SCENESETTER FOR G-8 AFRICA PARTNERSHIP

UNCLAS SECTION 01 OF 04 BERLIN 001007 SIPDIS SIPDIS SENSITIVE NSC FOR BOBBY PITTMAN STATE FOR AF/CAMILLE JACKSON USEU FOR PATRICIA LERNER E.O. 12958: N/A TAGS: EAID ECON ECIN EMIN ETRD PREL GM SUBJECT: SCENESETTER FOR G-8 AFRICA PARTNERSHIP FORUM, BERLIN, MAY 22-23 REF: A. 2006 BERLIN 207 ¶B. 2007 BERLIN 605 ¶C. 2006 BERLIN 693 ¶1. (SBU) Summary. Chancellor Merkel will open the Eighth Africa Partnership Forum (APF) in Berlin immediately following the G-8 Finance MinistersQ Meeting in Potsdam May 19-20 and the German-World Bank Forum on May 21. Hosted by the German Development Minister, the APF will set out the key components of GermanyQs G-8 development agenda with Africa for the Heiligendamm Summit, including financing mechanisms, donor harmonization, and trade agreements. Many of the initiatives Germany envisions show an adoption of U.S. approaches to development, including increased engagement of the private sector and market-oriented trade policies. End Summary. G-8 and EU Presidencies Precipitate New Thinking -------------- --- ¶2. (SBU) GermanyQs concurrent G-8 and EU presidencies have offered its development experts opportunities to revisit attitudes towards the U.S. and move to policies more in line with USG approaches. Since 2006, the German Development Minister Heidemarie Wieczorek-Zeul and her team have consistently demonstrated an increased interest in working more closely with the USG, particularly in the G-8 process and on our own development priorities. They seek our support as a key partner in engaging the emerging market countries, particularly China, in what the Germans hope will be their signature G-8 initiative: a High Level Dialogue between the G-8 and Brazil, China, India, Mexico, and South Africa known as the "Heiligendamm Process." While the Process will cut across a spectrum of issues -- including energy, trade, intellectual property, and investment -- the development component will aim to implement new development strategies reflecting the growing importance of these five states. Those around her say the Minister, who has long been a fixture on the left of the German political spectrum and is the longest-serving member of the current German government, sees the program as an important piece of her legacy. With much of the MinisterQs domestic and international reputation riding on her producing deliverables for the German presidencies, the sixty-four year-old Wieczorek- Zeul has kept an eye towards her legacy as retirement looms. Financing Mechanisms and Donor Harmonization -------------- ¶3. (SBU) Wieczorek-Zeul wants the G-8 to pay particular attention to good governance -- Germany chose the theme QGrowth and ResponsibilityQ for their G-8 presidency -- while calling for the creation of innovative financing methods which would enable large segments of African society to contribute to economic growth. The U.K. and World Bank have in some cases joined the U.S. in disagreeing with the German proposals on these initiatives due to technical and policy grounds. However, it would be worth highlighting the positive change in German attitudes towards development policy that these efforts represent. Wieczorek-Zeul is moving German development priorities toward a more market-oriented approach while drawing more closely from other U.S. development principles. Notably, Wieczorek-Zeul, who once clung closely BERLIN 00001007 002 OF 004 to the 0.7% of GDP target for development aid as a matter of course for all developed countries, is now on record as naming the 0.7% figure as an imperative for Germany, rather than for the G-8 overall. ¶4. (SBU) GermanyQs specific finance proposals - the creation of a regional microfinance fund (REGIMFA) and the local currency fund Q- also reflect new efforts towards deeper collaboration between the German Development and Finance Ministries. At the same time, the MinisterQs efforts towards donor harmonization under the Making Finance Work for Africa (MFWFA) agenda would replicate in the G-8 context the key development-related achievement of GermanyQs EU Presidency. On good governance, she also wants to leverage GermanyQs role in the establishment of the Extractive Industries Transparency initiative (EITI) to seek greater commitments from the G-8 on transparency in the raw materials sector. (Note: German G-8 Sherpa Bernd Pfaffenbach served as the keynote speaker at the April EITI board meeting in Berlin. End note.) On this theme, the Development Ministry has hosted a series of events during their Presidencies on access to raw materials in Africa, particularly emphasizing the activities of China. Health, Gender Priorities -------------- ¶5. (SBU) Wieczorek-Zeul frequently cites her decades as a