MALDIVES ASSISTANCE OVERVIEW: U.S. AND OTHER DONORS

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SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: PGOV PREL PREF PHUM PTER EAID MOPS ECON EFIN
SUBJECT: MALDIVES ASSISTANCE OVERVIEW: U.S. AND OTHER DONORS

REF: A) COLOMBO 936 B) COLOMBO 1144

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1. (U) SUMMARY: The United States and Maldives have enjoyed a
friendly and expanding relationship. U.S. efforts were instrumental
in the successful conclusion of negotiations between Maldives and
IMF, with the IMF approving in December 2009 a stand-by arrangement
and related program worth a combined 92 million USD for Maldives.
President Obama also signed in December 2009 a proclamation
reinstating Maldives as a beneficiary to the Generalized System of
Preferences (GSP). The Trade and Investment Framework Agreement
(TIFA) between the United States and Maldives signed in October 2009
aims to examine ways to enhance bilateral trade and investment.


2. (U) In the areas of military defense and law enforcement, the
United States has extended significant assistance to Maldives with
President Obama signing a determination in September 2009 that made
Maldives eligible to receive U.S. defense articles and services. In
the areas of democratization, human rights, education and drug
prevention, the Embassy has extended continuing and regular
assistance through international visitors and educational programs,
visits and lectures from U.S. experts, and civic and good governance
programs. In the aftermath of the 2004 tsunami, the United States
extended 12 million USD to Maldives for relief and reconstruction
efforts. Maldives also has a host of development partners that
continue to provide assistance. On December 16, 2009, Ambassador
Patricia Butenis convened a Friends of Maldives Meeting to discuss
development partnership engagement in Maldives and prospective
future assistance plans. END SUMMARY.

UNITED STATES ASSISTANCE TO MALDIVES
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3. (U) Per reftel A, President Mohamed Nasheed outlined an ambitious
program of economic, social and political development that includes
pledges for affordable cost of living, low-cost housing, drug-abuse
reduction, introduction of a health care plan, and establishment of
a nationwide transport system. The GOM has stated to Post that is
seeking assistance in consolidating and deepening democracy,
budget/fiscal management, climate change adaptation, social service
improvements and military defense and enforcement. The GOM has
insisted that it does not want handouts but rather seeks technical
assistance and help in finding free market solutions to its
problems. U.S. assistance to the GOM in the aforementioned areas is
as follows:


4. (U) Economy, Fiscal Management and Trade

-- Current and Ongoing Programs: In December 2009, President Obama
signed a proclamation reinstating Maldives as a GSP beneficiary. The
Maldives will be eligible to export nearly 3,500 products to the
United States duty-free, which would assist in advancing economic
development in the country. With support from the U.S., IMF approved
a USD 92 million loan for Maldives, which would assist the GOM in
tackling its large fiscal and external imbalances. The U.S.-Maldives
TIFA agreement signed in October 2009 provides opportunities for
enhanced bilateral and trade investment. The first TIFA council
meeting is scheduled for spring 2010 in Washington. The Maldives
Economic Minister is expected to be accompanied by a Maldivian
business delegation. Post is working with Treasury to fulfill the
Maldives Ministry of Finance's request to provide a TDY official in
Male to help design new revenue taxes. Post has asked the GOM for
additional information on expertise required, and logistical and
operational arrangements. Post is also coordinating with Treasury on
developing a proposal requested by the GOM for implementation of a
business profit tax.

-- Proposals/Future Programs: Maldives has been selected for 200,000
USD in global financial crisis support funds to provide technical
assistance to support the GOM's efforts to establish a government
bond market. This assistance will be managed by USAID/Sri Lanka.
Per reftel B, Post has requested an annual program for Maldives of
10 million USD in Economic Support Funds for three years beginning
FY 2010. The MCC did not accept new threshold members in 2009, but

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Post plans to advocate for the GOM for future acceptance into the
MCC threshold program. Post is also working with Treasury to sponsor
a regional counter terrorism financing conference in March or April,
which will examine how to develop effective sanction regimes and
strengthen the expertise of South Asian financial intelligence
units.


