Cablegate: The Maldives President Welcomes New U.S.

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OO RUEHIK
DE RUEHLM #0936/01 2800638
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O 070638Z OCT 09
FM AMEMBASSY COLOMBO
TO RUEHC/SECSTATE WASHDC IMMEDIATE 0602
INFO RUCNMEM/EU MEMBER STATES COLLECTIVE PRIORITY
RUEHKA/AMEMBASSY DHAKA PRIORITY 1931
RUEHIL/AMEMBASSY ISLAMABAD PRIORITY 8967
RUEHKT/AMEMBASSY KATHMANDU PRIORITY 7205
RUEHLO/AMEMBASSY LONDON PRIORITY 5148
RUEHNE/AMEMBASSY NEW DELHI PRIORITY 3345
RUEHNY/AMEMBASSY OSLO PRIORITY 5104
RUEHOT/AMEMBASSY OTTAWA PRIORITY 1381
RUEHSM/AMEMBASSY STOCKHOLM PRIORITY 0639
RUEHKO/AMEMBASSY TOKYO PRIORITY 4214
RUEHCG/AMCONSUL CHENNAI PRIORITY 9527
RUEHBI/AMCONSUL MUMBAI PRIORITY 6828
RUEHON/AMCONSUL TORONTO PRIORITY 1310
RHEFDIA/DIA WASHINGTON DC PRIORITY
RUEHGV/USMISSION GENEVA PRIORITY 3760
RHHMUNA/HQ USPACOM HONOLULU HI PRIORITY
RUEHBS/USEU BRUSSELS PRIORITY
RHEHAAA/NATIONAL SECURITY COUNCIL WASHINGTON DC PRIORITY
RUEKJCS/SECDEF WASHDC PRIORITY

UNCLAS SECTION 01 OF 04 COLOMBO 000936

SENSITIVE
SIPDIS

DEPARTMENT FOR SCA/INSB,
TREASURY FOR MALACHY NUGENT AND ATTICUS WELLER,
EEB FOR JENNIFER PETERSON

E.O. 12958: N/A
TAGS: PGOV PREL PREF PHUM PTER EAID MOPS ECON EFIN
CE
SUBJECT: THE MALDIVES PRESIDENT WELCOMES NEW U.S.
AMBASSADOR WITH ASSISTANCE REQUESTS

REF: COLOMBO 892

COLOMBO 00000936 001.3 OF 004

1. (U) THIS IS AN ACTION REQUEST. DEPARTMENT SEE PARA 12.
TREASURY SEE PARA 13.

2. (SBU) SUMMARY: In his first meeting with Ambassador
Butenis, the Maldives President Nasheed outlined an ambitious
program of environmental and economic reform, business
development, social-service improvements, and military and
other international cooperation. The Maldivians insisted
they did not want handouts. Rather, they were interested in
technical assistance and help in finding free-market
solutions to their problems. Post actively engages with the
Maldives in a number of areas. But this engagement, while
significant, meets neither the Maldivians' desire for greater
cooperation and assistance, nor the U.S. vision of a robust
and mutually beneficial relationship with a democratic Muslim
state. Post will send septel a more detailed and
comprehensive analysis of the specific assistance requests
from the Maldivians and areas of potential cooperation. In
the meantime, post has formed a Maldives task force headed by
the DCM to compile this information. Post requests
Department identify a point person and office to coordinate
U.S. assistance and cooperation with the Maldives. END
SUMMARY.

THE PRESIDENT'S MANY PROMISES
-----------------------------

3. (SBU) On October 1, Ambassador Patricia A. Butenis
presented her credentials to President of the Republic of
Maldives Mohamed Nasheed. In lieu of a series of previously
scheduled individual meetings with a range of Maldivian
officials following the credentialing ceremony, the president
invited the Ambassador and her delegation to return later in
the day for an expanded meeting with the president and key
members of his cabinet. At the latter meeting, the president
provided an overview of his government's goals and promises
to the Maldivian people since it took office November 2008.
First and most importantly was the promise to restore
democracy, freedom of assembly, and a system of checks and
balances between three branches of government following the
30-year authoritarian rule of former President Gayoom. The
president believed the GOM had made good progress in this
area but welcomed assistance to consolidate and deepen
democracy. (NOTE: Members of the Maldives Opposition
Movement, including the former ruling DRP party, traveled to
Colombo earlier in the week to discuss with members of the
diplomatic community their concerns regarding free assembly
and freedom of the press under the new president, claiming
that opposition rallies had been disrupted and the opposition
was denied access to the government-controlled press. They
said they had good access to the private press. Embassy has
not seen evidence to substantiate these claims but will
follow the situation closely. END NOTE.)

