PRT TIKRIT: PROJECT SELECTION PROCESS IMPROVING,

C O N F I D E N T I A L SECTION 01 OF 03 BAGHDAD 000829

SIPDIS

SIPDIS

E.O. 12958: DECL: 03/04/2017
TAGS: ECON EFIN PGOV IZ
SUBJECT: PRT TIKRIT: PROJECT SELECTION PROCESS IMPROVING,
BUT EXPOSES GOVERNANCE CHALLENGES

REF: 06 BAGHDAD 4729

Classified By: Classified by Stephanie Miley, PRT Deputy Team Leader, f
or reasons 1.5 (b) and (d).


1. (U) This is a PRT Tikrit, Salah ad Din cable.


2. (C) SUMMARY AND COMMENT. Provincial government in Salah
ad Din today relies on a capital budget resolution procedure
strongly influenced by a process instituted in 2005 designed
to promote Iraqi participation and initiative in planning
U.S.-funded reconstruction activities. This system provides
a platform for provinces to select capital projects through
the Provincial Reconstruction Development Council (PRDC),
however, many challenges remain. (NOTE: The PRDC process
before December 2006 often marginalized the role of the
Provincial Council and gave excessive powers to a small group
of political insiders within the PRDC who operated without
oversight by the Provincial Council. END NOTE) While the
forthcoming Ministry of Finance (MoF) guidelines (which
delineate authority and require transparency) should mandate
a more effective capital budget process, this positive
change will likely require more than just a new set of rules.
Most important is the establishment of formal and informal
processes ) which take far longer to develop than a
regulation - that are critical to resolving difficult issues
within the nascent democratic system. These include the
ability and willingness of political leaders to negotiate,
compromise, and communicate across ethnic, political, and
religious lines. END SUMMARY AND COMMENT.

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The Process AND the People
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3. (C) The Government of Salah ad Din (SaD) Province, a
predominantly - but not exclusively - Sunni province located
north of Baghdad, made significant strides forward in 2006 to
establish an embryonic but (mostly) functioning democratic
process for selecting and funding projects in the province.
However, the process of developing a timely, fair, and
transparent procedure has been difficult. Budget resolution
and execution (the process of creating and implementing a
budget, respectively) are the main functions of provincial
government in Iraq; ensuring fair and efficient allocation of
financial resources is paramount to functioning democratic
local governance as well as economic reconstruction.
Bequeathed an ambiguous budget execution process - no clear
guidelines were codified by CPA General Order 71 or the Iraqi
Constitution - leaders and planners in SaD have often
struggled to efficiently examine, approve, and oversee
capital projects here. Anticipated new Ministry of Finance
budget implementing regulations clarifying roles and
responsibilities among key decision makers will be critical
in assisting the Iraqis to develop a more effective process
in 2007.


4. (C) Even more important to effectively resolving and
executing the 2007 provincial allocation windfall in Salah ad
Din will be the ability of key power players to communicate
amongst themselves and resolve differences between various
groups within the council. This is especially important at
the present time because the Provincial Council is comprised
of several voting blocks, with a lingering dispute between
the normally dominant clique from the Tikrit suburb community
of al Alam (led by the Deputy Governor, Abdullah Al-Jobori
and predominantly Sunni) and the voting block from the
community of Tuz (predominantly Turcoman and Kurdish area;
recent boycott of Provincial Council by its members reported
septel).

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The PRDC Transformation
--------------


5. (C) Formed in early 2005, the Provincial Reconstruction
Development Committee (PRDC) was designed to solicit and
encourage formal Iraqi participation in the USG-led Iraq
Reconstruction and Redevelopment Fund (IRRF) program at the
provincial level. Much like a planning committee for a
county government in the U.S., the PRDC was intended to be a
non-political entity staffed by technical experts who would
recommend reconstruction projects to the Provincial Council
for approval and funding. There was an additional step,
however, in that all IRRF projects approved by the PRDC
process were then submitted to a committee comprised of
Embassy Baghdad and MNF-I entities that further vetted the
projects for their eligibility for IRRF funding. In
practice, for over a year the PRDC served as a medium for
communication between CF and Iraqi leadership. Meetings at
that time were held by the Iraqis to satisfy the CF. They
were not open to the public, they were focused solely on

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project approval, and they were dominated by the CF.


