AMBASSADOR MEETS MOCI, DISCUSSES TRADE, CORRUPTION

UNCLAS SECTION 01 OF 02 KABUL 001392 DEPT FOR SRAP, SCA/FO, SCA/RA, AND SCA/A DEPT PASS FOR AID/ANE DEPT PASS USTR FOR DELANEY AND DEANGELIS DEPT PASS OPIC DEPT PASS FOR TDA FOR STEIN AND GREENIP USOECD FOR ENERGY ATTACHE CENTCOM FOR CSTC-A NSC FOR JWOOD TREASURY FOR MHIRSON, ABAUKOL, AWELLER, AND MNUGENT COMMERCE FOR HAMROCK-MANN, DEES, AND FONOVICH SENSITIVE SIPDIS E.O. 12958: N/A TAGS: ETRD EINV EFIN EAID AF SUBJECT: AMBASSADOR MEETS MOCI, DISCUSSES TRADE, CORRUPTION ROZS, TRADE, CAPACITY BUILDING, CORRUPTION TOP MOCI AGENDA ¶1. (SBU) Ambassador Eikenberry, accompanied by Deputy ECOUNS note taker, met with Minister of Commerce and Industry (MOCI) Wahidulla Sharani for a courtesy call on May 28. Sharani briefed the Ambassador on Afghan thinking on Reconstruction Opportunity Zones (ROZs),WTO accession the status of Afghan-Pakistani Transit Trade Agreement (APTA) discussions, and the need for technical assistance within the MOCI. Sharani was receptive to the Ambassador's comments on invigorating "Afghan First" procurement polices, as well as the need to tackle corruption both within MOCI and in Afghanistan in general. The meeting was both cordial and informative, and the Minister and Ambassador agreed to stay in close contact as movement on ROZs in particular progressed. In addition, Sharani's take on corruption at the Ministry were followed by a more informal but no less telling general discussion of government corruption between the Ambassador and local bazaar vendors in a surprise stop on Darulaman Road. While not a scientific survey, the "everyman" view from the bazaar of the Afghan government nonetheless made clear that corruption was foremost on the minds of at least this small sampling of the Afghan electorate. AFGHANS ANXIOUS FOR PROGRESS ON ROZ LEGISLATION ¶2. (SBU) Sharani began the meeting with a briefing on his recent meetings in Washington on ROZs. He noted that his meetings with Congress, State, USTR and Commerce were helpful, but that he hopes to see movement forward on the legislation soon. Sharani said that GIRoA has already identified six sites for ROZs: Kandahar, Khost, Jalalabad, Kunduz, Parwan, and Herat. (NOTE: Upcoming SEPTEL will inform Washington of Embassy views on ROZs and how best to achieve fast results. End Note) ¶3. (SBU) The Ambassador noted USG support for ROZ legislation and the efforts of State and other cabinet agencies to press Congress to pass the legislation. The Ambassador also emphasized the positive role ROZs can play in the counter-insurgency campaign and for their consideration in integrated civ-mil plans. ¶4. (SBU) Sharani said that the U.S military could be helpful in working to develop facilities at Hairatan, Toragundi, and Sher Khan Bandar as part of an overall export-oriented trade development strategy. WTO ACCESSION, ROZ IMPLEMENTATION RELY ON CAPACITY BUILDING... ¶5. (SBU) Sharani said his conversations in Washington with State and USAID focused on a USAID-funded project to support trade policy capacity building within MOCI. Sharani said that the Memorandum for Foreign Trade Regime (MFTR),a major first step toward gaining WTO membership, would be submitted in Geneva next week. He said GIRoA has assembled a team of all government stakeholders to work on accession. At the same time, he noted that the human capacity of MOCI to deal with these increasingly complex trade issues was lacking, and urged the Ambassador to shake loose approval for the USAID Trade Assistance (TAFA) program. Sharani also emphasized the role of the private sector in development and lauded efforts by the Department of Commerce in Washington to establish a business roundtable discussion. The Ambassador told Sharani that he recently met the CEO of Pepsi who expressed interest in investing in Afghanistan. . . . BUT APTA IS MAIN CONCERN ¶6. (SBU) Sharani quickly turned the discussion to APTA negotiations with Pakistan. He said the key issues for Afghanistan boiled down to two: overland access for Afghan goods through the Wagha Border, and choice of Freight Forwarders for access to India. He said technical barriers and standards issues were not a major concern, but emphasized that, especially because of the upcoming summer fruit harvest, both of these issues are of the utmost importance. Sharani said that Afghanistan possesses a comparative advantage in carpets, agricultural products, gems, and marble, and that successful conclusion of the APTA was crucial for these sectors. KABUL 00001392 002 OF 002 ¶7. (SBU) The Ambassador noted his support not only for technical assistance to the Ministry, but also for successful conclusion of the APTA negotiations by the ambitious December 31 deadline. He suggested that it may be helpful to host both the Afghan and Pakistani negotiating teams for a reception at his residence when the next round of talks takes place at the end of June. CORRUPTION ON EVERYONE'S MIND. . . ¶8. (SBU) Sharani concluded the meeting by noting his personal efforts to reform the Fuel and Liquid Gas Enterprise (FLGE),the MOCI-related entity that was a source of numerous complaints by USFOR-A and ISAF logistics, due in large part to the shakedown perpetrated by the former head of the FLGE, Engineer Rozi. Sharani said Rozi was gone and that FLGE was well on its way to functioning as a privatized entity. ¶9. (SBU) The Ambassador noted that corruption was not only inhibiting the functioning of the Afghan government, but could even be seen as fueling the insurgency. He stressed that good governance was paramount to ensuring the continued support of the Afghan people for GIRoA and defeating anti-government militants. . . . ESPECIALLY THE AVERAGE CITIZEN, VOTER ¶10. (SBU) This importance of the corruption issue was emphasized when the Ambassador made an impromptu stop at a local bazaar on Darulaman Road on the way back to the Embassy. The Ambassador spoke with several local vendors and shopkeepers, all of whom noted with varying degrees of excitement corruption as the real enemy of the Afghan people. The Ambassador asked pointed questions about the opinion of Afghans of coalition and especially U.S. forces, and most responses - sometimes reluctantly - admitted that foreign donors had done a lot to assist Afghanistan. The real message however, was that corruption among Afghan government officials and the siphoning off of dollars to political cronies made a number of good faith donor efforts amount to naught. EIKENBERRY