Viewing cable 07KABUL185, BOUCHER, MOSBACHER AND KARZAI TALK ENERGY,
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VZCZCXRO3684
OO RUEHDBU
DE RUEHBUL #0185/01 0201235
ZNY SSSSS ZZH
O 201235Z JAN 07
FM AMEMBASSY KABUL
TO RUEHC/SECSTATE WASHDC IMMEDIATE 5559
INFO RUCNAFG/AFGHANISTAN COLLECTIVE PRIORITY
RUEHZG/NATO EU COLLECTIVE PRIORITY
RHEHAAA/NATIONAL SECURITY COUNCIL WASHINGTON DC PRIORITY
RUEAIIA/CIA WASHINGTON DC PRIORITY
RHEFDIA/DIA WASHINGTON DC PRIORITY
RUEKJCS/OSD WASHINGTON DC PRIORITY
RUEKJCS/SECDEF WASHINGTON DC PRIORITY
RUEKJCS/JOINT STAFF WASHINGTON DC PRIORITY
RHMFISS/HQ USCENTCOM MACDILL AFB FL PRIORITY
RHMFISS/COMSOCCENT MACDILL AFB FL PRIORITY
RUCNDT/USMISSION USUN NEW YORK PRIORITY 3537
Saturday, 20 January 2007, 12:35
S E C R E T SECTION 01 OF 05 KABUL 000185
SIPDIS
NOFORN
SIPDIS
STATE FOR SCA/FO DAS GASTRIGHT, SCA/A, SCA/CEN, S/CRS,
SA/PB, S/CT,
EUR/RPM
STATE PASS TO USAID FOR AID/ANE, AID/DCHA/DG
STATE PASS TO OPIC DEPUTY CHIEF OF STAFF DULCE ZAHNISER
NSC FOR AHARRIMAN
OSD FOR KIMMITT
CENTCOM FOR CFC-A, CG CJTF-76, POLAD, JICCENT
EO 12958 DECL: 01/20/2017
TAGS PREL, PGOV, PTER, ASEC, MARR, AF, PK
SUBJECT: BOUCHER, MOSBACHER AND KARZAI TALK ENERGY,
INVESTMENT, PAKISTAN AND COMPREHENSIVE STRATEGY
Classified By: A/DCM Sara Rosenberry for reasons 1.4 (B) and (D).
-------
SUMMARY
-------
¶1. (S/NF) On January 10, Assistant Secretary for South and Central Asian
Affairs Richard Boucher and Overseas Private Investment Corporation
President and Chief Executive Officer Robert Mosbacher met with President
Karzai. Mosbacher briefed Karzai on the Investment Corporation’s projects
in Afghanistan, focusing on energy projects, credit programs, and the
209-room Marriott Hotel planned for Kabul. Boucher called on both Afghan
and Pakistani Jirga Commissions to meet as soon as possible. Karzai is
doing everything he can to make the jirgas work. The President expressed
his opposition to Pakistani mining and fencing of the border and suggested
that Pakistan close madrassas and terrorist training camps if it was
really serious about terrorism. Karzai wants to rid himself of the Bugti
problem but argued that the Bugtis were not terrorists. Boucher briefed
on requested budget funding for Afghanistan. He encouraged acceptance of
ground spraying of poppy crops in Helmand. Karzai was non-committal and
pointed to British reluctance. Karzai believes that 2007 will be a better
year for Afghanistan and called for better preparations to show the people
that we were ready for the spring offensive. END SUMMARY
Overseas Private Investment Corporation Projects in Afghanistan
--------------------------------------------- ------
¶2. (SBU) President Karzai began by noting that electricity was becoming
increasingly important for Afghanistan. Electric power from Afghanistan,s
neighbors was unreliable and countries like Uzbekistan were raising prices,
he said. Mosbacher briefed Karzai on his meetings in Kabul on electricity
and other projects. He said new power capacity and building private sector
development were key. If and when the legal structure for independent power
production was established, the Investment Corporation would be able to
help with more financing.
¶3. (SBU) In response to a question from Karzai about projects being
considered, Mosbacher explained that industrial consumers were paying
too much for electricity. These entities would be good customers for new
electricity projects since households were not paying enough to support
new investment. At the end of March, the utility industry would be
corporatized, but a consistent set of rules will be needed to set a
framework for independent power production. Any private power project
would take 18-24 months from the time the legal framework was established.
Karzai thought this was too long. Mosbacher explained that huge pieces of
equipment needed to be brought in, which takes time. They would be run by
heavy fuel oil, but natural gas was best as it was a fraction of the cost
of diesel. In addition, laws needed to be passed before investment could
begin.
¶4. (SBU) Mosbacher explained that other Investment Corporation projects
included a 209-room, four-star Marriott Hotel. The project was on track but
outstanding problems on the lease needed to be resolved. He expected
that construction could start in the spring and with an opening within
18-24 months. Much of the material and labor will be sourced in Afghanistan.
