure to the parliamentary budget process, and in some
cases, budgets in general. USAID has made training on the
budget a key component of the US assistance program to
parliament and, through implementing partner the State
University of New York (SUNY),hired an advisor to serve as
an assistant to the WJ Budget and National Economy Committees
for six weeks. This advisor is assisting the committee in
understanding the contents of the submitted budget and then,
at the request of the Commissions, assisted in drafting
amendments to the budget law increasing Parliament's
oversight role over the budget. SUNY also conducted several
well-received briefings for the Meshrano Jirga leadership and
budget commissions.


10. (SBU) Regular briefings and workshops on budget review
and analysis will continue over the next year, and efforts
are underway to facilitate the creation of a coordinating
mechanism between the Ministry of Finance and the Budget
Committees in Parliament. In addition to its work on the
budget, SUNY has plans to begin training for the Budget and
National Economy Committees on general economic and
development issues - from the principles of a free market
economy to the Afghan National Development Strategy -
beginning June 2006. Overall, however, most MPs have a low
base of understanding of budget and economic principles on
which to build.

Comment
--------------


11. (C) Throughout the budget process thus far, the
Parliament's primary concern has been to establish its
authority to provide genuine oversight. The executive
branch, however, paid little attention to Parliament's role
in this process until Minister Ahadi began taking questions
on Sunday. While Ahadi stated that the Ministry of Finance
had answered all of the Budget Committee's questions in short
order, Committee members and staff complained that they had
no contact with the Ministry of Finance. This lack of
attention to Parliament's proper role (similar to the
government's attitude at the beginning of Cabinet
confirmation hearings) temporarily exacerbated tensions
between the legislature and the executive, but Ahadi's strong
performance before Parliament and Qanooni's conciliatory
attitude are likely to lead to a positive solution.
Parliament does not have the capacity currently to provide
more than superficial oversight of the budget, but without an
acknowledgment that this is Parliament's proper role, the
government could be headed toward trouble on passage of
future financial legislation. END COMMENT.
NEUMANN