(C) PM BARZANI: INVESTMENT LAW PASSES; KRG EDUCATION IN

C O N F I D E N T I A L SECTION 01 OF 02 KIRKUK 000127 SIPDIS SIPDIS E.O. 12958: DECL: 7/15/2016 TAGS: PHUM PGOV PINS PINR PNAT PREF PREL KDEM IZ SUBJECT: (C) PM BARZANI: INVESTMENT LAW PASSES; KRG EDUCATION IN CRISIS KIRKUK 00000127 001.2 OF 002 CLASSIFIED BY: Tim Uselmann, Political Officer, IPAO, Department of State. REASON: 1.4 (a),(d) ¶1. (C) Summary. KRG Prime Minister Nechirwan Barzani said in July 2 meetings with IPAO that the new Investment Promotion Law had been held up in Parliament over the provision for 100% foreign ownership of property. He said the KRG had a window of opportunity for attracting foreign investment that might change if security improved in the south. Also, the Kurdistan Regional Government (KRG) Ministry of Finance should have a budget by 2007. Finally, Barzani requested U.S. assistance in building new schools and training teachers. This is the second of two cables addressing this meeting (REFTEL). End Summary. INVESTMENT PROMOTION LAW HITS BUMP, PASSES -------------- ¶2. (C) Passage of the Investment Promotion Law was delayed because committee members disagreed with the 100% ownership provision for foreign companies. Barzani said they wanted to require investors to establish a 49-51% joint venture (JV) with a local company. (Note: The law passed July 5 with three members dissenting.) He said he would not compromise on this issue and had asked the committee for two years to test the provision. ¶3. (C) Local companies lacked the experience to enter into a JV with a foreign company, opening the door to mafia-style control over JV partnerships. He wanted investors to invest without restrictions or second-rate partnerships, and with the support of a good legal structure. Kurdistan should be the gateway to Iraq for investors. The KRG needed to push for these incentives now because they had a window of opportunity to take advantage of the poor security in the rest of Iraq. He added, "Time is not on our side." Ministry of Finance -------------- ¶4. (C) Barzani said the KRG Ministry of Finance should have a budget by ¶2007. Ten committees had been established to unite the financial regulations, including customs, taxation, and finance. He said currently funds were limited and there was no sense of the budget. Education System in Dire Need of Assistance -------------- -------------- ¶5. (SBU) Barzani said the KRG badly needed assistance in developing the education system. They needed new schools, teacher training, and a revised curriculum. Barzani asked for teacher training not only in their subjects but to develop tolerance of diversity and knowledge about democracy and the principles of a civil society. ¶6. (SBU) Many schools had three shifts a day because there were not enough classrooms for children to attend at the same time. After 2003, expectations for the future rose and many wanted to resume their education. Every year, an additional 65,000 students had returned to school. Eight hundred new schools were needed throughout Erbil, Dohuk, and Sulaymaniyah. He said the South Koreans were doing an excellent job monitoring construction of the 52 schools they were building. KIRKUK 00000127 002.2 OF 002 ¶7. (C) Barzani said the national education curriculum was inappropriate for schools in the Kurdistan Region. The sciences were not a problem, however the history of Iraq tended towards an Arab-centric version, describing the region as the "Arab homeland" and the Tigris and Euphrates rivers as the "source of the Arab world." There was also too much focus on Islam and a differing view on Palestine. He said the KRG did not want violence and intolerance taught in the KRG schools. ¶8. (C) Barzani said that five years ago he had closed an Islamic college in Dohuk because of its strict religious curriculum. He refused calls to reopen it despite partial funding by Saudis and private offers to help. He said that since closing the school, violence in the area had been easier to deal with. COMMENT: -------------- ¶9. (C) The quick passage of the Investment Promotion Law was expected. The KRG's next step will be to coordinate with the central government on large investment projects and implement much needed banking and legal frameworks. Education in the Kurdistan Region is as dire as the Prime Minister represents it. Providing additional U.S. assistance in education is an opportunity to affect the population in real terms. End comment. JBIGUS