MEETING BETWEEN DEPUTY SECRETARY NEGROPONTE AND

C O N F I D E N T I A L SECTION 01 OF 02 BAGHDAD 001991 SIPDIS SIPDIS E.O. 12958: DECL: 06/16/2017 TAGS: ECON ENRG PREL SUBJECT: MEETING BETWEEN DEPUTY SECRETARY NEGROPONTE AND DEPUTY PRIME MINISTER BARHAM SALIH Classified By: AMBASSADOR RYAN C. CROCKER for Reasons 1.4 (b) and (d). ¶1. (C) SUMMARY: Deputy Secretary John Negroponte, Senior Advisor to the Secretary of State David Satterfield, and Ambassador Ryan Crocker met with Deputy Prime Minister Barham Salih (DPM) to discuss a range of issues from security and budget execution to the draft hydrocarbon-related laws and relations with Iran and Syria. END SUMMARY. ¶2. (C) On June 14, 2007, DepSec, Senior Advisor to the Secretary of State David Satterfield (S/I),and the SIPDIS Ambassador met with Deputy Prime Minister Barham Salih to discuss a number of topics. The DepSec noted that this was his first visit to Iraq since becoming the Deputy Secretary, and while encouraged by what he has seen in Al-Anbar province, he gave other areas he visited mixed reviews. He reported that officials in Mosul complained that the central Government of Iraq (GOI) was not devoting needed attention to the area as demonstrated by the fact that the Ministers of Interior and Defense had not visited the area since taking office. ¶3. (C) The DPM stated that Al-Anbar and Mosul were experiencing reconstruction difficulties because contractors were still fearful of the security situation. He also stated that other areas like Kirkuk and Kut were doing much better in their reconstruction efforts. ¶4. (C) The DepSec observed that budget execution by the various Iraqi ministries appeared to be a problem. The DPM noted that budget execution was improving, but there were other contributing problems including security and capacity. The DPM stated that because of the current security situation, many valuable technocrats have left the government, and while procurement requirements and other regulatory issues appear to complicate efforts to execute that budget, the GOI was attempting to "fast-track" resolution of these issues. He also anticipated that a review of the procurement and other procedures as part of a supplementary budget exercise would help with the GOI,s budget execution efforts. ¶5. (C) The DepSec observed that the GOI still had some unfilled cabinet posts. The DPM observed that this presented a "golden opportunity" to fill these posts with individuals who could contribute to the stability of, and confidence in �00A;the government. He also identified the GOI's effort to streamline the cabinet by, perhaps, having only five ministers instead of the current forty. ¶6. (C) The DPM noted that the Ministers of Communications, Public Works, Electricity, and Water were performing well. The Minister of Oil, however, has manifested an inability to manage the issues confronting that ministry. The DPM stated that he anticipates that the passage of the suite of hydrocarbon laws would give a beneficial structure to the Ministry of Oil and be helpful to efforts to attract the interest of foreign oil companies. He noted, however, that in his opinion, the oil companies will not be interested in the Iraqi oil industry until they see better management in the Ministry of Oil. (Note: The DPM observed that in the current political climate, production sharing agreements were not favored, but that he hoped this situation could be overcome. End Note.) ¶7. (C) The DPM stated that pipeline security was a problem, but that the Prime Minister had authorized the use of Kurdish forces to assist with the effort to secure the pipelines. ¶8. (C) The DepSec stated that he had had productive meetings with President Masoud Barzani and Prime Minister Nechirvan Barzani of the Kurdish Regional Government regarding the Revenue Management law negotiations. The DPM stated that they would meet on this topic tomorrow (June 15) and discuss a few suggested changes to the existing draft law. He anticipated that the parties could resolve all outstanding issues, conduct a meeting of the Cabinet on Sunday morning (June 17),and announce the closure of all issues on that same day. ¶9. (C) The DepSec stated that he had spoken with Prime Minister Maliki about Iraqi problems with Iran and Syria, and that those countries were becoming increasingly aggressive in their actions. Ambassador Crocker noted that Iran and Syria were becoming increasing dangerous and confident in their aggression. The DPM noted that both countries had a major stake in Lebanon and were searching for similar successes in Iraq. ¶10. (C) The DepSec and DPM concluded the meeting with a discussion of internal Iraqi ethnic and sectarian issues, specifically about the influence of Grand Ayatollah Ali BAGHDAD 00001991 002 OF 002 al-Sistani. Ambassador Crocker stated that he would like to explore ways to have a more direct line of communication with Sistani. Offering that the Ayatollah's son would be an avenue worth pursuing, the DPM noted that Sistani is very engaged and interested in Iraqi and American politics, and stated that perhaps Sistani,s foundation in Qum could offer a better, more direct avenue of communication. The DPM noted that in his only meeting with Sistani, Sistani stated that, in his opinion, the benefits of an American presence in Iraq would be available only for the next eighteen months. CROCKER