NETHERLANDS: STATUS OF ASSISTANCE TO PAKISTAN

C O N F I D E N T I A L SECTION 01 OF 02 THE HAGUE 000357

SIPDIS

E.O. 12958: DECL: 06/19/2019
TAGS: EAID EFIN PHUM PREF PK NL
SUBJECT: NETHERLANDS: STATUS OF ASSISTANCE TO PAKISTAN

REF: A. (A) STATE 61213

B. (B) STATE 57298

C. (C) THE HAGUE 313

Classified By: Economic Deputy Shawn K. Gray for reasons
1.5(b,d)


1. (SBU) Summary: The Dutch Ministry of Foreign Affairs
(MFA) confirmed that the Government of the Netherlands (GONL)
pledged 86.7 million euro (USD 120 million) at the April 17
Tokyo Donor Conference, all of which will be channeled
through the Dutch Embassy in Islamabad. The GONL has also
pledged a total of 3.5 million euro (USD 4.8 million) since
December 2008 to UNHCR and/or the International Red Cross as
part of the UN,s Pakistan Humanitarian Response Plan. The
GONL does not provide budgetary or other support directly to
the Government of Pakistan, and the MFA maintains a low
profile regarding its assistance programs there. End summary.

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TOKYO PLEDGE
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2. (SBU) Emboffs met June 18 with Mr. Hidde Baars, Senior
Pakistan Policy Officer at the Dutch MFA, to discuss the
status of Dutch assistance to Pakistan. Regarding the 86.7
million euro pledge in Tokyo, Baars explained that this
assistance is for the period 2009-2011, and all of these
funds will be channeled through the Dutch Embassy in
Islamabad. (Note: The bulk of Dutch development assistance
is administered through their embassies, which contract with
local NGOs on education, health, human rights, and other
projects that meet the GONL,s assistance goals. See Ref C
for additional detail on how the GONL structures its foreign
assistance. End note.)


3. (SBU) The GONL originally had budgeted 112 million euro
for Pakistan assistance from 2009-2011 but had to reduce that
amount by about one-quarter (to 86.7 million euro) due to the
economic slowdown and recession in the Netherlands. The
current coalition government has continued the GONL practice
of allocating 0.8 percent of Dutch GDP to foreign assistance,
which normally amounts to about 5 billion euro (USD 7
billion) annually. However, as GDP has begun to shrink with
the onset of the recession in 2009, so too has the foreign
assistance budget, which the MFA expects to cut by about 400
million euro (USD 555 million) this year (ref C). The MFA
has not made final decisions about where these cuts will be
made, but the Dutch consider Pakistan to be a priority
country for security and humanitarian assistance, and to date
the MFA has no plans to target its Pakistan programs for
budget cuts.


4. (SBU) Minister for Development Cooperation Bert Koenders
has identified human rights, water, and education as key
areas of focus for Dutch assistance to Pakistan; these are
areas where Koenders believes the Netherlands, as a small
country, can add real value among the myriad of donor
activities in-country. Baars noted that the Dutch Embassy in
Islamabad had been focusing on education projects in the
Northwest Frontier Province (NWFP),including a joint project
with the British and Australian governments. However, once
the agreement to implement sharia law in the region came into
effect, the GONL deemed it too risky to continue its
education projects there. It is now revamping its plans,
including possible new education programs in the camps
throughout Pakistan for internally displaced persons (IDPs).


5. (SBU) Baars noted the difficulties faced by the Dutch
Embassy in Islamabad: The GONL is providing a substantial
fund from which to draw, but it is difficult for the small
embassy -- with only 17 Dutch officials -- to vet local NGOs,
identify worthwhile projects, and supervise their execution.
Qidentify worthwhile projects, and supervise their execution.
Moreover, NGOs now find it almost impossible to operate in
the NWFP, where the Government of Pakistan has virtually no
influence and conditions are highly unsafe. Baars added that
the Dutch embassy is beginning its summer transfer season,
which will further impede project selection and
implementation. Given these circumstances, Baars expressed
concern that the GONL would actually be able to spend its
entire Tokyo pledge by 2011. He noted that the GONL was
interested in the idea expressed at the Tokyo Donor
Conference of a World Bank "trust fund" into which donors
could place their unused pledge funds, as the bank might be
more successful than individual donors at managing a wide
range of assistance projects on the ground.


6. (SBU) In addition to its bilateral assistance to Pakistan,
the GONL contributes 40 million euro (USD 55 million)
annually to the UN,s Central Emergency Response Fund to
provide emergency relief to areas deemed by the UN to be in
critical need. Baars noted that about 16 million euro (USD

THE HAGUE 00000357 002 OF 002


22 million) of the GONL,s 2008 contribution in 2008 went to
UNHCR for projects in Pakistan.

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PHRP PLEDGE
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7. (SBU) The GONL has pledged a total of 3.5 million euro
(USD 4.8 million) since December 2008 to UNHCR and/or the
International Red Cross (IRC) as part of the UN,s Pakistan
Humanitarian Response Plan (PHRP). Baars explained that in
response to the PHRP,s calls for donations, the GONL pledged
1.5 million euro (USD 2 million) in December 2008 and 1.0
million euro (USD 1.4 million) in May 2009. When the PHRP
issued a revised call for donations in response to the
deteriorating situation in the NWFP, Minister Koenders
pledged another 1.0 million euro on June 12, 2009. According
to Baars, the first two donations in December and May were
directed to both UNHCR and the IRC; the third donation in
June was directed only to the IRC for the express purpose of
providing relief to the IDPs from the NWFP.

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DUTCH SENSITIVITIES REGARDING DEVELOPMENT ASSISTANCE
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8. (C) The GONL must contend with both internal and external
sensitivities regarding aid to Pakistan. Externally, the
GONL remains loathe to provide budgetary support or other
types of monetary assistance directly to the Government of
Pakistan; Baars cited concerns about the GOP,s ability to
provide proper oversight of the funds, as well as its
effective absence from the NWFP where the GONL would like to
focus more of its resources. The GONL suspended all Dutch
assistance to Pakistan and withdrew its Islamabad embassy
staff in November 2007 after then-President Musharraf
declared a state of emergency. By February 2008, the GONL
had decided to reinstate its core human rights and good
governance projects; it slowly reintroduced other programs
throughout the year, including the pledges to the PHRP
beginning in late 2008. However, none of this assistance is
channeled through the GOP. Instead, the GONL, like many
donors, provides its assistance through the UN, IRC, and
other international organizations, as well as bilaterally
through its embassy to local NGOs.


9. (C) Internally, Baars explained that Minister Koenders
chooses to keep a low profile regarding GONL assistance to
Pakistan. With the onset of the recession in 2009, bank
bailouts, and stimulus packages, the GONL,s budget is under
increasing pressure. Some opposition leaders have demanded
that the current coalition government find ways to cut
spending now, asserting that foreign development assistance
is a good place to start. However, the Dutch coalition
government thus far has resisted calls to cut ODA (ref C).
With the advent of sharia law, radical madrassas, Taliban
resurgence, and collapse of security in the NWFP, however,
critics have tougher questions for the GONL about the utility
of continued investment into this and other regions of
Pakistan. Minister Koenders has therefore chosen not to
focus substantial public attention on the GONL,s Pakistan
program, preferring instead a quieter approach that is less
likely to subject the program to criticism from skeptical
opposition members. That said, the minister and the GONL
more broadly remain committed to bolstering security, human
rights, and education in Pakistan, and the GONL currently has
no plans to scale back its assistance in-country.
GALLAGHER