DEPUTY SECRETARY LEW AND PRIME MINISTER MELES

UNCLAS SECTION 01 OF 02 ADDIS ABABA 001526

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: EAID PHUM PGOV ET
SUBJECT: DEPUTY SECRETARY LEW AND PRIME MINISTER MELES
DISCUSS U.S. ASSISTANCE TO ETHIOPIA


1. (SBU) Summary. Prime Minister Meles told visiting
Deputy Secretary Lew on June 29 that he was grateful for U.S.
assistance to Ethiopia, and they both agreed that shifting
from emergency food aid to sustainable agriculture
development should be a priority for Ethiopia. Meles was
comfortable with U.S. provision of humanitarian aid to
Ethiopia, but worried that development aid might be tied to
human rights and democracy conditions. Meles made a case for
direct U.S. assistance to Ethiopia, rather than going through
NGOs who, he said, ate up part of the aid in administration
costs. However, Meles was concerned that a shift away from
emergency aid would expose the support to political
conditions from the U.S. Congress that were "unhelpful," and
based on "wrong" ideas. Deputy Secretary Lew assured Meles
that Ethiopia remained a strategic partner of the U.S., but
he noted that Washington had concerns about the direction of
political space for the opposition and increasing
restrictions on NGOs. He urged Meles to ease the
restrictions and release imprisoned opposition leader
Birtukan Mideksa, so that the 2010 elections would be a
success. End Summary.

Sustainable Agriculture Development Needed for Ethiopia
-------------- --------------


2. (SBU) Deputy Secretary Lew opened by explaining to the
Prime Minister that the United States was looking at
reforming the way it provided foreign assistance, and he said
one of the U.S. goals for Ethiopia was to move from emergency
food assistance to sustainable agriculture development.
Meles agreed that there was a need for agriculture
development in Ethiopia where 85 percent of the population
were small scale farmers. He went on to note that this kind
of development required more investment than the Ethiopian
government could afford, and he asserted that the donor
community had failed to live up to its commitments in
Ethiopia. He said the donor community had agreed to provide
40 percent of Ethiopia's needs, while his government had
agreed to provide the remaining 60 percent (Note: We are
unaware of such an agreement. End Note.). He insisted that
Ethiopia had kept its side of the bargain, but the donors had
not. He complained that the donors were too erratic, and
that there was "room for improvement."

Room for Expansion in the Health Arena
--------------


3. (SBU) Deputy Secretary Lew said improving health care in
Ethiopia was another U.S. priority. Meles responded that he
was grateful for the assistance the U.S. provided,
particularly under PEPFAR, and he said the Ethiopian
government had good coverage of the rural areas, but not in
the urban areas. Meles thought that PEPFAR aid could be more
useful if it included programs to develop the pharmaceutical
industry in Ethiopia to allow the manufacture of generic
medicines.

Meles: The U.S. Should Provide Direct Assistance...
-------------- --------------


4. (SBU) Meles stated that the provision of direct
assistance to the Ethiopian government would be more
efficient than using NGOs who ate up a large proportion of
the support with administration costs. He noted that the
United States was the only donor country that Ethiopia
"allowed" to use NGOs, and he upheld the British practice of
providing direct budget support as a model Washington should
follow. Meles said there were "thousands" of NGOs in
Ethiopia, and that this produced overlap and unnecessary
"reinventing of the wheel." Deputy Secretary Lew responded
that while direct support had some advantages, the U.S. would
continue to balance its assistance between the Ethiopian
government and NGOs, particularly when the government lacked
capacity to absorb direct funding.

...Without Conditions
--------------


5. (SBU) The Prime Minister again acknowledged the need to
move from emergency assistance to sustainable development,
but he cautioned that the move had "certain risks," as he
believed that moving to the latter exposed aid to the

ADDIS ABAB 00001526 002 OF 002


imposition of political conditions by the U.S. Congress. As
an example, Meles referred to H.R. 1125 Omnibus
Appropriations Act, 2009 which required congressional
notification for the provision of military assistance to
Ethiopia, Zimbabwe, and Sudan, among others. Meles
misinterpreted the act to be a prohibition of all military
assistance beyond current programs to Ethiopia. Meles
complained that U.S. support in recent years had been prone
to "surprises" for Ethiopia, including H.R. 1125, a condition
he wanted to avoid in the future. Meles also complained that
listing Ethiopia together with Sudan and Zimbabwe was unfair
to Ethiopia. Deputy Secretary Lew and Ambassador Yamamoto
reminded Meles that the legislation merely required
congressional notification on assistance to Ethiopia, a
common practice in Washington, and that it did not prohibit
any type of aid.


Meles: "Birtukan Will Stay in Prison"
--------------


6. (SBU) On the domestic political front, Deputy Secretary
Lew assured Meles that Ethiopia remained a vital strategic
partner of the United States, and did not equate Ethiopia
with Zimbabwe and Sudan, but he emphasized that as partners,
Washington had concerns about the direction of the domestic
political environment within Ethiopia. Specifically, the
Deputy Secretary said with the 2010 elections rapidly
approaching, Washington wanted to see the political space
expanded, and see opposition leader Birtukan Mideksa released
from prison. Meles chose not discuss the issue of closing of
political space, but provided an extended explanation of why
Birtukan would now serve out her life sentence. Meles said
Birtukan had been playing "political games," and had violated
the terms of her pardon. Therefore, he insisted that she
would remain in prison, and that this was an issue where
Washington and the U.S. congress was "wrong." Deputy
Secretary Lew pushed back and again urged Meles to reconsider
this issue.


7. (U) Deputy Secretary Lew cleared this cable.
YAMAMOTO