KOENDERS ON FUTURE DUTCH FOREIGN DEVELOPMENT ASSISTANCE

UNCLAS SECTION 01 OF 03 THE HAGUE 001913

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TAGS: EAID ECON NL
SUBJECT: KOENDERS ON FUTURE DUTCH FOREIGN DEVELOPMENT ASSISTANCE

REF: THE HAGUE 1091

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1. (SBU) SUMMARY. Dutch foreign assistance will now increase
emphasis on women's rights, fragile and conflict states, climate
change, and economic growth issues in a shift of development
strategy recently unveiled by Bert Koenders, the Netherlands' new
and energetic Development Minister. The strategy aims to better
track results and ends assistance to seven countries.
Multilaterally, the strategy calls for giving developing countries a
larger say in IMF and World Bank decision-making, consolidating UN
operations in the field, improving consistency between the EU and
Dutch on foreign assistant programs, and increasing collaboration
within the framework of the OECD's Paris Declaration on Aid
Effectiveness.


2. (SBU) GONL actions to date underscore these new priorities,
including support for UN programs in Afghanistan, emergency aid to
flood victims in Africa, and an increase in the Dutch contribution
to the Global Fund to fight AIDS, malaria, and tuberculosis.
Koenders is likely to use his upcoming visit to Washington for the
IMF/World Bank meeting to showcase his views on the way forward for
development assistance. (See reftel for biographical information on
Koenders.) END SUMMARY.

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Consultations with Dutch Civil Society
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3. (U) While most of the new cabinet traveled around the
Netherlands during the first hundred days of the fourth Balkenende
government in February, Minister for Development Cooperation Bert
Koenders traveled to Africa -- visiting Uganda, Rwanda, Burundi,
Southern Sudan, Darfur and Chad -- to become more familiar with the
difficulties facing these countries and to study the effectiveness
of Dutch aid. In the Netherlands Koenders met with various NGOs,
business and religious leaders, and concerned citizens to seek their
views on the future direction of Dutch foreign development
assistance.


4. (U) To further engage the country on foreign development
assistance issues, Koenders signed, together with 36 prominent
businesses, associations, and institutions, a widely-publicized June
30 Schokland Accord. The accord outlined areas where governments,
business, and society could contribute to the Millennium Development
Goals (MDGs). Koenders also used this opportunity to announce a
Schokland fund of 50 million euros, which would promote -- through
the provision of knowledge and resources -- innovative ideas that
support one or more of the MDGs.

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Establishing Priorities for Development Assistance
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5. (U) Drawing on these consultations, Koenders presented to
Parliament on October 16 a new Dutch foreign development assistance
strategy. In an earlier meeting with Emboffs, Maarten Brouwer,
Director, Effectiveness and Quality Department, Dutch Ministry of
Foreign Affairs (MFA) explained that the following priorities would
not replace, but rather "intensify" existing efforts:

-- Address gender inequality and poverty by increasing educational
and employment opportunities for women and by focusing on family
planning.

-- Target fragile states and conflict areas by increasing their
capacity to absorb shocks caused by economic and natural disasters
and/or regional conflicts and terrorism. Address state-sponsored
violence, especially in Africa. (Koenders has stated previously
that corruption, although a major risk to development, should not
deter the Netherlands from aiding those most in need. He has also
promised the GONL will do more to monitor aid distribution.)

-- Address climate change by supporting the G8 target of reducing
emissions by 50 percent by 2050 and by advocating the "polluter
pays" principle (The GONL plans to investigate how to fund
developing country efforts to adapt to climate change and rising
energy prices. Koenders has established an inter-ministerial
working group, with participants from the ministries of Foreign
Affairs, Environment and Transport on climate change. One of the

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working group's goals is to encourage partner countries to embrace
sustainable energy).

-- Promote more evenly distributed economic growth and increased
equality and access to institutions and power in order to realize
economic growth while also reducing poverty.


