FOCUS ON USG-GRP DEVELOPMENT PARTNERSHIP IN MINDANAO: GRP

UNCLAS SECTION 01 OF 04 MANILA 004846

SIPDIS

SENSITIVE
SIPDIS

STATE FOR EAP, S/CT, PM, INR/EAP, AND EAP/MTS
USPACOM ALSO FOR FPA HUSO AND J5
SECDEF/OSD/ISA/AP (TOOLAN/BAILEY)
JOINT STAFF/J5 (WILKES/ROBINSON/CLEMMONS)
AID/W FOR ANE/EAA PHILIPPINE DESK OFFICER CALISTA DOWNEY

E.O. 12958: N/A
TAGS: PREL PTER MOPS MCAP EAID EFIN PGOV RP
SUBJECT: FOCUS ON USG-GRP DEVELOPMENT PARTNERSHIP IN MINDANAO: GRP
SECRETARY OF SOCIO-ECONOMIC PLANNING TRIP WITH USAID DIRECTOR

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SENSITIVE BUT UNCLASSIFIED; PLEASE HANDLE ACCORDINGLY

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SUMMARY
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1. (U) Embassy Manila continues to engage actively in demonstrating
substantial USG support for improved conditions for peace, security
and development in conflict-affected areas of Mindanao. During a
substantive two-day visit to Mindanao beginning on Thanksgiving Day,
of GRP cabinet member, Secretary of Socio-Economic Planning, Romulo

L. Neri and USAID/Philippines Director Jon D. Lindborg, the
U.S.-Philippines partnership for peace and development in Mindanao
was reaffirmed with the GRP expressing a strong interest in
replicating similar programs in Mindanao. Secretary Neri and
Director Lindborg led a group of GRP and USAID officials and staff
in visiting various projects jointly undertaken by the USG and the
GRP and other development partners, where they were impressed by the
gains of peace and accelerated economic growth in Mindanao. The
party visited communities in the Autonomous Region in Muslim
Mindanao (ARMM) and other conflict-affected areas. The party also
visited ARMM headquarters and the Office of the International
Monitoring Team and met with media at the end of the visit.
Secretary Neri commended the USG for "being very brave" in engaging

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in catalytic, high-impact and cost effective programs in Mindanao's
conflict affected areas, and for setting a development agenda that
is fully consistent with GRP priorities, while representing "value
for money." End Summary.

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INFORMING GRP OVERSIGHT OF DONOR ASSISTANCE FOR INCREASED
COLLABORATION
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2. (U) From November 23-25, 2006, GRP Secretary of Socio-Economic
Planning Romulo Neri and Mission Director Jon Lindborg and other GRP
and USAID officials visited USAID-assisted programs in the cities of
Davao, Kidapawan and Cotabato, and the provinces of North Cotabato
and Maguindanao. Secretary Neri is also the Director General of the
National Economic and Development Authority (NEDA),the GRP agency
mandated to exercise oversight of official development assistance to
the Philippines. As the USG is the donor with the largest on the
ground presence in Mindanao, USAID and NEDA had agreed in recent
consultations that joint monitoring visits to Mindanao would be
useful. This visit is the NEDA Director General's first to USAID
assisted programs in Mindanao and only his second to Mindanao in

2006. The Party also visited ARMM headquarters for briefings on
programs for health services delivery improvement, internally
displaced persons and environmental governance. Also joining the
GRP's party was a representative of the Mindanao Economic
Development Council (MEDCO),a GRP agency tasked to promote and
coordinate the active participation of all sectors to effect the
socio-economic development of Mindanao

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DAVAO CITY THANKSGIVING DINNER WITH LOCAL LEADERS
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3. (U) Davao City local leaders from the business and education
sectors exchanged views with Secretary Neri on trends and issues in
their sectors. The leaders noted the increasing prospects for
trade, especially with respect to niche markets for agricultural and
other exports to China and issues in education sector, such as,
declining enrolment in tertiary education and the deterioration in
English proficiency. Secretary Neri noted that USAID has been very
supportive of GRP's initiatives to increase the cadre of development
workers in Mindanao, including those in the public sector
bureaucracy, business managers, and development workers in the
field. He noted the increasing atmosphere of peace and
collaboration in the Muslim areas and the reduction in poverty in
some of the poorest provinces. Still, some of the provinces in the
ARMM have the worst performance in health and education indicators.
Secretary Neri stated that a development model for high potential

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but very poor areas in Mindanao is needed, and this model should
focus on improving productivity and capacity building.

