Identifier
Created
Classification
Origin
09DILI26
2009-01-28 08:15:00
UNCLASSIFIED
Embassy Dili
Cable title:
TIMOR-LESTE FORMALLY REQUESTS MCC THRESHOLD PROGRAM
how-toVZCZCXRO6614 RR RUEHDT RUEHLMC DE RUEHDT #0026/01 0280815 ZNR UUUUU ZZH R 280815Z JAN 09 FM AMEMBASSY DILI TO RUEHC/SECSTATE WASHDC 4210 RUEHLMC/MILLENNIUM CHALLENGE CORP INFO RUEATRS/DEPT OF TREASURY WASHINGTON DC RUEHDT/AMEMBASSY DILI 3714
UNCLAS SECTION 01 OF 02 DILI 000026
SIPDIS
EAP DAS MARCIEL; MCC FOR THRESHOLD PROGRAM UNIT; EEB/IFD/ODF; USAID PDELP/JLANG;
USTR EBRYAN; TREASURY BPELTON
E.O. 12958: N/A
TAGS: PREL PGOV MCC ECON EFIN TT
SUBJECT: TIMOR-LESTE FORMALLY REQUESTS MCC THRESHOLD PROGRAM
UNCLAS SECTION 01 OF 02 DILI 000026
SIPDIS
EAP DAS MARCIEL; MCC FOR THRESHOLD PROGRAM UNIT; EEB/IFD/ODF; USAID PDELP/JLANG;
USTR EBRYAN; TREASURY BPELTON
E.O. 12958: N/A
TAGS: PREL PGOV MCC ECON EFIN TT
SUBJECT: TIMOR-LESTE FORMALLY REQUESTS MCC THRESHOLD PROGRAM
1. Summary. Embassy Dili received on January 27, 2009, a
letter (see below) from Prime Minister Xanana Gusmao to John J.
Danilovich, CEO of the Millennium Challenge Corporation (MCC).
The Prime Minister accepts the offer of eligibility under the
MCC's Threshold Program in response to a Danilovich letter of
December 20, 2008. The Prime Minister designates Dr. Joao
Saldanha as the Timorese government's point of contact for the
Threshold Program. Embassy and USAID Mission Dili
representatives will meet with Dr. Saldanha and his team on
January 30 to initiate work towards an MCC Threshold Program
proposal. Prime Minister Gusmao also asks that the MCC again
review Timor's eligibility for an MCC Compact at the next
meeting of its Board of Directors. End summary.
2. The full text of PM Gusmao letter follows.
Begin text (quoted verbatim).
His Excellency John J. Danilovich
Chief Executive Officer
Millennium Challenge Corporation
January 23, 2009
Ambassador Danilovich:
This is to acknowledge that Timor-Leste government has received
your letter dated December 20, 2008 regarding Timor-Leste's
eligibility for Threshold Program. As you aware, Timor-Leste
have completed compact submission for MCC in 2008 which was
comprised of Constraint Analysis, Public Consultations, two
concept papers (on roads and vocational education) and a mini
concept paper for Strengthening Institutions to Fight
Corruption. A documentation of the new policy reforms was also
reported to the MCC in 2008.
Although we were disappointed for not being re-selected as
compact eligible country, we are happy to accept the Threshold
Program. For coordination of the Threshold Program and the
principal liaison with the MCC, Mr. Joao Mariano Saldanha, PHD
will continue to the government's Point of Contact within the
Ministry of Finance.
Finally, based on the results of compact development and Policy
Improvement Plans (PIPs) last year, we would like to propose to
the MCC Board to reconsider Timor-Leste's eligibility for
compact in its forthcoming meeting. However, signing of compact
assistance is subject to Timor-Leste passing of weak indictors.
Thank you very much and looking forward for another productive
year of cooperation.
Sincerely,
/s/
Xanana Gusmao
Prime Minister
Democratic Republic of Timor Leste
End text of letter.
3. Comment. One concern facing Dr. Saldanha and his colleagues
is their loss of policy leverage resulting from the MCC decision
not to renew Timor's Compact eligibility in December 2008. Last
year, the Minister of Finance and her MCC team used the "MCC
effect" - inter alia the promise of a large U.S. investment as
long as Timorese policy and performance improved - to press and
badger other ministers and members of parliament to make and
support policy advancements, from the creation of an
anti-corruption commission to accepting the principle of
competitive international bidding for major procurement
projects. To recover some leverage and encourage full and
enthusiastic participation in the development of a Threshold
proposal, Prime Minister Gusmao included in the last paragraph
of his letter a request that the MCC Board again review Timor's
eligibility for Compact status. As stated in his letter, the
Prime Minister recognizes that Timor cannot receive compact
eligibility again until it turns all the necessary indicators
green. Accordingly, in conversation with the ambassador, Dr.
Saldanha asked whether, even as work towards a Threshold Program
begins, the Board could soon issue a statement that reaffirms
the principle that Timor can again be eligible for Compact
status, and once eligibility is again secured, that negotiations
towards a compact will resume promptly.