The hotel will employ 400 people.
¶5. (SBU) Mosbacher briefed that his organization was also going to be
providing small and medium-sized business credits for agricultural and
manufacturing facilities, through a new commercial and a non-bank lending
institution. These two
KABUL 00000185 002 OF 005
projects could start in 6-9 months.
Cross-Border Jirgas
-------------------
¶6. (C) President Karzai said that Afghanistan had done everything it could
on the jirgas, e.g., providing lists and documents to Pakistan. Prime
Minister Aziz explained during his visit that a Commission would soon be
appointed. Assistant Secretary Boucher urged that both sides get their
Commissions together as the next step, the sooner the better. He suggested
it shouldn,t be too difficult to work out the local versus national
versions of the jirgas and pledged U.S. and international support. Karzai
reiterated that he was doing everything he could. Boucher stated that
he would nudge the Pakistanis on the jirgas and hoped the Foreign Minister
and Prime Minister-level meetings would continue.
¶7. (C) Karzai described Aziz as a “good man,” someone he could talk to
openly and frankly. Aziz had the intellectual capacity to talk through the
issues. Karzai hoped the U.S. could influence the Pakistanis on the jirgas.
Boucher noted that Speaker Quanooni had been invited to Pakistan and Karzai
said he would encourage him to go.
Border Mining and Fencing
---------------------------
¶8. (C) The Assistant Secretary relayed press reports that Pakistan may be
reconsidering its proposal for selective mining and fencing of the border.
The U.S. had been encouraging Pakistan to use the tripartite meetings to
deal with such issues. Karzai said there was speculation that Pakistan
was clamping down on the Taliban and the insurgency on the border as a
pretext to get to the Balochi refugees who were crossing the border.
He observed that there was much domestic pressure in Pakistan against
mining and fencing. Boucher interpreted the move as a sign of Pakistani
frustration and that Pakistan was taking the border problem seriously.
Karzai rebutted that they could close madrassas and training centers if
they were really serious about terrorism. Pakistan just needed to check
its own intelligence.
¶9. (C) Karzai noted that some in the Pakistani media were calling for
jihad against the United States. He expected more bloodshed in 2007.
Assistant Secretary Boucher replied that the Pakistani media said many
things but it was important to look at the actual situation on the border.
For example, in November, there was actually a decrease in infiltration
from North Waziristan, although the reason is unclear. Karzai explained
that the media in the region was not like that in the West, as it was
easily manipulated by governments. Both the Pakistani and Afghan governments
knew well how to use the media.
¶10. (C) Boucher told Karzai that the United States believed that Pakistan
was now doing more on terrorism. He pointed to an increase in arrests of
more Taliban and the recent attack on a madrassa in the Bajaur Agency.
Boucher acknowledged, however, that some Pakistani authorities also
turned a blind eye to infiltrators. He said we needed to keep reminding
them of their responsibilities. Karzai responded that we needed to keep
reminding them to give up the Pakistani dream of a larger Islamic
Pakistani Emirate. Boucher conveyed the United States, view that both
Musharraf and Aziz knew well the dangers of not cracking down on terrorism.
He said events in North Waziristan have scared them and they now fear
they could lose control. Boucher agreed that we needed to see swifter
action by Pakistani authorities, but we should not doubt their commitment.
KABUL 00000185 003 OF 005
Bugti
-----
¶11. (S/NF) Assistant Secretary Boucher asked Karzai if he knew where Bugt
i was. Karzai responded that a lot of Bugtis come to Afghanistan. In fact,
over 200, with their sons and money, have come. Karzai said he advised
them to go the United Nations for asylum, but many were frightened and
are in hiding. The United Nations declined to deal with the issue,
considering it too sensitive. Karzai said he was “not interested in
having them in Afghanistan as it was too much trouble.”
¶12. (S/NF) In his meeting with Pakistani Prime Minister Aziz, Karzai
had said that the Bugtis were not terrorists and represented nobility
in Afghanistan, so it would be hard to turn them over to Pakistan.
Boucher clarified that it was the grandson that the Pakistanis were
after for instigating an uprising. Karzai responded that fomenting
uprising does not make one a terrorist. The real terrorists were Bin
Laden and Mullah Omar. Afghanistan needs a sign that Pakistan will stop
supporting these terrorists. Boucher asked Karzai which side should
move first and queried whether Afghanistan could take the grandson into
custody or strike some political deal. Karzai explained that the Bugtis
would blame the United States if Afghanistan turned them in. There would
be disgust toward both Afghanistan and the United States.
¶13. (S/NF) Boucher asked Karzai if he could assure Pakistan that the
Bugtis were not supporting armed struggle and that India was not involved.
Karzai said “yes”, though he doubted Pakistan would accpet his assurances.
