PRIME MINISTER MELES ON GOVERNANCE AND FOREIGN POLICY

UNCLAS SECTION 01 OF 04 ADDIS ABABA 001319

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: PGOV ECON PREL ET SO SU ER
SUBJECT: PRIME MINISTER MELES ON GOVERNANCE AND FOREIGN POLICY

SUMMARY
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1. (SBU) Prime Minister Meles Zenawi met with the joint Ambassadors
and Donors group on June 5, the first such meeting with this group
and the first in several years with any broad group of Ambassadors.
Organized by the American Embassy chair, Meles explained that
international observers will be invited to the 2010 elections, but
cautioned that they must be judges of the electoral process not
predictors of the results. Public sector-led growth under
government oversight and direction in banking, telecom and insurance
will remain unchanged, though the private sector will be developed
to attract investment and increase needed foreign exchange.
Finally, the Prime Minister urged the United Nations and the
international community to listen to, and support, the
Intergovernmental Authority on Development (IGAD) and African Union
call for sanctions against Eritrea for its destabilizing arms and
financial support of extremists in Somalia and in the region, and
the need to support the Somali Transitional Federal Government (TFG)
through a no-fly zone and port embargo to halt arms flows to
extremists who seek to destroy the TFG.



2. (SBU) Confident and precise in explaining his policy objectives
and the challenges Ethiopia faces, Meles' key message was to the
Ambassadors to be neutral in the upcoming national elections,
encourage the opposition not to boycott the elections, to support
the electoral process and understand the government will hold fair
and transparent elections. There may be problems, but it would be
the result of the lack of capacity, not the government's lack of
effort. Finally, he cautioned that any violence will be from the
opposition, the government is committed to holding peaceful
elections. End Summary.

PART I: GOVERNANCE - THE ELECTORAL PROCESS


3. (SBU) Prime Minister Meles Zenawi met with 30 Ambassadors and
Charges from the joint Ambassadors group (EPG - Ethiopia Partners
Group) and Donors Assistance Group (DAG) on June 5 for over two and
a half hours, arranged by the American Embassy, the chair for the
joint group. This was the first meeting with a large group of
diplomats in several years by the Prime Minister and the first time
the Prime Minister has ever met with the joint EPG/DAG, which
includes representatives of the United Nations, World Bank as well
as major donors and key embassies. Prime Minister Meles focused on
three areas: governance, sustainable economic development, and
regional issues. On governance, the Prime Minister said the
government learned from its mistakes in the 2005 national elections
which saw a dramatic increase in opposition representation in the
Parliament from 12 seats to over 170 seats in the 547 seat
parliament. The over 30 percent vote and seats won was the best
showing ever by Ethiopia's opposition. But, Meles said the
post-election violence was the result of opposition arrogance and
the meddling of international observers. The International
Republican Institute's (IRI) election observers said the 2005
elections would be fair only if the opposition won at least 30
percent of the seats and vote, which it did. EU chief observer, Ana
Gomes, a socialist EU parliamentarian from Portugal, declared the
opposition the winners of the 2005 elections based on urban polling
results, when it was clear from the Carter Center that the ruling
EPRDF had won (Note: Roughly 86 percent of the populace lives in
rural areas. End note).


4. (SBU) According to Meles, the 2005 violence, which led to the
deaths of 197 people, demonstrated that international observers must
focus on judging the electoral process and specifically the openness
and transparency in pre-election preparation including voter
registration and candidate registration, and in the conduct of the
elections. Meles made it clear that international observers must
not speculate on outcomes, must not focus on predictions of election
results, and must not attempt to sway voter opinion. Observers must
be neutral, judging only the electoral process, he stressed.
Whatever the electorate decides, the process must be respected.
Meles said the government will invite international observers, but
will be selective. He said IRI and the National Democratic
Institute (NDI),for instance, would not be invited, but the Carter
Center would.