5. (SBU) Military Defense

-- Current and Ongoing Programs: Regular high-level visits, USN ship
visits, expert exchanges, conferences, Joint-Combined Exercise
Trainings (JCETs),U.S. service academy scholarships, trainings, and
seminars on counter-terrorism, drug trafficking, maritime security,
disaster management and crisis response. The number of JCETs is
expected to increase this year. Funding for IMET courses which
include Intelligence, Special Forces, and basic and captain career
courses for Maldivian military officers has increased every year.
The determination made by President Obama in September 2009
recognizes that Maldives is a valued strategic partner to whom the
United States is willing to provide equipment in defense of our
shared national interests.

-- Proposals/Future Programs: Post plans to seek additional IMET and
Foreign Military Financing (FMF) to professionalize the Maldives
National Defense Force (MNDF). No FMF was allocated for Maldives in
FY 2011. Current IMET funding levels limit U.S. security assistance
to the tactical level. Post has requested 3.4 million USD in 1206
funding that would provide training, equipment and intelligence
support to increase GOM capacity to conduct counter-terrorism
operations. The request is currently under review at PACOM and OSD.
Post is working on an information sharing agreement between the
United States and the GOM and trainings on Vessel Board Search and
Seizure (VBSS),and maritime security. The Joint Interagency Task
Force West (JIATF West) is developing a plan to extend assistance to
the GOM in areas of border security, interdiction of narcotics
traffic and transnational crime. The draft plan calls for a broad
approach to providing assessments, training, and some equipment to
security forces, including the MNDF. JIATF West support, with DOD
funding would enable U.S. agencies such as DHS, DEA, FBI and others
to provide more robust assistance. Post has requested an assessment
of Maldivian Coast Guard and Customs boat maintenance capabilities,
and as required, provision for a Small Craft Maintenance Training
Team (SCMTT). STATE/PM will look into the GOM's interest in GPOI
operations to see if there might be any benefit for them becoming a
GPOI partner.


6. (U) Law Enforcement

-- Current and Ongoing Programs: ICE provides training in narcotics
interdiction and fraud document recognition, capacity building,
investigative support and information sharing under the Customs
Mutual Assistance Agreement entered into by ICE and CBP with the
GOM. The FBI enjoys an outstanding relationship with the Maldives
Police Service (MPS). The DEA New Delhi Country office covers
Maldives and coordinates directly with the MPS on narcotics matters
and any request for assistance. DS Office of Antiterrorism
Assistance Programs (DS/ATA) provided pilot courses on Underwater
Explosives Incidents Response and Vital Infrastructure Security in
FY 09.

-- Proposals/Future Programs: Post has requested an assessment of
infrastructure improvements for Maldivian Security and LE Forces
with priority on establishing a biometric identification system for
the Department of Immigration, as requested by the GOM, and an air
and sea port interdiction program for Maldivian Customs, Police and
Coast Guard. ICE is working with JIATF-West and the DAO on a
proposal to provide training and maritime security assessments for
Maldives Customs, Coast Guard and Maritime Police on fraudulent
document detection, bulk cash smuggling and cash couriers, money
laundering, trafficking-in-persons and human smuggling, basic drug
enforcement, criminal investigative intelligence and biometrics,
border enforcement and airport passenger analysis. DS/ATA is looking

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into the possibility of reprogramming funds to enable more ATA
training in the future.


7. (U) Climate Change Adaptation

-- Current and Ongoing Programs: USAID currently has a team in
Maldives to assess ways in which the 2004 tsunami can provide clues
on sea-level rise and adaptation.

-- Proposals/Future Programs: State as well as USAID will have FY
2010 funds for climate change adaptation and mitigation programs
that Maldives should be able to benefit from. SCA plans to
coordinate with OES on climate project proposals for Maldives.
State, NOAA, and others are working to provide a ten-day intensive
training seminar in the Maldives this year on coastal management and
global climate change. The U.S. Navy has also offered to conduct an
oceanographic study for Maldives.


8. (U) Drug Prevention/Treatment

-- Current and Ongoing Programs: In 2009, Post provided 50,000 USD
to NGOs and GOM institutions that support after care services for
recovering drug addicts. The program aims to improve the capacity
of after-care counseling and support services to create a cycle of
treatment that if successful can be used as a best practice model.