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BRIEFING ON USAID'S GROWTH WITH EQUITY IN MINDANAO (GEM) PROGRAM
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4. (U) On November 24th in Davao City, Secretary Neri was joined by
Secretary Datu Zamzamin Ampatuan, Administrator of the Southern

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Philippines Development Authority, and Chairman Ali Sangki of the
Al-Amanah Islamic Investment Bank of the Philippines at the Growth
with Equity in Mindanao (GEM) Program office for a breakfast
briefing on the GEM program. USAID's flagship activity in Mindanao
since 1996, GEM is an umbrella program under which USAID is able to
support a wide range of activities, including small infrastructure
projects, livelihood assistance to former MNLF combatants,
strengthening of business organizations, and opening international
markets for Mindanao products -- all intended to contribute to peace
and development in Mindanao.


5. (U) Secretary Neri noted that cost estimates for GEM's
infrastructure projects seem much more reasonable than equivalent
projects implemented by the GRP and asked for cost information to
provide examples to the GRP's Department of Public Works and
Highways. He also concurred with GEM's approach to economic
development which veers away from traditional livelihood projects
and focuses more on catalytic infrastructure such as post harvest
facilities, food processing and packaging. He noted that GEM has
correctly focused its business facilitation assistance on export
markets of greatest opportunity. Sec. Neri expressed interest in
knowing more about and promoting GEM assistance to fish cage
technology. He also expressed interest in the occupational placement
of the interns under the GEM Congressional Internship Program for
Young Muslim leaders, and in exploring USAID support for addressing
land access issues under vestiges of a feudal system and development
or review of the master plan for Liguasan Marsh.

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VISIT TO EDUCATION ACTIVITIES
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6. (U) In Kidapawan City, Secretary Neri and Director Lindborg
turned over a package of seven computers, internet connections and
resource materials to the Manongol National High School. Through
this USAID GEM activity, students establish email accounts,
communicate with other students throughout the world and conduct
research on various academic topics. Teachers enhance the students'
learning experiences by augmenting classroom lessons with additional
materials obtained from the internet. As of November 20, 2006, this
program has assisted 455 schools in the Autonomous Region in Muslim
Mindanao and other conflict-affected areas, benefiting more than
400,000 students and about 12,000 teachers. Secretary Neri remarked
that the project is needed in an environment that is increasingly
knowledge based, and that it is important for attaining progress and
greater productivity. He also saw opportunities in linking this
activity with the best teachers in the country and in its
replication using Chinese ODA which is supporting similar
initiatives.


7. (U) In Midsayap, North Cotabato, the party turned over math and
science kits and learning materials to a community learning center
and visited an out-of-school youth training and an on-the-job
training site under USAID's Education Quality and Access for
Learning and Livelihood Skills (EQuALLS) Program and implemented by
the Save the Children Federation (SCF). The community learning
center provides basic and alternative education and assistance in
youth productivity and introduced its current batch of graduates
scheduled for certification. A 25-year old graduate of the program
gave a testimony indicating that dropping out of school is not an
excuse for not learning and expressed her increased optimism in
moving on.

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TURN OVER OF RURAL ELECTRIFICATION AND SMALL INFRASTRUCTURE PROJECTS

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8. (U) In Pagalungan, Maguindanao province, the party participated
in a symbolic turnover of an energized village to the province,
visited an electrified household and installed a marker
commemorating the electrification of 1,140 households in the
province. These are achievements of USAID's Alliance for Mindanao
Off-Grid Renewable Energy (AMORE) Program. Residents of the
electrified household thanked USAID for making possible a number of
night-time productive activities, such as studying for school.

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9. (U) In Midsayap, the party formally turned over the Midsayap
Trading Center to the village (Barangay Poblacion 5) and the
Municipal Government of Midsayap. Secretary Neri commended USAID
for having well prioritized and selected projects which are
relatively inexpensive and have high impact. He suggested that
other donors which have more resources for infrastructure might
follow the USAID model. Under the GEM Program, USAID is financing
the construction of 815 "barangay infrastructure projects" and up to
40 "regional impact projects" in the Autonomous Region in Muslim
Mindanao (ARMM) and other conflict-affected communities.

