Identifier
Created
Classification
Origin
03ROME4957
2003-10-31 07:58:00
CONFIDENTIAL
Embassy Rome
Cable title:  

IRAQ RECONSTRUCTION: ITALY'S SPECIAL ENVOY

Tags:  EAID ECIN ECON PREL IZ IT EUN 
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C O N F I D E N T I A L ROME 004957 

SIPDIS


E.O. 12958: DECL: 10/30/2013
TAGS: EAID ECIN ECON PREL IZ IT EUN
SUBJECT: IRAQ RECONSTRUCTION: ITALY'S SPECIAL ENVOY
COMMITTED BUT CONCERNED

REF: A. ROME 4438

B. STATE 301383

C. ROME 4904

D. ROME 2148

E. ROME 1678

F. ROME 1660

G. STATE 138587

H. ROME 4764

Classified By: Economic Minister Counselor Scott Kilner for reasons
1.5 b and d.

C O N F I D E N T I A L ROME 004957

SIPDIS


E.O. 12958: DECL: 10/30/2013
TAGS: EAID ECIN ECON PREL IZ IT EUN
SUBJECT: IRAQ RECONSTRUCTION: ITALY'S SPECIAL ENVOY
COMMITTED BUT CONCERNED

REF: A. ROME 4438

B. STATE 301383

C. ROME 4904

D. ROME 2148

E. ROME 1678

F. ROME 1660

G. STATE 138587

H. ROME 4764

Classified By: Economic Minister Counselor Scott Kilner for reasons
1.5 b and d.


1. (U) This cable contains an action request in paragraph 15.


2. (C) SUMMARY: Italy's Special Envoy to Iraq, Ambassador
Antonio Armellini, met with EmbOffs on October 27 to discuss
the reconstruction process to date and Italy's pledge of Euro
200 million at the Madrid Donors Conference. Armellini
characterized the reconstruction effort so far as a "mixed
bag:" he acknowledged that the Madrid conference went far
better than expected and that the well-being of Iraqis
continues to improve. He underscored, however, the critical
need to focus on the "psycho-economic" factor: the perception
that the lack of security in Iraq is undermining the
reconstruction process.


3. (C) Armellini noted that while the more than 3,000 Italian
personnel represent the third largest civilian and military
contingent in Iraq, they are not widely recognized as such.
He also detailed how Italy had to overcome a problematic
selection process to place nearly 40 Italian experts in CPA
and in new Iraqi ministries and provincial authorities. He
specifically requested that CPA provide clear security
instructions to all Italian personnel working with CPA.
Armellini also provided an update of five reconstruction
projects in the areas of transportation, health, environment,
media and communications. END SUMMARY.

MADRID'S MESSAGE MUTED BY SECURITY CONCERNS
--------------


4. (SBU) EcMin, EconOff and PolOff met October 27 with
Italy's Special Envoy to Iraq, Ambassador Antonio Armellini,
and his MFA assistant, Dr. Cajati, to take their pulse on
Iraq reconstruction in the aftermath of the Madrid Donors
Conference. EcMin expressed strong USG appreciation for
Italy's generous pledge of Euro 200 million over three years,
recognizing that for the GOI to contribute such an amount in

the face of significant budget pressures, represents a major
effort (Ref A). EcMin also noted that we look forward to
working with Italy in the context of the Paris Club on the
crucial matter of Iraqi debt restructuring (Ref B).
Armellini reflected that the Madrid conference had gone far
better than expected. He noted that the Donors Conference,
while always about money, "also sends a signal about
re-engaging in Iraq, but unfortunately that signal was muted
by (high profile) security problems." Armellini acknowledged
that the GOI pledge represents a major effort, but added that
"it is consistent with the existing major efforts that Italy
has made in Iraq."


