ENCOURAGING LARGER WORLD BANK AND IMF IRAQ PRESENCE

C O N F I D E N T I A L BAGHDAD 003283

SIPDIS

E.O. 12958: DECL: 10/08/2018
TAGS: ECON EAID OFDP IZ
SUBJECT: ENCOURAGING LARGER WORLD BANK AND IMF IRAQ PRESENCE

REF: BAGHDAD 2990

Classified By: EMIN - Marc Wall, reason 1.5 (b,d)


1. (U) This is an action message, see para three.


2. (C) We believe the upcoming Bank/Fund meetings in
Washington, which will be attended by Iraqi Finance Minister
Jabr and Central Bank of Iraq Governor Shabibi, present a
golden opportunity to press the World Bank and IMF to
increase their staff presence in Iraq. As the Iraqi
government increasingly provides for its own security, and as
it prepares for provincial and national elections in 2009,
the time has arrived for the international organizations to
step up to their responsibilities and manage their programs
with robust Iraq-based staffing. The security situation,
while fragile, is no longer the deterrent it once was. The
UN is currently expanding its presence, both in Baghdad and
in the provinces, and several neighboring countries are
moving to reestablish their diplomatic presence. But the IMF
still has no staff in Baghdad and the World Bank currently
has only one international staff member here. World Bank
Country Director Jean Michel Happi has told us that the Bank
plans to send two or three professional staff to join him,
but the timetable for expansion is not fixed. The World
Bank's plans to concentrate its efforts on public
administration and public financial management would provide
valuable support for our own current assistance strategy. We
would argue that there is enough work for several World Bank
staff in Iraq, and the sooner they get here the better.


3. (C) In September, IMF Managing Director Strauss-Kahn
told Ambassador Crocker that he would react positively to an
Iraqi request for an extension of a formal relationship
between the IMF and Iraq after the end of the current Standby
Arrangement in March of 2009. We have pressed the Iraqis to
do so, and, while Shabibi is open to a post-SBA relationship
(reftel),it is not clear whether the GOI delegation is going
to Washington prepared to solicit it. We believe that IMF
has much still to offer Iraq (e.g. assistance on reserves
management) and should undertake that assistance with an
on-the-ground staff presence.


3. (SBU) Action requested: We urge Washington to press both
sides on these issues during the Bank/Fund meetings next
week. If the Iraqis have not yet asked the IMF to extend
something like a precautionary SBA, we should urge them to do
so next week. And we should press management at both the
Bank and Fund to agree to establish robust on-the-ground
presence in Iraq as soon as possible.
CROCKER