VICE PRESIDENT'S ECONOMIC ADVISORS DISCUSS BAGHDAD

C O N F I D E N T I A L BAGHDAD 000545

SIPDIS

SIPDIS

E.O. 12958: DECL: 02/14/2017
TAGS: ECON PGOV IZ
SUBJECT: VICE PRESIDENT'S ECONOMIC ADVISORS DISCUSS BAGHDAD
SECURITY PLAN


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


1. (C) Summary: Economic Minister-Counselor met with Farid
Yaseen and Zuhair Humadi, economic advisors to Vice President
Adel Abdul Mehdi on February 11. The advisors appreciated
the Baghdad Security Plan's focus on commercial zones and
mixed neighborhoods. They also noted the lack of Iraqi
government ability to absorb large amounts of capital, and
proposed a larger role for non-governmental actors. End
summary.

--------------
BSP III: Protect the Middle Class
--------------


2. (C) EconCouns gave a brief description of the economic
component of the Baghdad Security Plan, noting the focus on
protecting commercial activities and basic services. The
real indicator of success, and the real mechanism for
economic development, would be increased investment from the
private sector. Zuhair Humadi said that while we shouldn't
ignore the difficult areas, we should focus on areas that are
not totally hostile. "The most important thing is to protect
the mixed neighborhoods, which are mostly middle class, and
people will feel the difference immediately," Humadi said.
He also suggested that operations targeting lawbreakers in
Sadr City would be necessary to address the concerns of
Sunnis in Baghdad. Farid Yaseed cautioned against rounding
up the foot soldiers of the Jaysh Al Mahdi; instead, he said,
target the leaders and organizational capability. EconCouns
requested Humadi and Yaseed's assistance in reporting
feedback from their constituents during the coming weeks.

--------------
Alternatives to Government Services
--------------


3. (C) Farid Yaseed described the Vice President's role as
supervisory, not executive, with the ability to give guidance
rather than instructions. Yaseed said that Vice President
Adel Abdul Mehdi is interested in fostering projects in
under-developed areas of the country. Given the government
of Iraq's lack of capacity to absorb funding and execute its
own budget, Yaseed and Humadi have developed a proposal for
the "Independent Development Council", an NGO that could
increase services and opportunities, particularly in the
Shi'a center and south, by complementing Iraqi government
activities. One purpose of the Independent Development
Council would be to absorb some of the donor projects
currently being transferred to the GOI. Given the GOI's
inability at this time to execute its budget, this NGO could
fill the gap by providing alternative avenues for donor
projects. Humadi requested USG support in convincing the
Ministry of Health to transfer some of the USG-funded clinics
to this NGO instead of keeping them unused at the Ministry of
Health.

--------------
Comment
--------------


4. (C) Both Yaseed and Humadi spent years outside of Iraq
when the country was under Saddam Hussein's control, but
still seem to have extensive connections in Baghdad. They
will be useful contacts in gauging the response of the
educated middle class as to whether the surge of Coalition
Forces' activities in Baghdad is successful. The idea of
expanding the role of non-governmental organizations in Iraq
is useful both at the practical level given the GOI's lack of
budget execution capacity, and as a way to offer alternatives
to many Iraqis' instinctive reliance on the government, an
instinct created by several decades of a top-down command
economy.
SPECKHARD