AN IRAQI PUBLIC-EDUCATION STRATEGY FOR ECONOMIC

UNCLAS SECTION 01 OF 02 BAGHDAD 000041

SIPDIS

SENSITIVE

E.O. 12958: N/A
TAGS: ECON EPET PGOV PINS KCOR IZ
SUBJECT: AN IRAQI PUBLIC-EDUCATION STRATEGY FOR ECONOMIC
REFORM

REF: A. BAGHDAD 0020

B. BAGHDAD 4559

C. BAGHDAD 5079

Sensitive - Not for internet distribution.


1. (SBU) Summary: Embassy, the British Department for
International Development (DFID) in Baghdad, and the GOI
are developing an economic-reform public-education
strategy. To date, we have established that an effective
campaign would address three areas: 1) fuel-subsidy
reform; 2) social safety net implementation; and 3) basic
economic issues. We believe the campaign must have simple
messages and mainly target the average Iraqi, who typically
does not understand basic economic issues. We have already
engaged the Iraqi media on the necessity for fuel-price
increases, have gotten GOI agreement to take the same
message to the public, and are working this with the
Ministry of Finance (MOF). The creation of a
public-education strategy must have Iraqi ownership, and it
will be an on-going process, requiring flexibility to
change tactics as the public responds. End summary.

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Educating on Reforms That Are Happening Now
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2. (SBU) Fuel-price increases went into effect on December
18 in order to satisfy requirements for the IMF Standby
Arrangement (SBA). In initial response to the price
increases, certain segments of the general public
demonstrated in protest. These protests were mostly
non-violent and measured, and there has been no upswell of
opposition among the general population of Iraq. The
insurgent and criminal elements of Iraq have taken a
different approach, using violence and threats of violence
to intimidate refiners, truckers, and ordinary Iraqis into
cutting production and distribution and into protesting
against the price hikes. This terrorist activity has
caused severe supply problems throughout Iraq, which in
turn has caused further public unrest. Urgent
public-education efforts are needed to explain the price
increases to the general public, and the GOI has been
taking measured actions (Reftel A),both on its own
initiative and in response to our encouragement. However,
no amount of aggressive public education will convince the
terrorists and criminals that they should relinquish their
violent actions and allow fuel supplies to flow freely. We
should make fuel-subsidy education an integral part of the
public-education effort, but we need to set the strategy
with the Iraqis in the lead, having the key officials at
the planning table.


3. (SBU) USAID and the Embassy have worked with the
Ministry of Labor and Social Affairs (MOLSA) to create new
social safety net legislation that has been put into
operation (Reftel B). While not specifically addressed by
the SBA, many ordinary Iraqis believe it is linked. In any
case, the basic messages about the economic distortions and
corruption caused by continued subsidies are the same.
This new Safety Net will provide money, career counseling,
and job training to approximately one million Iraqi
households, or that 20% of the population that lives in
extreme poverty. USAID plans to use World Bank funding to
launch a public-education campaign in the mid-March
timeframe to teach the public about the benefits and
necessity of the new Safety Net. This new Safety Net is
critical (and revolutionary for Iraq) in that it creates a
means-tested welfare system on which Iraq can base future
subsidy reductions, especially critical as Iraq begins
reforming its Public Distribution System (PDS) (Reftel C).

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Educating on Reforms to Come
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4. (SBU) Possibly the most important part of an
economic-reform public education campaign will be to
prepare the Iraqi public for the necessary changes that
will come, and State has $3 million that should be put
toward this program. Post believes that this program
should be based on three main objectives of economic reform
in Iraq: 1) Subsidy reductions; 2) Privatization; and 3)
Anti-corruption. Under each of these subjects, there
should be three simple messages that the Iraqis push out to
their people, and these messages should be crafted both to
educate the recipient on basic economics and to influence
his current beliefs about the Iraqi economy. (Our current
discussions with the MOF are focused on this strategy, and
we will be using the US/Iraq Joint Task Force on Economic
and Financial Issues as a structure to continue developing
and refining it.)


5. (SBU) While the campaign will need to address
government, business, and social leaders, the main audience
of the campaign should be the average Iraqi, who currently
believes that the government owes him handouts because of
Iraq's oil reserves and who quite possibly benefits from
some form of corruption in his daily life. Only by
influencing the attitudes and opinions of average Iraqis
can we truly ensure that the GOI is taking actions that
will be understood and supported. If we focus our efforts
on the leadership and intelligentsia of Iraq, whatever
positive actions they might take run the risk of falling on
the deaf ears of unwilling citizens.


6. (SBU) Post believes that the GOI should hire Iraqi
media companies to design and implement the public
education campaign. This is necessary to avoid the
impression that outsiders are forcing change on a sovereign
Iraq. Post, through the Public Affairs Office, can assist
with the design and publication of posters, but only with
the agreement and buy-in of the GOI. However, according to
Embassy media sources, the best way to reach the average
Iraqi audience is through television, and Iraqi media
companies are in the best position to utilize this medium.

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Media Engagement
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7. (SBU) Discussion with the media and government on the
subjects of reform and subsidies has already begun.
EconMinCouns and Commercial Counselor participated in an
on-the-record press conference for the domestic and
international media January 4 in Baghdad. EconMinCouns
emphasized the linkages between corruption, fuel blockages,
and protest actions. He also provided an outline of the
budgeting impact of subsidies on security and a large
variety of social services valued by the public. Later,
during a discussion between Acting DCM Litt and DPM
Chalabi, the latter said he would:

a) Provide a brief explanatory paper for the media on
subsidies;

b) Release to the press a paper on the reasons for unrest
contributing to the fuel crisis at Bayji; and,

c) Initiate a public discussion of Iraqi consumption of
refined products, focused on the need to cut imports owing
to negative budget impact. (Parenthetically, Chalabi
observed that consumption has dropped in Baghdad from 10
million liters to 6 million liters per day. As we see
Baghdad as better supplied than the rest of the nation, we
tend to agree with Chalabi that this is a price-related
drop in demand.)


8. (SBU) Public Affairs will be holding press conferences
on a regular basis with Embassy Econ and Commerce to inform
the Western and Iraqi/Pan-Arab media on economic issues.
EconMinCouns and Commercial Counselor participated in the
first of these on December 27. These press conferences
will serve as one medium through which to educate the Iraqi
public on the need for subsidy reductions and
anti-corruption efforts.
KHALILZAD