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Viewing cable 06KINSHASA977, DRC NEARS COMPLETION OF POVERTY REDUCTION STRATEGY

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Reference ID Created Released Classification Origin
06KINSHASA977 2006-06-22 11:47 2011-08-25 00:00 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Kinshasa
VZCZCXRO7201
RR RUEHDU RUEHGI RUEHJO RUEHMR
DE RUEHKI #0977/01 1731147
ZNR UUUUU ZZH
R 221147Z JUN 06
FM AMEMBASSY KINSHASA
TO RUEHC/SECSTATE WASHDC 4165
INFO RUEHXR/RWANDA COLLECTIVE
RUCNSAD/SOUTHERN AFRICAN DEVELOPMENT COMMUNITY
RHMFISS/HQ USEUCOM VAIHINGEN GE
RUEAIIA/CIA WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RHEFDIA/DIA WASHDC
RUFOADA/JAC MOLESWORTH RAF MOLESWORTH UK
UNCLAS SECTION 01 OF 02 KINSHASA 000977 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
TREASURY FOR LKOHLER 
 
E.O. 12958: N/A 
TAGS: EAID ECON CG
SUBJECT: DRC NEARS COMPLETION OF POVERTY REDUCTION STRATEGY 
PAPER 
 
REF: KINSHASA 968 
 
1. (U) Summary: The DRC Minister of Planning unveiled what is 
nearly the final draft of the DRC's Poverty Reduction 
Strategy Paper (PRSP) the week of June 5. The 104-page 
document, the fruit of months of work by a committee composed 
of GDRC, civil society, and non-governmental organization 
representatives, sets out the DRC's poverty reduction plan 
through 2008 and is a crucial roadmap of how the country will 
aid its population of almost 60 million people.  Donors and 
international organization representatives met with the 
committee and the Minister of Planning on June 13 to share 
their recommendations.  The final document will then be 
approved by the GDRC before being given to the IMF and World 
Bank, probably by the end of June.  Implementation, albeit 
under the transition government in place, could begin in 
July.  End summary. 
 
------------ 
Son of IPRSP 
------------ 
 
2. (U) The new PRSP, once adopted, will replace the interim 
PRSP (IPRSP) of March 2002, which is in need of revision. 
When the IPRSP was written, the population was estimated at 
52 million, foreign armies still occupied part of Congolese 
territory, per capita GDP was at USD 80 (it is now around USD 
110), annual economic growth rate was negative 4.6 percent 
(it is now projected at 6.5 percent for 2006), and annual 
inflation was at 787 percent (versus less than 13.0 percent 
now).  In addition to the goal of macroeconomic stability, 
largely accomplished, the 2002 IPRSP noted the need for 
greater control of GDRC spending, the strengthening of GDRC 
revenue generation, and the more effective use of GDRC funds 
in pro-poor sectors.  These latter three objectives have not 
been completely achieved. 
 
------------------------ 
The Final "Final Draft"? 
------------------------ 
 
3. (SBU) The PRSP was first presented to the donors for 
comment in March of this year by then-Minister of Planning, 
Thambwe Mwamba.  Weaknesses in the macroeconomic framework, 
budgetary framework, follow-up/evaluation strategy, and in 
certain socioeconomic sector strategies prevented the 
adoption of the PRSP at that time.  Now, more than two months 
later, a "final draft" has again been presented to the DRC's 
international partners by Thambwe's successor, Minister 
Sesanga Hipungu.  In a June 13 meeting presided over by 
Sesanga, the donors presented their reactions to the latest 
draft.  Donor recommendations included calls for further 
macroeconomic framework revisions, changes to the 
follow-up/evaluation strategy, and the addition of two 
ministries to those which will make up the interministerial 
commission that will oversee implementation of the PRSP. 
 
----------------------- 
Macroeconomic Framework 
----------------------- 
 
4. (SBU) The main donor objection to the draft PRSP 
macroeconomic framework is its overly-optimistic assumptions 
of the economic and financial status of the DRC for the next 
three years.  The donors suggested that an "alternative" 
scenario be presented as an annex, with exterior assistance 
figures and economic growth rates reduced slightly to reflect 
current and possible future circumstances.  The IMF 
recommended that the PRSP state the need for public 
enterprise reform, for reforms to increase GDRC revenues, and 
for the need to match expenditures with poverty reduction 
objectives.  Donors also recommended that the PRSP indicate a 
higher objective for Central Bank international reserve 
levels, and that the document call for an analysis of 
expected increased international assistance and for 
expenditures currently used to service debt that will be 
freed up by debt forgiveness. 
 
------------------------ 
Follow-Up and Evaluation 
------------------------ 
 
 
KINSHASA 00000977  002 OF 002 
 
 
5. (SBU) The PRSP, as written, has very specific and detailed 
descriptions of the offices that will provide implementation, 
evaluation, and follow-up of the strategies outlined in the 
document.  The donors felt that this level of specificity, 
down to the provincial (of which there will be 26) and local 
levels is too restrictive and should be decided instead by 
the Interministerial Commission for the National Strategy 
Against Poverty, led by the Prime Minister of the new 
government. The Minister of Plan, backed up by the World Bank 
PRSP expert, contended that these provincial and local-level 
committees already exist and had participated in the drafting 
of the PRSP. 
 
6. (SBU) The donors recommended the inclusion of the Minister 
of the Interior, who oversees the important National 
Statistics Institute, and the Minister of Women and Family 
Affairs, for gender balance, on the Interministerial 
Commission.  This commission, as envisioned by the PRSP, is 
already composed of the Ministers of Planning, Finance, 
Budget, Education, Health, Environment, Agriculture, Energy, 
Infrastructure, Social Affairs, Commerce, Industry, and 
Mines. 
 
------------ 
What's Next? 
------------ 
 
7. (U) The donors indicated, in a letter addressed to the 
Minister of Planning, that they would approve the PRSP with 
the recommended changes.  The Draft PRSP must also now be 
vetted by other DRC partners, including civil society and 
non-governmental organizations.  Once that is accomplished, 
it must go back to the ECOFIN Commission for review before 
being submitted for final approval to the DRC Council of 
Ministers.  It is expected that this will happen before the 
end of June, although no Council of Ministers meeting has yet 
been scheduled or announced.  Only after being accepted by 
the DRC Council of Ministers can the PRSP be handed to the 
IMF and World Bank and begin being implemented. 
 
8. (SBU) Comment: It has taken a long time to get the PRSP 
ready for primetime.  Despite the fact that a new government 
might not be seated until late 2006, it is important to have 
the PRSP approved and in place by July so that the clock can 
start ticking on the one year of implementation necessary 
before HIPC Completion Point can be achieved.  With large 
multilateral debt payments looming in the third quarter of 
2007, it is in the best interests of the country to finally 
accomplish this task.  End comment. 
MEECE