(SBU) SALAH AD DIN LEADERS SPLIT OVER PRIVATE SECTOR

C O N F I D E N T I A L SECTION 01 OF 02 KIRKUK 000038 SIPDIS SIPDIS BAGHDAD FOR POL, ECON, IRMO AND NCT E.O. 12958: DECL: 2/18/2016 TAGS: ECON PGOV EAID IZ SUBJECT: (SBU) SALAH AD DIN LEADERS SPLIT OVER PRIVATE SECTOR DEVEOPMENT KIRKUK 00000038 001.2 OF 002 CLASSIFIED BY: Scott Dean, Regional Coordinator (Acting),Reo Kirkuk, Department of State . REASON: 1.4 (b),(d) ¶1. (U) This is a SET Tikrit cable. -------------- SUMMARY -------------- ¶2. (C) SET and IRMO Tikrit discussed Salah Ad Din province economic development planning with provincial leadership. Although the discussion was candid, it brought to light concerns the provincial council chairman had about extending his authority, and that of the council. Though several people supported an idea to go seek new companies to locate in the province, the provincial council chairman refused to consider any agenda aimed at increasing private company ownership in Salah Ad Din Province. END SUMMARY. ¶3. (SBU) On February 13, SET Officer and IRMO representative met with Salah Ad Din Provincial Council Chairman Rashid Ahmad Osman, Governor Hamad Hamud Shukti, Deputy Governor Abdullah Hussein Mohammed, and the Deputy Governor for Technical Affairs, Khataan Hamadi Saleh. SET and IRMO briefed on the concept of establishing an industrial park to entice foreign companies to invest. They also spoke about establishing a provincial economic development committee whose primary purpose would be to attract foreign business. ¶4. (C) Reaction proved illuminating. The first to speak was the provincial council chairman. He said that the country was still trying to decide about the national government: "we will be removing the concept of regions from the constitution." Additionally, it would be illegal to establish this industrial area because the national government had not told the provincial council to do this. He argued more government-owned industries were needed to provide jobs; private industry could not be brought in until the national government directed. ¶5. (C) He was followed by the deputy governor, who was very supportive, but outlined several real obstacles. He talked about the need to provide clear ownership of property to be used by foreign companies. He predicted that either sale or rental to foreign companies would prove very difficult; he spoke from the experience of having interested companies tire of waiting for solid assurances in the past. He talked about the need to provide a quality work force, and though he believed Salah ad Din had one, it was difficult to prove to potential investors. ¶6. (C) The governor spoke next; he very strongly supported the idea. He spoke of the need to establish a commission to set goals and prepare to bring companies into the province. ¶7. (C) However, the most supportive and most eloquent speaker went last, the Deputy Governor for Technical Affairs, an engineer by trade. He spoke of his dream to bring foreign companies to the province and to have jobs for many types of people, especially highly trained engineers. He spoke about combining an airport and industrial area for security and convenience. (One could see the vision on his face.) He is ready to proceed with establishing a commission to study the idea, and present a plan to improve the economic situation in the province. He believes that the first province to act will win big with foreign investors. -------------- COMMENT -------------- ¶8. (C) The discussion of economic development in Salah Ad Din Province ran the full spectrum: from absolutely not, to yes, we must. Unfortunately, the man with arguably the most power in the province, the provincial council chairman, stands very much against the idea. Though this was anticipated, the strength of his concern was not. He expects that the central government is going to tell him how to run his province. He predicts that the constitution will be changed to remove federalism, and Iraq will get back to a strong central government which will tell the provinces how to operate. The governor said that the chairman was not living in the current world; he (the governor) did not believe federalism would be removed. He said the province needed to plan for the future as if they would have a lot of authority. The discussion was very open and frank. ¶9. (C) Looking ahead, there can not be substantive change without provincial council support; we may see some small KIRKUK 00000038 002.2 OF 002 actions, but not the commission envisioned by the Governor. Change will come when provincial council elections bring a much different council to the table this summer. Because of the January 30, 2005, boycott by Sunni Arabs, three major cities are not now represented. The council will see representation drop from Tozkhurmato, in the far eastern end of the province, in favor of Sunni Arab cities, like Samarra, along the Tigris River. DEAN