VZCZCXRO1579
PP RUEHDBU RUEHFL RUEHKW RUEHLA RUEHNP RUEHPW RUEHROV RUEHSL RUEHSR
DE RUEHLO #1989/01 2381356
ZNY CCCCC ZZH
P 261356Z AUG 09
FM AMEMBASSY LONDON
TO RUEHC/SECSTATE WASHDC PRIORITY 3298
INFO RUCNAFG/AFGHANISTAN COLLECTIVE PRIORITY
RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY
RUEHIL/AMEMBASSY ISLAMABAD PRIORITY 1016
RUEHYN/AMEMBASSY SANAA PRIORITY 0266
RUEATRS/DEPT OF TREASURY WASHDC PRIORITY
RHEHNSC/NSC WASHDC PRIORITY

C O N F I D E N T I A L SECTION 01 OF 03 LONDON 001989 
 
NOFORN 
SIPDIS 
 
E.O. 12958: DECL: 8/24/2019 
TAGS: EAID ECON PGOV UK
SUBJECT: UK'S ASSISTANCE STRATEGY - CUT POVERTY, ADDRESS 
NEEDS OF FRAGILE STATES; THE PRIME MINISTER WANTS TO KNOW WHAT IS BEING DONE  

REF: A. LONDON 1788      B. DOHERTY-MARBURG-HOVENIER EMAILS 8/20/09  

Classified By: Minister Counselor Richard Albright for reasons 1.4 b an d d.  

¶1. (C/NF) Summary. The UK's development assistance ministry, DFID, is seeking to ramp up programs in conflict and fragile states, especially in Pakistan, Afghanistan and Yemen, while fulfilling its legal mandate to reduce poverty and operate within budgetary limits, Martin Dinham, Director General, International, told EMIN and ECOUNs on August 14. Prime Minister Brown and Development Secretary Alexander are personally involved in defining and refining DFID's development strategies, giving the Ministry the highest political support in its history. PM Brown is also seeking President Obama's participation in two upcoming international development events, in New York at the UN General Assembly and in South Africa. DFID recently released a White Paper outlining its priorities for the next decade, with a particular focus on education and child and maternal health. DFID officials are confident that even if the Conservative Party were to win the next election, the UK would remain on track to meet its commitment to provide 0.7 percent of GDP for development assistance by 2015. End Summary.  

Fragile States - Yemen, Afghanistan, Pakistan ---------------------------------------------  

¶2. (C/NF) Dinham explained to EMIN and ECOUNS that HMG had made a policy decision to allocate fifty percent of DFID's GBP 6.3 billion budget to conflict or fragile states. The definition of both is broad, and includes countries from the Democratic Republic of the Congo to Yemen.  Regarding the latter, Dinham said the UK is concerned that Yemen combines all the conditions of a potential failed state. DFID intends to funnel more aid to Yemen, with a focus on governance and justice programs. On a broader political level, HMG sees assisting Yemen as way to improve relations with the Middle East.  The Saudis, he said, share the UK's concern about the fragility of Yemen and its potential for greater political instability, and the prospect that a more unstable Yemen would act as a contagion for the region. However, he noted that given the history between Saudi Arabia and Yemen, the Saudis can not play a constructive role in promoting change in Yemen, and that other donors would need to step in to fill the vacuum.  

¶3. (C/NF) In a separate meeting on August 19, Matt Baugh, Principal Private Secretary to Development Secretary Douglas Alexander noted that Alexander had been pleased with his meetings held in Washington on July 28-29, and believed that his discussions on Afghanistan were fruitful, though he came away with some uncertainty how much Washington was willing to direct more aid programming in Afghanistan through national and local government, as the UK was advocating.  Baugh said the UK recognizes there is a significant problem of corruption. But the UK believes that the government needs to be able to deliver basic services if it is ever to gain legitimacy, and therefore, the UK will increase its direct assistance to the government. (see Ref A on UK aid to Afghanistan.) Alexander also was interested about the broader "aid review" that Washington is conducting, said Baugh, and DFID is looking for ways where the UK and the U.S. could collaborate further.  Baugh said Pakistan might represent an opportunity where the two countries could combine their resources and have greater impact.  

Post-Conflict Strategies - Inter-Ministerial Cooperation --------------------------------------------- -----------  

¶4. (C) HMG has created mechanisms to ensure coordination between the Foreign Ministry (FCO), Ministry of Defence (MoD) and DFID on development strategies, particularly for conflict or fragile states. The Stabilization Unit is jointly owned, run and financed by DFID, FCO and MoD, and its mandate is to improve the UK's ability to support countries emerging from conflict. It has its own budget of GBP 269 million, and is physically housed in DFID's headquarters, with staff from all three Ministries.  This unit and other departments within DFID are involved in internal HMG analysis of extremism and what drives radicalization in Pakistan, Afghanistan, Yemen and elsewhere, commented Dinham. In Pakistan, HMG has identified the lack of education opportunities and the poor  LONDON 00001989  002 OF 003   quality of education in general as primary contributors to radicalization. For this reason, DFID is focusing on assistance to education in Pakistan, said Dinham.  In a separate August 19 meeting with Matt Baugh, Alexander's private secretary, stressed the importance of supporting secondary and tertiary education, as fragile states need skills.  Baugh said it was important to avoid scenarios in which children leaving primary school lack secular options to further their education and are forced to rely on madrassas. The UK sees the U.S. as particularly strong in counter-insurgency, both civilian and military activity in this area, and the UK is interested in working further with the USG in this area. The Stabilization Unit, said Baugh, is working with the UK Defense Academies to develop training and curriculum for civilian and military leaders on assistance and counter-insurgency issues.  

