ADDITIONAL FY 2010 BUDGET REQUIREMENTS FOR AFGHANISTAN

UNCLAS KABUL 002103 FOR the Secretary from Ambassador Eikenberry CENTCOM FOR COMMANDER AND ALSO CSTC-A, USFOR-A SENSITIVE SIPDIS E.O. 12958: N/A TAGS: EAID ABUD AFIN AF SUBJECT: ADDITIONAL FY 2010 BUDGET REQUIREMENTS FOR AFGHANISTAN REF: A) KABUL 1762, B) KABUL 1776 ¶1. (SBU) SUMMARY. Madame Secretary: Embassy Kabul has concluded a rigorous analysis of U.S. Government civilian assistance programs required to effectively implement the President's strategy for Afghanistan and Pakistan. Success will be contingent upon balanced gains in the fields of security, economic development and governance. Based upon our review, we have determined that additional resources totaling $2.515 billion are required beyond currently available funds and funds already requested in Fiscal Year (FY) 2010 if we are to show progress over the next 14 months. Our estimated need for additional civilian staffing has been sent separately (reftel A). We have provided a detailed expl anation of the additional requirements separately to Deputy Secretary Lew, to the Special Representative for Afghanistan and Pakistan (SRAP) Ambassador Holbrooke, and to the Acting Director of Foreign Assistance (F). END SUMMARY. ¶2. (SBU) In implementing the President's strategy for Afghanistan, we have adopted an array of innovative tools and approaches (reftel B). Additionally, we have rigorously examined the resources required to make substantial progress over the next 14 months. ¶3. (SBU) In undertaking our analysis, we calculated that success will be measured by how well we: 1) rapidly shift U.S. assistance to support counterinsurgency efforts in the South and East; 2) implement an aggressive agricultural strategy that will stimulate rural economies and increase incomes and jobs; 3) build the credibility of the Afghan government by channeling more funding through their most capable ministries and "Afghanize" our assistance programs by including many more Afghans in program design and implementation, among other steps; and 4) target more U.S. assistance to the provincial and district level through smaller, more flexible contracts enabled by our rapidly expanding civilian presence outside of Kabul. ¶4. (SBU) We have determined that the following additions to our FY 2010 budget are needed to implement the President's strategy: a.) (SBU) As the military increases its counterinsurgency campaign in southern and eastern Afghanistan, we require an additional $521 million for targeted stabilization programs in areas of conflict. �A; b.) (SBU) An expanded program in agriculture ($572 million increase) and economic growth ($106 million increase) will further stimulate the creation of jobs in the licit economy and provide economic opportunity for the Afghan people. c.) (SBU) Additional funding ($190 million) for roads, vertical structures (e.g. school buildings),and civil aviation is critical to provide the infrastructure that permits economic growth. d.) (SBU) The continued development of the justice and law enforcement sectors ($221.4 million increase) is essential to provide an alternative to an inhumane but rapid "Taliban justice" and to inspire confidence in Afghan government institutions. e.) (SBU) Additional funding for national and sub-national governance programs ($194.9 million increase) will accelerate our efforts to build Afghan capacity to fulfill the basic responsibilities of government and should improve popular perceptions of the Afghan government. f.) (SBU) We must accelerate our efforts to "Afghanize" our foreign assistance through increased funding for the World Bank-managed Afghanistan Reconstruction Trust Fund ($450 million) and through direct budget support ($190 million),which will place increased responsibility on the Afghan government to deliver basic services to the Afghan people. g.) (SBU) Finally, we are requesting additional funding ($70 million) for community-based demining programs. ¶5. (SBU) The funding requested above ($2.515 billion in total) is in addition to currently available funds and to the President's FY 2010 base budget request that is now under consideration by Congress. Though we will seek additional funding for other sectors in FY 2011 (including power, health, education, strategic communications, counter-narcotics and civil society),we believe that we have sufficient funding for FY 2009-2010 in these sectors. Available and anticipated funds for Afghanistan are $6.9 billion, which includes the existing pipeline (estimated at $1.5 billion),FY 2009 appropriations ($2.6 billion) and the request level in the FY 2010 Congressional Budget Justification ($2.8 billion). We have calculated all the existing funding streams into our request. -------------- BACKGROUND & METHODOLOGY -------------- ¶6. (SBU) We have developed this budget proposal through intensive collaboration with Deputy Secretary Jacob Lew, Acting Director of Foreign Assistance Richard Greene, and SRAP Ambassador Holbrooke and their teams. We have reasoned that we must accept the challenge of managing substantially higher amounts of funds in order to realize the strategic gains required over the next 14 months. We have focused our budget requirements on priorities that also incorporate innovative approaches and new operational models for managing these increased funds. For example, we will provide direct budget