BUILDING CAPACITY AT THE COR FINANCE COMMITTEE

C O N F I D E N T I A L BAGHDAD 001790

SIPDIS

SIPDIS

E.O. 12958: DECL: 05/28/2017
TAGS: ECON EFIN PGOV IZ
SUBJECT: BUILDING CAPACITY AT THE COR FINANCE COMMITTEE

Classified By: Economic Minister-Counselor Daniel Weygandt for reasons
1.4 (b) and (d).


1. (C) Summary: Chair of the Finance Committee at the
Council of Representatives Ayad Samarai (Tawafuq - Iraqi
Islamic Party) discussed building institution capacity with
Econoff and USAID representative on May 27. He described
efforts to review the Government of Iraq's budget execution
process on a quarterly basis, as required by the Financial
Management Law, and discussed plans for resolving financial
disagreements between the central government and the
Kurdistan Regional Government. USAID is planning on
responding to Samarai's request by assigning a full-time
technical expert to the Finance Committee, and providing
targeted training as needed. End summary.

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Building Institutional Capacity
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2. (C) "So far," Samarai said, "the financial laws sent to
us by the executive branch have not been professional." He
noted that the one exception was the Hydrocarbon Framework
Law, which he has reviewed even though it has not yet been
formally submitted to the Council of Representatives (CoR).
Samarai would like to build capacity within the Finance
Committee to develop necessary financial legislation more
efficiently. Currently the Finance Committee has two
professional staff members and two administrative assistants.
Samarai would like advice from experts with professional
qualifications and opportunities for training of the
Committee in areas such as banking, trade legislation, and
budget formulation and review.


3. (C) The USAID representative said that there was funding
for this kind of assistance, and offered to provide one
full-time technical expert who is already in-country. He
also said that USAID could work on bringing in particular
expertise as needed - a budget formulation expert during the
2008 Iraqi budget process, for example. Samarai appreciated
this response and said that with these opportunities
available he would hire two junior professionals to join the
Finance Committee's full time staff. This training and
expertise will contribute to the long term ability of the
Finance Committee to formulate and review financial
legislation.

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Budget Execution and Formulation
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4. (C) The Finance Committee will soon begin requesting
reports from the Ministry of Finance on the government's
budget execution progress. Samarai said that these reports
are due on a quarterly basis, but that the Ministry of
Finance has yet to submit a report. Sumarai has also asked
the Board of Supreme Audit for its final report of government
expenditures for 2006. Regarding the 2008 budget formulation
process, Sumarai intends to send letters to each of the
ministries urging them to involve the Council of
Representatives early in their budget formulation process.

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Working with Kurdistan
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5. (C) Samarai said that he had met that morning with
Nechirvan Barzani, Prime Minister of the Kurdistan Regional
Government. As a result of this meeting, Samarai agreed to
send a task force consisting of two members of the Finance
Committee, an advisor to the Committee, a Ministry of Finance
official, and Dr. Abdul Bassit from the Board of Supreme
Audit to the Kurdistan region. The task force will meet with
regional officials to resolve disagreements about the balance
between central and regional power, particularly with regard
to customs and budgets.

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Comment
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6. (C) Ayad Samarai's suggestions for building institutional
capacity and his willingness to work with the Kurdish
Regional Government are positive developments and an
indication of commitment to professionalism in the CoR's
Finance Committee. As was evident during the CoR's review of
the 2007 Budget Law in January, the Committee's members are
dedicated but inexperienced. This kind of U.S. contribution
to capacity development will greatly benefit the Finance
Committee's, the CoR's, and the GOI's ability to improve
financial legislation and fiscal policy.
CROCKER