GOVERNANCE - NEUTRALITY
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5. (SBU) Meles warned the diplomatic corps not to interfere in
Ethiopia's internal politics through support for the opposition, as
he argued it did in 2005. In 2005, Meles said some Embassies worked
with the opposition, coordinating meetings and unwittingly

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contributed to the violent aftermath of the elections by giving the
opposition false hope that these embassies would stand behind them.
After the elections, Meles said some Embassies demanded a one year
transition for the ruling Ethiopian People's Revolutionary
Democratic Front (EPRDF) coalition to cede authority to a unified
opposition group. Ana Gomes, in particular, advocated for this
position. Referring to the Carter Center report that the EPRDF had
won and noting that the opposition only obtained 30 percent of the
vote and seats, Meles said the activities of some of the Embassies
were not democratic. Elections must be free, fair and peaceful;
they cannot be a mechanism to replace an elected government.

GOVERNANCE - AMBASSADORS PRESS FOR INTERPARTY TALKS
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6. (SBU) Meles cautioned the Embassies not to encourage the
opposition to boycott upcoming elections or to intimidate the ruling
party through international pressure and support for the opposition.
The German Ambassador replied to the Prime Minister that the clear
message from the international community to the opposition is not to
boycott and to participate in dialogue with the government. In this
context, the questions from the Ambassadors stressed the importance
of the government and ruling party to engage in interparty talks
with the opposition, which have yet to begin, and to pursue any
charges of harassment. Further, there need to be terms of reference
which will allow for observers to judge the electoral process. The
German Ambassador also raised concerns over the draft anti-terrorism
law currently before parliament and recently passed laws. Meles
replied that the anti-terrorism law draft will be circulated to the
diplomatic corps and discussions on this law can take place after
everyone has reviewed the draft law text. Meles added that
interparty talks are guaranteed under the electoral process which
will promote a free, fair and peaceful election. He referred to the
recent national electoral law, noting that the opposition had vetted
the nine candidates who he was authorized to select to form the
board and that three of the members were opposition people.


7. (SBU) The problem is not the recent laws passed, but
implementation, Meles said. The electoral code of conduct is based
on the best international practices, but the Ethiopian electorate
needs to be educated. This will take time and education. There is
a tendency to "Ethiopianize" ideas borrowed or incorporated in the
laws. That only makes the situation confusing, complicates the
process, and leads to unintended consequences. It is in this
context that the electorate must be educated and understand what is
being adopted from other countries and why it must not be altered in
the implementation process. On the terms of reference for
international observers, Meles said the observers must also abide by
the TOR because Ana Gomes rejected the agreement and pursued her own
agenda in 2005.

PART II: Somalia Stalemate
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8. (SBU) Meles said in recent days Hizb al Islam and al-Shabaab
tried to control the central region of Somalia and choke off any
north-south movement. The sufi Alhu Sunna Wal Jama'a (ASWJ) stopped
the effort, giving the TFG breathing room in Mogadishu. It is
clear, Meles said, that al-Shabaab cannot, at this time, remove the
TFG and the TFG cannot defeat al-Shabaab. Meles said the African
Union Mission in Somalia (AMISOM) and ASWJ are elements that prevent
al-Shabaab from taking over Somalia. The United Nations must
support AMISOM with payments and support. The United Nations must
hear and support the call by IGAD and African Union states for a no
fly zone and blockade of some ports to prevent arms and financial
flows from reaching al-Shabaab. Eritrea must be stopped from
helping the al-Shabaab gain advantages. If AMISOM fails and if the
UN does not help Africa cut off assistance to the extremists then
al-Shabaab will win. Meles raised, but did not expand on, the
importance of the TFG reaching out to anti-al-Shabaab elements, like
ASWJ, which would help the TFG cause.


9. (SBU) Eritrea remains a major obstacle to defeating al-Shabaab,
Meles argued. The Prime Minister said it was regrettable that the
UN only "barked" but did not "bite" Eritrea in not enforcing UN
Security Council Resolution 1862 to sanction Eritrea for holding
Djiboutian territory. The lack of UN action has emboldened
President Isaias even further to destabilize the region, Meles
asserted. He again urged the ambassadors to support IGAD and the AU
in controlling Eritrea. Meles added that IGAD and the AU cannot
understand how the international community overlooks Eritrea's
jailing of its own ministers and people. The EU recently granted
120 million Euros in assistance to Asmara with no criticism of
Eritrea's abusive human rights record. Sweden gave assistance
without criticizing Eritrea for the jailing of a Swedish-Eritrean

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reporter for the past several years.