support to the Afghan government and increased funding for the World Bank-managed Afghanistan Reconstruction Trust Fund (ARTF) that do not require significant increases in USG management because appropriate compliance and oversight mechanisms are already in place. New stabilization programs will be accompanied by large increases in personnel and the introduction of USAID's Office of Transition Initiatives' (OTI) expertise. We will introduce direct assistance for agriculture, extend a large and successful agricultural voucher program, and expand U.S. Department of Agriculture's presence and programs, which will accelerate our expenditures of funds. We are also pursuing increased managerial flexibilities and decentralized authorities to allow us to move more rapidly. We will continue to work closely with the Special Inspector General for Afghanistan Reconstruction (SIGAR) and other Inspectors General to help assure accountability and effectiveness (reftel B). ¶7. (SBU) This prioritized request for additional resources represents a 91 percent increase above the original 2010 request of $2.767 billion. We understand that there are serious competing budget needs, but I know you demand our best judgment of the budget and staffing levels required for success in the months ahead. ¶8. (SBU) If the additional resources are unavailable, we will reassess what we can achieve. Meanwhile, we have embarked on programs possible with our existing funds, including the pipeline, as well as funds anticipated in FY2010. We have refocused stabilization and agriculture activities in priority districts to support the counterinsurgency strategy (COIN); with additional FY2010 funding, we could increase the number of districts covered and the depth of our assistance. We will provide modest increases to our contributions to the Afghan government, the ARTF and the National Solidarity Program; with additional FY2010 funding, we could increase these contributions and more effectively build the capacity and credibility of the Afghan government. With additional FY2010 resources, the Bureau of International Narcotics and Law Enforcement (INL) would be able to increase our funding for critical programs in the justice and corrections sectors, two areas central to improving the rule of law and the perception of access to justice in Afghanistan. Similarly, the Federal Aviation Administration (FAA) could build capacity in the civil aviation sector and begin to install surveillance and air-to-ground communication systems is necessary to improve the air traffic system safety and to increase civilian and military traffic. -------------- ASSUMPTIONS -------------- ¶9. (SBU) During our rigorous review, we made the following assumptions, all of which will be feasible but challenging to obtain: -- a.) (SBU) We will be able to recruit and fully staff the selected programs (Stabilization, Agriculture, Governance, and Economic Growth.). -- b.) (SBU) Collaborating with agency headquarters, we will streamline current USG processes for approval of new programs and reprogramming of resources, requiring a proper balance of risk versus benefit. At the field level, we will enhance our own measures of risk mitigation and accountability, including rigorous annual performance reviews, increased levels of civilian oversight of contractors, and close coordination with SIGAR and other Inspectors General. -- c.) (SBU) The Department will also seek substantial levels of funding resources in the FY 2011 budget for areas such as power, education and health, for which we are not including additional FY2010 requests. -- d.) (SBU) Sufficient mobility and force protection will be available to program implementers in the field. Given current conditions, security costs can be as much as 40 percent of project costs in areas of violent conflict and post-conflict areas. -- e.) (SBU) The upcoming August 2009 elections will not result in a significant decrease in the capabilities and willingness of Afghan officials to cooperate with us on the implementation of our foreign assistance programs. ¶10. (SBU) Additional FY 2010 funding would increase effort in those areas prioritized under the Administration's new strategy, prioritize support for Afghan-led capacity building efforts at all levels, focus on COIN regionally, increase local procurement initiatives, and channel increased funding through the Afghan national budget. -------------- CONCLUSION -------------- ¶11. (SBU) All agencies at post are now working together under a whole-of-government approach to achieve the goals specified in the Administration's strategy: we are working as teams, not individualized agencies. We are collaborating across our Country Team to integrate population security with building effective local governance, economic development, and sustainability. Likewise, we also are cooperating closely with US Forces/Afghanistan and International Security Assistance Force (ISAF),with our coalition partners, with international organizations, and especially with our hosts, the government of Afghanistan, and Afghan civil society leaders. We believe that the newly requested funding is vital to the success of the President's strategy over the next 14 months and that we can use it efficiently and responsibly. I ask for your support, and stand ready to discuss our proposal with you further at your pleasure. EIKENBERRY