DPM BARHAM SALIH ON ICI AND DEC, NEW COR SPEAKER,

C O N F I D E N T I A L SECTION 01 OF 02 BAGHDAD 001105 SIPDIS E.O. 12958: DECL: 04/12/2019 TAGS: EFIN ECON EPET EAID PGOV EINV CVIS IZ SUBJECT: DPM BARHAM SALIH ON ICI AND DEC, NEW COR SPEAKER, ENERGY PROJECTS, AND VISAS REF: A. BAGHDAD 001074 ¶B. BAGHDAD 001062 ¶C. BAGHDAD 001056 ¶D. BAGHDAD 000756 Classified By: Economic Minister Counselor Marc Wall for reasons 1.4(b) and (d) ¶1. (SBU) Summary: At a 22 April meeting with EMIN, GoI DPM Barham Salih confirmed that the GoI is committed to the ICI and would be issuing invitations to a Fall ministerial meeting in Baghdad after a senior officials meeting in late May; deferred a decision on agreeing to hold the next Dialogue on Economic Cooperation meeting in June; looked forward to working with newly elected COR Speaker Samarrai'e on pushing through pending bilateral agreements; admitted that the GoI no longer has the money to throw at its problems, especially in the energy sector; and complained about visas. End Summary. ============================================= === ICI: "We Need to Make Up The Excitement Deficit" ============================================= === ¶2. (C) GoI Deputy PM Barham Salih told EMIN on April 22 that the GoI is committed to holding a ministerial level meeting of the International Compact for Iraq (ICI) in Baghdad in the Fall. Salih assured EMIN that Prime Minister al-Maliki is "excited" about hosting a fall meeting, admitting that the PM "had reservations about the ICI from day one," but now sees its usefulness. He added that with a new USG administration still working out its priorities, the GoI would have to "make up the ICI excitement deficit" by pushing it forward (note: a reference to the departure of former Deputy Treasury Secretary Kimmitt and other senior officials who had been instrumental in launching the ICI). The PM's position is that there can be no further ICI meetings outside of Iraq, Salih explained, and said that invitations to the Fall meeting in Iraq would be sent after the May 25 (tentative) Baghdad Consultative Group (BCG) meeting (Ref C.) Salih welcomed EMIN's suggestion that he meet soon with representatives of leading donor countries for an informal discussion of how to prepare for the May and Fall ICI meetings. ¶3. (SBU) (Note: On April 23 DPM Salih hosted a meeting of the ICI Executive Committee, which included UN, World Bank and GoI officials. World Bank officials told us that the committee agreed to go ahead with a ministerial meeting in ;Baghdad at the end of October; Salih will seek a GoI decision on the ministerial at the next Cabinet meeting. The BCG in late May will focus on narrowing down the ICI benchmarks to an achievable set of priorities and report on progress since the Stockholm meeting. The meeting will also be used to focus on reform efforts to offer Iraq and the ICI partners a sense of direction and purpose for the next few months. End note.) ============================== DEC Timing/Structure Uncertain ============================== ¶4. (SBU) EMIN invited Salih to attend the next meeting of the bilateral Dialogue on Economic Cooperation in Washington June 22-23, with the second day including a commercial promotion event hosted by the U.S. Chamber of Commerce. EMIN also noted that DPM Issawi was planning to travel to the U.S. at the end of May with several of the essential services ministers, and suggested it would be beneficial if this trip coincided with the DEC. Salih responded cautiously, noting that the late June timeframe would be difficult for him, given the planned July elections in the Kurdistan Region. Salih said he would discuss with Issawi the format for the DEC meeting before confirming dates (Comment: likely a QDEC meeting before confirming dates (Comment: likely a reference to making Issawi the Iraqi Chair of the DEC). ================================ Working With New COR Speaker ================================ ¶5. (C) EMIN asked Salih for his assessment of how successful the new Speaker of the Council of Representatives (COR),Ayad Samarrai'e (Ref B),will be in moving forward the stalled bilateral agreements (bilateral assistance agreement, OPIC incentive agreement, and TIFA). Salih agreed that it was time to ratify these agreements and promised to discuss these with Samarrai'e soon. He was relatively optimistic, noting that the coalition that had elected Samarrai'e could hold together and advance some of the pending economic legislation. BAGHDAD 00001105 002 OF 002 ======================================= Oil Contracts Still Under Discussion ======================================= ¶6. (C) Asked about next steps in his efforts to accelerate development of the oil sector, Salih focused on the PM's effort to negotiate directly with selected international oil companies for six (not specified) projects. Salih said he and the PM would meet in the coming days to discuss criteria for these contracts, noting that he (Salih) may invite both Exxon and Chevron to come to Baghdad for talks soon. As always, Salih complained about Ministry of Oil's poor performance, but added that the existing bid rounds would continue separate from the direct approach to selected firms for the priority projects. Salih said he wanted to meet again with EMIN for an in-depth discussion on this topic after he had spoken with the PM. ================== Need Smarter Plans ================== ¶7. (C) Using the GE turbine project as an example, Salih complained that the current budget constraints will force the GOI to do better planning for critical projects rather than continuing to "throw money at our problems." Salih said he believes the Ministry of Electricity does not have the skills to put in place the massive generation expansion project needed to fully utilize the GE and Siemens turbines that the GOI purchased last year. Without going into details, Salih said that the project is in "deep trouble" and said he is proposing the MoE look at build-operate-transfer schemes going forward. =============================== Visas: "Totally Inappropriate" =============================== ¶8. (SBU) Salih closed the meeting with reference to the high-level intervention needed to obtain a visa for Central Bank Governor Sinan al-Shabibi to attend IMF/World Bank meetings. Salih said that "something must be done" to ease the visa process, especially for GoI officials, describing current conditions as "totally inappropriate." National Investment Commission Chairman Sami al-Araji, who was also present, strongly agreed, noting the negative impact on investment and procurement decisions. BUTENIS