DEMARCHE ON PAKISTAN DONORS CONFERENCE IN TOKYO (APRIL 17)

UNCLAS SECTION 01 OF 02 BRUSSELS 000405

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: EAID ECON EFIN IBRD IMF PK EUN
SUBJECT: DEMARCHE ON PAKISTAN DONORS CONFERENCE IN TOKYO (APRIL 17)

REF: SECSTATE 24367

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1.(SBU) SUMMARY. USEU, along with the Japanese Mission to the
European Union, presented subject demarche to European Commission
(EC) counterparts. While the EC indicated interest in the upcoming
Tokyo donors conference and expressed hope that it will be
successful, they noted that the composition of the EC delegation and
the size of its pledge have yet to be determined. EC counterparts
also highlighted the fact that the European Union is Pakistan's
largest trading partner. In addition, they noted that the first
ever EU-Pakistan summit is likely to be held in June, toward the end
of the Czech Presidency. END SUMMARY.


2. (SBU) As requested, US Mission to the EU (USEU) delivered subject
demarche to the European Commission (EC) on the upcoming Pakistan
donors conference scheduled to take place in Tokyo on April 17. A
colleague from the Japanese Mission to the European Union also
participated in the meeting, ensuring that the demarche was
delivered jointly.


3. (SBU) EC counterparts expressed interest and support, though
noting that the timing over Easter is not fortuitous and that it is
not yet certain who will represent the EC. Japan was also asked to
provide details as soon as possible on practical arrangements,
including the program, location and schedule.


4. (SBU) According to counterparts, the EC funding system is not
particularly flexible and expectations on possible EU support need
to take into account the rigidities of the EC budgetary process.
Current EC assistance to Pakistan is on the order of 50 million euro
annually, a figure which has been increasing in recent years. Also,
the European Investment Bank (EIB) is contemplating an energy
(hydro-power) loan to Pakistan. More broadly, though, the
Commission should typically not be viewed as an international lender
except in exceptional cases.


5. (SBU) As far as non-financial assistance is concerned, EC
counterparts noted that the European Union is Pakistan's largest
trading partner. Also, the first ever EU-Pakistan summit will
likely take place in late June under the Czech presidency in either
Prague or Brussels. Deliverables need to be developed in advance of
that summit and may include a trade component, though it would be
premature to announce the details in Tokyo.


6. (SBU) EC representatives will be attending the Friends of
Pakistan expert meeting held in Abu Dhabi on April 1-2 and believe
that meeting can help inform the Tokyo discussion. However, the
fact that the two events are separated by only two weeks makes it
unlikely that the EC will make any decisions based on the Abu Dhabi
meetings in time to have an impact in Tokyo.


7. (SBU) Following the discussion of the Pakistan donors conference,
EC counterparts noted that they had been approached by Pakistan
about contributing to provincial police training, especially in the
Northwest Frontier Province (NWFP),and asked if the United States
had received a similar request.


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8. (SBU) The EC also expressed interest in the idea put forward in a
previous Friends of Pakistan meeting about a Frontier Trust Fund,
possibly managed by the World Bank, and would like to know if the
United States still supports it. According to the EC, they are very
interested in the idea but their World Bank contacts in Pakistan had
indicated little or no progress so far. They requested further
details from the United States on whether or not the trust fund
concept is likely to move forward.


9. (SBU) Finally, the meeting closed with a brief discussion of
Afghanistan. Most notably, EC counterparts expressed interest in
what they interpreted as signals that the USG may be willing to
consider dialogue with some elements of the Taliban. While views
among the donor community in Kabul vary, it was suggested that the
position of the Taliban is now stronger than was the case even a
couple of years ago. The fact that Taliban-led actions are taking
place simultaneously in Kabul, southern Afghanistan and Pakistan
point to some degree of strategic coordination among the main
Taliban players. Also, while discussions with the Taliban might
previously have focused exclusively on Afghanistan it is
increasingly clear that issues related to Pakistan might need to
figure in any talks as well.

MURRAY