5. (C) Armellini offered his impression of progress to date
in Iraq, with the caveat that his view is the product of six
or seven recent trips to the country since his appointment as
Special Envoy, rather than from having been based there
continuously (Ref C). Following the war, the Iraqi people
had benefited from steadily increasing well-being through
about July, he said, at which point progress seemed to level
off. Things began picking up again about a month ago,
Armellini continued, as CPA and Iraq's ministries have begun
to manage more effectively the running of the country, and as
tribal leaders in the provinces have begun retaking control.
But, also recently, there has been an upsurge in the number
of attacks, Armellini said. Baghdad, he observed, feels like
a schizophrenic city where there are plenty of products in
stores and residents enjoy outdoor cafes, but wonder when the
next bombing will occur.


6. (C) EcMin asked whether sensational events are
overwhelming other more positive news in Iraq. Armellini
replied that most of Iraq is quiet, apart from Baghdad and
the Tikrit triangle, but that the increasingly heavy
fortification of buildings conveys the image of a fortress
that is, nonetheless, vulnerable, as the Al Rasheed Hotel
proved to be over the weekend. One does not know, Armellini
said, whether the increased attacks are the final acts of


opposition or the reflection of an increasingly potent
resistance to the occupation. In any event, the current
scenario is not a good one. We need to focus, he admonished,
on "what could be called the psycho-economic element" of the
situation: failing to convey a more secure and stable image
of Iraq could deter participation in the reconstruction
process.

ITALY: "THE THIRD LARGEST COALITION PRESENCE"
--------------


7. (C) Armellini went to some length to describe Italy's
civilian and military contingent in Iraq, which he maintained
is the third largest in the Coalition (Ref D). Armellini
noted that Italy has over 3,000 military personnel in Iraq,
including: 300-400 Carabinieri involved in law enforcement,
1,700 infantry, a naval contingent aboard an Italian vessel
based in Kuwait, and a helicopter unit (Ref E). Armellini
said that the GOI will soon have embedded approximately 40
experts in CPA and with new Iraqi authorities. He described
the process, however, as "excruciating," noting that many
highly qualified applicants were lost due to delays in the
review process, during which Italy "was not always treated
initially as a part of the coalition of the willing."


8. (SBU) Armellini specified that half of the total number of
Italian experts are in Baghdad working on transportation,
higher education, culture, health, justice, public finance,
irrigation, and military training. He added that there are
some 15 experts in Basra, where an Italian is serving as
Deputy Governor while others are working in the areas of
transportation, health, political affairs, media, water and
sanitation. Finally, in Dhi Qar, Armellini noted, a second
Italian holds the post of Deputy Governor, while another four
experts are working in the areas of media, agriculture,
health and transportation.


9. (C) Armellini reviewed five bilateral projects that are
pending in Iraq. The first he described as a proposal from
Telecom Italia to supply fixed-line telephone service to Iraq
by way of its Mediterranean/Nautilus link which runs through
Israel and Jordan. According to Armellini, this proposal
could complement, rather than compete with, a proposed link
through Kuwait. While Armellini noted that he had heard some
opposition in Iraq to the idea of using telephone links that
run through Israel, he suggested that because the lines also
run through Jordan, there could be a wide mutual interest in
promoting such a venture. He added that he looked forward to
USG support for the proposal.


10. (SBU) A second Italian project that Armellini described
-- a 12-15 month, Euro 1.3 million proposal to develop a
national transportation infrastructure plan -- has reportedly
already received a green light from CPA and the Iraqi
Infrastructure Ministry. Armellini said that, having
completed several advance team visits, an initial project
team of ten people is en route to Iraq. This group
reportedly includes representatives of Italy's Ministry of
Infrastructure, national rail company, air traffic
controllers, Italy's major energy company (ENI),and the
national road builders' association. The project, according
to Armellini, is based on the national transportation plan
that Italy developed some years ago and which is now a
blueprint for the EU transportation plan. The plan will
reportedly identify and prioritize transportation
infrastructure projects, which will stimulate investment and
commerce. Given that the success of the project will depend
upon in-depth assessments of intermodal transportation
capabilities throughout the country, Armellini stressed the
importance of realizing a high-degree of coordination with
CPA.