4. (SBU) President Nasheed also discussed the problem of
climate change, which threatens to raise sea levels to the
point of forcing the abandonment of many islands of the
Maldives. (NOTE: The president recently spoke passionately
on this issue to the UNGA, as well as at the UN Summit on
Climate Change, and had been named a "hero of the
environment" by Time Magazine. END NOTE.) He asked for U.S.
assistance in many aspects of the climate issue, including
developing a plan for carbon neutrality, strengthening
environmental regulations, starting up green utility

COLOMBO 00000936 002.3 OF 004

companies, and more. President Nasheed wanted to make the
Maldives a show-piece of environmental awareness,
experimentation, and decisive action. While they recognized
that the Maldives going "carbon neutral" would have no real
impact on the global environment, they hoped that their
example would inspire others who had more and better
resources to make the hard choices necessary to save the
planet. (NOTE: A knowledgeable third-country diplomat
recently told econoff that despite all the promises, he had
seen no evidence that the Maldives had actually taken any
action to reduce its carbon footprint. END NOTE.)

5. (SBU) The president outlined as well what he called his
"five pledges" to the people of the Maldives:

-- Cost of Living: A high budget deficit and bloated
government bureaucracy were contributing to high costs. The
president had a plan to reduce spending and the size of the
government in line with IMF recommendations but requested
U.S. help in convincing the IMF to be flexible by allowing
the Maldives to reduce the number of government employees
rather than reducing government salaries. The GOM also had
plans to restructure its tax code to create goods and sales
taxes, income taxes, and business profit taxes, and would
appreciate U.S. technical assistance. (NOTE: The Maldives
previously requested technical assistance on these issues.
Post is coordinating with Washington on this request. END
NOTE.)

-- Build Low-Cost Housing: The Maldives had a plan to offer
50-year leases on premier real estate plots to developers
willing to build ten low-cost houses per high-end plot. Thus
far, a few developers had taken the offer, but many more
low-income units needed to be built. The president requested
help in locating additional such developers. He also
requested assistance in establishing a western-style mortgage
program for home-buyers.

-- Reduce Drug Abuse: The Maldives had one of the world's
worst drug-abuse problems with approximately 10 percent of
the population classified as users (mostly heroin). The
president requested U.S. assistance with prevention and
rehabilitation programs.

-- Introduce a Health Care Plan: The GOM intended to cover
the entire population with a social insurance scheme by 2012.
High deficits and low revenues made this difficult.

-- Establish a Nationwide Transport System: The Maldives
lacked a comprehensive transportation system linking its many
islands. The GOM had found a private ferry company to manage
routes to some of the islands and sought to expand the
program, but there remained difficulties in attracting
investment.

6. (SBU) Ambassador in general terms responded positively to
the president's requests, noting that the U.S. would like to
assist the Maldives as much as possible. She promised to
discuss the president's requests with Washington. In
response to her request for a single point of contact in the
GOM with whom we could work, the president responded that the
vice president, Dr. Mohamed Waheed -- who has already been in
touch with A/S Blake regarding a number of specific
assistance requests -- would serve in that role. On the
question of coordinating requests and assistance amongst
potential donor nations, the president noted that a donors'

COLOMBO 00000936 003.3 OF 004

conference was planned for November. Ambassador also noted
our commitment to increase the official U.S. presence in the
Maldives and discussed options. (NOTE: Post has been in
touch with SCA/EX on leasing office space in Male, which
would provide a base of operations for an LES representative
based in Male and for embassy officials when they traveled
there from Colombo. We also are exploring the option of
engaging a Maldivian LES person to work at the embassy. END
NOTE.)

OTHER MEETINGS
--------------

7. (SBU) In addition to the meeting with the president and
his cabinet, the Ambassador also met separately with the vice
president, who covered many of the same items raised at the
president's meeting and provided further details. He also
discussed the current political situation in Male, noting
such things as the growing risk of Islamic extremism and the
opposition the GOM faced for opening relations with Israel.
In a meeting at the Ministry of Defense, DefMin Ameen Faisal
said his two top concerns were violent religious extremism
and maritime threats, such as Somali pirates. The Maldives
was prepared to sign an information-sharing agreement and an
Acquisition and Cross-Servicing Agreement (ACSA) with the
U.S. He also reiterated the Maldives' interest in
establishing a USN facility in the southernmost atoll. He
thanked the Ambassador for U.S. security assistance and
ongoing Joint Combined Education and Training (JCET). He
confirmed media reports that the Maldives intended to
contribute to UN peacekeeping operations and requested
assistance in developing PKO capability (NOTE: The Maldives
is not a Global Peace Operations -- GPOI -- recipient. END
NOTE). The Ambassador expressed appreciation for excellent
security cooperation and promised to follow up on the
minister's requests.