self-described feminist leader as the guiding principle toward her heightened sensitivity to gender issues and bases her enthusiasm for microfinance initiatives. She sees these programs as primarily providing positive benefits to women. The growing impact of HIV/AIDS, Tuberculosis, and Malaria on women remains one of the essential elements of the calls from Chancellor Merkel and Wieczorek-Zeul for additional support for the Global Fund. Chancellery officials indicated repeatedly that Merkel plans to renew calls for Global Fund support at Heiligendamm. We therefore expect the Germans will watch closely any statements from the U.S. on the Global Fund specifically, or on HIV/AIDS, T.B., or Malaria generally. (Note: They initially misinterpreted the President's Malaria Initiative as an effort to single out one disease for preferential attention at the expense of Fund commitments. End note.) Merkel to Engage German Business -------------- ¶6. (SBU) Chancellor Merkel, who will open the Africa Partnership Forum by adding her support to increased development assistance for Africa, plans to hold a business conference May 21 to promote investment in Africa. Chancellery sources told the Embassy Merkel planned to invite CEOs of German companies and the leadership of German business associations in order to develop strategies for an increased private sector role in development assistance. Trade Elements Emerge at APF -------------- ¶7. (SBU) Trade remains another key element of GermanyQs development agenda, particularly in its EU presidency. On May 14, Wieczorek-Zeul led the European Council to adopt conclusions on the BERLIN 00001007 003 OF 004 Economic Partnership Agreements (EPAs) between the EU and the African, Caribbean and Pacific (ACP) countries. Wieczorek-Zeul told the press Qthe member states confirmed the goal of creating tariff- and quota-free access to the European market for all products, with a few transitional arrangements for particularly sensitive products,Q and added all the ACP countries promised to conclude the EPA negotiations before the end of 2007. The EPAs will enable the EU Commission and the member states to provide 2 billion euros a year in Qaid for tradeQ for developing countries, starting in 2010. ¶8. (SBU) German trade and development experts largely view the African Growth and Opportunity Act (AGOA) as a model for trade and development relations with Africa. Nevertheless, German officials sometimes question U.S. Rules of Origin policies under AGOA with figures across the German government believing China, India, and Pakistan benefit disproportionately from AGOA's more liberal rules on textiles. German officials, believing the U.S. has greater influence on China, India, and Pakistan than the other G-8 states, see the U.S. as the primary interlocutor with these countries. The German Ministry for Economics and Technology (BMWi) and the Association of German Industry (BDI) believe that AGOA should be expanded to include more industrialized countries through similar agreements that merge of the best practices of AGOA and the EUQs Everything but Arms (EBA) initiative. ¶9. (SBU) GermanyQs AGOA critics in the Bundestag and BMWi say a large portion (80%) of AGOA trade is derived from oil and luxury products, like the U.S.-bound Mercedes and BMW vehicles produced in South Africa. The Development Ministry also sees the AGOA limitations both in regional capacity and product eligibility as more restrictive than advantageous. The Development Ministry wants to see steps in AGOA and similar trade regimes to focus on least developed countries to prevent China and India from profiting. View from the Bundestag -------------- ¶10. (SBU) The Bundestag convened special debates May 10 focusing on GermanyQs development policy towards Africa. Wieczorek-Zeul, an SPD Bundestag member, renewed GermanyQs pledge to increase Official Development Assistance (ODA) by 2010 and to implement debt relief under the Highly Indebted Poor Countries (HIPC) initiative -- the obligations of which Germany had largely met. Although she lauded the current debt relief effort, Wieczorek-Zeul spoke out against a renewed push, except in the case of Liberia. Christian Ruck, the CDU/CSUQs development spokesman, endorsed for the MinisterQs agenda and pointed to a promising generation of new African leaders, including GhanaQs President Kufuor and LiberiaQs Johnson-Sirleaf, as role models for modern, cooperative, and accountable statesmanship. ¶11. (SBU) The opposition Free Democratic Party, led by development spokesman Karl Addicks, criticized the direct support for African government budgets provided by western countries, claiming it had led to increased corruption in Africa. BERLIN 00001007 004 OF 004 TIMKEN JR.