Identifier | Created | Classification | Origin |
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06BAGHDAD2937 | 2006-08-14 10:27:00 | CONFIDENTIAL | Embassy Baghdad |
VZCZCXRO9525 RR RUEHBC RUEHDE RUEHIHL RUEHKUK DE RUEHGB #2937/01 2261027 ZNY CCCCC ZZH R 141027Z AUG 06 FM AMEMBASSY BAGHDAD TO RUEHC/SECSTATE WASHDC 6245 RUEATRS/DEPT OF TREASURY WASHDC RHEBAAA/USDOE WASHDC RUEKJCS/SECDEF WASHINGTON DC INFO RUCNRAQ/IRAQ COLLECTIVE |
C O N F I D E N T I A L SECTION 01 OF 02 BAGHDAD 002937 |
1. Summary: On August 9, the Ambassador met with
Minister of Finance Bayan Jabr to discuss problems in the GOI budget execution process that were preventing GOI ministries and provinces from carrying out their badly needed programs, including support for the vital Baghdad Security Plan now underway. The Ambassador recommended that the Ministry of Finance and the Ministry of Planning work to develop a proactive program of working groups within the cabinet, provinces and cities (as appropriate) to identify and remove roadblocks. Minister Jabr acknowledged the importance of establishing an efficient budget planning and execution process in Iraq to deliver badly needed services to the Iraqi people. He also noted the critical role the ministries have to play in support of the Baghdad Security Plan. Jabr already meets weekly with most Ministers but welcomed the idea of lower level meetings, including participation of U.S. ministerial advisors, and pledged to begin such a program immediately. Jabr also noted the need to build the planning, contracting and overall budget execution capabilities of the Iraqi government. The Ambassador expressed U.S. willingness to continue to work together on such capacity building. End summary. - - - - - Solutions Needed - Iraq Minister of Finance Pledges Help on Budget Execution - - - - - 2. (C) On August 9, the Ambassador met with Minister of Finance Bayan Jabr to discuss problems in the GOI budget execution process. The Ambassador was accompanied by the Director of the Iraq Reconstruction Management Office (IRMO), the Treasury Attache and the Deputy Econcons. The Ambassador began by noting that officials in GOI ministries, provinces, and cities were complaining that the MOF was failing to release funds in a timely manner or imposing onerous requirements that prevented them from carrying out their badly needed programs. The Ambassador noted that the vital Baghdad Security Plan was now underway. While the USG was prepared to cover initial expenses for the economic aspects of the plan for a month or two, it is vital that the GOI, through central and local government organizations, be able to plan and contract projects as well as disburse project funds quickly. 3. (C) The Ambassador added that the issues were not confined to projects in the Baghdad region but included issues in other regions. Further, ministries have argued to US officials that the MOF is not releasing in a timely manner funds for operations and maintenance as well as investment within ministries. Resolving the various intertwined issues is vital to providing the services from health to energy to water that the Iraqi people desperately need. For example, the USG has supported construction or rehabilitation of water processing plants, but the next step is providing the pipe connections from the plants to houses. GOI officials need the funds to carry out such projects and the funds must be released promptly. The Ambassador emphasized that these issues are also critical if Iraq is to be able to capitalize on the new International Compact. If the GOI is not using its own funds efficiently or the funds are sitting in the MOF, other nations will not feel further donations are needed for projects in Iraq. The Ambassador urged the Minister to take immediate action to identify and remove roadblocks. He suggested that the MOF set up working groups with the ministries and local governments, beginning with Baghdad, to identify and resolve issues immediately. - - - - - Minister Commits to Improvements - - - - - 4. (C) Minister Jabr said that he was fully committed to making the resources in the budget available promptly. Timely execution of well-planned projects and delivery of services was vital given the security situation as well as the people,s needs. He was fully committed to the success of the Baghdad Security Plan. He agreed that Baghdad was a test case for the new government. He noted that the International Compact was important for Iraq,s future and it was unreasonable to expect others to provide aid if Iraq's own government had budgeted unspent money. 5. (C) The Minister was aware that GOI organizations from ministries to local governments were having difficulties at all stages from planning to budgeting to contracting to disbursing of funds for projects because of inexperience and BAGHDAD 00002937 002 OF 002 lack of technical capability. Much more capacity building through training was needed from top to bottom. He argued that he did respond promptly and fully to ministerial requests for funds already budgeted. He noted, however, that before releasing funds, he checked the requesting ministry,s &bank account.8 If the ministry still had significant funds in the bank, he did not add further monies automatically. 6. (C) Minister Jabr agreed with the Ambassador that inter-ministerial communication was vital to ensuring the GOI budget execution process worked as it should. He noted that he already met with ministers weekly to ensure he and they were aware of what needed to be done. He thought that the idea of having working groups with officials below ministerial rank was excellent and promised to start such groups. He welcomed participation by US advisors as well. The Ambassador ended the conversation by reiterating the US commitment to working together on capacity building at all levels to ensure the budget execution process works efficiently for the future of Iraq. KHALILZAD |