FOREIGN ASSISTANCE UNDER REVIEW IN MADAGASCAR

UNCLAS SECTION 01 OF 02 ANTANANARIVO 000258

SENSITIVE
SIPDIS

STATE FOR AF/E - MBEYZEROV
PARIS FOR RKANEDA
LONDON FOR PLORD

E.O. 12958: N/A
TAGS: PGOV MA
SUBJECT: FOREIGN ASSISTANCE UNDER REVIEW IN MADAGASCAR


1. (SBU) SUMMARY: Although many donors in Madagascar are
still deliberating on the future of their assistance
programs, several missions have moved to suspend support to
the High Transitional Authority (HAT) government and stop any
new projects, but maintain non-governmental and humanitarian
programs where possible. The notable exception is France,
which intends to continue all functioning pre-coup programs
without interruption; with France leading the upcoming
European Union political dialogue with the HAT, the EU will
likely be under pressure to follow suit. Most multilateral
agencies are still waiting for member governments to
determine their course of action, but in general, programs
that existed before are continuing, while new ones are being
put on hold. No donor has entirely suspended operations,
most have yet to determine their final posture, and all are
taking a "wait and see" approach to Madagascar's new
government. END SUMMARY.

BILATERAL MISSIONS
--------------


2. (SBU) France is the largest bilateral donor to Madagascar,
and will continue its programs uninterrupted to avoid
"penalizing the Malagasy population", per an April 3 press
release. The French embassy has indicated that it will not
begin any new projects, but all pre-coup programs will
continue, in line with EU policy. In coordination with the
IMF, budget support remains frozen since December 2008, but
will resume once the IMF does the same.


3. (U) Germany has "suspended its projects until further
notice", pending decisions at the German MFA and within the
European Union. The most immediate impact has been the
withdrawal of German-funded technical advisors within several
GOM ministries, and the continued freeze on budget support in
coordination with the IMF. Germany will continue projects in
the environmental domain that go directly to local
communities, but no new projects will be launched at this
time.


4. (U) Norway has frozen roughly USD $14 million in bilateral
aid programs that were going directly to government agencies,
including the Ministry of Education, the anti-corruption
bureau BIANCO, and the mining authority OMNIS. They continue
to fund their non-governmental programs through UNICEF and
the ILO, Norwegian missionaries, and the Electoral Institute
of South Africa (EISA). The Norwegian mission is maintaining
working level contact with the GOM as necessary, but not
engaging with the HAT.


5. (U) Japan has "suspended bilateral assistance"; for the
moment, that means they will continue honoring their current
contracts but will not begin any new projects. Japanese
humanitarian assistance largely focuses on food security and
funding for "microprojects" (which are not targeted to any
particular sector),but they also are in the evaluation phase
for larger infrastructure projects at the airport in Ivato
and the port in Tamatave. They will continue work on these
projects pending further decisions from Tokyo. The Japanese
government does not recognize the HAT, but contacts at the
embassy indicate that the infrastructure projects may
continue if the HAT does not oppose them.

MULTILATERAL DONORS
--------------


6. (SBU) The European Union, under the local leadership of
the French Ambassador, will be launching a political dialogue
with the HAT during the week of April 13. The EU is waiting
for this dialogue before taking any further decisions on aid
programs; in the meantime, their sizable assistance continues
uninterrupted (although the EU also froze budget support in
December with the IMF). This current status, and the
political dialogues, will last a maximum of 120 days, at
which point the EU will make a final determination on its
programs and relations with the HAT government. HAT PM
Roindefo Monja has indicated to the media that he considers
this a first move towards recognition from the international
community, although EU officials have asserted that
non-recognition of the HAT is still a possible outcome.


7. (U) The future of World Bank programs is currently pending
further discussion at the Washington level, which should take
place this week.


8. (U) Budget support from the International Monetary Fund

ANTANANARI 00000258 002 OF 002


remains frozen pending written responses from the GOM to
questions posed in December 2008 concerning budgetary
procedures, and tax and customs irregularities.


9. (U) African Development Bank National Coordinator Herivelo
Razafindrainibe has stated in the media that ADB programs
have been delayed by recent events, but that no decision has
been made to suspend their projects. ADB programs are aimed
at improving access to water and sanitation infrastructure,
and food security.


10. (U) The multi-donor funded Health Global Fund will
continue operations without interruption, while the Education
Fast Track Initiative (managed by the World Bank) is waiting
for a decision from the HAT government as to how it will
continue its programs.


11. (U) The United Nations Development Program, the
International Labor Organization, UNICEF, and the World Food
Program are continuing their programs, but without direct
interaction with the HAT where possible. UNESCO has suspended
is educational program, which largely consisted of direct
support to the government.
MARQUARDT