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