C O N F I D E N T I A L BAGHDAD 002392

SIPDIS

E.O. 12958: DECL: 06/03/2015
TAGS: PGOV PREL ECON KDEM KISL IZ IR
SUBJECT: CHARGE DISCUSSES IRAQI POLITICS AND INTERNATIONAL
ISSUES WITH DEPUTY PRESIDENT MAHDI

Classified By: Classified by Charge d,Affaires David Satterfield
for reasons 1.4 (b) and (d)


1. (SBU) CDA and DCM met with Deputy President Adil abd-
al-Mahdi on May 31 to discuss local politics and
international issues.

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IRAQI POLITICAL DEVELOPMENTS
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3. (C) After opening pleasantries, Mahdi noted that he has
devoted a lot of time over the past three weeks to Kurdish
issues. He said the agreement giving Massoud Barzani a
four-year term as President of the Kurdish Regional
Government offers grounds to hope for a period of relative
calm. Mahdi cautioned, though, that agreement was possible
because discussion of a number of sensitive issues, such as
the flag and the status of the Kurdish and Arabic languages,
has been suspended for now.


4. (C) On Sunni outreach and the constitution-drafting
process, Mahdi said the ITG must maintain a delicate balance.
On the one hand, it is essential to show respect for the
Sunni community's position and equities. However, this must
be done without undercutting the legitimacy of the elected
Transitional National Assembly (TNA), particularly its Sunni
members.


5. (C) Charge's expression of regret for the arrest of Iraqi
Islamic Party leader Mohsen Abdul-Hamid elicited little
reaction from Mahdi. The Deputy President calmly took on
board the explanation that the detention resulted from
inadvertence and that coalition forces were fine-tuning their
"hands-off" list to prevent future such occurrences.

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NO IRANIAN AMNESTY
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6. (C) Responding to a question from the Charge, Mahdi said
that the proposed liberation of Iranian prisoners in Iraq
will not take place. Although Prime Minister Jaafari did
indeed sign a letter authorizing a general amnesty for
detained Iranians, he lacks the authority to implement this
promise on his own. According to Mahdi, the Presidency
Council rejected the proposal; Charge noted that this was an
encouraging example of how that body can use its powers
responsibly.

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PREPARING FOR INTERNATIONAL CONFERENCES
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7. (C) Charge reminded Mahdi of the full slate of conferences
facing the IIG in June and July: the EU-US conference in
Brussels, the US-Iraq Joint Economic Committee, and the IRFFI
donors' conference. Charge also underlined the importance of
using these fora to present a coherent reconstruction and
development strategy and to demonstrate tangible progress in
reforming the policy distortions such as fuel and food
subsidies that hamstring
the capacity of the Iraqi economy to sustain economic growth.


8. (C) Mahdi concurred in the value of these meetings for
highlighting the progress Iraq has made and its continuing
need for assistance. Key economic policymakers such as Ali
Allawi, Mahdi's successor as Finance Minister, and Central
Governor Shabibi are fully committed to the need for economic
reform and are explaining the need for these steps to other
new members of the Cabinet who have not previously focused on
these issues.


9. (U) REO Hillah, Basrah, Kirkuk, and Mosul Minimize
considered.
Satterfield