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C O N F I D E N T I A L LONDON 002961 
 
SIPDIS 
NOFORN 
 
DEPART FOR SCA/PB (MARY TOWNSWICK) 
 
E.O. 12958: DECL: 11/28/2018 
TAGS: EAID ECON EFIN IBRD IMF PK UK
SUBJECT: PAKISTAN: UK ON MID-DECEMBER DONORS CONFERENCE 
 
REF: STATE 124618  

Classified By: Acting Political Counselor Jim Donegan, reasons 1.4 (b/d ).  

¶1. (C/NF) The UK is generally on board with a donors conference on Pakistan, though there is some hesitation over the timing, according to FCO Pakistan Team Leader Laura Hickey.  That said, it is likely that a UK Minister will attend.  Both Foreign Secretary David Miliband and Development Secretary Douglas Alexander are considering attending.  HMG is hesitating on the timing because it has no new money to offer.  HMG will try to re-package its current assistance and thinks a donor conference will look like an empty gesture if the international community does not pledge substantial new money.  On timing, Hickey suggested a donors conference might be an ideal way to spur on economic improvement if it occurred at the same time as the IMF's first quarterly review of the Pakistan program, which would also give donor countries time to prepare significant new packages of support.  Hickey noted that it was clear from Miliband's November 25 visit that Pakistani expectations of the donor conference are very high (septel) and hoped that the USG would pledge enough new support to carry the conference's success.  Absent new USG money, the success of the event would depend largely on non-traditional donors like China, Saudi Arabia, and other Arab nations.  

¶2. (C/NF) Hickey said the UK Department for International Development (DFID) was keen for the conference:  -- to give the Pakistanis a platform to explain what they would do to implement their IMF-endorsed economic reform program, thereby offsetting IMF concerns that the program will crumble in the first three months;  -- to gather a credible package of support from international donors for the next two years.  While international financial institutions are likely to fill most of the assistance gaps, it would be better for Pakistan to have grants and soft loans; and,  -- to be set up under the existing Development Partners forum rather than the more political Friends Group, so the Government of Pakistan and the World Bank should be in the lead.  Visit London's Classified Website: XXXXXXXXXXXX
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