WORLD BANK ANGOLA BRIDGING TWO WORLDS

UNCLAS SECTION 01 OF 02 LUANDA 001270 SIPDIS SENSITIVE SIPDIS FOR AF/S NSC FOR PITTMAN AND LEO E.O. 12958: N/A TAGS: EFIN EAID ECON AO SUBJECT: WORLD BANK ANGOLA BRIDGING TWO WORLDS ¶1. (SBU) Summary. World Bank Country Representative - Angola Alberto Chueca is decidedly more upbeat about prospects for successful Bank engagement in Angola than he was only three weeks ago, when he last met the Ambassador. His new-found optimism is founded on several recent developments: final agreement with the GRA on a $102 million project to provide water and feeder roads to rural Angola; break in a logjam that had blocked a project for USD 50 million to provide technical assistance to the Ministry of Agriculture and Rural Development (MINADER); improved prospects to convince the Bank to shift Angola from the concessional IDA window to a &blend8 program that would enable the Bank to make considerably larger loans to the GRA and thus raise the Bank,s profile here as well as demonstrate the Bank,s confidence in Angola credit-worthiness; and emerging engagement with the Tribunal de Contas (Audit Court, the GRA's version of a national inspector general),which has asked the Bank to help improve its oversight of GRA procurement activities, a fertile breeding ground for corruption. End Summary. ¶2. (SBU) Surprisingly upbeat, World Bank Country Representative in Angola Alberto Chueca, shared with the Ambassador December 18, 2007 recent improvements in the Bank's operations in Angola. Chueca believes the Bank will classify Angola as a blended country, thereby permitting significantly larger lending programs, potentially reaching over $800 million. This development will signal to the GRA the Bank,s increasing faith in Angolan credit-worthiness, which will be well received by the GRA and which will help get the Bank a better seat at the table on future engagement with the Angolans. On the Angolan side, the GRA recently approved two WB programs after a contentious year of negotiations, complicated by arcane Angolan legal requirements. These projects include the 102 million for rural water and roads and the 50 million for technical assistance to MINADER. Tribunal de Contas -------------- ¶3. (SBU) Chueca was particularly pleased with his budding relationship with the Tribunal de Contas (equivalent of a national inspector general),which has requested the Bank,s assistance in bringing greater transparency to the GRA,s procurement processes, which are ripe for corruption. Chueca 
said he is organizing a workshop for the first quarter of 2008 to train managers from the Tribunal de Contas on government procurement, budget management, and evaluating the recurring cost of programs. According to Chueca, strengthening an institution like the Tribunal de Contas, which seems genuine in pursuit of its monitoring role, could be an important step in bringing greater sunshine to Angola's public finances. Chueca said a recent meeting with Tribunal President Juliao Antonio left him convinced that Antonio (a retired senior judge) genuinely wants improvements in public financial management; as Chueca put it, &the auditors are starting to grow some teeth.8 He said the President is supporting Antonio,s endeavors. (Note: The Tribunal is responsible for auditing GRA execution of Angola's budget as well as for trying cases of official corruption. A review of its website makes clear that Antonio has far to go in achieving his objective as the website posts only a single decision against official corruption and no audit of any ministry. End note.) Understanding the GRA psyche -------------- ¶4. (SBU) Chueca spoke at length on his perspective as to why the Bank, other International Financial Institutions, and many western countries are frustrated in their endeavors to engage the Angolans. The key to understanding GRA leadership, he asserted, is to appreciate their self-perception as the winners, the party that defeated the Portuguese, the South Africans, the Zairois and the Americans. As such, President Dos Santos asserts his independence, sees himself as a global statesman, and does not want to be seen as bowing to the West. Citing an example to support his point, Chueca said he recently was told by a senior GRA official that the President, when informed that Angola was only &a few cosmetic changes away8 from qualifying for participation in the Extractive Industries Transparency Initiative, personally had blocked Angola,s seeking EITI membership, declaring that he himself would do what needs to be done without bowing to the West. Chueca cited this incident as an example of Angola,s taking a LUANDA 00001270 002 OF 002 decision against its own interests, all in the name of independence. ¶5. (SBU) Expanding on the theme, Chueca said Angola,s leaders have ) literally ) been fighting all their lives, so even now after peace has arrived, they continue to fight, now against the Bank, IMF and the West &just to show who has the power.8 Chueca added that outsiders need to accept these realities, and seek to engage the Angolans on their terms in a fashion that shows how we can help the Angolans achieve their own agenda. He advocated letting Angolans think through issues own their own and participate in designing programs, so they then see their own ideas and support the programs. This low-key approach would also reduce friction when donors work with civil society, the private sector, the media, and political partners. ¶6. (SBU) Comment. Although business in Angola for Chueca and the Bank has often been frustrating, to put it mildly, Chueca has learned some valuable insights into how to have an impact in this challenging environment. These insights have enabled the Bank to remain engaged here, while its sister instititution the IMF has essentially had to pack its bags. We, too, see value in Chueca,s insights and will factor them into our own assessments of how best to advance our agenda here. MOZENA