Experts Meeting on Regional Economic Cooperation on

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E.O. 12958: N/A
TAGS: ECON EINV EFIN ETRD ELAB PGOV OPIC BE AF
SUBJECT: Experts Meeting on Regional Economic Cooperation on
Afghanistan (Corrected Version)


1. (SBU) SUMMARY: The European Commission hosted a meeting of
experts March 17 in Brussels to develop tangible areas for regional
projects centered on Afghanistan ahead of the Regional Economic
Cooperation Conference on Afghanistan (RECC),to be held in
Islamabad, perhaps in May. Experts represented the countries from a
region extending from India to Turkey, plus EU member states, the
G8, major development banks and the UN. Iran was also invited (with
the EU paying for travel) but did not attend. The discussion was
focused on finding areas where regional countries might find common
ground on joint projects to encourage Afghan and regional economic
growth. The conversations were substantive and identified areas for
continued work, but only a few concrete projects, mostly already in
train, were discussed. END SUMMARY

Background
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2. (SBU) At an informal Ministerial meeting in Paris December, 2008,
the European Commission offered to host experts to prepare concrete
proposals for a 3rd Regional Economic Cooperation Conference on
Afghanistan to be held in Pakistan. This Conference had been
scheduled for April 1-2 in Islamabad, but the scheduling of a March
31 Ministerial on Afghanistan in The Hague, along with the April 2
meeting of the G20 and the NATO Summit April 3-4 made that date
problematic. The Pakistani government hopes to finalize a new date
for the conference soon, with the Pakistanis proposing mid-May dates
to the Afghans. The latter pressed to maintain the meeting in
April, given the political calendar in Afghanistan. Nonetheless,
the March 17 Experts' Meeting proceeded pursuant to EU invitation.
The USG delegation was led by SCA PDAS Patrick Moon.

Atmospherics
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3. (SBU) The Central Asian presence was relatively robust, with
Brussels-based diplomats sitting in the Uzbekistan, Turkmenistan and
Kyrgyzstan chairs, but capitals sending Kazakhstan and Tajikistan
reps. Economic Affairs Director General Enayatullah Nabiel from the
Afghan Ministry of Foreign Affairs (MFA) and Joint Economic Affairs
Division Secretary Sohail Rehan from the Pakistani MFA led their
respective delegations. The Iran chair was empty, an absence
Meeting Chair James Moran (Asia Director for Commission External
Relations) attributed to a missed flight on the part of the putative
Iranian rep.


4. (SBU) At the opening of the meeting, World Bank and Commission
speakers encouraged Afghan and Pakistani officials to work together
to address the "soft underpinnings" of economic development, such as
convergence in customs procedures, transportation regulations, and
border concerns that will in turn build an infrastructure that will
support "bolder" reconstruction projects. Five working group
sessions (trade and transit, people and skills, food security,
infrastructure and energy, and drugs) then convened. The outcomes
of the working groups will be summarized in a letter from the
Commissioner for External Affairs to the hosts of the Regional
Conference with the proposed follow work. Paragraphs 5 to 15 below
present the oral summaries provided at the conclusion of the experts
meeting and are expected to provide the grist for the EU letter.

Trade and Transit
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5. (U) The Afghanistan Pakistan Transit Agreement (APTA) is a key
building block for future trade and economic cooperation and
regulatory convergence and the parties were encouraged by the
experts to rapidly conclude APTA negotiations. This agreement will
be a useful model in the region and an international effort can and
should seek to replicate the agreement with other neighbors. In
addition, the experts agreed that donors should design and support a
project to develop cooperation and harmonization of regional
trucking procedures, licensing, regulations, and standards.


6. (U) Countries in the region should also ensure coordination and
allocation of responsibilities among agencies operating at border
points. By providing national clarity on those responsibilities,
they can also identify focal points for cross border coordination
and facilitate sustained data exchange, dispute resolution, and
sharing of best practices, possibly by revisiting a project to
establish a customs academy with regional input. Experts
highlighted problems with transport of an Indian 250,000 metric ton
wheat donation to Afghanistan and said it should be a test case of
how the three countries can work together flexibly to overcome trade
and transport obstacles. They expressed hope that the transaction
could be completed before the Regional Conference.