Pakistan would continue to think India is involved. There is a lot of
misinformation out there, Karzai commented. He said he knew Bugti, who
was highly respected in the U.S. Karzai explained that Bugti had once
tried to call Karzai but he had refused for the sake of good relations
with Pakistan. Now he cannot forgive himself for refusing. Karzai assessed
that Pakistan had troubles with many other tribes too, as a result of its
trying to divide and conquer and turn the tribes against each other.
Pakistan needed to address the bigger picture, Karzai urged. (Note:
Halfway through the discussion of Bugti, Karzai signaled that the issue
was too sensitive and asked that notetaking be suspended. End Note)
New U.S. Funding
----------------
¶14. (C) Assistant Secretary Boucher briefed Karzai in broad terms on
new funding for Afghanistan that we expect to come from a supplemental
budget. In addition to an increase in U.S. funding we were working
toward, a series of international meetings would focus on funding and
other needs for Afghanistan )- the NATO Foreign Ministers meeting, the
Joint Coordination and Monitoring Board Political Directors meeting in
Berlin, and the G-8. The United States will be pushing countries to
commit to funding where it is needed most. He reported that Presidential
Senior Economic Advisor Naderi had agreed to attend a series of meetings
to brief on where the money was most needed.
¶15. (C) Boucher explained that several key elements should move forward
to support the new money, namely the Presidential Appointments Commission,
improved governance, continuation of the Policy Action Group process
(which he said was working well), more government presence around the
country such as the Presidential Policy Action Group visit to Kandahar,
and dealing with corruption. Karzai expressed his disappointment with
the Policy Action Group, asking “What is
KABUL 00000185 004 OF 005
it doing?” He said that when displaced people from Kandahar have been
returned and when the youth in the South have jobs, then he will be able
to declare that the Policy Action Group was working. 16. (C) On corruption,
Karzai called for corrupt people to be punished and to simplify the
procedures for doing so. On governance, he believed that the situation
was much better than three years ago. Most governors were competent and
knew what was going on in their provinces. Karzai felt that the
Government of Afghanistan was much more in charge than three years ago.
He said the police were better and were becoming more linked to other
police in other regions. Organization and training had much improved.
¶17. (C) Boucher said that the supplemental budget would allow for an
expanded target for police expansion and stepped up training. He shared
that the budget would be more than the normal USD 3 billion, but
possibly broken up between 2007 and 2008, with the police and military
portion showing up in 2007. The money would focus on more training
equipment, road construction, power grids, and provincial judicial
systems. Boucher said that the final figures would be out in a few
weeks, possibly around the time of the State of Union Address. Secretary
Rice would make an announcement at the NATO Foreign Ministers meeting.
More details will emerge in February.
Strategic Dialogue
------------------
¶18. (C) Assistant Secretary Boucher apologized that scheduling programs
had prevented the travel of Under Secretary Burns for the Strategic
Dialogue meeting. With the
SIPDIS expected arrival of Deputy Secretary Negroponte, Burns’ schedule
should become more flexible, he said. Boucher underlined that Burns
was keenly interested in the Strategic Dialogue. Karzai said it would
send an important signal.
United Kingdom, Helmand and Poppy
---------------------------------
¶19. (C) Karzai asked if the United States was “fine with the UK in
Helmand? Are they up to something?” Boucher responded that the British
were trying to do a good job and were focused on Helmand. Karzai said
they need to know that Helmand is part of a bigger picture. Boucher
agreed and said it was important to get other countries to look at the
country as a whole and to promote national authority, not just focus
on the regions where they are operating.
¶16. Boucher said that everyone needed to accept ground spraying of poppy
in Helmand. Karzai stated that the United Kingdom would not accept it.
Boucher urged Karzai to focus on poppy this year to show our seriousness
in the most serious of places, Helmand. Karzai reported that Helmand
Governor Wafa complained that the British were willing to do eradication
only in areas where there was government control, but that we needed to
eradicate where the Taliban were. Boucher urged Karzai to consider a
pilot project in Helmand and offered to approach the British if necessary.
Boucher said that he would be meeting his British counterpart soon and
would raise the issue.
Spring Offensive
----------------
¶17. Karzai believes that 2007 will be a better year but called for better
preparations to deal with the spring offensive. We need to show the people
that we are prepared, he said. Boucher stated that the spring offensive
must be “our offensive” and that we need to hit the Taliban hard
KABUL 00000185 005 OF 005
before they can come at us. He commented that all of us were better
prepared this year.
¶18. Karzai asked Boucher to convey to Prime Minister Aziz how grateful
he was for his recent visit to Afghanistan. He also noted that he
enjoyed Boucher’s recent meeting with him in Turkmenistan and he hopes
to be the first visitor to Ashgabat after the upcoming election.
¶19. SCA Senior Advisor Caitlin Hayden cleared this cable.
NEUMANN
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