DEPUTY SECRETARY COVERS POLITICAL PROCESS,

S E C R E T SECTION 01 OF 03 BAGHDAD 002348

SIPDIS

NOFORN

E.O. 12958: DECL: 06/01/05
TAGS: PGOV PHUM PINR ECON IZ
SUBJECT: DEPUTY SECRETARY COVERS POLITICAL PROCESS,
ECONOMICS AND SECTARIAN VIOLENCE IN MAY 19 MEETING WITH
DEPUTY PRIME MINISTER ROWSCH SHAWAYS

Classified By: Classfied by David M. Satterfield, Charge d'Affaires, fo

r reasons 1.4 (b) and (d).


1. (S/NF) SUMMARY: Deputy Prime Minister (DPM) Rowsch Shaways
told Deputy Secretary May 19 that the schedule for
development of a new constitution outlined in the
Transitional Administrative Law (TAL) must be kept. He also
said the Committee should include members from outside the
Transitional National Assembly (TNA) to ensure adequate Sunni
representation and prevent a potential boycott of the
constitution. Shaways said Iraq needs a free market economy,
more investment, and a free pricing system. Shaways said the
Council of Judges should develop a security system for
judges. Shaways said the Government must take a unified
stand, along with Shia and Sunni religious leaders, against
sectarian violence, which is often attributed - without
evidence - to the Badr Corps. The Deputy Secretary
reiterated USG support to Iraqi Security Forces, but
emphasized the responsibility of the Iraqi people for the
future of their country. END SUMMARY.

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CONSTITUTIONAL DEVELOPMENT
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2. (S/NF) Deputy Secretary met with Deputy Prime Minister
(DPM) Rowsch Shaways on May 19 to discuss political and
economic issues, as well as the recent increase in sectarian
violence. The Deputy Secretary asked Shaways about the
progress of constitutional development and how the public is
being engaged in the process. He noted the disquieting
uncertainty about when the Constitutional Committee will
begin its work. Shaways said the need to meet the TAL
deadlines must be balanced against the need for Sunni
participation in the process. Shaways accepted the need to
include &real Sunnis8 and said the key was to include
Sunnis who are believers in democracy and federalism - not
the rejectionists. Shaways also said the constitutional
development process should be "consensus-driven" and not
based on voting by Committee members.


3. (S/NF) Shaways added he does not agree with the
Transitional National Assembly's (TNA) insistence on having
only Assembly members as participants on the Constitutional
Committee because it precludes adequate Sunni participation
given their insignificant representation in the TNA.
Individuals from outside the TNA should be part of the
process, said Shaways, insisting that such expanded
participation would not result in a substantially different
constitution. Instead, he said, it would provide the
mechanism for "buy-in" by Sunnis and other minorities. He
added that a lack of such expanded participation could well
result in a boycott of the new constitution.


4. (S/NF) The DPM also mentioned the idea of developing a
committee comprising governmental representatives that would
participate in the constitution drafting process. He said it
was a good step, but not sufficient. Shaways went on to
complain that the Government's work was slowed by a tendency
to work only through certain ministerial committees that have
been set up to address broad subject areas, such as security
or civil society issues. He insisted that this model would
not work because the committees are too large and there are
too many of them to be effective. It is important, said
Shaways, for the Government to focus on its priorities.

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ECONOMIC DEVELOPMENT
--------------


5. (C) Deputy Secretary noted the many upcoming events in
June, including the International Monetary Fund Article IV
consultations and the Brussels conference at the end of the
month. He said the ITG must have a clear set of its
priorities - particularly for the Brussels conference - with
respect to economic development such as agriculture and
private sector development. Specific suggestions as to how
the international community can be more helpful would help to
better focus assistance.


6. (C) Shaways said Iraq needs a free market economy, adding
that investment must be encouraged. Currently, the security
situation precludes investment in many areas, he noted, and
this must be addressed to support investment - either through
the Government or private sector. Another priority, Shaways
indicated, is the implementation of a free pricing system -
and he specifically pointed to the need for market fuel
pricing. He said these issues must be worked through the
Council of Ministers.


7. (C) The Deputy Secretary concurred with DPM Shaways' views
on pricing, especially with respect to fuel. The current
pricing policy, he said, brings with it all the wrong
incentives, resulting in the misuse of electricity and fuel.
He pointed out that a great deal of natural gas, which could
be used for fuel for power plants, is currently burned
because there is no way to capture it. The Deputy Secretary
re-emphasized the need for the ITG to develop its priorities
for better policy making. The elections, he said, gave a
whole new face to Iraq and the international community
definitely wants to assist. However, it needs a single focal
point in the ITG to facilitate better support.

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THE JUDICIARY
--------------


8. (C) Shaways briefly discussed the judiciary, noting that
most judges in Iraq are former Ba'athists and alleging that
Saddam,s regime forced all judges to be involved in the
execution of opposition figures (thereby tainting the
judges). He said that, until there is a new generation of
judges, it would be difficult to find "clean" judges or those
who are unafraid of bringing judgments. Shaways did note
that there are some good judges at the Federal level and said
the most important duty of the Council of Judges is to
reconstruct the security system for judges. Conceding that a
100-percent solution is not likely, the DPM said even a
50-percent solution would be acceptable.

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SECTARIAN VIOLENCE
--------------


9. (C) In response to Deputy Secretary's question about the
recent increase in sectarian violence, Shaways suggested
several possibilities for who is perpetrating it and why. He
noted the routine accusations - although without credible
evidence - against the Badr Corps. He said the Government
must use the "Maghawir" (Ministry of Interior commandos) to
counter the violence and clearly state its position. A clear
statement of ITG policy, he said, would go "a long way" to
stopping the violence. He also said that contact must be
made with the Shia religious leaders, specifically Grand
Ayatollah Ali al-Sistani, to secure their assistance. The
DPM also said there would always be a tendency for Sunni
Ba'athists and radicals to try to incite sectarian violence.


10. (C) The Deputy Secretary agreed that a comprehensive
government approach to insurgency and violence is key to
Iraq's continued progress. He told DPM Shaways that part of
the Government's job is to set the core values and morality
of the country. It now has the opportunity to make unified
statements to the public - combined with statements by both
Shia and Sunni religious leaders - to emphasize that the
violence is not part of its vision for Iraq and terrorists
such as Zarqawi are nothing but murderers. He also suggested
that the ITG encourage others in the Islamic world to make
similar statements to reinforce this sense of unity against
sectarian violence. The Deputy Secretary told Shaways that
the Kurds could help to bring the Shia and Sunni together on
this issue.


11. (S/NF) Shaways said both the Sunni and the Shia are
pulling Iraq in a direction that is inconsistent with
democracy and indicated that support by Coalition Forces
remains necessary. Noting that the Coalition's mandate
pursuant to UNSCR 1546 would end after the elections
scheduled for the end of the year, the Deputy Secretary
reassured the DPM that the USG would continue to work with
Iraqi Security Forces to prepare them for fully taking over
Iraq's security. He emphasized the need to continue to
assess the situation but emphasized "we are in this for
success." Ultimately, he said, it is up to Iraqis to guide
their country to its ultimate goal, hence the importance of
addressing the problem of sectarian violence.


12. (U) REO HILLAH, REO BASRAH, REO MOSUL, and REO KIRKUK,
Minimize considered.
Jeffrey