FRENCH RESPOND WARMLY TO MCC CEO DANILOVICH'S

UNCLAS SECTION 01 OF 03 PARIS 002422 SIPDIS E.O. 12958: N/A TAGS: EAID PGOV FR SUBJECT: FRENCH RESPOND WARMLY TO MCC CEO DANILOVICH'S BRIEFINGS ¶1. Summary. Senior French officials enthusiastically welcomed updates on Millennium Challenge Corporation (MCC) activities presented by MCC CEO Danilovich. They applauded MCC's focus on accountability, support for democratic institutions, and reducing poverty. The French officials urged Danilovich to look at France early on as a potential partner in upcoming compact negotiations with third countries. End Summary. ¶2. On 5 April, MCC CEO John Danilovich, met with President Chirac's Personal Africa Representative to Africa (and former IMF Chief) Michel Camdessus, and Minister for Cooperation Brigitte Girardin to brief them on recent MCC activities. MCC Vice President for Policy and International Relations Rodney Bent, Managing Director for International Relations Dick Morford, Executive Assistant Chris Vanderbrouk and Embassy Econ Counselor accompanied Ambassador Danilovich to the bilateral meetings. Meeting Mr. Camdessus -------------- ¶3. Michel Camdessus noted that he was delighted that Amb. Danilovich was taking the time to brief French officials. He said he was impressed by the magnitude of MCC's mission and accomplishments and said he was astonished at the abiding support MCC received from the President and the U.S. Congress. MCC, he said, "is music to our ears." ¶4. Ambassador Danilovich thanked Camdessus for his enthusiasm and briefed him on MCC's recent activities as well as ongoing discussions with Ghana, Morocco and Nicaragua. Camdessus noted particular interest in the MCC's activities in Benin. He said he used to work very closely with President Boni. He urged Ambassador Danilovich to go see him at his earliest opportunity. He noted that Boni was careful, prudent, and understood and supported good governance principals. Despite this positive assessment, Camdessus noted that Boni will need some time to consolidate his authority in Benin. He reminded Ambassador Danilovich that the IMF had proposed that a foreign body operate and account for Benin's customs revenues (which come principally from the port). He said he was sure that MCC would make further progress in that area, but said that MCC officials should not underestimate the challenge. He also added that he hoped that MCC might one day be active in Cote d'Ivoire, positive developments there "are so central for that part of Africa." Camdessus also asked Ambassador Danilovich to outline MCC activities to support girls' education and to reduce poverty among the "poorest of the poor." Camdessus also welcomed the MCC's work in Albania and was pleased at VP Bent's assessment that the situation, particularly in terms of tax collection and use was improving. He praised MCC's efforts to try to overhaul financial sectors to stimulate savings in places like Albania and Madagascar. He said that one of his frustrations as IMF chief was that the organization had not made more progress in these areas with many poor countries. He said that effective land titling and efficient financial markets were key to helping the poor raise themselves up out of poverty. ¶5. Turning to Moldova and Ukraine, Camdessus was pleased to hear that both were considered "threshold" countries under the MCC's criteria. He opined that Moldova would be very receptive and asked if France could "do anything to help" there. Indeed, Camdessus said he believed there was "lots of room for closer cooperation" between the U.S. and France in the development area. ¶6. Camdessus then turned to two subjects he wanted to raise, NEPAD and water. First, he hoped that the MCC could find a mechanism to work with NEPAD. He explained that he was still active with that forum and that the NEPAD partnership should be highly complementary to MCC's goals. Sadly, Camdessus opined, he thought that NEPAD might be losing some momentum and support, particularly on the African side. Again, he emphasized that MCC criteria were "totally in line" with what NEPAD was seeking to do. On water, Camdessus recalled that President Bush had made strong pronouncements on public health and the role of safe water. He asked whether Congress had ever approved a program to promote water programs in the poorest countries. He noted that he was still active in this field and that the African Development Bank was very interested too. The bank has launched an important $14 billion program over ten years. Was the MCC involved in any way in this, Camdessus asked? ¶7. Responding to the NEPAD query, Ambassador Danilovich explained that the MCC was set up in such a way that only individual countries could seek to work with the MCC. There is no mechanism for the MCC to work with a group of countries or an organization. Such work would contradict the very bilateral and partnership nature of the MCC. On water, Ambassador Danilovich reminded Camdessus that the MCC could only fund programs that are proposed by potential recipient countries. Thus far, he noted, no country has proposed a major drinking water project. Camdessus said he understood. He urged Ambassador Danilovich to remain in contact and noted that he may make a trip to Washington before the end of 2006. If he did, he hoped he could call on Ambassador Danilovich at that time. Ambassador Danilovich said he would welcome such a visit. Cooperation Minister Girardin -------------- ¶8. Ambassador Danilovich also met with Minister-Delegate for Cooperation, Brigitte Girardin, who was accompanied by Jerome Walter from her staff, and officers from her ministry and AFD (Agence Francaise de Developpement). Ambassador Danilovich opened by briefing the Minister on the MCC's history and current activities. Girardin responded by thanking Ambassador Danilovich for taking the time to inform her of these activities and to open up a dialogue between her ministry and the MCC. She explained that Cooperation was undergoing reorganization. "We are changing our focus," she said, "like you, we now demand results and are focusing on `real' reforms which will be evaluated by us every year" in recipient countries. She added that the ministry was setting up new directorates to support democratic governance and to work with post conflict/crisis countries. She underlined that the U.S. and France could do some extremely useful work together in the development field and said she hoped the U.S. and France could "augment our cooperation vis a vis other states" and that "we should consider perhaps co- financing some projects." She noted that she was particularly interested in Ghana and wondered whether there was any scope for GOF -MCC cooperation in Ghana. ¶9. Ambassador Danilovich noted that the compact with Ghana was already almost completed and that it was probably too late to begin something at this point. There will be room for other donor activity, however, and he urged Minister Girardin to remain in touch directly or through the Embassy He thought there could be good scope for enhanced U.S. - France cooperation. ¶10. Girardin also asked whether the MCC was focused on post conflict/crisis states. This she said, was an increasing priority for her ministry. No, Ambassador Danilovich responded, the MCC's structure makes negotiating compacts with such countries difficult to imagine. The focus, he said, remained on poor countries, but ones with a determination to invest in their people and that governed themselves well. He pointed out that some countries that had been failing states, such as Liberia, make the MCA a goal as they begin to recover. She also asked whether it was imaginable for MCC to consider budget support in approved countries. Ambassador Danilovich responded that that would be all but impossible. The Minister and he agreed on the desirability of consulting regarding the Office du Niger in Mali. Ambassador Danilovich also pointed to the potential for cooperation on governance issues in MCA Threshold countries. COMMENT: -------------- ¶11. Both French officials were effusive in their embrace of the MCC and its guiding principals and both encouraged the U.S. to consider closer coordination and cooperation with France. They may believe that closer cooperation could help leverage their own goals of democratization and increased good governance in regions of mutual concern. Embassy Paris would urge MCC officials to consider carefully where and when they may be able to benefit from French expertise as they continue to negotiate compacts, particularly in francophone countries. Embassy stands ready to help. STAPLETON