WORLD BANK LOOKS TO SUPPORT DARFUR PEACE

C O N F I D E N T I A L KHARTOUM 000507 SIPDIS SIPDIS DEPT FOR D AND AF A/S FRAZER E.O. 12958: DECL: 02/27/2016 TAGS: PGOV PREL EFIN PINR SU SUBJECT: WORLD BANK LOOKS TO SUPPORT DARFUR PEACE REF: KHARTOUM 477 Classified By: POL Michael Honigstein for reasons: Section 1.4 (b) and (d) ¶1. (C) On February 27, Charge d'Affairs met with Asif Faiz, World Bank Country Manager for Sudan, to discuss the Bank's activities in the country. The Charge asked about the ways the World Bank could support a negotiated peace settlement in Darfur, using the recently submitted Government of National Unity (GNU) peace package as a foundation for a wealth sharing agreement (reftel). Faiz responded that the World Bank had already engaged the GNU on this issue in Khartoum, Abuja and Nairobi. He thought the proposal to establish a World Bank window in the Multi-Donor Trust Fund (MDTF) for Sudan was feasible and laid out ways to make it even more attractive to the rebels, the international community, and even the GNU. ¶2. (C) Faiz explained that the MDTF for Darfur would be most effective if the secretariat for disbursing the money were established in Darfur, outside the direct and exclusive control of the GNU. The money could then be managed by a special commission, perhaps made up of GNU representatives and members of a Darfur Council. This would also encourage a power-sharing agreement by assigning such a large role to a future Darfur council. ¶3. (C) According to Faiz, the GNU could be convinced to support this concept-- and a significantly larger "seed money" contribution to the fund than they are currently proposing-- by clearly establishing the link between peace in Darfur and normalization with the international financial institutions (IFIs). Sudan is currently barred from borrowing from the IFIs because of sanctions and large arrears. If peace in Darfur were tied to lifting financial sanctions and assistance in clearing the arrears, Sudan could return to the international financial market very quickly. This would greatly increase the GNU's access to capital and could greatly offset the expense of a more generous offer of development money to Darfur. ¶4. (U) Faiz said he would ask his senior economist to develop a more detailed report covering this proposal and present it to the Charge on Wednesday, March 1. HUME