-- Proposals/Future Programs: State/INL is funding efforts to
understand why so many drug addicts in the Maldives are committing
suicide - as many as 30 in the past three years. The team will be
traveling to Maldives early this year. State/INL has strong programs
in drug rehabilitation for prisoners. State/EEB may also have some
funding for public outreach programs.


9. (U) Democratization/Human Rights/Education/Cultural Preservation

-- Current and Ongoing Programs: Annually, Post sends Maldivians to
the United States under the International Visitors Leadership (IVLP)
and Fulbright programs. Maldives currently is allocated five grants
under the IVLP and Post has requested an increase in the number or
Maldivian participants. These programs provide intensive exposure to
current best practices in the U.S. in a variety of fields and
topics. Post also regularly sends U.S. speakers to Maldives on
topics including fiscal policy and civil issues such as the role of
women, family violence, and drug use. Post plans to continue
providing experts on these and related topics this year. Post has a
DVC facility located at the American Corner in the National Library
in Male through which lectures on a number of topics are transmitted
from Colombo and the United States. Post recently funded a new
computer-assisted English program at the American Corner and the
English Language Fellow from Post regularly visits to improve
English teaching in the schools. The Ambassador's Fund for Cultural
Preservation provides grants for the preservation of objects and
sites of national importance. Maldives has an ongoing grant for the
preservation of the site of an old Buddhist monastery on Kashidhoo.
Post has received a number of Maldivian proposals for next year.
Grants average about USD 40,000.

-- Proposals/Future Programs: Under the 2011 MSP, Post requested USD
2 million for judicial reform and civil society programs, including
modernizing legal training of lawyers, streamlining judicial
procedures, case-management training for court officials, and
encouraging civic education and citizen participation. DRL would
consider ideas and likely have some resources from its worldwide
budget to develop programs for deepening Maldivian democracy.


10. (U) Post-tsunami Recovery Program

-- In response to the 2004 tsunami, U.S. Congress allocated 12
million USD for relief and reconstruction assistance for Maldives.
Relief programs worth 1.3 million USD were concluded within the six
months following the tsunami. For longer term reconstruction, State
awarded Maldives an 8.6 million USD grant for construction of a

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harbor and breakwater, upgrading of sewage systems, repair of power
systems, and assistance to the Ministry of Finance to improve its
public accounting. Most of these projects have already been
completed. USAID/Sri Lanka provided a 1.9 million USD grant to
install water desalination plants, help build local capacity, and
improve health care services.


11. (U) Other Proposals/Future Programs

-- To deepen United States engagement and Post's contact network and
relationships with the GOM, the embassy is looking into hiring a
public affairs specialist in Male and a Maldivian Political and
Economic Specialist that will be based at the embassy in Colombo.

ASSISTANCE PROVIDED BY OTHER DEVELOPMENT PARTNERS
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12. (U) On December 16, 2009, Ambassador Butenis convened a Friends
of Maldives Meeting in preparation for a donor conference that
Maldives is planning to hold in March. It was attended by financial
institutions such as the International Monetary Fund (IMF),the
Asian Development Bank (ADB) and the World Bank. IMF and ADB
recently granted 127 million USD in loans to the GOM in support of
reform initiatives that seek to correct fiscal imbalances and
restore economic growth. In 2008 and 2009, the Bank extended
financing to the GOM totaling 24.6 million USD for pension and
social protection administration, environmental management, and
mobile banking services.


13. (U) Other development partners in attendance were Australia, the
European Union, Japan, Germany, Norway, The Netherlands, the U.K.
and the UNDP, all of whom have contributed to tsunami recovery
efforts. These development partners have continued to extend
assistance to the GOM through loans, grants, and technical
assistance in areas that include democratic governance capacity
building, infrastructure development, food-aid, environmental
protection, and climate change mitigation.


14. (U) Based on the GOM's public database and media reports, other
countries such as China, India, Kuwait, Saudi, and the U.A.E. have
increasingly extended loans and grants for infrastructure and
utilities development, and improvements in the health and education
sectors. The World Health Organization (WHO) provides ongoing
assistance for health sector development.


15. (U) A matrix outlining other donors' assistance is available
from Post upon request. POC is Political Specialist Mary Anne Green,
email: greenma@state.gov

FOWLER