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Food Security
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7. (U) Experts agreed on the need to target multiple sectors to
lower the high rate of food insecurity among the Afghan population.
Primarily, efforts should be directed at facilitating trade,
increasing agricultural productivity, augmenting humanitarian
assistance, expanding Afghan capacity to store food commodities,
leveraging private sector activities, and improving animal and plant
health. Participants cited a number of examples from the region to
expand upon including free trade zones along border and bridge
passes on the Afghan/Tajikistan border; the South Asian Association
for Regional Cooperation (SAARC) regional food bank; and the
Turkey-Afghanistan-Pakistan Trilateral partnership.

People and Skills
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8. (U) Countries in the region need to forge a commitment to enhance
and draw on local skills to provide vocational training and to fill
gaps in trade and craft expertise. Participants recognized that
the multiplicity of capacity development models pursued by various
donors cried out for an effort to establish greater coherence and to
focus planning efforts on achieving swift, acceptable, and
recognizable impacts on the lives of Afghans.


9. (U) Afghan DG Nabiel outlined a project to develop and draw on
the capacity of returnees for job creation and economic development.
Experts expressed strong support for the project, and suggested it
could be expanded beyond returnees to the general population.
Nabiel agreed, but said any expansion of the proposal beyond its
planned scope would necessitate additional funding. Another
existing project that participants agreed merited consideration at
the RECC is the regional approach of the Aga Khan
Foundation-sponsored University of Central Asia and its value as a
model for the establishment of vocational schools throughout the
region. Related to vocational training, it was agreed an inventory
of relevant training materials available in Dari and Pashtun would
be useful.

Infrastructure, Energy, and Water
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10. (U) Experts reported progress on developing the Central
Asia-South Asia Electricity transmission system, and the four
involved countries - Kyrgyz Republic, Tajikistan, Afghanistan, and
Pakistan - confirmed their interest and support. The World Bank
representative discussed efforts to refine the costs and size of the
project in light of the available electricity surpluses for export
and the reduced financial commitment of the Asian Development Bank
(ADB),which was absent from the meeting.


11. (U) Participants called attention to the opportunities for
bilateral and multilateral donors to contribute to measures to
address particular investment security risks and support of Afghan
payments. The Commission indicated it would work with the European
Investment Bank (EIB) to determine whether it might participate in
the funding and UNAMA suggested it would work with the ADB and other
potential donors. The World Bank expressed hope that a next round
of commitments advancing the project would be finalized at the
RECC.


12. (U) A number of participants emphasized that stakeholders and
international financial institutions should energize the
Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline project at
the RECC. The $7.6 billion pipeline will provide natural gas to
Afghanistan, Pakistan, and India, with construction expected to
begin on the oft-delayed project in 2010. Pakistan's Rehan
reiterated that TAPI was "a very important project" to the
Pakistanis. The Turkmen representative did not comment on the
project.


13. (U) Afghanistan and Pakistan also agreed that the extension of
the Pakistani railhead from Torkham to Jalalabad should be a
priority. UNAMA said it will work to further clarify the scope of
this project and the possibility of initiating a feasibility study.


14. (U) On water, Pakistan and Afghanistan agreed it was not an
appropriate topic for the pending RECC, although Afghanistan noted
it had begun to look at the requirement for capacity development
with select donors, such as the U.S. UNAMA highlighted the need for
any Afghan government approach to donors to be well-coordinated to
avoid confusion.

Drugs

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15. (U) Participants underlined the need to build law enforcement
capacity in a regional context in order to improve operational
cooperation and intelligence sharing. The Good Performer Initiative
to benefit poppy-free provinces should be extended to look at ways
to stimulate integrated rural development. Experts also agreed that
action on key precursors should be taken through increased support
of the United Nations Office of Drugs and Crime (UNODC) Rainbow
Strategy, including the TASCIT program for regional targeting and
for its second phase of mobile teams with more targeted, intel-led
operations.

Comment
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16. (SBU) The experts meeting provided an opportunity to review
efforts to spur regional cooperation and identify tangible projects.
While the discussions were substantive, they served largely to
underline the status of ongoing efforts and the limited commitment
to cooperation by regional countries. There is reasonable potential
that, having hosted this meeting, the European Commission will take
more ownership in the effort. The UN Assistance Mission in
Afghanistan also recognizes that it needs to be more active as well.
More than two years after the Delhi Conference, with prospects for
holding the 3rd conference in the near future uncertain, the EU
meeting served a useful purpose in renewing focus on regional
economic activity. The effort to find a strong set of concrete,
implementable projects that are visible to Afghans as signs of
support and progress, however, remains pretty elusive.

MURRAY