MINPLANNING ON ICI, ASSET TRANSFER, AND POLITICS

UNCLAS SECTION 01 OF 02 BAGHDAD 001619 SENSITIVE SIPDIS AIDAC E.O. 12958: N/A TAGS: EFIN ECON ETRD PGOV IZ SUBJECT: MINPLANNING ON ICI, ASSET TRANSFER, AND POLITICS SENSITIVE BUT UNCLASSIFIED. PLEASE PROTECT ACCORDINGLY. ¶1. (SBU) Summary: EMIN met on June 15 with Minister of Planning Ali Baban to discuss the International Compact with Iraq (ICI) and the transfer of assets from USG to GOI. Baban said that the ICI will only see progress if it is seen by the GoI as politically advantageous, and that what is needed first is a "National Compact in Iraq." Regarding assets funded by the USG to be transferred to the GoI, Baban noted that DPM Issawi had taken an interest in this issue, and that it needs to be coordinated with all line ministries. He accepted the draft MOU on asset transfer and said that his office would reply with any changes by June 21. End Summary. ICI: Progress Only If Politically Advantageous -------------- ¶2. (SBU) EMIN met June 15 with Minister of Planning and Development Cooperation (MoPDC) Ali Baban and asked about the GoI's commitment to the International Compact with Iraq (ICI). Baban said that it is unfortunate that the GoI's enthusiasm for the ICI is down and that the people who were committed to prepare the ICI framework and action items "did not do their job well." Some people, Baban added, look to the ICI as a "political vehicle" and not as a real commitment by Iraq to the international community. The Minister said that the MoPDC has been grumbling about the slow process of the ICI, but that his Ministry had discovered that "higher officials" were not enthusiastic to do more. ¶3. (SBU) EMIN told Minister Baban that the USG is prepared to provide strong support to the ICI only as much as the GoI is itself committed to the mechanism, to which Baban responded, "this is the problem." Baban explained that the future of the ICI will depend on political circumstances in Iraq. If it is seen as politically advantageous, it will go forward, and if not, it won't. The MoPDC is convinced of the usefulness of the ICI, he added, but said that others are not and see it as an example of "U.S. strategy in Iraq," and not an international effort. Baban said that the five-year National Development Plan (NDP) currently being formulated would refer to the ICI, but he could not guarantee that there would be a sustained commitment to the ICI over the next five years. ¶4. (SBU) Alluding to the uncertain nature of the current GoI's commitment to the ICI and to any potential future commitment, Baban noted, "this is the democracy that the U.S. has exported to us; things change." Bringing the issue back to the need for the GoI to speak with one coherent voice to the international community, Baban explained, "What we really need is a National Compact in Iraq before an International Compact with Iraq." Asset Transfer: MOU Delivered -------------- ¶5. (SBU) Updated English and Arabic versions of the Asset Transfer MOU were handed to Minister Baban, who said that his staff would review and respond by June 21 with any changes. The Minister noted that he is traveling often to the provinces and said that he would be discussing the transferred assets with Governors and Provincial Councils. He agreed that there would have to be a commitment from the GoI to fund personnel, operations, and maintenance for the transferred assets, but noted that the Council of Ministers had discussed this issue without coming to any conclusions or providing any additional funding. Minister Baban added that it would also be the responsibility of the line ministries to take on the new assets and manage them appropriately. He also noted the interest of DPM Issawi in the asset transfer issue. QIssawi in the asset transfer issue. NDP and Budget Assistance -------------- ¶6. (SBU) Twice in the conversation, the Minister praised the technical budgetary assistance that the MoPDC had previously received from the USG and asked for more. This request has been passed to USAID, which has been assisting the MoPDC in aligning the National Development Plan (NDP) with budget priorities. (Progress on the NDP and USAID's assistance with this important initiative to be reported septel.) Politics: Corruption is the Topic of the Day -------------- ¶7. (SBU) Turning to politics, Baban said that Iraq is in a period of political transition, but that rumors of a cabinet reshuffle "will not include the MoPDC." Corruption is the topic of the day, Baban added, noting that all of the political blocs are "after each other." He and his Ministry did not expect to have any problems, Baban explained, because "I am an independent Minister and have no problems. We supervise and control everything, but don't implement anything." BAGHDAD 00001619 002.2 OF 002 ¶8. (SBU) Baban said that rising oil prices would help with the budget, but that any additional revenues would just be covering the deficit and not providing any additional money. Proceeds from sales of oil out of the KRG would solve half the problem, Baban added, with IOC contracts awarded in the upcoming bid rounds solving the other half. He noted that the foreign companies providing services in the KRG would need to get paid soon, but that the proceeds were going directly into the federal budget. ¶9. (SBU) Finally, commenting on the just-announced election results in Iran and the street protests that followed, Baban said that the election and aftermath would "no doubt have an impact" here in Iraq. Particularly noting the strong presence of youth and women in the street protests in Iran, Baban said that "maybe some in Iraq will do the same," and that, whatever the eventual outcome in Iran, it would affect Iraq and the region directly. Ford