DELEGATION GUIDANCE FOR THE 7 JULY IRFFI DONORS

UNCLAS STATE 071896 SENSITIVE SIPDIS E.O. 12958: N/A TAGS: EAID ECON IZ PGOV PREL SUBJECT: DELEGATION GUIDANCE FOR THE 7 JULY IRFFI DONORS COMMITTEE MEETING IN BAGHDAD REF: A. (REFTEL A) 2007STATE154955 ¶B. (REFTEL B) 2008STATE60125 ¶C. (REFTEL C) 2008BAGHDAD1814 ¶1. (U) This is an action cable for Embassy Baghdad. See guidance in paragraphs 3 through 12. ¶2. (U) Along with Iraq and the U.S, EU/EC, UN, and World Bank, the info addressee countries of this cable constitute the membership of the International Reconstruction Fund Facility for Iraq Donors Committee (IRFFI DC). ¶3. (SBU) Summary: Reflecting the high importance he attaches to Iraq's international partnerships, Prime Minister Maliki will deliver the welcoming address to the Seventh Meeting of the IRFFI Donors Committee. The U.S. delegation should endorse the progress reports and plans of the United Nations Development Group (UNDG) and World Bank (WB) for their respective Iraq Trust Funds (ITFs). Both organizations are working to align their activities with the International Compact with Iraq (ICI). The delegation may want to suggest a number of priorities for the ITFs (for example, to help GoI develop effective programs for IDPs and returning refugees). The delegation should support extending the lifetime of the IRFFI by another two years (through 2012) to match the ICI. Also worthy of support are the UN efforts for restructuring the UN Country Team (UNCT). On co-financing, the delegation should counsel against Iraq adopting an overly detailed and restrictive "one-size-fits-all" approach in favor of arriving at approaches tailored to the needs and strengths of each donor. The delegation should seek to end the temporary arrangement adopted in Istanbul for the DC to be co-chaired by both Iraq and a donor. Rather, the DC should return to the conventional arrangement for a single chairperson chosen from among the Donors. The delegation may use its discretion in choosing the next IRFFI chairperson. Washington agencies would welcome Italian Ambassador De Martino continuing as full Chairman, should this be his wish. Alternatively, Australia, Sweden or Denmark would be good candidates. End Summary. ¶4. (U) Current Status: At the end of May 2008, Donor commitments to the UNDG-ITF and WB-ITF reached $1,338 million and $494 million, respectively, or $1,832 million in total. In addition, the ITFs report interest and investment earnings of $45-50 million each. Recalling the DC decision reached in Bari to align the IRFFI with the ICI (reftel A),the ITF operators will present their findings about the amounts that may be available for reprogramming and recommendations for how they can support the ICI. ¶5. (U) Multi-Donor Stocktaking: The DC will receive a report reviewing progress with efforts to take stock of donor activities and expenditures. We should encourage efforts to determine how the Donor Assistance Database (DAD) and the Capital Budget Reporting Tracking (CBRT) system could do more to track, analyze and report upon donor contributions in support of IRFFI and ICI goals and benchmarks. There will also be discussion of donor field trips and donor activities at the provincial level. ¶6. (SBU) Co-Financing: There is much to commend in the co-financing discussion that appears in the main body of the ICI Annual Report. For example, it is possible to see how U.S. assistance could contribute to a "co-financed" project by providing technical assistance for studies and designs while Iraq provides the main funding, contracting and project management. However, it is difficult to see how the U.S. approach to assistance could be reconciled with the overly detailed and restrictive guidelines for co-financing that were presented in the co-financing annex. Iraq should be prepared to tailor its co-financing arrangements to the strengths and requirements of each individual donor. ¶7. (SBU) UN Country Team (UNCT) - ICI Secretariat Issues: The UN will report and invite discussion on the issues surrounding its efforts to restructure and strengthen its Country Team. As reported so well in reftel C, the UN is having to contend with the fact that GoI has not implemented the inter-ministerial coordination and policy-planning mechanisms suggested in the original ICI document, favoring instead its own approaches. The delegation should support efforts to ensure that ICI mechanisms and GoI implementation efforts are both effective, such as for policy planning, without mandating a review or a solution that lacks GoI support. ¶8. (SBU) World Bank Third Interim Strategy Note: It has been three years since the World Bank last updated its Interim Strategy Note for Iraq. The World Bank's activities in Iraq appear to be at a low ebb. In view of the new Strategy Note, the delegation should encourage the World Bank to maintain a high level of interest in Iraq, including as an IRFFI ITF manager and as an important partner to the ICI. ¶9. (U) Uses of Interest Income; New ICI-Aligned Projects: If the delegation finds an opportunity to suggest ways for IRFFI resources to be allocated, it may wish to point to the Bari decision to permit IRFFI funds to be used in support of internally displaced persons and returning refugees, as well as to the statement by PM Maliki in Stockholm that $195 million has been allocated to these efforts. Your suggestion would be that, working with the relevant Iraqi ministries, the UNDG should develop a program of technical assistance aimed at designing and executing effective programs in support of IDPs and returning refugees. ¶10. (U) Lifetime of the IRFFI: At Istanbul in February 2007 the DC decided to extend the lifetime of the IRFFI to December 2010. The lifetime of the ICI is for five years from when it was adopted in mid-2007 through 2012. The UN and others favor aligning the lifetimes of the IRFFI and the ICI. The delegation should support such a proposal. ¶11. (U) Next DC Chairperson: The temporary joint Iraq-Donor co-chairmanship arrangement should revert to a single chairmanship held by a donor country, although a compromise on this point may be unavoidable. U.S. Del should heartily support Italian Ambassador DeMartino if he is willing to extend for another year as Chairman of the Donors Committee. Alternatively, candidacies from Australia, Sweden or Denmark would be suitable. The U.S. is not prepared to offer a candidate for DC Chairperson. ¶12. (U) Next DC Meeting: While recognizing the value in holding more frequent informal IRFFI meetings, Washington agencies would support holding the next full IRFFI DC meeting in approximately five-six months (November-December 2008), ideally in the home country of the next Donor Chairperson. RICE