Identifier
Created
Classification
Origin
08WINDHOEK337
2008-10-24 15:45:00
CONFIDENTIAL
Embassy Windhoek
Cable title:  

NAMIBIA MCA COMPACT: THE HARD ROAD TO RATIFICATION

Tags:  KMCA PGOV ECON WA 
pdf how-to read a cable
VZCZCXRO3601
PP RUEHDU RUEHMR RUEHRN
DE RUEHWD #0337/01 2981545
ZNY CCCCC ZZH
P 241545Z OCT 08
FM AMEMBASSY WINDHOEK
TO RUEHC/SECSTATE WASHDC PRIORITY 0128
INFO RUCNSAD/SOUTHERN AFRICAN DEVELOPMENT COMMUNITY PRIORITY
RUEHLMC/MILLENNIUM CHALLENGE CORP PRIORITY
C O N F I D E N T I A L SECTION 01 OF 02 WINDHOEK 000337 

SIPDIS

E.O. 12958: DECL: 10/24/2018
TAGS: KMCA PGOV ECON WA
SUBJECT: NAMIBIA MCA COMPACT: THE HARD ROAD TO RATIFICATION

REF: A) WINDHOEK 335 B) WINDHOEK 331

WINDHOEK 00000337 001.2 OF 002


Classified By: Charge d'affaires, a.i. Matt Harrington for reasons 1.4
(b) and (d).

- - - -
Summary
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C O N F I D E N T I A L SECTION 01 OF 02 WINDHOEK 000337

SIPDIS

E.O. 12958: DECL: 10/24/2018
TAGS: KMCA PGOV ECON WA
SUBJECT: NAMIBIA MCA COMPACT: THE HARD ROAD TO RATIFICATION

REF: A) WINDHOEK 335 B) WINDHOEK 331

WINDHOEK 00000337 001.2 OF 002


Classified By: Charge d'affaires, a.i. Matt Harrington for reasons 1.4
(b) and (d).

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Summary
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1. (C) Charge d'affaires called on Namibia's Millennium Challenge
Account (MCA) Compact lead negotiator Franz Kapofi on October 23 to
discuss the prospects for the Compact's ratification before Parliament'
December-January recess. Charge emphasized that failure to ratify the
Compact before the recess could put the funding at risk. Kapofi lamente
that critics of the MCA program are likely winning in the court of
Namibian public opinion at the moment. While some senior leaders have
innocently misconstrued aspects of the MCA Compact, Kapofi argued
other critics (politicians) have deliberately distorted the Compact for
their own political gain. These critics, he noted, have resorted to
rekindling old "Cold War, anti-U.S." rhetoric - which still resonates
amongst many Namibians. Kapofi explained that he and his negotiating
team of civil servants have now been thrust into the position of having
to explain to the "politicians" the benefits of the MCA program and the
legal implications of international agreements, even though the
"politicians" had been fully briefed throughout the two-year Compact
negotiation process. Kapofi has until November 13, when Parliament is
set to resume debate on the Compact -- to clear up lingering questions
and to wrap up negotiation of the pending Program Implementation
Agreement (PIA) and tax agreement. Despite the criticisms raised to
date, Kapofi expressed optimism that the Compact would be ratified.
End Summary.

- - - - - - - - - - - -
Pressing the GRN to Act
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2. (C) Charge met with the Namibian Government's (GRN) lead negotiator
on the Millennium Challenge Account (MCA),Secretary to the Cabinet
Frans Kapofi, on October 23, to discuss the status of the ratification
of the MCA Compact. Charge was accompanied by the MCC Country Director
and econoff. Charge stressed that failure to ratify the Compact before
the Parliament's adjournment at the end of November could put the
program at risk. He made it clear the U.S. side is prepared to be

helpful in any way we can, and he encouraged the GRN to respond more
forcefully to the questions raised about the substance of the
Compact -- as well as the related Program Implementation Agreement
(PIA) and tax agreement. (Note: The SWAPO Youth League and other
critics have distorted language in the Compact and the draft PIA
to support their claim that the USG would purchase Namibia's "natural
treasures." The critics have focused on the Compact's language
exempting MCC from taxation and legal liability, the requirement that
private tour operators and conservancies be granted tourism concessions
adjacent to Etosha National Park and other parks, or exclusive access
to Etosha and other parks, and the supremacy of the MCA compact
over Namibian law (except for the constitution) End Note).