6. (SBU) In the multilateral arena, Browers said Koenders plans to
pursue the following priorities:

-- Increase participation of developing countries in the
decision-making process at the IMF and World Bank;
-- Accelerate the pace of "one-UN" reforms that seek to consolidate
UN operations in the field (the Dutch are already financing a few
related pilots);

-- Maintain close cooperation with the EU to avoid inconsistency
between EU and Dutch foreign development assistance efforts; and

-- Increase collaboration within the framework of the Paris
Declaration on Aid Effectiveness and promote inclusiveness on
sensitive political issues.

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New Categories for Partner Countries
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7. (SBU) The new strategy will phase out, over the next four
years, assistance to seven of the Netherlands' 36 foreign assistance
development partner countries (Albania, Armenia, Bosnia-Herzegovina,
Cape Verde, Eritrea, Macedonia, and Sri Lanka). It divides the
remainder into three categories to help obtain "accountable
results," according to Brouwer. The first category will include
well-governed traditional aid recipients with large poverty problems
(Bangladesh, Benin, Bolivia, Burkina Faso, Ethiopia, Ghana, Kenya,
Mali, Mongolia, Mozambique, Nicaragua, Rwanda, Senegal, Tanzania,
Uganda, Yemen, and Zambia). The second category will include
fragile states and areas that lack the conditions to achieve the
MDGs (Afghanistan, Burundi, Columbia, Congo, Guatemala, Kosovo,
Pakistan, Palestine, and Sudan). A third category will include
countries that do not require significant aid, have annual GDP per
capita over $1,000, but risk falling back into poverty (Egypt,
Georgia, Indonesia, Moldova, Vietnam, South Africa, and Suriname).


8. (SBU) Local circumstances, along with Koenders' policy
preferences, will also determine in which category countries were
placed, Brouwer noted. The GONL did not plan to set quotas for the
number of countries in each category or the total budget for each
category. The GONL will release subject-specific papers in 2008
detailing how such a strategy would be implemented.

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Initial Actions Underscore Priorities
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9. (U) Since coming into office, Koenders has already undertaken
some significant decisions and actions that underscore his
Ministry's new priorities. His new strategy earmarked an extra 100
million euros ($141.8 million) for fragile states and an extra 375
million euros ($531.9 million) for sustainable energy investments to
confront the challenge of climate change. In July, Koenders
supported a UN proposal to appoint a special representative in Kabul
for UN programs in Uruzgan, and the GONL pledged 15 million euros
($21 million) through the Afghanistan Reconstruction Trust Fund for
programs in human rights, judicial reform, infrastructure, and
women's rights in Afghanistan. In September, the GONL gave 11
million euros ($16 million) in emergency aid to flood victims in
Uganda, West Africa, and Sudan. In October, Koenders announced an
increase of 50 million euros (about $70.9 million) over the years
2008-2010 for the Global Fund to fight AIDS, malaria, and
tuberculosis. The annual Dutch contribution will rise from $85.1
million in 2008 to an estimated $127.7 million by 2010.

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COMMENT: Positive Reactions to the Shift in Emphasis
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10. (SBU) Initial reactions to the strategy within the press,
Parliament, and the Dutch foreign development community have been
positive. Hivos -- one of the largest Dutch development NGOs with
750 partner organizations and active in 31 countries -- welcomed

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Koenders' "ambitious" plans, especially in the area of women's
rights. Further parliamentary reaction is expected when the
Parliament debates the Dutch foreign development cooperation budget
during the week of November 6. Koenders is likely to use his
attendance at the October 20-21 IMF/World Bank Annual meeting and
any discussion/meetings on the margins to showcase his views on the
way forward for Dutch as well as multilateral foreign development
assistance efforts. In particular, he can be expected to encourage
the World Bank
to focus on the poorest countries, fragile states,
climate issues, and accountability.

ARNALL