IAEA BUDGET: DEPUTY DG SHARES VIEWS

UNCLAS UNVIE VIENNA 000509

SENSITIVE
SIPDIS

IO FOR ANDERSON, ABRAHAMS, CONNER, HUSKEY, DETEMPLE; ISN
FOR JENKINS, DOE FOR NA-24, NA-25, NA-21; NSC FOR
SCHEINMAN, HOLGATE, CONNERY; NRC FOR DOANE, SCHWARTZMAN

E.O. 12958: N/A
TAGS: AORC PREL KNNP IAEA UN
SUBJECT: IAEA BUDGET: DEPUTY DG SHARES VIEWS

REF: UNVIE 491


1. (SBU) Summary: IAEA Deputy Director General David Waller
contributed his views on the 2011 budget process, focusing on
issues of sequencing, financing capital investments, and
building alliances among G8 countries. Waller described DG
ElBaradei's recent meetings in Washington as "very positive,"
and noted the IAEA's strong message on resources with the
Senate Foreign Relations Committee and others. Waller felt
strongly that close coordination between the IAEA and USG on
budget strategy had been lacking from previous debates, but
would be key to future budget increases. Waller hoped that
high-level U.S. commitment to resourcing the IAEA would be
expressed in global venues, particularly the Nuclear Security
Summit in April and meetings of the G8. DCM underlined the
need to seize the opportunity of DG Amano's arrival to set a
new tone on management reform. Waller said Amano is already
emphasizing economy. End Summary.


2. (SBU) IAEA Deputy Director General David Waller shared his
thoughts on the 2011 budget and newly established Budget
Working Group (BWG) in a meeting with DCM November 6.
Factors that would alter the normal course of budgeting
included DG-designate Amano's ascension in December and the
outcome of BWG deliberations in January. Waller suggested
that the BWG's activities could cancel the traditional
"informal" meeting of the Program and Budget Committee (PBC)
in February and possibly delay the "formal" PBC in May.
Waller had assumed that regardless of the BWG's results, the
Secretariat would use the previously-introduced figures for
2011 as the point of departure (which envision an 11.4
percent real increase). DCM warned Waller that many Geneva
Group members had already dismissed the 2011 figures and
expected to start with ZRG as the point of departure and
counseled against the Secretariat's over-shooting as they did
with the February 2009 proposal for a 22 percent increase
(reftel). Waller agreed with us that early, high-level
action would be required to keep the "budget hawks" from
settling immediately into a zero growth position.


3. (SBU) Waller did not immediately embrace the Canadian idea
of a "special assessment" to fund the Safeguards Analytical
Laboratory, noting that most of the Secretariat-proposed
increase of 11.4 percent real growth was already destined for
SAL. DCM suggested that disaggregating SAL from the general
budget debate through a special assessment or other mechanism
might accomplish some strategic goals: 1) it would lower the
2010 proposal to a figure much closer to ZRG, thus reducing
the "sticker shock" of the 11 percent figure; 2) it would
give global leaders a tangible project which they could latch
on to and champion (rather than the less compelling general
proposition of a budget increase),3) it would remove SAL
from the normal "tit-for-tat" budget negotiations in which
the G-77 trades safeguards for technical cooperation. Waller
promised to think over the proposal.


4. (SBU) Turning to other topics, Waller reported DG
ElBaradei's positive encounters in Washington. Waller had
recently accompanied DG ElBaradei to a meeting with members
of the Senate Foreign Relations Committee, where the two
enjoyed highly productive talks with Senator Lugar
(R-Indiana),John Kerry (D-Massachusetts),Chris Dodd
(D-Connecticut) and others. According to Waller, Senator
Lugar recalled a previous visit to the IAEA's Seibersdorf
Analytical Laboratory and its lamentable conditions, and
expressed his interest in seeing it revived.


5. (SBU) Waller offered to reciprocate ElBaradei's positive
exchanges in Washington with similar meetings in Vienna both
now and with the advent of the new Amano administration. He
especially urged improved coordination with Washington to
ensure that U.S. goals for the 2011 budget were put forward
at a high, strategic level early in the process. He
encouraged use of G8 venues for budget talks, agreeing that
Canadian and UK flexibility could be weighed against French
and German obstinacy. He also agreed that the April Nuclear
Security Summit could be leveraged to convince skeptics like
Egypt and Pakistan to sign on to the idea that the IAEA
required additional resources to fulfill its nuclear security
mandate.


6. (SBU) Comment: Waller was surprised to learn that some
Member States were already championing a zero growth position
for the 2011 budget. He recognized immediately the need to
loosen the budget hawks' positions through dialogue closer to
the policy-making level than the IAEA Board Room (i.e., G8,
Nuclear Security Summit). His tactical advice in addition to
the substantive program and budget presentations he musters
will be crucial to new DG Amano and us as we negotiate the
2011 budget and subsequent, longer-term planning documents.
We will want to use Amano's arrival on December 1 to set a
clear tone on both budget increases and further management
efficiencies. End Comment.




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