US embassy cable - 06TIRANA351

ALBANIA AND USAID SIGN MCC THRESHOLD PROGRAM AGREEMENT

Identifier: 06TIRANA351
Wikileaks: View 06TIRANA351 at Wikileaks.org
Origin: Embassy Tirana
Created: 2006-04-07 07:56:00
Classification: UNCLASSIFIED//FOR OFFICIAL USE ONLY
Tags: EAID ECON KMCA OTRA AL
Redacted: This cable was not redacted by Wikileaks.
VZCZCXRO5526
PP RUEHLMC
DE RUEHTI #0351/01 0970756
ZNR UUUUU ZZH
P 070756Z APR 06
FM AMEMBASSY TIRANA
TO RUEHC/SECSTATE WASHDC PRIORITY 4082
INFO RUEHTH/AMEMBASSY ATHENS 2870
RUEHBW/AMEMBASSY BELGRADE 2680
RUEHLO/AMEMBASSY LONDON 1168
RUEHFR/AMEMBASSY PARIS 1058
RUEHRO/AMEMBASSY ROME 5220
RUEHVJ/AMEMBASSY SARAJEVO 0399
RUEHSQ/AMEMBASSY SKOPJE 4071
RUEHVB/AMEMBASSY ZAGREB 2903
RUFNPKB/COMUSNAVEUR NAPLES IT
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUEHLMC/MILLENNIUM CHALLENGE CORP
RHEHNSC/NSC WASHDC
RUEHBS/USEU BRUSSELS
RUEHVEN/USMISSION USOSCE 2122
RUEHPS/USOFFICE PRISTINA 3375
RHEHAAA/WHITE HOUSE WASHDC
UNCLAS SECTION 01 OF 02 TIRANA 000351 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
DEPT FOR EUR/SCE (BENEDICT, SAINZ, RIEHL), EB/IFD/ODF 
(LCONNELL) 
DEPT PASS TO USAID (SBRENT) 
DEPT PASS TO USTR (EBRYANT) 
MCC FOR AMBASSADOR DANILOVICH 
TREASURY FOR ATUKORALA AND JFRANCO 
NSC FOR BRAUN 
 
E.O. 12958: N/A 
TAGS: EAID, ECON, KMCA, OTRA, AL 
SUBJECT: ALBANIA AND USAID SIGN MCC THRESHOLD PROGRAM 
AGREEMENT 
 
REF: TIRANA 313 
 
1.  (U)  SUMMARY:  The Millennium Challenge Corporation's CEO 
Ambassador Danilovich and VP Bent visited Albania on April 3 
to participate in a signing ceremony for a USD 13.8 million 
Threshold Program Agreement and to meet with GoA officials. 
The program is designed to reduce the opportunities for 
corruption in the GoA's tax administration, procurement 
system and business registration procedures.  Danilovich and 
PM Berisha both linked the goals of the program to the GoA's 
ongoing efforts to combat corruption.  End summary. 
 
2.  (U)  MCC CEO John Danilovich and Vice President Rodney 
Bent and other MCC staff visited Albania on April 3.  They 
met with PM Berisha, Deputy PM Rusmajli and other GoA 
officials to express the USG's high interest in the MCC 
threshold program proposal for Albania.  The GoA and MCC 
co-hosted a highly-publicized signing ceremony for the 
agreement before government officials, business leaders, 
civil society leaders and the press corps.  Following the 
ceremony, Rusmajli and Bent gave an interview with Albania's 
top-rated TV station to explain the program's details. 
 
3.  (SBU)  The signing of the agreement follows nearly 18 
months of GoA, MCC, USAID, and Embassy efforts to craft a 
realistic, but effective program to fight corruption and 
improve the business environment.  Initiated by the former 
Socialist Party (SP)-led government, the proposal went 
through a number of changes -- we believe for the better -- 
at the initiative of the new Democratic Party (DP)-led 
government, which took office in September 2005.  The 
approved program features a three-pronged attack on 
corruption.  First, MCC funds will be used to reform tax 
administration practices in the Tirana tax office through 
increased transparency, better access to information on 
taxpayer rights, increased IT capacity and, most importantly, 
reduction of the interaction with and discretion of 
individual tax collectors with taxpayers.  Second, the GoA's 
procurement system will undergo similar measures, with an 
emphasis on non-discretionary decision-making and highly 
transparent procedures.  The new GoA augmented this part of 
the proposal by adding the creation of an Ombudsman's office 
to review disPuted decisions.  Third, the program provides 
funding for the establishment of a "One-stop shop" for 
business registration.  This component is designed to remove 
administrative barriers to business registration and reduce 
the opportunities for bribe-taking, as well as to reduce the 
number of days to register a business from 47 to 1. 
 
4.  (SBU)  In a meeting with the PM before the signing 
ceremony, Danilovich noted that the GoA had a tremendous 
opportunity open to it if the program produced the indicated 
measurable results.  If successful, then Albania would 
potentially be eligible for more extensive funding under the 
broader MCC compact funding scheme.  Danilovich stressed that 
Albania's performance in the program would bring an enormous 
amount of attention here.  He encouraged PM Berisha to make 
the fight against corruption a national issue, rather than 
political one. 
 
5.  (SBU)  PM Berisha thanked Danilovich for the assistance 
and began by noting that his government understood the 
country's vote in last July's election to be one against 
crime and corruption.  He said that "we won't stop" the 
effort to make the rule of law prevail and described some of 
 
TIRANA 00000351  002 OF 002 
 
 
his administration's initial efforts to combat crime and 
corruption and to improve the business environment -- new 
laws addressing conflict of interest and nepotism, arrests of 
crime bosses, enforcement of long-unenforced court decisions, 
reduction of government expenses, more efficient collection 
of revenues, higher salaries for government employees, and 
increased spending on education and health care.  Berisha 
said that the threshold program for Albania focused on "three 
fundamental pillars" of corruption and would incidentally 
help Albania meet NATO and EU entry requirements.  Berisha 
expressed concerns over the existence of "state capture" of 
certain institutions by corrupt forces, but said he was 
determined to "follow legal avenues to solve that problem." 
 
6.  (SBU)  In a statement before the press during the signing 
ceremony, Berisha said that "corruption was a real cancer, an 
emergency which must be fought."   He expressed hope that 
Albania would ultimately qualify for MCC compact funding and 
added that "President Bush was right to make corruption a 
non-negotiable indicator." 
 
7.  (U)  USAID will now conduct procurement procedures to 
award a contract for implementation of the agreement.  The 
selected contractor will monitor GoA performance under the 
two-year program.  Work under the program work will begin 
this summer. 
 
8.  (U)  This cable has been cleared by MCC. 
RIES 

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