Iraqi Reconstruction Fund Facility for Iraq (IRFFI)

UNCLAS AMMAN 007506

SIPDIS

SENSITIVE

USDOC FOR 4520/ITA/MAC/ONE/PTHANOS
TREASURY FOR OASIA - LARRY MCDONALD

E.O. 12958: N/A
TAGS: PREL ECON EAID IZ
SUBJECT: Iraqi Reconstruction Fund Facility for Iraq (IRFFI)
Meeting Reviews State of Play



1. (SBU) On September 6 the Japanese Embassy in Amman
hosted an information sharing meeting on the current
activities of the Iraqi Reconstruction Fund Facility for
Iraq (IRFFI) in the run up to the October 13-14 Tokyo Donor
Conference. The meeting was chaired by IRRFI Donor
Committee chief Ambassador Akio Shirota, assisted by Interim
Iraqi Government (IIG) Planning and Development Cooperation
Minister Mehdi al-Hafedh, and the UN Development Group
(UNDG) and World Bank IRFFI Trust Managers. Attendees
included representatives (mainly Ambassadors) of
approximately twenty Amman-based Embassies.


2. (SBU) Shirota opened the meeting by distributing a draft
agenda for day one of the October 13-14 Tokyo Donor
Conference (faxed separately). Planning Minister Mehdi
stressed the IIG's desire to use the Tokyo conference as a
vehicle to "present our vision of the future" and to obtain
additional donor support. Shirota commented that the Tokyo
conference should indeed be a "celebratory event,"
underlining areas of significant progress that have been
ignored by the media focus on acts of violence.

IIG Working Toward an Iraq Development Strategy
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3. (SBU) Mehdi said that the IIG is preparing a
comprehensive document to serve as a three-year Iraq
"national development strategy," noting that the IIG hopes
that this paper will serve as a basis for discussion at the
Tokyo conference. He promised to provide the strategy
document to donor countries for review by late September

2004. In response to questions, Mehdi and Shirota assured
attendees that donors will also be provided with a
substantial list of development "success stories" and an
overview of the current overall security situation at or
before the Tokyo meeting.

Iraq Trust Fund Developments
--------------


4. (SBU) The World Bank and UNDG trust fund managers
outlined the status of funds received and projects awarded.
The managers reported that both trust funds have nearly
exhausted the over $720 million in pledged funds already
deposited (approximately $200 million in pledged funds have
not yet been provided). Funded World Bank trust fund
programs include approximately $100 million for education
and school rehabilitation, $60 million for water and
sanitation projects, $55 million for telecommunications
projects, $90 million for other infrastructure, and $55
million for private sector development. Planned UNDG
projects include $340 million split among 35 electricity,
health, and education projects.


5. (SBU) The UNDG manager acknowledged that at least one
major donor (read the USA) is considering re-directing its
trust fund contribution away from electricity toward job-
creation projects. This evoked a comment from attending EU
Director General Patrick Laurent that the EU may similarly
adjust its outyear Iraq assistance strategy. (Note: Laurent
later privately confirmed that the EU will announce a new
200 million Euro trust fund donation at the Tokyo
Conference. End Note.)

Implementation Monitoring
--------------


6. (SBU) The World Bank and the UNDG managers strongly
praised the professionalism of their Iraqi counterparts at
the senior and working level. In response to questions on
effective monitoring, the World Bank representative noted
that the Bank is currently advertising for Iraqi companies
to take over financial management and environment/social
safety net responsibilities typically performed by World
Bank in-country staff. For his part the UNDG trust fund
manager acknowledged that optimal efficiency cannot be
ensured until full-time international UN staff begin working
in Iraq, at a point in time yet unknown.


7. Baghdad minimize considered.

Hale