ITALIANS CAUTIOUS ON ISG RECOMMENDATIONS, PROPOSE

C O N F I D E N T I A L SECTION 01 OF 02 ROME 003312 SIPDIS SIPDIS E.O. 12958: DECL: 12/10/2016 TAGS: PREL PGOV MOPS IZ IT SUBJECT: ITALIANS CAUTIOUS ON ISG RECOMMENDATIONS, PROPOSE FULL PROGRAM FOR USR REF: STATE 196230 ROME 00003312 001.2 OF 002 Classified By: Classified by David D. Pearce, Political Minister Counse lor, for reasons 1.4 (b) and (d). Summary - - - - - ¶1. (C) Summary. Gianludovico De Martino, head of the MFA's Iraq Task Force, says many of the Iraq Study Group (ISG) recommendations, such as embedding coalition members inside police, military and institutional structures, have already been tried and found to be difficult to implement. Other recommendations, including those regarding the establishment of training programs for security forces, have been underway since the beginning of the reconstruction period. Still others, including engagement with Syria and Iran, were likely to be of little use as long as those two nations thought they benefited from the short-term instability. He thought the most realistic approach for the international community was to plan for long-term engagement on social and economic issues, coupled with a short-term focus on continued Iraqi progress on security, economic development and national reconciliation. On Italy's plans for its Reconstruction Support Unit (USR) in Dhi Qar province over the next year, De Martino reviewed a list of technical and reconstruction projects that Italy has undertaken and plans to continue. Some 45 million Euros of direct assistance and grants to Italian humanitarian assistance and NGOs has been committed until the end of calendar year 2007 and a request for approximately 30 million Euros has been requested in the current budget for 2008 for similar projects. In total, Italy estimates it has spent 260 million Euros in reconstruction and development assistance since the beginning of the war. End summary. Italy Cautious on ISG Recommendations - - - - - - - - - - - - - - - - - - - ¶2. (C) De Martino told PolMinCouns that he had reviewed the ISG recommendations. Many of the recommendations had already been tried. Embedding coalition personnel in police and military units and civilian structures had been tried and found to be less effective than envisioned. Some proposals regarding the training of security forces through NATO and Coalition efforts have been underway since the beginning of the reconstruction period and needed only to be stepped up and strengthened. De Martino was cautious on engagement with Syria and Iran, saying that engagement in and of itself would not necessarily produce anything and the international community should not expect that such engagement would produce short-term change in Iranian and Syrian behavior. From his point of view, as long as Syria and Iran thought they benefited domestically and internationally by maintaining the Iraqi pot at a low but steady boil, it was unrealistic to expect any real change from the two governments. ¶3. (C) Iraq's long-term stability depends on national reconciliation, economic development and democratic development - all of which require strong, sustained international engagement over the course of several years. On the issue of national reconciliation, De Martino believes that the development of a constitutional order can be done on several tracks. The division of power between the central government and regional authorities need not be immediately resolved. Some divisions, particularly the relationship between Kurdish regions and the federal government are fairly stable. Other regions in the south can wait until the federal government matures sufficiently to make the discussion practical. The priority should be to develop a national framework for infrastructure development, not a lot of local "framelets". Political development will also continue to require national direction. ¶4. (C) He saw two major issues related to Iraqi economic and political development -- too much reliance on oil for economic development, and the succession battle likely to break out among Shia following the death of Ayatollah Sistani. He said national reconciliation and democratic development will take time, but could be accelerated by economic development. Greater emphasis on agriculture, small ROME 00003312 002.2 OF 002 enterprise, and light industry would create greater employment than reliance on oil, which employs few people, as the basis of economic sustainability. Iraq had a relatively successful economy before it became an oil economy, he remarked. Continued reliance on oil could result in a population dependent on government subsidies and less invested in the success of the country. It would also intensify the fight for control of territory between sectarian groups. With a more vibrant economy and an independent, professional civil service, Iraq can begin to withstand outside pressure and resist the appeal of sectarian infighting. Italy's long-term plan for its participation in international efforts, therefore, will focus on economic development and building institutional capacity. ¶5. (C) He said the death of Ayatollah Sistani was another looming issue, because it would likely unleash a power struggle between Abdulaziz Hakim's Supreme Council for the Revolution in Iraq (SCIRI) and Muqtadir al-Sadr's followers. Both had ties with, and support from, Iran. But De Martino wondered if the Iranians would not have to be concerned to some extent, given the traditional rivalry between Iran-based and Iraq-based Shia clergy, about their ability to control the situation. If there were clashes between rival groups, there might be some danger that intra-communal discord could have negative reflections in Iran itself. USR prepared for work in 2007 ¶6. (C) De Martino noted that the USR in Dhi Qar had identified and begun to work on several reconstruction and civil society projects for the new year. These plans included: a project to train civil servants in various institutions in the region; funding a feasibility study to repair drainage in Nassiriyah with the ultimate goal of repairing the system; providing medical equipment to hospitals and schools; supplying technical assistance to the agricultural faculty of the local university; repairing over 450 tractors for farming; repairing an electrical substation and donating transformers; assisting in the modernization of museums in Baghdad, Najaf, Mosul, Kut, and Suleimaniya; providing technical training for electricity, water, transportation and communications sectors. Overall, the GOI will have spent 45 million Euros by the end of this calendar year and plans to spend 30 million in CY 2007. By mid January there will be eight Italian members of the USR in Dhi Qar providing direct technical assistance or directing the efforts of Italian NGO grantees. De Martino estimates that Italy has spent roughly 260 million Euros on reconstruction and civil society projects since the beginning of its involvement. ¶7. (C) In addition to its efforts in Iraq, De Martino added that Italy would continue to provide political support for Iraq through conferences, training and high-level political dialogue in Italy to gain public support for its mission in Iraq. The MFA recently organized a conference in late November on federalism and national reconciliation with representatives from the Iraqi Government and other Iraqis. A follow-up session will be held in Iraq. This month, the MFA is working with a media outlet to produce a documentary film on Italy's reconstruction efforts. SPOGLI