DPM SALEH: DECENTRALIZE AUTHORITY TO THE

C O N F I D E N T I A L SECTION 01 OF 02 BAGHDAD 004067

SIPDIS

SIPDIS

E.O. 12958: DECL: 12/13/2017
TAGS: PGOV PREL IZ
SUBJECT: DPM SALEH: DECENTRALIZE AUTHORITY TO THE
PROVINCES, POLITICAL FIXES NEEDED, SECURITY AND ECONOMY
IMPROVING


Classified By: Charge d'Affaires Patricia A. Butenis for reasons 1.4 (b
) and (d).


1. (C) Summary. DPM Barham Saleh told GOVDEL (Don Carcieri,
R-RI; Bill Ritter, D-CO; and Mike Rounds, R-SD) on December
11 the central GOI needs to devolve more authority to the
provinces. Political fixes are needed, he said, and called
for more compromises between the party blocs as well as
power-sharing. He called the Strategic Partnership
Declaration (aka Declaration of Principles) an important step
for Iraq's long-term relationship with the U.S. and important
to maintaining the benefits brought about by the surge. In
addition to the Council of Ministers (CoM) passing the 2008
budget to the Council of Representatives (CoR),Saleh
highlighted the improvements in provincial budget execution
and the resulting increase of funds allocated for provincial
spending from $2 billion in 2007 to $3.3 billion in 2008.
End summary.

DECENTRALIZE AUTHORITY TO THE PROVINCES
--------------


2. (C) DPM Saleh told GOVDEL more power needs to be
transferred to the provinces in Iraq. He stressed provincial
leadership will respond more immediately to local service
delivery needs. As an example, he said, "Why should I be
involved in telling the police what to do in Anbar Province?"
He also raised the Public Distribution System as another
service the central GOI is not performing well which the
provinces could execute more efficiently. "There are a wide
range of issues," he said, "that cannot be dealt with easily
by the central GOI." Saleh acknowledged the central GOI is
weak and unable to regulate the provinces effectively. He
pointed to the important role of the Council of
Representatives (CoR) in pressuring the GOI towards more
decentralization. At the same time, he highlighted the
challenges in wrestling with these tough questions of central
vs. provincial authority in the midst of the current
political and security environment.

POLITICAL FIXES NEEDED
--------------


3. (C) Saleh said the GOI needs to "seize" upon the
opportunity to reach more compromises on legislation,
power-sharing, and other difficult issues. He noted, "there
is growing sentiment that we need to do better and bring more
competency to the delivery of services." He added, the GOI
can no longer afford to function in the same way. He
referenced meetings during the past week with key GOI
political leaders and commented that there is an agreement
that something needs to be done "fast" (over the next three
months). Towards this end, he said a power-sharing pact is
needed. He pressed the USG to play an important role in this
process.

SURGE WORKING, SPD
--------------


4. (C) DPM Saleh highlighted the security improvements since
the surge, but added, "what we have is a cease fire." To
temper expectations, he noted, Iraq still has a long ways to
go. He talked about the success of the surge and movement in
Anbar to drive out al-Qaeda, as well as the militias driven
out of some Baghdad neighborhoods. Saleh acknowledged
American pressure to reduce the number of its troops and mode
of operations, and noted Iraq will have to start doing the
"heavy lifting." He lauded the recent agreement of the
Strategic Partnership Declaration (aka Declaration of
Principles) as a good step towards building a long-term
relationship.

ECONOMIC IMPROVEMENTS
--------------


5. (C) Saleh discussed the 2008 budget currently being
debated in the CoR. He said there is a $48 billion overall
budget, with $19 billion of this amount devoted to capital
expenditures, taking into account 2007 capital investment
rollover. He cited positive trends such as job creation and
other economic indicators. Regarding resources for the
provinces, Saleh talked about the difficulty in disbursing
money from the budget in 2006 due to security problems. He
noted recent improvements in provincial budget execution
resulted in the GOI increasing provincial budget allocations
from $2 billion in 2007 to $3.3 billion in 2008. These
funds, he said, come without GOI strings or interference.
Streamlining contracting procedures is making it easier to
efficiently deliver services. However, corruption,
ministerial capacity, and oversized bureaucracies, he
stressed, still limit economic progress.

BAGHDAD 00004067 002 OF 002




6. (U) GOVDEL Carcieri did not have the opportunity to clear
this cable before departure.
BUTENIS