DFID White Paper ----------------  

¶5. (C) Dinham provided EMIN and ECOUNS with an overview of the DFID White Paper, released on July 8.  By law, UK development assistance must target poverty reduction. In the White Paper, DFID spells out its spending priorities and framework, within the context of poverty reduction.  It reiterates HMG's commitment to dedicate 0.7 percent of GDP to aid by 2015 (a UN Millennium Development Goal), that half of future UK direct support will go to public services; that education and maternal health will be key focus areas. Of DFID's assistance budget, 42 percent is delivered through multilateral mechanisms, 50 percent is direct bilateral aid; the remaining amount is used for emergency projects.  Of DFID's overall budget, 90 percent must go to low-income countries; 10 percent for middle-income countries. Dinham noted that the decision to ramp up assistance to Iraq required DFID to reduce funding for other middle-income countries. The White Paper highlighted GBP 800 million that HMG is making available to support climate change adaptation. Dinham commented that climate change adaptation needs in poor countries were enormous and that governments would need to establish dedicated funding for this purpose to prevent it from overwhelming aid budgets. The White Paper states that at least fifty-percent of DFID's assistance budget of GBP 6.3 billion for this fiscal year will go to conflict or fragile states, with a tripling of investment in security and justice in these countries. DFID will also continue its focus on sustainable growth, by providing assistance to help 50 million poor through the global economic downturn, to deliver on its commitment to double agricultural research, and to invest GBP one billion for African regional development. As noted in the White Paper, DFID will be shifting funding away from some countries to others in the next few years, with aid to China, for example, likely to be reduced; China received GBP 81 million in assistance in fiscal year 2007/2008.  

¶6. (SBU) DFID's engagement with other multilateral donors is also a major focus of the paper, underlining HMG's plan to spend more money through the UN system, to increase support for UN emergency response funds to meet growing humanitarian demands, to push for the creation of a UN agency for Women, and to press the EU to create a single Commissioner for Development and re-prioritize resources to fragile states. DFID also will focus on enhancing the effectiveness of the World Bank, by pressing for governance reform, pushing environmental sustainability at the core of the Bank's work, encouraging changes in the Bank's health programs to focus on maternal and child health, and mainstreaming gender equality in all the Banks work. DFID also supports new World Bank lending instruments.  

¶7. (C) Dinham explained that DFID works under legal constraint; by law, the UK's assistance must target poverty deduction.  Anything done must fall under that rubric, so while there has been internal pressure to conduct more "hearts and minds' programs, especially in conflict areas, DFID could only do so if it can be proven that these programs directly improve the health and benefit of the population.  

The Prime Minister - Early Morning Emails on Malaria --------------------------------------------- -------  

¶8. (C/NF) The Prime Minister is personally engaged on assistance issues, Dinham noted.  It is not usual, he said, for DFID officials to receive emails sent before dawn from  LONDON 00001989  003 OF 003   the Prime Minister, inquiring about bed net programs to combat malaria, or sharing his latest idea on education programs. Assistance issues have never before enjoyed such high-level political support, and DFID as an institution has benefited from this, especially in discussions with MoD and FCO on post-conflict strategies, said Dinham. DFID has also benefited from having Douglas Alexander as Secretary of State of Development, commented Matt Baugh, since Alexander also is Gordon Brown's General Election Coordinator. He has political savvy, can work Parliament's corridors, and shares the PM's commitment to assistance, said Baugh.  

Showcase Events - PM Would Like High-Level USG Participation --------------------------------------------- ---------------  

¶9. (C/NF) Prime Minister Brown is planning to co-host an event focused on maternal and child health with World Bank President Robert Zoellick during the UN General Assembly in New York, probably on September 23 in the afternoon.  DFID officials said that the UK Embassy in Washington had passed on the PM's request for either the President or Secretary of State to participate. (Note: Dinham noted that the wife of French President Sarkozy, Carla Bruni, was also proposing a separate event at UNGA on HIV/AIDs. The UK is trying to de-conflict the events, possibly by combining them.)  

¶10. (SBU) The PM also has asked for the President's participation in 1-Goal, a global education event to take place in South Africa and several other sites worldwide on October 6, supported by FIFA and linked to South Africa's hosting of the 2010 Soccer World Cup. Dinham shared with us the PM's joint letter with FIFA President Joseph Blatter to the President (which Post has shared with the desk and National Security Council, Ref B) asking the President to be involved in the event, in person, though Dinham said the Prime Minister would also appreciate the President's appearance by satellite.  

Conservative Party on Assistance --------------------------------  

¶11. (C/NF) There is an all-party consensus on development assistance for the first time ever, noted Dinham. Opposition Leader David Cameron in a recent white paper on development said the Conservatives are committed to fulfilling the UK's pledge to meet the UN goal of providing 0.7 percent of GDP in development assistance.  To do this, the Conservatives would have to maintain DFID's projected budget increases from GBP 6.3 billion this year to GBP 8 billion in 2010 to GBP 11-12 billion in 2012.  Publicly, Cameron has stated that only two ministries would not be subject to a mandatory 10 budgetary cut: DFID and the National Health Service. The Conservatives are more likely, however, to be more skeptical toward combining UK assistance funds with those of the EU, given their natural skepticism toward Brussels, said Baugh. Labour and the Conservatives do face the challenge of "selling" assistance to a skeptical British public, said Dinham.  For that reason, DFID recently coined the phrase UKAID and produced some effective PR materials for the public that spell out the benefits of development assistance and how individuals can do their part to help.  Visit London's Classified Website: XXXXXXXXXXXX  
SUSMAN