AZERBAIJAN: DRAFT 2008 EPC AGENDA AND DELIVERABLES

UNCLAS BAKU 001506 SIPDIS SIPDIS SENSITIVE DEPT FOR EEB A/S DANIEL SULLIVAN DEPT FOR EUR/CARC AND EEB/CBA DEPT PASS TO TDA FOR STEIN, EXIM FOR GLAZER ANKARA FOR FCS COMMERCE FOR 4231 ITA/MAC/ORUE FOR DSTARKS COMMERCE FOR 3004 ITA/FCS/ ADVOCACY FOR ACHAMS-EDDINE E.O. 12958: N/A TAGS: ECON EFIN ETRD EAID PREL ENRG KCOR AJ SUBJECT: AZERBAIJAN: DRAFT 2008 EPC AGENDA AND DELIVERABLES ¶1. (SBU) Embassy passes to Washington colleagues initial thoughts for the 2008 EPC agenda items and potential deliverables and welcomes Washington's comments, edits and additions. We note that in this early draft of possible deliverables, many of the proposed action items are for the Government of Azerbaijan; the U.S. will also need to develop a similarly robust list of possible U.S. action items. Embassy requests Washington's input by mid-January as Finance Minister Sharifov has requested a meeting with Ambassador Derse during the third week of January to plan for the February EPC in Washington. We especially welcome Washington agencies' input. ¶2. (U) BEGIN DRAFT 2008 EPC AGENDA TEXT 2008 ECONOMIC PARTNERSHIP COMMISSION AGENDA ¶I. Welcome and Introduction II. Macroeconomic Policy and Development (AJ lead) GOAL: To focus the GOAJ on the need to restrain fiscal spending, improve its public investment planning program and ensure long-term sustainability of its energy wealth. --Macroeconomic Overview for 2008: Inflation, Fiscal Policy, Monetary Policy (AJ) --Public Expenditure Reform - Update on status and progress to put in place a best practices-consistent regulatory reform framework in 2008. (AJ) --Oil Fund and Investment Strategy - Update on status and progress on rationalizing long-term investment strategy and ensuring the efficient/transparent use of oil revenues invested locally. (AJ) --Public Investment planning and budget decree (AJ) --Briefing on expenditure reform support efforts (U.S.) III. WTO (U.S. lead) GOAL: To solidify GOAJ WTO progress, push for co-financing of U.S. WTO assistance and set obtainable dates for meeting critical WTO benchmarks. --USTR update on WTO process; briefing on U.S. WTO assistance (U.S.) --GOAJ steps taken with U.S. assistance (AJ) --IPR (AJ) IV. Trade and Investment Climate (AJ lead) GOAL: To improve the overall business climate, highlight the negative effects of corruption, push for real investment reforms, and create commercial opportunities for U.S. businesses. --Enabling Environment Reform; update on World Bank Doing Business reforms - Progress read out (AJ) --U.S.-Azerbaijan commercial relationship (U.S.) --Briefing on the state investment projects 2008-2010 (AJ) --Competitive taxation system (U.S.) --Anti-corruption - Status update and further practical commitments in key areas, including public procurement reform, tax admin reform, and customs reform (AJ) --Anti-money laundering and terrorist finance legislation (AJ) --Briefing on state procurement process (AJ) --Competition code/anti-monopoly law and the foreign investment law (AJ) ¶V. Working Lunch VI. Non-Oil Sector Development and Economic Diversification (AJ) GOAL: To highlight the importance of the non-energy sector in Azerbaijan,s long-term sustainable development and stress the positives of economic diversification in the IT and agricultural sectors. --Briefing on information technology initiatives (AJ) --Briefing on agricultural sector reform assistance (U.S.) --Briefing on transportation infrastructure projects (AJ) --Bilateral cooperation for energy sector public policy initiative (Baker Center) (U.S.) --Free Economic Zones (AJ) VII. Co-Financing and Assistance (U.S. lead) GOAL: Obtain a concrete plan for GOAJ co-financing of all U.S. assistance projects. --Co-financing progress and follow-on commitments. (U.S.) VII. Conclusion VIII. Evening USACC hosted dinner with EPC participants and senior executives from U.S. companies. DAY 2: Organize a businessmen roundtable with key GOAJ ministers - Babayev, Sharifov - with the goal of expanding U.S. commercial opportunities. END DRAFT 2008 EPC AGENDA TEXT ¶3. (U) BEGIN DRAFT 2008 EPC DELIVERABLES TEXT EPC Deliverables Macroeconomic Policy and Development -------------- --Issue in 2008 a new public investment planning decree which strengthens the transparency and rigor characterizing public investment planning processes. (AJ) --Issue in 2008 an strategy to promote development of a trained cadre of specialists is developed which can carry out cost/benefit analysis. (AJ) --Adopt in 2008 an international best practices-consistent public procurement law. (AJ) --Adopt in 2008 anti-money laundering/counter terrorist financing law. (AJ) WTO --- --By June 2008 the GOAJ commits to co-finance U.S. WTO assistance (AJ) --In 2008 Azerbaijan will demonstrate significant progress towards ensuring that a WTO-consistent legal/regulatory framework is put in place. (AJ) --Issue in 2008 a WTO-consistent customs code and key implementing guidelines. (AJ) Trade and Investment Climate -------------- --Adopt in 2008 a new collateral law which significantly strengthens creditor rights and improves incentives for using moveable property for loan guarantee purposes. (AJ) --Adopt in 2008 a new competition code which creates an international best practices-consistent legal analysis and enforcement framework for reducing/eliminating anti-competitive practices. (AJ) --Implement in 2008 streamlined and transparent business registration and licensing procedures. (AJ) --Issue in 2008 regulatory reforms reducing trade restrictions and related approval documentation. --Adopt in 2008 a new credit bureau law. (AJ) --Adopt in 2008 a new conflict of interest legislation. (AJ) --By June 2008 finalize Bechtel Trans-Azerbaijan Express Motorway project discussions. (AJ) --By October 2008 re-establish USDOC representative in Azerbaijan. (U.S.) Non-Oil Sector Development and Economic Diversification -------------- -------------- --By June 2008 establish an inter-ministerial working group on agricultural strategy development and operational plan development (AJ); follow-up on USAID/USDA technical collaboration efforts launched in support of agricultural reform (U.S.). --Support and assist MES delegation visit to U.S. in March or April 2008. (U.S.) --By June 2008 further DOE Cooperation/Baker Center. (U.S.) --By September 2008 create bi-national Fulbright Commission to facilitate scholarly and student exchanges. (U.S.) Co-Financing and Assistance -------------- --At the EPC the U.S. and Azerbaijan sign a co-financing MOU encompassing all USG activities included in our request to the GOAJ totaling USD $21.8 million over the next two years ($8.2 million supporting EG; $13.6 million supporting NGO/Civil Society strengthening; and an unspecified amount supporting scholarships). (AJ) END DRAFT 2008 EPC DELIVERABLES TEXT DERSE