4. Both the Embassy and USAID Mission in Dili will quickly
engage Dr. Saldanha on a Threshold Program proposal. At this
point of transition from working with the MCC Compact
Development team, to supporting the efforts of the MCC Threshold
DILI 00000026 002 OF 002
Program unit in Timor-Leste, Embassy Dili would like to
recognize and thank Vice President John Hewko and his team for
the tremendous energy, commitment and creativity they brought to
their work with Timor-Leste. We were very grateful throughout a
challenging year for their consistently prompt and constructive
assistance, wisdom and counsel. Moreover, the enthusiasm and
dedication that Darius Nassiry, Richard Day and many others
brought to their cooperation with the Timorese will have our
long-lasting admiration. The labors of the MCC Compact
Development Team built a great reservoir of confidence, trust
and a spirit of partnership among the Minister of Finance and
her MCC squad, and made Timor's difficult decision to support a
transition to a Threshold Program possible. End comment.
KLEMM
SIPDIS
EAP DAS MARCIEL; MCC FOR THRESHOLD PROGRAM UNIT; EEB/IFD/ODF; USAID PDELP/JLANG;
USTR EBRYAN; TREASURY BPELTON
E.O. 12958: N/A
TAGS: PREL PGOV MCC ECON EFIN TT
SUBJECT: TIMOR-LESTE FORMALLY REQUESTS MCC THRESHOLD PROGRAM
1. Summary. Embassy Dili received on January 27, 2009, a
letter (see below) from Prime Minister Xanana Gusmao to John J.
Danilovich, CEO of the Millennium Challenge Corporation (MCC).
The Prime Minister accepts the offer of eligibility under the
MCC's Threshold Program in response to a Danilovich letter of
December 20, 2008. The Prime Minister designates Dr. Joao
Saldanha as the Timorese government's point of contact for the
Threshold Program. Embassy and USAID Mission Dili
representatives will meet with Dr. Saldanha and his team on
January 30 to initiate work towards an MCC Threshold Program
proposal. Prime Minister Gusmao also asks that the MCC again
review Timor's eligibility for an MCC Compact at the next
meeting of its Board of Directors. End summary.
2. The full text of PM Gusmao letter follows.
Begin text (quoted verbatim).
His Excellency John J. Danilovich
Chief Executive Officer
Millennium Challenge Corporation
January 23, 2009
Ambassador Danilovich:
This is to acknowledge that Timor-Leste government has received
your letter dated December 20, 2008 regarding Timor-Leste's
eligibility for Threshold Program. As you aware, Timor-Leste
have completed compact submission for MCC in 2008 which was
comprised of Constraint Analysis, Public Consultations, two
concept papers (on roads and vocational education) and a mini
concept paper for Strengthening Institutions to Fight
Corruption. A documentation of the new policy reforms was also
reported to the MCC in 2008.
Although we were disappointed for not being re-selected as
compact eligible country, we are happy to accept the Threshold
Program. For coordination of the Threshold Program and the
principal liaison with the MCC, Mr. Joao Mariano Saldanha, PHD
will continue to the government's Point of Contact within the
Ministry of Finance.
Finally, based on the results of compact development and Policy
Improvement Plans (PIPs) last year, we would like to propose to
the MCC Board to reconsider Timor-Leste's eligibility for
compact in its forthcoming meeting. However, signing of compact
assistance is subject to Timor-Leste passing of weak indictors.
Thank you very much and looking forward for another productive
year of cooperation.
Sincerely,
/s/
Xanana Gusmao
Prime Minister
Democratic Republic of Timor Leste
End text of letter.
3. Comment. One concern facing Dr. Saldanha and his colleagues
is their loss of policy leverage resulting from the MCC decision
not to renew Timor's Compact eligibility in December 2008. Last
year, the Minister of Finance and her MCC team used the "MCC
effect" - inter alia the promise of a large U.S. investment as
long as Timorese policy and performance improved - to press and
badger other ministers and members of parliament to make and
support policy advancements, from the creation of an
anti-corruption commission to accepting the principle of
competitive international bidding for major procurement
projects. To recover some leverage and encourage full and
enthusiastic participation in the development of a Threshold
proposal, Prime Minister Gusmao included in the last paragraph
of his letter a request that the MCC Board again review Timor's
eligibility for Compact status. As stated in his letter, the
Prime Minister recognizes that Timor cannot receive compact
eligibility again until it turns all the necessary indicators
green. Accordingly, in conversation with the ambassador, Dr.
Saldanha asked whether, even as work towards a Threshold Program
begins, the Board could soon issue a statement that reaffirms
the principle that Timor can again be eligible for Compact
status, and once eligibility is again secured, that negotiations
towards a compact will resume promptly.
4. Both the Embassy and USAID Mission in Dili will quickly
engage Dr. Saldanha on a Threshold Program proposal. At this
point of transition from working with the MCC Compact
Development team, to supporting the efforts of the MCC Threshold
DILI 00000026 002 OF 002
Program unit in Timor-Leste, Embassy Dili would like to
recognize and thank Vice President John Hewko and his team for
the tremendous energy, commitment and creativity they brought to
their work with Timor-Leste. We were very grateful throughout a
challenging year for their consistently prompt and constructive
assistance, wisdom and counsel. Moreover, the enthusiasm and
dedication that Darius Nassiry, Richard Day and many others
brought to their cooperation with the Timorese will have our
long-lasting admiration. The labors of the MCC Compact
Development Team built a great reservoir of confidence, trust
and a spirit of partnership among the Minister of Finance and
her MCC squad, and made Timor's difficult decision to support a
transition to a Threshold Program possible. End comment.
KLEMM