ITALY SUPPORTS PAKISTAN DONORS CONFERENCE,

UNCLAS ROME 000339 SIPDIS SCA/PB FOR MARY BETH GOODMAN AND TARA FOLEY E.O. 12958: N/A TAGS: EAID ECON EFIN IBRD IMF PK IT SUBJECT: ITALY SUPPORTS PAKISTAN DONORS CONFERENCE, UNDECIDED ON PLEDGE REF: A. STATE 24367 ¶B. ROME 316 ¶1. Sensitive but Unclassified. Please protect accordingly. ¶2. (SBU) Poloff delivered Reftel demarche to Italian MFA South Asia Office Director Domenico Bellato on March 18. Bellato said that Special Envoy for Afghanistan and Pakistan Massimo Iannucci would attend the Pakistan Donors Conference in Tokyo on April 17, and did not rule out the possibility that FM Frattini might attend as well, given the importance Italy attaches to the issue as the host of the June 26-27 G8 Conference on Afghanistan and Pakistan in Trieste. Bellato noted that ministerial level participation is more likely to be achieved if Secretary Clinton attends the conference. ¶3. (SBU) Italy has not yet arrived at a pledge total, but recognizes the urgency of the situation in Pakistan and will make a commitment that is "significant" provided the IMF and the donor community continue to assess that Pakistan is meeting its IMF program benchmarks. (Note: The Berlusconi government has had difficulty reconciling its leadership role on Afghanistan and Pakistan in the G8 with its decision last year to cut development spending by up to 60 percent. Italy hopes to provide between 30 and 40 million Euros in soft loans for Pakistani provinces along the Afghan border by this June (Ref B)). Bellato said that Italy will continue to use its leverage as G8 President to urge other G8 members to make significant pledges. ¶4. (SBU) Bellato said Italy has not yet identified a target area for its pledge but is actively involved in ongoing discussions in Brussels concerning EC assistance to Pakistan. One area of possible Italian emphasis is reform and capacity building in the Pakistani customs service and border authorities. Bellato observed that if Pakistan presents a credible strategy for directing donor assistance, it could provide the basis for an articulated donor monitoring mechanism, less invasive than the Joint Coordination and Monitoring Board for Afghanistan, but designed to ensure close coordination between the donor community and the Pakistani government. DIBBLE