11. (SBU) Armellini briefly mentioned three other projects.
One is a marshland reclamation project being carried out by
the Iraqi Foundation and the Italian and Iraqi Environment
Ministries. Another is the transformation of Italy's
erstwhile field hospital into a base from which Italian
medical professionals work on the structural rehabilitation
of the Iraqi health care system (Ref F). As noted, Italians
are also assisting with public health in the Basra region.
Finally, Armellini mentioned a project in which Italy's state
broadcasting network, RAI, would provide content and training
support to its Iraqi counterpart. (In a separate, October 29
discussion with EcMin, RAI's newly-appointed President, Lucia
Annunciata, said that RAI has already developed some 300
hours of content, including sports and cultural programming,


for delivery to the Iraqi broadcasting network. RAI has also
lined up journalists and support technicians to help train
Iraqi counterparts. EcMin expressed appreciation for RAI's
offer to contribute its expertise to Iraq during this
critical period. "We must do something," Annunciata stated
forcefully, adding, however, that the project is temporarily
on hold, pending clarification of whether the security
situation permits sending additional personnel to Baghdad.)

ITALIAN PRIVATE SECTOR ENGAGEMENT STILL LIMITED
-------------- --


12. (SBU) During their meeting, EcMin asked Armellini for his
reaction to a recent newspaper article which claimed that
there are nearly 200 Italian firms ready to work in Iraq.
"There may in fact be a couple hundred Italian companies
waiting in the wings," Armellini said, "but the current view
is that they will wait to engage in Iraq until basic security
and telephone service is available." He noted that, for the
time being, Jordanian, Lebanese and Syrian businesses are
booming in Iraq, while a number of Italian companies have
opted to work out of regional offices in Kuwait and Oman.


13. (SBU) Armellini noted that an Italian presence is
"completely lacking" among Bechtel subcontractors, despite a
great deal of interest on Italian firms' part. EcMin replied
that the Embassy was well aware of the problem of reaching
Bechtel, besieged by offers at the time of solicitations,
and, in reporting it back to Washington, found that the
phenomena was not unique to Italy (Ref G). Armellini
affirmed, however, that several smaller Italian firms with
experience in Iraq that had managed to return to the country.
Armellini also mentioned that ENI was already working with
the Oil Ministry and was in the process of opening an office
in Baghdad. Ansaldo, a diversified power plant and
transportation construction company and part of the
Finmeccanica Group, is also already active in Iraq, according
to Armellini.

COMMENT
--------------


14. (C) Armellini on several occasions made the point that
the GOI is very much looking forward to the reconstruction
process beginning in earnest. Through significant post-war
military participation, development of multiple
reconstruction projects, embedding a sizable complement of
experts with CPA and Iraqi authorities, and, most recently,
through active participation in and promotion of the Madrid
Donors process, Italy, he said, has sought to show itself as
a close US ally and as a leader within the EU on Iraq issues.
But the GOI, Armellini emphasized, has also sought to
position Italy to reap the fruits of these political,
military and human capital investments. This was clearly in
evidence in the large, multi-sector delegation Italy sent to
the Madrid private sector meeting (Ref H). Within the GOI,
Armellini is championing an activist approach in Iraq, but he
is also making clear that this approach generates significant
anticipation, if not expectation. In Armellini's words, the
GOI "anticipates -- yes, I would say 'anticipates' rather
than 'expects' -- receiving recognition" commensurate with
its contributions.


15. (C) Action Requested: Apart from his general request for
USG support for Telecom Italia's proposal, Armellini
specifically requested that CPA provide clear instructions on
security to any and all Italian personnel working with CPA.
Embassy asks that the Department please provide us with the
appropriate points of contact within CPA with whom Armellini
can discuss and clarify security procedures. End Action
Request.
SEMBLER


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2003ROME04957 - Classification: CONFIDENTIAL