DPM SALEH TALKS SECURITY AND ECONOMY, TURKEY, AND

C O N F I D E N T I A L SECTION 01 OF 02 BAGHDAD 003950 SIPDIS SIPDIS E.O. 12958: DECL: 12/04/2017 TAGS: PREL PGOV IZ SUBJECT: DPM SALEH TALKS SECURITY AND ECONOMY, TURKEY, AND POLITICS WITH CODEL WEBB Classified By: Charge d'Affaires Patricia A. Butenis for reasons 1.4 (b ) and (d). ¶1. (C) Summary. DPM Barham Saleh told CODEL Webb in a meeting November 30 that security is improving, highlighting improvements in Anbar province and several neighborhoods in Baghdad. On the economic side, he mentioned oil production is close to 2 million barrels a day, and referenced positive developments with budget execution. He is less optimistic on the political situation, however, and asked for USG involvement to help the GOI develop a power-sharing agreement that will bring about national reconciliation. Saleh said he is hopeful the situation with Turkey will improve given some Kurdish measures against the PKK, but is cautiously optimistic about a long-term solution. Responding to a question from Senator Webb regarding integration of Kurds into Iraqi Security Forces (ISF),he said there are now brigades as well as mixed divisions in Mosul and Kirkuk. End summary. SECURITY SURGE AND ECONOMIC INDICATORS IMPROVING . . . -------------- -------------- ¶2. (C) DPM Saleh told CODEL Webb -- Senator Jim Webb (D-VA) and Senator Jon Tester (D-Mont) -- security is improving, highlighting the changes in Anbar and Baghdad. Saleh said he is optimistic given the defeat of al-Qaeda in Anbar and is hopeful Iraq will be able to sustain these positive developments. "I think it is important to note the surge has worked," he said. As an example, he highlighted a recent event at the University of Baghdad, where he was told by the Chancellor that student attendance is finally increasing. He also referenced increased political engagement with the Sunnis as a positive development. ¶3. (C) "Progress on the economic side is more limited," Saleh said, but added that economic indicators, including employment rates, are improving. He noted Iraq's oil production is close to 2 million barrels a day, an increase from levels last year. (Note: Oil production is actually a little higher now, around 2.37 million barrels a day. End Note). Progress with the budget, improvements in infrastructure, and increased rates of budget execution by the ministries and at the provincial levels were other positive developments highlighted by Saleh. To ease concerns regarding corruption, Saleh told CODEL Webb the GOI is improving its financial controls and expenditure measures to ensure that funding reaches the governorates. . . . BUT A POLITICAL SURGE IS NEEDED -------------- ¶4. (C) On the political side, DPM Saleh said the situation is "not well," emphasizing political blocs and parties as further apart than before. "The political struggle is intense," he said, causing the political lines of battle to be drawn. He called the current improvement of security a "cease-fire" adding, "in the present formation of the GOI, I don't think we can keep these gains." In the next few months, DPM Saleh said a political surge and power-sharing arrangement are needed. Towards that end, he called for active diplomacy in the region to sustain a power-sharing arrangement. "Politics in this country falls short of what is needed to make it work," he said. He pressed for USG engagement as critical to reform in Iraq. Most importantly, he pressed the need to help the political parties come to terms on power-sharing. He noted quick fixes will not work, but highlighted "it is possible" given security improvements in neighborhoods of Baghdad (i.e., Karadah, Adameyah) in just the past year. KURDISH RELATIONS WITH TURKEY AFTER PKK CRISIS -------------- - ¶5. (C) DPM Saleh told CODEL Webb the situation with Turkey and PKK is now less dangerous. He highlighted measures the Kurds are taking, such as closing PKK offices. He noted, "I'm more hopeful than before," but he is still cautious about a long-term solution. Turkey is an important trade partner with Iraq, he noted, referencing five to seven billion USD in business between the two countries. KURDS AND IRAQI SECURITY FORCES INTEGRATED -------------- ¶6. (C) When asked by Senator Webb regarding the integration of Kurds into the Iraqi Security Forces (ISF),DPM Saleh said that there are now Kurds in brigades in the ISF. He noted two divisions in Mosul and Kirkuk that are also mixed brigades of all three groups - Kurds, Sunni, Shia. Saleh emphasized this is an not an easy process given the intense military operation. "Our military is very good," DPM Saleh, BAGHDAD 00003950 002 OF 002 but noted problems still exist with the Ministry of Interior. ¶7. (U) CODEL Webb did not have a chance to clear this cable before departure. BUTENIS