BAGHDAD SECURITY PLAN: GOI EXPEDITES BUDGETARY

C O N F I D E N T I A L SECTION 01 OF 02 BAGHDAD 003061

SIPDIS

SIPDIS

E.O. 12958: DECL: 08/20/2016
TAGS: EFIN PREL EAID PGOV IZ
SUBJECT: BAGHDAD SECURITY PLAN: GOI EXPEDITES BUDGETARY
ASSISTANCE FOR ECONOMIC PROJECTS

REF: A. BAGHDAD 3015


B. BAGHDAD 2937

Classified By: CDA Daniel Speckhard, for reasons
1.5 (b) and (d).

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Summary
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1. (C) Deputy Prime Minister Barham Salih has instructed
the Ministry of Finance and other GOI entities to begin
implementing new measures, approved by the Economic
Affairs Committee, to accelerate reconstruction spending
to support the Baghdad Security Plan. Barham Salih
believes these measures could be a model for improving
overall GOI contracting and budgetary expenditure
mechanisms ("budget execution") among both the provinces
and ministries. Mission staff is preparing a position
paper for Prime Minister Maliki to identify budgetary
execution bottlenecks and make recommendations for
action. End Summary.


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Economic Affairs Committee Approves Accelerated Measures
for Baghdad
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2. (SBU) Deputy Prime Minister Barham Salih recently
informed us that the Economic Affairs Committee agreed
on several new procedures to accelerate reconstruction
expenditures in Baghdad governate in support of the
Baghdad Security Plan:

- Grant Baghdad City (the "Amanat") the authority to
shorten the time period for bidding and solicitation of
open bids to one week from one month; and allow for
sole sourcing (direct invitation) if an acceptable bid
is not received after the two one-week bidding
announcements.

- Increase the qualifications rating by one level for all
contractors and companies already registered in Iraq,
thus expanding the pool of available contractors; and

- Authorize the release of $10 million from the Amanat's
operational budget as immediate payment to support
essential services in Baghdad. These funds should be
spent according to the priority orders of the Baghdad
Secretariat through the last quarter of this year.

SIPDIS

DPM Barham Salih provided written notification on
August 15 of the Economic Affairs Committee decisions
to the Ministry of Finance, the Ministry of Planning,
the Baghdad Municipality Secretariat and to the Board
of Supreme Audit.

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PM Issues New Directive on Spending Guidelines
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3. (SBU) Mission IRMO Director Ambassador Saloom met
with Prime Minister Maliki's Chief of Staff, Dr. Tariq
Nejim, on August 15 to discuss ways to improve the
Iraqi government's contract and budget execution
mechanisms generally, including those involving the
central government ministries. During the meeting,
Ambassador Saloom noted that the Baghdad Security
Plan's success would be dependent on improved
coordination between the security and economic
components of the plan. Dr. Tariq Nejim stated that
PM Maliki is working on a directive to the Ministry of
Finance to modify spending guidelines for provincial
development funds. The directive will shift execution
authority to the Governors and the Mayor of Baghdad.

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Comment
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4. (C) DPM Barham Salih believes the streamlined
measures for accelerating reconstruction expenditures
in Baghdad could be a model for improved budget
execution at the provincial and federal level. It is

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too early to judge how well these measures will be
implemented in Baghdad. Budget execution at the
federal level remains a serious problem and provincial
capacity is uneven and also lagging generally. The
mission is preparing a position paper for the PM's
office that will evaluate current contracting and
budgetary expenditure mechanisms, identify bottlenecks
and critical points, and make recommendations for
improving the system. This paper will focus on Iraq's
vital energy and electrical sectors. We hope this
analysis makes clear to the PM the seriousness of the
budget execution issue, as well as stimulate the GOI
to adopt corrective measures.
SPECKHARD