8. (SBU) Ambassador hosted a lunch for representatives of
civil society organizations, including the Raaje Foundation,
focusing on the promotion of democracy and human rights;
Transparency Maldives, which promotes good governance and
works to eliminate corruption; Society for Women against
Drugs, which provides intervention and after-care support to
drug abusers; and the American Red Cross, which has been
focused on post-tsunami recovery and formation of a Maldivian
Red Crescent Society. The NGO representatives described
their work, discussed areas for improvement, and requested
assistance with developing fund-raising capacity, expanding
democracy and good-governance programs, and otherwise
increasing their contact and cooperation with the USG.

THE WAY AHEAD AND ACTION REQUESTS
---------------------------------

9. (SBU) The Maldives is a good news story: a Muslim country
with a democratically elected government that is free-market
oriented and pro-U.S. It faces a host of challenges,
however, and is very eager to work with the U.S. and other
western partners. The Maldivians insist they do not want
handouts. Rather, they are interested in technical
assistance and help in finding free-market solutions to their
problems.

10. (SBU) Embassy actively engages with the Maldives in a
number of areas, including:

COLOMBO 00000936 004.3 OF 004

-- Support for an American Corner at the Maldivian National
Library and a Maldives Virtual Presence Post (VPP);
-- Positioning of a Public Affairs Specialist in Male in the
near future;
-- Robust Maldivian participation in International Visitor
programs;
-- Very active Maldivian military participation in
International Military Education and Training (IMET) courses,
seminars, expert exchanges, conferences, and U.S. service
academy scholarships, as well as bilateral high-level visits;
-- Regular visits by USN ships;
-- Support (50K USD) for the drug abuse aftercare program;
-- English Language Fellow regular visits to the Ministry of
Education; and
-- Training of Maldivian police at the FBI's National Academy.

11. (SBU) This engagement, while significant, meets neither
the Maldivians' desire for greater cooperation and
assistance, nor the U.S. vision of a robust and mutually
beneficial relationship with a democratic Muslim state. Post
will send septel a more detailed and comprehensive analysis
of the specific assistance requests from the Maldivians and
areas of potential cooperation. In the meantime, post has
formed a Maldives task force headed by the DCM to compile
this information. We have encouraged the Maldivians to
coordinate better their interaction with the international
community to void overlap and redundancy in assistance. They
are planning a donors' conference in November, which we plan
to attend.

12. (SBU) ACTION REQUEST FOR DEPARTMENT: Post requests
Department identify a point person and office to coordinate
U.S. assistance and cooperation with the Maldives.

13. (SBU) ACTION REQUEST FOR TREASURY: The Maldives President
Nasheed strongly requested U.S. support for approval of an
IMF stand-by agreement for the Maldives in the upcoming
October 23 IMF board meeting. During the recent IMF staff
mission, the IMF staff insisted that the Maldives meet key
targets by October 15, in advance of a vote on the IMF
program. The IMF seeks to impose stiff medicine in its
program to control the Maldives' massive budget deficit and
uncontrolled spending (see reftel). President Nasheed argued
that while the Maldives would meet its other targets, the
goal to cut drastically government salaries was politically
unfeasible. Instead, the Maldives preferred to focus on a
medium-term goal to reduce government employment by one
third. In addition, the Maldives believed that the proposed
IMF program was inadequate. According to President Nasheed,
the IMF planned to disburse up to seven times the Maldives
IMF quota ($86 million), but the Maldives needed 12 times its
quota, or $147 million. (NOTE: The Maldives Monetary
Authority officials told econoff several weeks ago that the
proposed IMF package was $78 million at most. END NOTE.)
Post is convinced that the Maldives is sincere in its
intention to reform and, given the precarious state of the
Maldivian economy, urges Washington agencies to support an
IMF program in the October 23 meeting. If necessary, the IMF
could monitor the Maldives' progress toward meeting IMF
targets by disbursing the financial support in tranches, as
the IMF has done in Sri Lanka.
BUTENIS

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