PARLIAMENT REJECTS BUDGET

C O N F I D E N T I A L SECTION 01 OF 03 KABUL 002323

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E.O. 12958: DECL: 09/04/2015
TAGS: PGOV PREL PINR KDEM AF
SUBJECT: PARLIAMENT REJECTS BUDGET

REF: A. KABUL 794


B. KABUL 807

Classified By: POLCOUNS ANGUS SIMMONS FOR REASONS 1.4 (B) AND (D)


1. (C) SUMMARY. On May 21, the lower house of the Afghan
Parliament rejected the GOA budget by a clear majority
(although with only around half of MPs voting). The impasse
occurred after the GOA rejected Parliament's suggested
changes to the budget, including an increase in salaries for
civil service employees and in payments to the disabled,
orphans and widows. Debate in Parliament focused on the
independence of the nation to make its own decisions about
government salaries, and rejected the idea that salary
increases should be linked to civil service reform
conditionality (notwithstanding Afghanistan's continued
reliance on donor contributions to fund the bulk of its
operating budget). The GOA is reportedly prepared to declare
the budget in effect despite Parliament's vote. END SUMMARY.

Vote Count
--------------


2. (SBU) While no roll call vote was taken, the votes in the
Wolesi Jirga (WJ) against the budget were around 100, with
votes in favor numbering no more than 20. MPs voting against
the budget included Rabbani and Mohaqqeq; Sayyaf walked out
of the vote after seeking a "third way" compromise solution.
Votes in favor of the budget included some conservative MPs,
including Mullah Salam Rocketi. Other possible Karzai allies
(such as Jamil Karzai) abstained from the vote. The budget
was voted on twice, with votes to reject in the majority each
time. The first vote was on three options: reject, approve,
or defer, with the understanding that debate would continue
between the GOA and Parliament (this option got 30-40 votes).
After Government Oversight Committee Chair Ranjbar noted
that only an up or down vote is allowed by the Constitution,
a vote was taken again on rejecting or accepting the budget.

Impasse over Parliament's Suggested Amendments
-------------- -


3. (SBU) Parliament resumed debate on the budget on Saturday,
May 20 after Qanooni sent a letter to the President outlining
the WJ's suggested changes to the budget. The primary
suggestions were a pay increase for all government employees
(of around USD 13 each) and a 100% increase in the payments
(now around USD 7 a month) to the disabled, widows and
orphans. The letter itself was a laundry list of the Wolesi
Jirga's ideas on changes that should be made to the regular
budget (everything from civil service salaries to the budget
for the National Assembly) and the development budget
(prioritizing hydroelectric power and mines as
income-generating projects for the country). (COMMENT. The
WJ did not suggest offsets for its programs - the letter was
a document of consensus, not hard choices. END COMMENT.)


4. (C) The Ministry of Finance (MOF) had approached the IMF,
World Bank, and key bilateral donors in February with a
similar proposal for an across-the-board civil service salary
increase, which donors soundly rejected on the grounds that,
among other things, any salary hikes should be linked to
civil service reform (REFTELS). Donors reiterated their
stance in a meeting with the MOF after it received
Parliament's suggestions. Faced with the inability to
accommodate Parliament's requests, the President reportedly
decided to invoke Article 98 of the Constitution, which would
declare the budget in force without approval by Parliament
(he had the legal right to do so since Parliament did not
vote on the budget within the 30 days required by the
Constitution). Before this took place, and after receiving

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unfavorable press coverage in the media for holding up the
budget, Parliament decided to return to debate on the budget
earlier than expected. It called in the Minister of Finance
for additional questioning on May 20.

Debate Focused on Parliament's Rights
--------------


5. (SBU) While Deputy Minister Shahrani appeared before
Parliament on May 20, and Minister Ahadi spoke again to
Parliament on May 21, their explanations of why the budget
could not be revised were not satisfactory to Parliament.
The two main points made (by MPs across the political
spectrum) were:

- Why should the budget be passed without having Parliament's
views taken into consideration? (Other similar comments
focused on MPs as representatives of the people, and that the
people's views need to be considered.)
- Why should the International Community (IC) dictate what
civil service salaries should be? (While many MPs accepted
that the IC can determine where development money is spent,
IC conditions on the regular budget were rejected.)


6. (SBU) During debate, Qanooni emphasized repeatedly (and
Ahadi affirmed) that what is at issue was not a lack of money
on the part of the GOA, but a question of policy: that the
international community wants civil service reform to precede
civil service salary increases, and is conditioning
assistance on that. Fazlullah Mojaddedi (Laghman) received
rare applause for his speech stating that the GOA should take
responsibility for its own budget, rather than keep referring
to the IC. Several statements were much harsher in their
comments on the IC. For example, in his speech urging
rejection of the budget, Imami Ghori (Ghor) criticized
international development projects and said that
Afghanistan's lack of development was a result of its lack of
independence. Another MP stated that the GOA has caved to
international pressure and that the independence of the
nation rests in Parliament's hands now. Several other MPs
linked the budget to security, stating that increased
salaries for the military and police are needed to improve
security for the nation. The few members who spoke in favor
of the budget noted that the Parliament should have an
alternate proposal to present or that delaying passage of the
budget would hurt Afghanistan's economy.

Next Steps
--------------


7. (C) It is unclear what steps the GOA will take next.
According to a Ministry of Finance advisor, the MOF's and
GOA's legal advisors' opinion is that Article 98 can still be
invoked. In other words, the GOA may still declare the
budget in effect, despite the negative vote by Parliament.
While meetings within the GOA on this issue are still
ongoing, the current plan appears to be to send a letter to
Parliament from President Karzai invoking Article 98. Karzai
would also lobby MPs as well in an attempt to smooth over
this disagreement.

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


8. (C) Parliamentarians view this vote as a bargaining
process with the GOA: when their initial position of higher
salaries and other benefits was rejected by the GOA, they
rejected the GOA budget in response. Qanooni made clear
before and after the vote that the rejection of the budget
was not intended to be final, but the means to further
negotiations between the GOA and the WJ. Parliament also

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believes it is representing its constituents in the debate -
MPs meet with delegations from their province on a daily
basis and many ask for higher pay.


9. (C) The impasse over the budget exemplifies the poor
communication between the executive and legislative branches
-- for example, the MOF did not know about the vote in
Parliament until Post called for a reaction. The GOA appears
not to have put much energy into working the WJ floor to seek
support for the budget, with many erstwhile Karzai supporters
backing the no vote. The vote on the budget also exemplifies
and increasingly nationalist/populist trend in its debate.
Parliament sees itself as a guardian of Afghan independence
and democracy, and has reacted negatively to the reality that
the GOA will remain dependent on conditioned donor funding to
support its day-to-day operating expenditures for years to
come. END COMMENT.
NEUMANN