US embassy cable - 04PRETORIA3919

UNCLAS PRETORIA 003919 
 
SIPDIS 
 
SENSITIVE BUT UNCLASSIFIED 
 
E.O. 12958: N/A 
TAGS: EAID, EFIN, ECON, EINV, PREL, SF 
SUBJECT: COUNTERING UNHELPFUL NEW INTERNATIONAL INITIATIVES 
ON ODA 
 
REF: SECSTATE 177369 
 
Sensitive But Unclassified; Protect Accordingly. 
 
1. (SBU) Summary.  Econoff met with Sheldon Moulton, head of 
the Directorate on Global Economic Organizations, to get 
South African reactions to reftel demarche.  Moulton 
explained that South Africa firmly supported the concept of 
an International Finance Facility (IFF) and would continue to 
do so.  He lauded increases in U.S. and other developed 
country official development assistance, but said that it was 
still not enough because the need was so great.  In general, 
he lamented the "sad state of honoring Monterrey pledges on 
aid and debt relief" by developed countries.  He specifically 
mentioned Professor Jeffery Sachs' calculation that the 
United States channeled only 0.14% of its GDP to development 
aid, far short of the 0.7% of GDP target embodied in the 
Monterrey Consensus.  End Summary. 
 
2. (SBU) Moulton said that South Africa supported the IFF 
concept in writing and would continue to do so.  He said that 
Finance Minister Trevor Manuel had signed a joint letter in 
support of IFF with British Chancellor of the Exchequer 
Gordon Brown.  On the concept of a global tax to fund 
development, Moulton commented that the idea had been around 
for a long time and would likely be around for a long time. 
He was not sure whether the recent dialogue on the subject 
"would bring us any closer." 
 
3. (SBU) Moulton said that President Mbeki would be attending 
President Lula's World Leaders Meeting on Financing Hunger 
and Poverty Eradication in New York in September "to try and 
find a way to advance the dialogue and to give impetus to 
meeting the goals of the Monterrey Consensus."  He thought 
that the Blair Commission (of which Manuel was a member), 
Britain's upcoming G-8 chairmanship and EU presidency, and 
the OECD's study into official development assistance would 
place increasing pressure on developed countries to increase 
their foreign assistance in the coming year.  He thought that 
other European countries would continue to support the IFF 
concept along with Britain. 
 
4. (SBU) Moulton argued that no matter how additional 
development funds were raised, developing countries would 
still have to meet the same criteria for development 
assistance that they do now.  He thought that good governance 
and accountability would remain important, and that the 
debate would continue as to how developing countries should 
strengthen themselves in these and other areas. 
FRAZER