NETHERLANDS MAY END DEVELOPMENT ASSISTANCE TO

C O N F I D E N T I A L THE HAGUE 000986 SIPDIS SIPDIS E.O. 12958: DECL: 05/03/2011 TAGS: EAID KCOR PREL XW ZF SUBJECT: NETHERLANDS MAY END DEVELOPMENT ASSISTANCE TO KENYAN GOVERNMENT Classified By: ECONOMIC COUNSELOR RICHARD HUFF. REASONS: 1.4 (B) AND (D ) ¶1. (C) SUMMARY: The Dutch parliament passed a resolution this month mandating an end to direct development assistance to the Kenyan government, unless substantial and significant progress on corruption is shown. The Ministry of Foreign Affairs told emboffs it will spend the next 5 months (i.e., until the September budget deliberations) showing how Kenya has made such progress. GONL development aid to Kenya amounts to approximately Euro 5.3 million per year, with roughly half going to the government. End summary. -------------- MFA Opposed Measure to End Assistance -------------- ¶2. (C) Emboffs spoke on April 26 with MFA Head of Central and East Africa Division Wouter Plomp, who said MFA Development Minister van Ardenne (who controls development funds and is the lead on Africa policy) had opposed the parliamentary measure. Van Ardenne, who is a strong advocate of increased public-private partnership, believed that Kenya was not the appropriate country to target for corruption. Plomp elaborated, saying that while Kenya has made only minimal improvements in corruption since Moi, the MFA feels that it is far less corrupt than many other Africa countries. Cutting direct assistance in Kenya could set a precedent for other Dutch aid recipients in Africa. MFA believes that, in the African context, a certain amount of direct assistance is a necessity. ¶3. (C) According to Plomp, about half the GONL,s assistance of Euro 5.3 million to Kenya is provided directly to the GOK. The decision impacts funding beginning in FY 2007, and excludes good governance and anti-corruption programs. Existing 2006 funding will remain in place, and the MFA will reroute money as best it can from the GOK to NGOs and other private sector implementing partners. Some programs currently in the pipeline have, however, been halted. -------------- - Parliament,s Decision Driven by GOK Corruption -------------- - ¶4. (C) According to Plomp, the Dutch Parliament was upset by a February report from Kenya,s former anti-corruption chief John Githongo. Green Left Politician and Second Chamber member Farah Karimi initiated the debate, and Labor supported the measure. The MFA, Plomp added, argued that the publicity the report received and the engagement of civil society on the issue demonstrated progress in Kenya. This argument was rejected by parliament. Comment: The support of Labor is noteworthy. Labor is widely expected to lead a coalition government following next year,s elections. End comment. -------------- - MFA to Continue Efforts to Persuade Parliament -------------- - ¶5. (C) Plomp said his office will spend the next five months until the budget debate in September trying to demonstrate that Kenya has made the required substantial and significant progress. To measure this progress, MFA is likely to use the international corruption benchmarks established in 2004 by the Donor Budget Support Group, a sub-group of the World Bank,s Kenya Consultative Group. ¶6. (C) This Parliamentary measure is not legally binding, but in follow up discussions MFA noted that it was adopted by a majority. GONL has rarely deviated from the intent of such resolutions in the past, and MFA stressed that it is their full intent to comply with the measure. ARNALL