10. (SBU) On Sudan, Meles speculated that in 2011 the Comprehensive
Peace Agreement (CPA) will not be implemented and that 2011 could
mark a potentially devastating time of instability in Sudan and the
region. He touched on the International Criminal Court (ICC)
warrant for President Bashir and the need to find some compromise
without exacerbating an already tense situation.

PART III: SUSTAINABLE ECONOMIC DEVELOPMENT
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11. (SBU) The Prime Minister said he saw no reason to change the
current public sector-led growth strategy in which government
oversight and direction in the banking, telecommunications, and
insurance sectors will remain unchanged. He said the private sector
will be developed to attract investment and increase needed foreign
exchange. He was encouraged by the expanded relations with India
and Turkey and was hopeful that Ethiopia's economic development will
benefit. He also expressed appreciation for the establishment of
the American Chamber of Commerce as a new paradigm for conducting
business and praised the Netherlands on export programs.


12. (SBU) Meles said the balance of payments problem is being
addressed. Inflation will be under control this year to single
digit levels, and the government will keep the deficit under 1.5
percent of GDP. This will entail tighter controls over money and
deficit spending. The Ethiopian birr has faced a 17 percent
devaluation, but more work will be necessary to tackle the
imbalances in the economy. The lack of foreign exchange is being
addressed through talks with the IMF. One problem to the deficit
and lack of foreign currency has been poor exports. But Meles said
the main problem is not the worldwide economic downturn but
fundamental problems in Ethiopia's export market. Changes, better
regulation, and new approaches are being taken. He pointed to
coffee as an example of the changes in this sector that are taking
place. The changes will hopefully make coffee exports and other
exports much better in the coming year. Support from the African
Development Bank and World Bank will also be important.


13. (SBU) Meles noted that tax collection is terrible. Better tax
collection is important. He did note that the revenue service has
been overly aggressive creating problems for individuals and
companies who are being unfairly over-taxed, but noted that the
legal process can help resolve these types of problems. To bring in
more investment, Meles said the government is promoting joint
ventures. No foreign investor wants Ethiopia's outdated textile
factories, but through joint ventures and better deals on sales or
leases, the government hopes to privatize the textile and other
sectors.

COMMENT
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14. (SBU) A few Ambassadors, including the U.S., were taken aback by
the firm warning by the Prime Minister on the international
community's meddling in the last election, responsibility for the
violence, and restrictions in the 2010 elections that could make
election observing very restricted. This may not be a factor since
the EU does not plan to send observers and there may be not
observers from the U.S. The Carter Center may pass on the 2010
elections because it may be unwilling to jeopardize its health
sector programs by engaging in elections work in Ethiopia.


15. (SBU) The series of laws passed since 2010 while termed as
supportive of creating an equal playing field in fact has impacted
most on the opposition parties. Forbidding outside funding for
parties and democratic activities is in sharp contrast to the ruling
party's ability to secure funds from enterprise corporations which
collect funds from government controlled sectors. The opposition,
which got most of its funds from the diaspora in 2005, has minimal
access to funding in Ethiopia. The Prime Minister's assertion that
the laws are sound but implementation difficult and that voter
education is critical can be met if the government aggressively
investigates charges of harassment and intimidation. In the 2009
local elections the opposition secured less than 1/100 of one
percent of contestable seats, though most of the opposition parties
boycotted the elections. There was almost no investigation of
charges by opposition parties on registration irregularities,
intimidation of opposition parties, inability to register opposition
candidates or charges of unfair arrest of supporters and candidates.
To date, we have not seen any reports addressing the charges raised
by the opposition parties.


16. (SBU) Without Europe's active participation, it will fall

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primarily on the U.S. to lead efforts with the government on the
2010 elections and to help expand political space for the
opposition. In this context, we intend to meet with the newly
formed Forum for Democratic Dialogue, which is a mechanism to unite
the opposition parties in the 2010 elections when they have selected
their own leaders and drawn up a plan on how they will deal with the
2010 elections. Further, we remain the lead in advocating for
interparty talks, scheduled for July, and clear commitments by the
government to investigate immediately any charge of harassment or
problems raised by any group or individual. End Comment.

YAMAMOTO