U.S. DELEGATION POSITION GUIDANCE FOR THE IRFFI

UNCLAS SECTION 01 OF 02 STATE 149147

SIPDIS

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: EAID ECIN ECON EUN UN IT IZ
SUBJECT: U.S. DELEGATION POSITION GUIDANCE FOR THE IRFFI
DONORS COMMITTEE MEETING IN BARI, ITALY ON OCTOBER 28-29.

REF: A. STATE 142290


B. STATE 148053

C. STATE 149144


1. (SBU) This is an action cable for the U.S. delegates to
the Meeting of the Donors Committee (DC) of the International
Fund Facility for Iraq (IRFFI) in Bari, Italy on October
28-29. See reftel country clearance requests for the
composition of the delegation.


2. (SBU) The agenda for the IRFFI DC meeting is divided into
three sessions: (1) IRFFI Governance and Technical Issues,
particularly for discussion and adoption of the new IRFFI
Terms of Reference (ToR),the alignment of the IRFFI to the
International Compact with Iraq (ICI),and the organization
and work of the IRFFI and ICI secretariats and sectoral
working groups (SWGs); (2) implementation of IRFFI programs
with reports from the World Bank (WB) and UN Development
Group (UNDG); and (3) future perspectives on IRFFI - to
discuss the way forward. The following guidance pertains
mainly to the first session (on governance and the ToR),and
the final session (on the future of IRFFI).


3. (SBU) General Points on Iraqi Leadership: We endorse
views expressed by the EC and others that the exercise of
genuine Iraqi leadership will be central to the success of
IRFFI and the ICI. We look to GoI to exercise its leadership
in ways that demonstrate its capabilities to deliver upon its
National Vision for Iraq as a peaceful and stable nation
where its people are well-served by their government. Iraqi
leadership will best be demonstrated by concerted and
sustained action effectively to spend GoI and IRFFI funds and
to implement the ICI beginning with the establishment of an
effective secretariat serving both IRFFI and the ICI.


4. (SBU) IRFFI Timeline and Resources: We concur in
observations made by IRFFI Co-Chair Ambassador de Martino
(Italy) that the timeline end-date for IRFFI activities
should be aligned with the life span of the ICI to run
through to the end of the year 2012. We note from informal
IRFFI DC discussions in New York (see reftel State 149144)
that a number of countries want to add funding resources to
IRFFI and would encourage the DC actively to seek additional
funds to be expended during IRFFI's remaining lifetime.


5. (SBU) IRFFI Terms of Reference: The IRFFI ToR must make
clear that the IRFFI on a priority basis supports
accomplishing the goals and benchmarks of the ICI, that the
ICI clarifies and substantially implements Iraq's National
Development Strategy (NDS) and that the NDS should
encorporate the ICI Joint Monitoring Matrix (which elaborates
the ICI benchmarks). Following the recommendations of the
SCAN consultants who reviewed the ToR, the new ToR should
establish that the chairmanship of the IRFFI DC should be
held by a representative of a donor country or organization.
Recognizing that the IRFFI still has important contributions
to make in the fields of relief and reconstruction, the new
IRFFI ToR should be broadened to allow IRFFI resources to go
to supporting Iraq's internally displaced persons as well as
protecting the most vulnerable of Iraq's citizens.


6. (SBU) Role of the Iraq Strategic Review Board (ISRB) and
Sectoral Working Groups (SWGs): The ISRB and its SWGs face
an ambitious agenda and must better focus and strengthen
their efforts toward implementation of the ICI. We agree
that the SWGs should serve both the IRFFI and the ICI.
However, only two SWGs have met (for Energy and Human
Development) and progress is spotty. The GoI, with the
strong support of the UN and World Bank, must work harder to
stand-up all of the SWGs; the SWGs play crucial roles for
bringing together Iraq's ministries and provinces with donors
and investors. We urge the GoI to adopt firm times for
standing-up all SWGs before the end of 2007, and to task the
SWGs with publishing their Sectoral Development Strategies
before mid-year 2008. The Sectoral Development Strategies
should emphasize mobilizing Iraqi resources, identify
requirements for ministerial and provincial capacity
development, indicate where other donor assistance in all its
forms is needed, and point to areas where private enterprises
and investors (domestic and foreign) can play greater roles.
Working with IRFFI and individual donor countries, the SWGs
should explore "project co-sharing" where diverse Iraqi and
international resources can be aligned or co-mingled to

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leverage results.


7. (SBU) IRFFI and ICI Secretariats: Thanks to the
European Commission (EC),WB, Italy and other DC country
members for supporting efforts to stand-up the secretariats.
We urge the GoI and the UN to complete staffing for the ICI
secretariat by the end of November. This will be integral to

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getting the SWGs to begin meeting. The IRFFI secretariat
should work closely with the ICI secretariat, or in time be
merged into the ICI secretariat. With the help of
consultants and advisors, including from the UN and World
Bank, the secretariats should collaborate with IRFFI donors
and ICI partners to build upon Iraq's Development Assistance
Database in order to clarify the current status, timelines
and aims of pledged donor assistance. They should also
collaborate with the Ministry of Planning and Development
Cooperation's (MoPDC's) Central Office of Statistics and
Information Technology (COSIT) much more fully to develop
national and provincial data on capital investment from all
national and foreign sources (public and private). Such
efforts to track capital investment should complement and
help to improve the Ministry of Finance's monitoring and
reporting of capital budget execution. This information is
needed for Iraq's national account data on Gross Fixed
Capital Formation - a key component of GDP and indicator of
current and future development. Equally important is to
develop greater visibility and recognition of the
considerable contributions to Iraqi relief and reconstruction
that are being made by its development partners both
bilaterally and multilaterally, as through the IRFFI.
RICE