UNCLAS SECTION 01 OF 02 BASRAH 000117

SIPDIS

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: ECON EAID PGOV IZ
SUBJECT: BASRAH DEVELOPMENT FORUM HIGHLIGHTS POLITICAL CONSENSUS FOR
RECONSTRUCTION AND SECURITY

BASRAH 00000117 001.2 OF 002



1. (U) SUMMARY: The "Third Basrah Development Forum" on December
12 was a resounding success. PM Maliki's presence on the dais
next to Basrah Governor Wa'eli was a public announcement that
the central and provincial governments are working together to
solve Basrah Province's security and development problems. This
was Maliki's first public appearance in Basrah, and the
attendance of many ministers gave weight to his promise of 700
billion ID for Basrah reconstruction. Basrawis applauded
Governor Wa'eli's reference to political reconciliation.
Attendees expressed to REO officers hope for a new spirit of
cooperation with the central government and a focus on
addressing corruption and security to move Basrah into an
economic renaissance. The BDF has helped to set the stage for a
smooth transition to Provincial Iraqi Control on December 16 and
fair provincial elections down the road. END SUMMARY.

BACKGROUND
--------------

2. (SBU) The Third Basrah Development Forum on December 12
inside Basrah's International Airport (BIA) brought together
most of Basrah's political, cultural and economic actors with
central government officials. Earlier development fora were
useful for public discussion of Basrah's development needs but
were set in an atmosphere of distrust between Governor Mohammed
Wa'eli (Fadhila) and the Provincial Council (PC). PM Maliki
cancelled at the last minute what would have been the second
development forum in July in a dispute over Governor Wa'eli
attendance.

ATTENDEES
--------------

3. (U) From the central government, Prime Minister Maliki,
Deputy Prime Minister Barham Saleh, and the ministers of
Finance, Defense, Municipalities and Public Works, Housing and
Construction, Environment and Health flew in from Baghdad for
the day. Governor Wa'eli was joined by a majority of the PC.
From among the over 250 attendees were prominent business
leaders, academics from the University of Basrah and religious
leaders such as the Catholic bishop of Basrah. All local women
wore headscarves. UN SRSG Ambassador Steffan Di Mistura was
joined by ambassadors from Australia, the UK, Japan

and Italy,
as well as Ambassador Charles Ries from the Embassy. LTG Rollo
led the MNF-I contingent that included MG Bergner, MG Scott and
RDML Driscoll.

ATMOSPHERICS AND MECHANICS
--------------

4. (SBU) PM Maliki and Governor Wa'eli appeared cool toward each
other at first but were chatting amiably by the end. All
speakers gave a generally positive view of security
accomplishments, while admitting the need for further progress,
and Basrah's great economic potential. Some in the audience,
including PC members, asked tough questions about the lack of
real impact for reconstruction projects so far. PM Maliki
expressed interest in a proposal to allocate one dollar from
every barrel of Basrah oil produced to provincial development.

PRIME MINISTER MALIKI
--------------

5. (U) According to REO contacts, this was PM Maliki's first
public appearance in Basrah. (He reportedly visited once before
in March 2006.) He stressed that Basrah was the heart of Iraq
and needed to develop in order for the rest of the country to
prosper. He labeled 2007 as the year for security in Basrah and
2008 as the year for development. He proclaimed the door to
Basrah open for foreign investment and announced the allocation
of 700 billion Iraqi Dinars (ID) for reconstruction in Basrah.
He cautioned that there were still people exerting bad
influence in Basrah, including "external forces," that create
problems for women and religious minorities, including
Christians. The PM emphasized several times the need to root
out the corruption interfering with delivery of basic services
to Basrawis.

Deputy PM Barham Saleh
--------------

6. (U) DPM Saleh organized this forum along the lines of recent
development fora. In his speech he committed to carry over ID
200 billion in unspent budget funds into 2008; add to Basrah's
over ID 400 billion 2008 allocation, bringing the total
available funds to ID 700 billion, (approximately $583 million).
The DPM also said Basrah would benefit from $50 million in
micro-credit programs. A centerpiece was the announcement of a
new Basrah development fund for which $30 million in central
government funds would be the first endowment. (Note: The
Basrah PRT is working to establish the fund. End note.)

