Twelfth Meeting of the Afghanistan Joint Coordination and

UNCLAS SECTION 01 OF 03 KABUL 001916 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 JCASAL, ABAUKOL, AWELLER, AND MNUGENT COMMERCE FOR HAMROCK-MANN, DEES, AND FONOVICH SIPDIS E.O. 12958 N/A TAGS: EAID EFIN ECON PGOV AF SUBJECT: Twelfth Meeting of the Afghanistan Joint Coordination and Monitoring Board (JCMB) REF: Kabul 1734 SUMMARY ¶1. (U) JCMB-XII approved the Afghan government's Civilian Technical Assistance Plan, and three donors, including the U.S., pledged specific support for some of the 55 urgently needed technical advisors. A new TA Task Force will carry implementation forward and take account of any donor concerns. The meeting also welcomed the GIRoA's recently improved revenue performance and approved a Revenue Action Plan of steps to improve performance further. Senior Afghan officials stressed that the Afghan army and police would spare no effort to ensure a secure and fair election, and that the GIRoA was cooperating closely with ISAF in this effort. The JCMB also approved the Commerce Minister's plans to streamline and reform business licensing, a key aspect of private sector development. Several donors said the JCMB is becoming a more effective forum for Afghan-international community collaboration, in part because the GIRoA is producing better, more supportable policy plans. End Summary ¶2. (U) The twelfth meeting of the Joint Coordination and Monitoring Board (JCMB) convened July 8 in Kabul, co-chaired by UN SRSG Kai Eide and Afghan Finance Minister Omar Zakhilwal, the latter's first JCMB as co-chair. The U.S. was represented by Ambassador Wayne, Coordinating Director for Development, Assistance, and Economic Affairs. Eide opened the meeting by citing the significant progress since the last JCMB meeting, including in agriculture and private sector development, based on improved GIRoA plans and firm international community (IC) support for those plans. It is important, he said, to keep up this positive momentum through the election campaign and beyond. Eide also welcomed new JCMB members Denmark, Poland, and UAE. Zakhilwal also noted the more active GIRoA leadership in working with donors. CIVILIAN TECHNICAL ASSISTANCE PLAN ¶3. (U) Zakhilwal presented the GIRoA's proposed Civilian Technical Assistance Plan (CTAP) and noted that the Development Standing Committee had broadly endorsed the proposal at its June 23 meeting (reftel). The plan asks donors in the first phase to support funding of 55 urgently needed technical advisor positions. A Civilian TA Task Force will be set up to decide delivery mechanisms that accord with the four principles the GIRoA has articulated for TA. In the second phase the GIRoA aims to establish a National Capacity Development and Technical Assistance Program (NCDTAP) that would pool donor funds to be used by line ministries to enlist the TA they need to implement the ANDS. Zakhilwal said the Task Force would hold its first meeting July 16. ¶4. (U) Donors broadly endorsed CTAP. Ambassador Wayne welcomed GIRoA efforts to prioritize its requests, expressed support for CTAP's principles, and said the U.S. wants to align our support with them as we increase civilian TA. He said the U.S. would provide up to $30 million to CTAP over two years. The number of advisors this would fund would depend on the delivery mechanism we select (septel). The U.S. supports the principle of hiring qualified regional advisors for some tasks. The only other countries to make specific commitments were Canada ($500K) and the UK (15 of the 55 advisors, amount unspecified). Most other donors expressed general support for CTAP, though the World Bank reiterated its concerns about the pooled funding aspect of NCDTAP. While noting these concerns, Eide declared the plan approved and said the new Task Force would take implementation forward and take account of any donor concerns. REVENUE ACTION PLAN ¶5. (U) Deputy Finance Minister Sabit providQ fresh evidence of the GIRoA's improved revenue collection, described the Revenue Action Plan to improve performance further, and noted those areas where the plan needs donor assistance. He said the average domestic revenue collected so far this fiscal year (since March 20) is Afs 5.3 billion ($106 million) per month, up from Afs 3.1 billion ($63 million) per month in the same period last year. Zakhilwal repeated his prediction that the GIRoA can surpass its IMF target of Afs 50 billion ($1 billion) this year. KABUL 00001916 002 OF 003 ¶6. (U) The U.S. and other donors strongly welcomed the improved performance and the new plan. Ambassador Wayne praised the good initial revenue improvement, welcomed MOF's commitment to enable donors to review performance going forward, and called for further structural reforms, including transparent recruitment of tax collectors. He said the U.S. would continue to support increased revenue generation through programs run by USAID and the Border Management Task Force, and urged other donors also to extend support. The JCMB approved the Revenue Action Plan. (Comment: In a separate dinner conversation, Zakhilwal told Ambassador Wayne that he fully intended to keep squeezing corruption out of the system and to make structural changes to perpetuate the increased revenues. He also said he was working hard not just to meet, but to surpass IMF targets for this year.) ELECTION SECURITY ¶7. (U) Defense Minister Wardak and Interior Minister