WORLD BANK: PROGRAMS IN ERITREA

C O N F I D E N T I A L ASMARA 000079

SIPDIS

SIPDIS

DEPARTMENT FOR AF/E
LONDON AND PARIS FOR AFRICA WATCHER

E.O. 12958: DECL: 02/18/2018
TAGS: ECON PREL ER
SUBJECT: WORLD BANK: PROGRAMS IN ERITREA

Classified By: Ambassador Ronald K. McMullen for reason 1.4 (d)


1. (SBU) Summary: Poloff met with visiting World Bank
Economist Tracy Lane and Eritrean World Bank Country Director
Chris Lovelace on February 14 to discuss FY2008 and proposed
FY2009-2010 projects in Eritrea. Lane discussed two repeat
projects, time tables, and costs, as well as the Bank's
strategy for working with the Government of the State of
Eritrea (GSE). She also sought Department assistance to
influence the American Executive Director to support the
Bank's plan. End Summary.


2. (SBU) Lane informed Poloff the World Bank's proposed
assistance will not include good governance and transparency
projects due to the GSE's complete lack of interest in
macroeconomic reform. Instead, the Bank will pursue a
pragmatic approach, stressing repeat projects directly
helping Eritrean people and allowing the Bank to stay engaged
in the country. In FY2008, twenty-five million dollars has
been proposed to extend the national electrical grid to 21
additional villages and stock spare parts for diesel
generators. (Note: This funding continues a World Bank
project which has already connected 59 villages to the grid.
End Note.) Twelve million dollars has been proposed to
continue Integrated Childhood Development projects, which
include education, health, and vaccination programs. The
entire thirty-seven million must be allocated by June 2008 in
order to avoid forfeiture; GSE stalling caused the delay,
which has condensed a six-to-eight month process into four
months.


3. (SBU) Future proposed projects for FY2009 through FY2010
include upgrading the national telecommunications
infrastructure by laying fiber optic cable between Eritrean
cities, with the GSE funding the international connection,
presumably using one of the underwater Red Sea cables. Other
World Bank projects include paying salaries for expatriate
professors providing instruction at tertiary schools and
installation of solar powered irrigation systems.


4. (SBU) Lane requested Department support in lobbying the
American Executive Director of the World Bank to support
their Eritrean strategy. She stressed that low risk/low
return projects were the best way to maintain Bank engagement
in Eritrea. Poloff informed Lane that the Embassy would
relay her request to the Department.


5. (C) Comment: The GSE has proven a notoriously difficult
partner in programs not included as priorities in its own
national plans. Further, it will not support any
donor-driven good governance or democracy program. The World
Bank's low risk program approach seeks to maintain its
presence during an extremely difficult political period while
providing greatly needed assistance to a deprived and
oppressed population. End Comment.
MCMULLEN