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.

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MFA Opposed Measure to End Assistance
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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.

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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.

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MFA to Continue Efforts to Persuade Parliament
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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