- - - - - - - - -
Back to Cold War
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3. (C) Kapofi responded that he was "frustrated" with the state of
affairs, noting that many of the accusations are the result of people
"misconstruing" certain aspects of the Compact and PIA. He noted that
even "people in government at the Cabinet level express misgivings
(about MCA)." Kapofi seemed perplexed by the attacks on the MCA
program, noting that Cabinet and many other senior officials were privy
to the details the MCA negotiating process as it occurred. He remarked
"I have never seen this (attacks on a major assistance package) before,
and I have been in government since 1990."


4. (C) Kapofi expressed consternation that some critics (mostly at th
Deputy Minister level) are deliberately attacking the MCA for political
reasons, in the hopes of raising their political stature. (Comment:
Kapofi was likely referring to Deputy Minister of Regional and Local
Government Kazenambo Kazenambo, a former SWAPO Youth League executive
committee member and Public Relations Manager for Namibian Wildlife
Resorts -- who is the only GRN official who has been openly critical of
the Compact, and who some believe leaked the draft PIA to the press.
End Comment). Kapofi noted these people are "reinforcing the
perception (that the USG is behind) a grand plot to gain a foothold in
Namibia." Kapofi remarked that "We are back to Cold War politics,"
noting that some senior officials are rehashing the 1980s when many in
the ruling SWAPO party saw the USG as on the "wrong side" of the
liberation struggle.

- - - - - - - - - - - - - - --
Public Believes the Criticisms
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5. (C) Kapofi acknowledged the attacks on the MCA were "reckless" but
that they had gained traction with the Namibian public. He speculated
that many Namibians had bought into some of the erroneous allegations

WINDHOEK 00000337 002.2 OF 002


about the Compact. He expressed his view that, if Parliament voted
"today" (October 23) the MCA Compact would not be ratified. (Note: Ther
was, in fact, a brief discussion in Parliament of the MCA Compact on
October 23. Despite claims in the press that the ruling party would
withdraw the Compact altogether, Parliament decided to postpone further
debate until November 13. End Note.) Despite the hiccups, Kapofi said
he thought Parliament would, in the end, ratify the Compact before the
December-January recess.

- - - - - -
Next Steps
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6. (C) In discussing the road ahead, Kapofi stressed that his team
would endeavor to resolve all lingering concerns in the two weeks befor
Parliament formally considers ratification. The first step, Kapofi
noted, was to "scrub" the current draft of the PIA and tax agreement
to make it more palatable for the "politicians." Kapofi noted that the
issue of Etosha concessions, exemption from taxation and liability, and
the supremacy of the MCA Compact over Namibian law are the thorniest
issues to overcome. Once his team had managed to secure clearance
at the political level of the GRN,s proposed amendments to the PIA and
tax agreement, Kapofi and his team would be able to share them with the
U.S. side. Kapofi commented that Namibia was "not attempting to reopen
the Compact, as yet." He added that he and other "bureaucrats" who
value the program were "doing (their) best to salvage the agreement."


7. (C) Charge emphasized that the USG was not prepared to reopen
negotiations over the Compact, an agreement that had taken two years to
complete. The MCC Director suggested that the Namibian negotiating team
keep the USG in the loop on its proposed changes to the PIA and tax
agreement throughout the process, as that could facilitate and speed
up U.S. approval. The MCC Director explained that the USG,s approval
process could take as long as the GRN's process and that Kapofi's team
should factor in time for the USG to review any proposed changes.

- - - -
Comment
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8. (C) Kapofi's candid comments regarding the status and politicizatio
of the MCA program were the most direct we have heard to date from a
senior GRN official. While ratification of the Compact still appears
likely, it is clear that Kapofi and his team have their work cut out fo
them. We believe Kapofi will make good faith efforts to sell the
program to the "politicians" he serves.


9. (C) In a call to Prime Minister Angula on October 24, we understand
that MCC CEO Ambassador Danilovic underscored the importance of
finalizing the PIA and tax agreement and ratifying the Compact before
the late November recess. Angula was receptive and pledged to make his
technical staff in the relevant ministries available to finalize
the outstanding agreements.

HARRINGTON