MINISTER OF PLAN WELCOMES CAS AND HIGHLIGHTS NEED FOR

UNCLAS SECTION 01 OF 02 KINSHASA 000812 SENSITIVE SIPDIS STATE PASS TO USTDA FOR LFITTS USAID FOR AFR/EA AND AFR/DP E.O. 12958: N/A TAGS: ECON ETRD EAID EINV PGOV PREL CG SUBJECT: MINISTER OF PLAN WELCOMES CAS AND HIGHLIGHTS NEED FOR PRIVATE SECTOR ENGAGEMENT ¶1. (SBU) Summary: Minister of Plan Olivier Kamitatu told USAID Director, DCM and Econcouns on September 18 that he welcomed the new Country Assistance Strategy (CAS) and hoped to engage international partners to improve DRC's investment climate and increase private sector development. Kamitatu identified the energy and river transport sectors and development of Lake Tanganyika as specific priority areas for increased private sector development. Decentralization was described by Kamitatu as the greatest risk to the country after the situation in Eastern Congo. Kamitatu acknowledged the need for improved statistical information to better coordinate and target development programs. End Summary. COUNTRY ASSISTANCE STRATEGY WELL RECEIVED -------------- ¶2. (SBU) USAID Director outlined the vision of the CAS, highlighting the priority areas of peace and security, governance, economic growth, health and education. The significant increase in U.S. bilateral assistance to the DRC was also noted by USAID Director and DCM. Kamitatu expressed support for the general objectives of the CAS and noted he was pleased that our vision aligned well with the GDRC's development priorities as outlined under the Poverty Reduction Strategy Paper (PRSP) and "Cinq Chantiers" or five pillars of the GDRC development strategy. BUT CHALLENGES REMAIN -------------- ¶3. (SBU) Turning to broader donor engagement and coordination, the Minister stated that his Ministry was developing a matrix to better evaluate international assistance and identify beneficiaries. However, limited capacity, weak statistical information and differing methodologies for data collection remain challenges. For example, Kamitatu noted concerns over the most recent Demographic and Health Survey (DHS),which measured national HIV prevalence rate in DRC at 1.5%, lower than previous surveys. As a result, some could believe that HIV/AIDS no longer represented a significant concern for the country. USAID Director noted that an HIV/AID survey will be conducted as part of PEPFAR programming, which will provide additional statistical information. ¶4. (SBU) Decentralization was described by Kamitatu as highly sensitive and the greatest risk for stability after the situation in the East. (Note: The DRC's 2005 Constitution requires provinces to transfer 40 percent of their revenues to the federal treasury. Implementation of this requirement has been slow, however, reflecting both limited capacity at the provincial level as well as politically sensitivities. End Note.) Kamitatu stated there needed to be more results, reforms, and efficiency to ensure the benefits of economic growth are distributed broadly. Kamitatu prioritized security, followed by the judicial sector, food prices and energy as key challenges for development. INVESTMENT CLIMATE KEY -------------- ¶5. (SBU) Kamitatu stated that he hopes to work with international partners to encourage private sector development. The need for a strategic vision with the private sector is needed, according to Kamitatu. He lamented that there had been few success stories since the 2006 elections. Energy and river transport (including river ports) were identified by Kamitatu as key areas for potential development. The potential development and exploitation of Lake Tanganyika was also highlighted. ¶6. (SBU) On energy, Kamitatu noted the need for a clearly defined policy for the short, medium and long-term. He told emboffs that the restructuring of the state-owned electricity utility, "Societe Nationale d'Electricite," (SNEL) and an international tender for the rehabilitation of the INGA I/II hydroelectric facility are slated by the end of the year. Kamitatu also expressed strong interest in working to develop the country's river transport sector, the traditional principal means for transportation of both goods and people. Increasing the capacity of ports, including river ports, would also help to open the country to international trade. ¶7. (SBU) Comment: With the DRC once again ranked dead last in the World Bank's Doing Business survey, Kamitatu's expressed interest in increasing private sector development to improve the DRC's investment climate is encouraging. Kamitatu rightly identifies both the energy and river transport sectors as key priorities for the development of the DRC's woefully inadequate infrastructure. Post KINSHASA 00000812 002 OF 002 appreciates USTDA support for SNEL and would welcome additional USTDA support in the area of river transport as part of broader USG efforts to promote U.S. commercial opportunities in the DRC and the country's economic development. End comment. BROCK