6. (C) In stark contrast to the earlier time period (2005 )
early 2006),the Salah ad Din PRDC now serves as a relatively
autonomous Iraqi instrument which has the effect of building
governance capacity and communication among different groups
within the province. The PRDC fulfills an indispensable role
by organizing, refining, and selecting suitable project
concepts submitted by local qadas (counties) and Directors
General (representing the central Ministries) and presenting
them to the Provincial Council for approval. While the
composition and mandate of the PRDC in its original
incarnation was an expedient solution to channeling USG
reconstruction funds quickly, its evolution to an Iraqi-only
entity that reflects its own concerns is a step forward in
institution-building. Where it once was viewed as an adjunct
of USG funding mechanism, almost the reverse is true now:
the PRDC now functions independently of the CF, with the CF
looking to the PRDC for approved project proposals to which
it could apply USG funding (CERP or ESF) in line with
provincial priorities.


7. (C) Having transformed itself from a small, private, back
room meeting group into an influential advisory group; the
Salah ad Din PRDC was able to achieve real breakthroughs in
December 2006. It successfully organized and approved a list
of projects, it published written meeting agendas, and it
distributed meeting minutes. There is even periodic media
coverage. However, while the PRDC process demonstrated
significant improvement, several critical challenges remain.
Security concerns prevent most members from outside the
Tikrit area from attending, resulting in the Tikrit-al Alam
area - which comprise only about 13 percent of the provincial
population - receiving over 40 percent of appropriated GOI
funds in 2006. Additionally, although the PRDC selected and
recommended to the PC projects to be completed, they failed
to communicate with the Provincial Council members on a
regular basis. (NOTE: PRDC members are also Provincial
Council members; however, since their hometowns were given
ample projects, it appears they had little incentive to
report their expenditures to the rest of the Provincial
Council. END NOTE.) Transparency and accountability
provisions, which first began in January 2006 through the
publication of a list of appropriated 2006 projects, will be
essential to ensuring fair distribution of SaD's 2007
resources. The PRT is actively working with the Provincial
Council to enact rules and regulations for the PRDC that will
mandate weekly updates on the status of all projects.

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Comment
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8. (C) COMMENT. The provincial governments,
responsibilities in Iraq, at least until the forthcoming
Provincial Governance Law is approved by the Council of
Representatives (COR),is very straightforward: decide how
money should be spent. This is why the forthcoming revised
provincial allocation/budget implementation regulations from
the MoF are so critical to continuing to increase local
governance capacity ) authority at the provincial level is
almost entirely limited to budget resolution and execution.
The SaD Provincial Council and PRDC made major strides
forward in 2006; however, clearly many challenges remain.
The Provincial Government having established the most basic
elements of successful governance, the new MoF guidelines are
now a critical catalyst to ensure further development of
local capacity building here, and likely in many other
provinces as well. Continued progress will be difficult
without them. The USG should strongly encourage the MoF to
promptly publish regulations that will provide more structure
for effective provincial budgeting.


9. (C) The evolution of the Salah ad Din PRDC, from a
USG-mandated &Iraqi face8 to CF project execution to an
Iraqi-only committee that vets, selects, and prioritizes
suitable projects for Provincial Council approval, marks a
step forward in local Iraqi capacity- and
institution-building. Clear and equitable budget resolution
and execution will continue to be a critical issue in Salah
ad Din province (and likely many other provinces) in 2007.
While revised MoF guidelines will help, the basic task of
learning democratic processes will not likely come easy or
fast. Far more important than the capital projects
themselves, the development of intangible skills which
transcend regulations and procedures - the vital ability to
negotiate, compromise, and adjust one,s expectation in order
to achieve a partial result, the necessity to see oneself as
a Council member who represents the entire province, and wise
and non-discriminatory allocation of scarce resources and
funding - instead of a parochial or &winner-take-all8
mentality, will be a truer measure of the success or failure

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of local governance than the sum of money spent. END
COMMENT.


10. (U) For additional reporting from PRT Tikrit, Salah ad
Din, please see our SIPRNET reporting blog:
http://www.intelink.sgov.gov/wiki/Tikrit.
KHALILZAD