Governor Wa'eli
--------------

7. (U) Governor Wa'eli echoed PM Maliki's theme that 2007 was

BASRAH 00000117 002.2 OF 002


the "year of building security" while 2008 would be the "year of
development" (suggesting they had coordinated their messages).
Wa'eli used a long PowerPoint presentation to announce several
new projects, including a major bridge across the Shatt-al-Arab
waterway, and reinforce statements made by the national speakers
on large future projects in Basrah such as the Grand Port in
Al-Faw and further development of the airport. One important
grassroots initiative was the allocation of $30 million for
development of the impoverished eastern marshes. Governor
Wa'eli received the first applause of the day when he stated
that political reconciliation in Basrah had moved forward and
received more applause when he promised that Basrah was on the
road to disarming the militias.

UNITED NATIONS, USG AND JAPAN
--------------

8. (U) UN SRSG Steffan de Mistura made the first speech by a UN
official in Basrah since 2003. While he did not refer to the UN
returning to Basrah Province, he stated that 2008 was to be the
"Year of the Compact" and that European Union funding would be
used for capacity building. Ambassador Charles Ries detailed
the USG's substantial contributions to Basrah, and Japanese
Ambassador Kenjiro Monji announced that $1.2 billion of the $3.5
billion in GOJ assistance to Iraq would go to Basrah.

WHO DID NOT COME - THE SADRISTS
--------------

9. (SBU) Leaders connected with Jaysh al-Mahdi and the Office of
Muqtada al-Sadr were invited but did not attend. REO contacts
did not find their absence alarming, noting that many Sadrists
were at the Haj and that there was too much public Coalition
participation in the event for OMS/JAM leaders to attend.

REACTION IN BASRAH
--------------

10. (SBU) Response by Basrawi leaders after the event has been
universally positive. PC members who have frequently clashed
with Wa'eli told us afterwards that the event was a success,
providing leaders follow through on the pledges made during the
conference. Sayid al-Shuhada (SAS) Secretary General Sayid
Dagher al-Musawi (Septel), a longtime political opponent of
Wa'eli, called the event "very positive" while Catholic Bishop
Imad Al-Banna told us he appreciated the PM's public reference
to the problems of Christians in Basrah. In a December 13 REO
meeting Governor Wa'eli said that he had now established a
personal relationship with PM Maliki that boded well for the
future.


11. (SBU) Virtually all of our Basrawi contacts, although
critical of the PM's performance in the past, saw great promise
in Maliki's attendance and public promise of support for Basrah.
The PC members who talked to the REO deputy director after the
event admitted that the forum placed a new responsibility on the
council to work constructively for Basrah's development.
Several contacts also considered the public reconciliation
aspect of the event as another step towards free and fair
provincial elections.

COMMENT - THE SETTING FOR PIC AND ELECTIONS
--------------

12. (SBU) The forum has generated remarkable expressions of
hope, reconciliation and determination to cooperate in order to
usher in an era of security and prosperity for Basrah Province.
The forum occurred on the heels of the concerted effort to bring
in all political actors, including JAM/OMS, together for the
negotiation and signing of the Honor Document. Together the BDF
and the Honor Document have created a positive environment for
the PIC ceremony and a new spirit of cooperation among police,
governate, militias and the PC.


13. (SBU) While we still expect some PC members to continue
demanding a bigger piece of the development pie, they will have
to get in line with the spirit of cooperation. All actors seem
invigorated by the hope for free and fair provincial elections,
as soon as possible. Iraqi speakers were a bit short in
acknowledging contributions by the USG and others such as Japan;
the PRT and REO should reach out more to local government
officials to detail USG-funded reconstruction projects.
Governor Wa'eli discussed with REO holding an investment forum
in the near future, perhaps to attract oil and gas companies.
SIGNATURE