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COTABATO CITY DINNER WITH LOCAL LEADERS AND IMPLEMENTING PARTNERS

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10. (U) Participants exchanged views and updates on peace and
development issues. Cotabato City Mayor Sema talked about education
as his priority concern and a community center that USAID will
support. Bangsamoro Development Agency Executive Director, Dr.
Danda Juanday, indicated his agency's engagement with World Bank
support in capacity building in six pilot areas in preparation for
the Peace Agreement and expressed optimism that the agreement will
come through.


11. (U) Secretary Neri responded to a number of questions pertaining
to NEDA's role in planning activities related to the peace process,
the need to improve ARMM capacity to generate its own resources and
manage its own development programs, that ARMM and the GRP more
appropriately should address education infrastructure finance issues
rather than rely on donors, and that deterioration in the quality of
education can be partially arrested through telecommunications.
Secretary Neri again commended USAID for having "very good,

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community based interventions."

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NOVEMBER 25TH BRIEFING AT ARMM HEADQUARTERS ON DEVELOPMENT ISSUES
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12. (U) On health services, Secretary Neri observed the dismal state
of the ARMM health situation and upon learning that the ARMM budget
was quite low, immediately called by mobile telephone the Secretary
of Budget and Management, with a request to double the ARMM health
budget. He also remarked that resources for family planning might
be better channeled to the ARMM.


13. (U) On environmental governance, Secretary Neri advised
increasing focus on reforestation through species where the
incentive is not to cut the trees down, such as fruit trees and
rubber. Also noted was the need to clarify property rights in
public land which has no forest cover.

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BRIEFING AT INTERNATIONAL MONITORING TEAM HQ
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14. (U) The IMT, composed of Malaysia, Brunei, and Libya, has been
operating in Mindanao since October 2004, after the Government of
the Republic of the Philippines (GRP) and the Moro Islamic
Liberation Front (MILF) signed the ceasefire agreement in July 2003.
The members of the IMT, in conjunction with the joint GRP - MILF
Committee have visited various areas throughout Central Mindanao,
Zamboanga Peninsula, and the province of Basilan in order to monitor
the progress of the peace talks, rehabilitation efforts, and
economic development in the MILF conflict affected areas. They also
evaluated reported "violations" of existing ceasefire agreements.
With a membership of about 60 people, the IMT's headquarters is
located in Cotabato City, while each of its five Team Sites is
located in the cities of Cotabato, Iligan, Zamboanga, General
Santos, and Davao. The IMT's jurisdiction covers 14 of Mindanao's 21
provinces. Recently, the Government of Japan joined the IMT,
dispatching an expert who would focus on socio-economic monitoring
and take an active role in the formulation and implementation of an
economic development plan for the area. Director Lindborg pledged
continued USG collaboration with the IMT.
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MEETING WITH MEDIA IN COTABATO CITY
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15. (U) In a final meeting with local media in Cotabato City,
Secretary Neri and Director Lindborg highlighted the opportunities

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for development throughout Mindanao with an improving environment
for peace and security.
Director Lindborg noted the USG's substantial commitment to Mindanao
with a range of diplomatic, defense and development cooperation
activities, as well as frequent visits of senior USG officials,
including the most recent visit of Ambassador Kenney on Thanksgiving
Day and DCM Jones party's meetings with MILF leadership the week
before.

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COMMENTS
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16. (SBU) As the principal GRP counterpart for USAID's enabling
agreements for assistance to the Philippines, it is important to
strengthen the relationship with NEDA and its Director General, who
is also one of President Arroyo's senior economic advisers. The
trip appears to have left a lasting favorable impression on
Secretary Neri on how the USG works in close partnership with the

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GRP and how the USG is using defense, diplomacy and development
instruments to transform the environment for peace and development
in Mindanao. He publicly acknowledged the USG's niche in the
development assistance community as well as its catalytic role in
helping promote sustainable development, and would like to
specifically replicate USAID approaches among the broader donor
community, as well as, the development programs implemented by the
national government and the local governments. KENNEY