Atmar gave the JCMB a report on plans to ensure election security. Wardak stressed that the ANSF would spare no effort to ensure a secure and fair election, and that the GIRoA was cooperating closely with ISAF in this effort. He said the government expects the enemy will try to disrupt the election. The GIRoA faces many challenges but has developed plans to tackle them. In all some 60,000 ANP and 47,000 ANA personnel would be deployed for election security. ANSF would be in the lead, with ISAF in a supporting role, including by providing airlift. ¶8. (U) Atmar noted the ANP's challenge of remaining neutral and professional. He said he had issued a directive to all ANP to be neutral, in support of the President's analogous decree. Some 36 ANP officers have received warnings about suspected partiality on the job. Atmar also called for donors to support a joint ANP-donor monitoring system, led by UNAMA, to promote ANP neutrality. He noted the acute shortage of police in some provinces (SE 6,000 short; West 1,200 short) for the upcoming elections and that the GIRoA will rely on community-based security in some places. Atmar particularly highlighted the shortage of female police and urged that solutions be found - possibly hiring teachers and students - to recruit and train a female cadre prior to elections. COMISAF General McChrystal said the coordination between ISAF and ANSF is very strong and that ISAF will commit every asset necessary to support ANSF efforts to ensure election security. AGRICULTURE ¶9. (U) Agriculture Minister Rahimi gave a progress report on the five priorities it presented at JCMB-XI in April. He said donors have pledged $17.5 million for urgent wheat seed assistance, short of the $32.4 million requested. A project to set up a one-stop shop at MAIL for leasing government-owned land is being developed. MAIL still seeks firm funding, and donors' cooperation on providing data, for its plans to research farm credit facilities. Partial funding has been identified for a "change management" project at MAIL, i.e. ministry restructuring. And UK DFID will provide BPS 30 million over three years for the Comprehensive Agricultural and Rural Development facility. Rahimi also noted the bumper harvest this year. Wheat production averaged 3 metric tons per hectare, he said. If Afghanistan could raise this to 3.5 tons/ha, which only required more agricultural inputs, it would be self-sufficient in grain. ¶10. (U) SRSG Eide urged donors to fund MAIL's immediate priorities and to supply information to the farm credit mapping exercise, which could be a model. Ambassador Wayne said support for agriculture was a key pillar of the U.S. strategy for Afghanistan. Afghan leadership was our guiding principle, and the U.S. would significantly increase its agricultural assistance. PRIVATE SECTOR DEVELOPMENT: LICENSING REFORM ¶11. (U) Commerce Minister Shahrani described his plans to streamline and reform procedures for business licensing, one of his ministry's five priorities for private sector development. He also noted a proposed new "business plan" for MOCI (ministry restructuring), which the Minister discussed in greater detail with donors at a separate meeting on July 12. Shahrani plans to begin the licensing KABUL 00001916 003 OF 003 reform effort in his own ministry and then expand the effort to other ministries that issue licenses. Hence he would need cabinet approval for the plan, which he secured at the cabinet's July 13 meeting. Donors supported the plan, and the JCMB approved it. JCMB ANNUAL REPORT ¶12. (U) SRSG Eide noted that the draft JCMB Annual Report covering the period since March 2008 has been circulated and invited donor comments by July 15. The report discusses progress or the lack thereof during this period in the JCMB priorities of donor coordination and the JCMB mechanism, ANDS implementation and aid effectiveness, security sector reform, sub-national governance, anti-corruption, agriculture, private sector development, and counter-narcotics. Looking ahead, the report argues that the period following upcoming elections offers a window of opportunity for the JCMB to drive issues of the broader governance and development agenda in Afghanistan forward, as agreed at the 2008 Paris and 2009 Hague conferences. It urges that joint Afghan-IC efforts be focused on implementation of a limited number of high-priority aspects of the ANDS, and that the JCMB play a more energetic role in identifying these priorities. At the same time, the report calls for further empowering the GIRoA to lead in identifying priorities where coordinated donor assistance should be aligned through the JCMB mechanism. The report also calls for institution building at central and sub-national level to be an overarching priority in the coming year. The Canadian and Dutch ambassadors, among others, intervened to say that the JCMB has significantly improved its performance over the last year and is now a much more useful and productive forum. ANDS ANNUAL REPORT ¶13. (U) Zakhilwal noted that the GIRoA's first annual report on ANDS has been circulated in draft to ministries and the IMF and World Bank. A short summary was provided to donors, and a donor meeting would be convened by end-July to approve the report and urge donors to align their aid programs with the ANDS. The ANDS annual report is a condition for receiving official debt reduction under the Highly Indebted Poor Countries initiative. EIKENBERRY