DEPUTY ASSISTANT SECRETARY JONES DISCUSSES

UNCLAS SECTION 01 OF 02 BRUSSELS 000063 SENSITIVE SIPDIS E.O. 12958: N/A TAGS: EAID PREL EUN PK SUBJECT: DEPUTY ASSISTANT SECRETARY JONES DISCUSSES PAKISTAN ASSISTANCE WITH EUROPEAN COMMISSION REF: 2009 BRUSSELS USEU 1480 BRUSSELS 00000063 001.2 OF 002 This message is sensitive, but unclassified. Please protect accordingly. ¶1. (SBU) EUR Deputy Assistant Secretary Stuart Jones met with the European Commission's Director of Asia and Oceania James Moran January 12 to discuss assistance to Pakistan. Moran stated the European Commission is deepening its commitment to Pakistan by increasing its assistance, holding a EU-Pakistan summit in the first half of 2010, and including it in its high-level Action Plan for Afghanistan and Pakistan (reftel). Specific sectors of interest to the European Union include education, the civil service, and energy, but Moran reported significant security and protection worries for European Union diplomats in Pakistan are hindering the EU-Pakistan relationship. Moran and Jones agreed that enhanced upstream coordination on Pakistan assistance would be positive. ¶2. (SBU) Moran noted baseline European Commission assistance is rising sharply. In April 2009, the Commission pledged 485 million euros to Pakistan for 2009-2013. In 2009, 150 million euros were disbursed, approximately three times prior amounts. Out of this, 50 million euros were for a food facility and the other funds were primarily development assistance and humanitarian aid for the Malakand strategy. Additionally, the Commission will be raising the annual development assistance budget to 75 million euros (from a previous 50 million euros). This fund increase is part of the mid-cycle review of the European Commission's five-year development budget, which covers 2008-2013. In addition the EC is making a significant increase in its Afghanistant assistance budget, from 150 million euros annually to 200 million euros annually. Together, Afghanistan and Pakistan now account for 41 percent of the Asia budget. Moran reported that after this increase, the development budget for Pakistan and Afghanistan will be "fixed in stone" through 2013. Any additional increases would require moving resources from another regional area to the Asia budget (which is typically not part of the mid-cycle review, but theoretically possible) and would likely happen only on direction from High Representative Catherine Ashton, with co-approval by the European Council (i.e., member states) and the European Parliament. Moran opined that SRAP Holbrooke or other senior government officials may want to raise this issue directly with Ashton. ¶3. (SBU) On specific programs, Moran noted the European Commission has some direct budget support to Pakistan in the field of education, through the UN, but the most recent tranches of funding have been delayed because Pakistan has not met the benchmark conditions. Additionally, the EC has a capacity-building and curriculum development program planned with the central Ministry of Education, but the program remains a highly sensitive issue for the government of Pakistan. Additionally, there is a planned program in the North-West Frontier Province (NWFP),but security problems there have stymied its roll-out. Additionally, the European Commission has budgeted funding for some small rural development projects on civil service training. Moran noted all of these programs have been affected by security and access problems, particularly in the NWFP. Additionally, accountability and output remain a concern. ¶4. (SBU) Moran said the European Commission's primary role in the field of energy comes in the form of a one-million-euro European Investment Bank (EIB) loan for renewable energy. Moran noted the Commission's development budget is not designed for heavy infrastructure projects; thus, the EIB was better suited to fund projects in this area. He thought it unlikely the European Commission would become involved in further energy projects in Pakistan unless the EIB is willing to invest more in this sector. However, the EIB has reached the end of its Asia mandate and funding which provided the 100-million-euro loan. The EIB is looking at an additional Asia mandate and would likely partner with the Asian Development Fund in future projects in the region. ¶5. (SBU) Moran said that security is a major concern for the European Union delegation in Islamabad. The delegation had hired a private Pakistan security company who provided perimeter security for the compound and also provided the gun licenses for Western-contracted guards who provided close protection for the delegation members. Approximately two months ago, however, the license was revoked by the Pakistan authorities, who said it was not in order. As a result, the delegation is currently lacking a significant element of their security plan. Moran noted the European Union would be BRUSSELS 00000063 002.2 OF 002 willing to increase the size of its delegation in Pakistan from its current 50 people (of whom 13-14 are expatriates), but they are stymied by the security problems. ¶6. (SBU) Jones and Moran agreed that closer cooperation on development assistance to Pakistan would benefit both the United States and the European Union. In addition to Islamabad-level coordination, Jones noted closer coordination on funding and projects between Washington and Brussels could enhance the international efforts. Jones noted a visit to Brussels by Ambassador Robin Raphel, who coordinates U.S. non-military assistance to Pakistan, may allow for more specific information sharing. Moran said he would warmly welcome such a visit, and invited increased coordination on international assistance to Pakistan. ¶7. (U) DAS Jones has cleard this message. KENNARD .