DPM BARHAM SALEH TO CODEL HIRONO: WE ARE MAKING

C O N F I D E N T I A L SECTION 01 OF 02 BAGHDAD 002085

SIPDIS

E.O. 12958: DECL: 07/01/2018
TAGS: ECON PGOV IZ PREL MARR
SUBJECT: DPM BARHAM SALEH TO CODEL HIRONO: WE ARE MAKING
PROGRESS BUT STILL NEED U.S. SUPPORT

BAGHDAD 00002085 001.2 OF 002


Classified By: Economic Minister Charles P. Ries for reasons 1.4 (b) an
d (d).


1. (C) SUMMARY: Deputy Prime Minister Barham Saleh told CODEL
Hirono Iraq is making significant progress toward standing up
its own security forces, reconciling politically, and
developing economically, but the country nevertheless needs
continued USG assistance to cement the gains. Saleh said
there would be no fully negotiated status of forces agreement
(SOFA) this year, but expressed confidence that the GOI and
the USG would conclude a Strategic Framework Agreement (SFA)
incorporating a "security protocol" that would serve as a
concise SOFA outline. Saleh was guardedly optimistic that
Tawafuq would return to the government in the coming weeks;
he was less sanguine that the GOI and the KRG would agree on
a hydrocarbons framework law anytime soon. He expressed
frustration with U.S. Members of Congress who criticize the
GOI on budget execution and corruption, arguing that Iraq is
improving on both fronts. He nevertheless opined that
improving the technical capacity of Iraq's government
institutions remains the country's greatest economic
challenge. END SUMMARY.

THE ISF ARE STRONGER TODAY, BUT NOT STRONG ENOUGH


2. (C) DPM Saleh emphasized both Iraq's progress and its
ongoing need for U.S. assistance in his June 30 meeting with
CODEL Hirono, which was comprised of: Rep. Mazie Hirono
(D-HI); Rep. Brian Bilbray (R-CA); Rep. Travis Childers
(D-HS); Rep. Robert Goodlatte (R-VA); and Rep. Thelma Drake
(R-VA). Saleh told the Representatives that the Iraqi
Security Forces (ISF) now boast 600,000 trained soldiers and
policemen and plan to add two Iraqi Army (IA) divisions next
year: a sharp increase from their numbers in 2004. Saleh
said the new forces have empowered the GOI to take on
militias in, e.g., Basrah and Sadr City, citing recent
operations there as examples of the GOI's growing confidence
and security capabilities. He said, however, growing GOI
confidence notwithstanding, Iraq is not yet ready to defend
its sovereignty against the internal and external threats it
faces. Saleh observed that Iraq could not expect the United
States to bolster the ISF forever, but he argued that the
regional ramifications of Iraq's security mean that GOI and
USG interests are aligned. "It would be different if we were
an island in the Pacific," he joked, "but our security draws
comments from Ayatollah Khamanei and Hassan Nasrallah
(Secretary General of Lebanese Hizbollah)." Queried by Rep.
Goodlatte regarding how many U.S. troops Iraq would need to
remain in country, Saleh responded that he has learned not to
second guess the judgments of the military; he offered,
however, that he believes current troop levels are too high.
Over time, he said, the ISF would move increasingly to the
fore, and Coalition Forces (CF) would move to support roles.

NO SOFA THIS YEAR, BUT THE SFA WITH A "SECURITY PROTOCOL"


3. (C) Saleh said there would be no fully negotiated SOFA
this year, noting domestic political sensitivities over
Iraq's sovereignty and the complexity of the negotiations.
He said, however, that Iraq's top political leaders agree
that the GOI and the USG need a common understanding with
respect to, e.g., immunities and bases. He acknowledged the
July 31 target date and opined that the GOI and the USG would
agree to a "security protocol" incorporated into the SFA that
would serve as a concise outline of a SOFA. Saleh noted
Iranian public statements in opposition to the SFA and SOFA
negotiations exacerbated existing concerns among ordinary
Iraqis. Responding to Rep. Drake's observation that many
Americans think the Iraqis do not want the CF in their
country, Saleh clarified some of Iraq's domestic political
complexities. "No Iraqi likes to have foreign troops in the
country, and some do not want you here at all: ex-Baathists,
al-Qaeda in Iraq, extremists and Sadrists. But Iraq's
political leaders understand that your presence is
necessary." Saleh said that some Iraqi politicians speak
against the CF to placate their constituents but concede
behind closed doors that the troops must stay. He said, for
example, "one of the top three Sunni leaders" told him that
Sunnis "know they would be in trouble without the U.S. forces
here."

TAWAFUQ MAY RETURN, BUT HYDROCARBONS LEGISLATION DOUBTFUL


4. (C) Regarding political reconciliation, Saleh said that
Iraq is going through a challenging period in its history:
progress is inherently slow and frustrating. Saleh noted
that the United States continues to debate issues such as the
death penalty and gay marriage more than 200 years after its
founding. He said Prime Minister Nuri al-Maliki and Tawafuq
representatives had a long meeting June 29 and that the Sunni
bloc may return to the GOI in the coming weeks. He urged
caution, however: "We have been here before," he commented

BAGHDAD 00002085 002.5 OF 002


dryly. Saleh stated he doubts that the Iraqis will agree on
hydrocarbons legislation "anytime soon." In addition to the
ethnic dimension to the negotiations, he said Iraq is
struggling to overcome the bureaucratic inertia left over
from years of socialist government.

DOING BETTER ON BUDGET EXECUTION BUT INSTITUTIONAL CAPACITY
STILL THE GREATEST CHALLENGE


5. (C) Saleh expressed frustration with U.S. Members of
Congress who criticize the GOI on budget execution and
corruption. He argued that the GOI is making progress on
both fronts and agreed with his guests that governing in a
democracy is like "herding cats." Saleh said both the
Council of Representatives and a vibrant media subject the
GOI to greater oversight than previous Iraqi governments ever
experienced. He told the Representatives that the GOI
nevertheless executed more than 60 percent of its USD 11
billion investment budget in 2007, up from 25 percent of USD
6 billion in 2006. He said he would be meeting later that
day to discuss the 2008 supplemental, which he believes will
total USD 17-20 billion. Saleh explained that provincial
budget allocations were an important issue to him because of
his own experience in sub-national government in the KRG. He
opined that the federal government is not responsive enough
to the provinces' needs: Iraq needs less government in
general, and more local government than federal. He told the
CODEL that the supplemental would provide USD 3 billion in
additional funds for the fifteen non-KRG provinces, bringing
their total 2008 block allocations to USD 7 billion.


6. (C) Despite the progress on budget execution and
corruption, in response to a question from Rep. Hirono, Saleh
identified institutional capacity as the greatest challenge
to Iraq's economic development. He noted that the GOI is
pursuing institutional reform under the auspices of the
International Compact with Iraq. Continued progress, he
said, will be essential; Iraq needs to "get the economics and
the politics right" to sustain the gains in security.


7. (C) CODEL Hirono did not have the opportunity to clear on
this cable before departing Iraq.
CROCKER