RRT ERBIL: REFLECTIONS ON A YEAR IN THE KURDISTAN

C O N F I D E N T I A L SECTION 01 OF 03 BAGHDAD 001933 SIPDIS E.O. 12958: DECL: 07/15/2019 TAGS: PGOV EPET PBTS PHUM EFIN IZ SUBJECT: RRT ERBIL: REFLECTIONS ON A YEAR IN THE KURDISTAN REGION Classified By: RRT TEAM LEADER LUCY TAMLYN FOR REASON 1.4 (b). ¶1. (U) The cable which follows reflects the personal views of the Kurdistan Region Regional Reconstruction Team (RRT) leader. ¶2. (C) Summary: We should be tougher on Kurdish leadership on the slow pace of democracy; less judgmental on hydrocarbons (where Kurdistani initiatives are accomplishing what six years and many billions failed to do in "the lower 15.") and more engaged in resolving Article 140 and Kirkuk, "that delicate situation designed by Saddam to explode if tampered with." A Consulate in Erbil should not be a reward, but a reassurance. End Summary. A Would-Be Dubai -------------- ¶3. (C) The day visitor to Erbil sees a growing city with lushly-landscaped median strips, a state-of-the-art international airport, new buildings and bustling shopping centers. It is an object lesson in what good security and a couple of years of healthy revenues can accomplish. But the Kurdistanis got off to a slow start: eighteen years ago the impoverished region was cut off from Iraq - no salaries, electricity, or even postal service. Through the nineties the PUK and KDP waged a futile and destructive civil war. Now, however, fueled by the momentum of the past few years, they are determined to change their historical narrative of poverty and martyrdom to one of prosperity and self-determination. The means will be rapid exploitation of the hydrocarbons sector and the development of close economic and political ties with nations (such as Turkey) which they hope will serve as a buffer against what they see as a predatory Iraqi state. They must still contend with inefficient and bloated government, a poorly-educated work force, and a just-nascent private sector. Some state planners speak of emulating the "Dubai Model" - optimistic, but slightly divorced from reality. Signs of Progress -------------- ¶4. (C) The RRT has reported on many of the promising approaches and personalities which are spearheading change in the region. A private sector-led strategy has allowed the region to dramatically improve essential services such as electricity and become an oil producer in a few short years. Kurdistanis have laid out the welcome mat to U.S. universities and are actively developing educational and professional exchanges with U.S. counterparts in order to improve the quality of the region's heretofore second-rate universities. Ethnic and religious minorities (Christians in particular) have found refuge in the Kurdistan Region where a secular leadership is committed to multi-ethnic and multi-religious coexistence. And finally, the region's relationship with Turkey grows better by the day, cemented by business ties and hydrocarbon sector investment. ¶5. (C) The leadership of President Barzani's iconoclastic nephew, Prime Minister Nechirvan Barzani, was critical in forging the 2006 agreement to unite the KDP and PUK governments (with final unification approved by the parliament in May 2009) - hopefully closing the last chapter of the dysfunctional two-state-within-a-region system. He has also invested his office's resources and his personal leadership to combating violence against women, improving prison conditions, putting bright and well-educated youth of the Kurdistani diaspora to work in key ministries and setting in motion an ambitious project to work with Price Waterhouse Coopers on improving transparency and governance in public administration. Barzani is bright, flexible and subtle. He is a popular figure across the region and a leader to watch. Qis a popular figure across the region and a leader to watch. and of concern -------------- ¶6. (C) But there are flaws in this picture. Kurdistani youth who have come of age after "Operation Provide Comfort" deeply resent the two parties' interference in the economic and social spheres and know that - aside from make-work government jobs - there are few options after graduation. A flood of unprecedented revenue in a system with few controls has fueled corruption and created a growing gap between the elites and the middle class in terms of standard of living. The Kurdistan Regional Government's (KRG) budget process is neither transparent nor efficient. The independent media has a long way to go: most of the press still has ties to parties or prominent individuals; journalists are harassed and, in one case in 2008, assassinated. Culturally ingrained attitudes toward women still result in a high number of honor killings and burning. The RRT works to address all of these BAGHDAD 00001933 002 OF 003 issues in a modest way with the limited tools at hand, often partnering with the UN on projects of mutual interest. Two Subject-Matter Experts advise the Ministry of Planning and the Parliament. Quick Response Funding is used for high visibility projects which can be catalysts for change in civil society and government. As Upcoming Elections Bring out the Worst -------------- ¶7. (C) In the run-up to the Parliamentary elections, it is clear the KDP and the PUK do not view political competition as healthy and welcome, particularly if it affects the ability of the PUK to gain the necessary votes to bring the coalition a solid majority in the Parliament. The worst characteristics of the Kurdistan Region police state are coming out. We are hearing multiple, credible accounts of Parastin and Asayeesh investigation and temporary detention of citizens who are suspected of favoring opposition candidates. Even as living standards rise, expectations rise faster, and Kurdistanis want politicians to make good on promises of electricity, clean water, better health and educational facilities and access to employment. While the leaders "on the hill" will continue to argue that resolution of Article 140 and existential security challenges posed by Baghdad require a disciplined, unified political leadership and the absolute prioritization of security over all other issues, the citizens on the plain are starting to speak their own minds. Often, what they have to say is that the rest of Iraq has gone much further in decentralization, practicing democracy and fighting corruption than the Kurdistan Region. ¶8. (C) Kurdistan Region leaders should hear from the United States that intimidation and harassment of voters and political parties in the run-up to the Parliamentary elections is unacceptable. Corruption, the long reach of the party into the economy and social life and the enrichment of party leaders is tainting their young democracy. May We Be Your Israel? -------------- ¶9. (C) Kurdistan Region leaders and the people of the Kurdistan Region want the United States to serve as a political buffer between them and Baghdad, particularly in order to keep the Government of Iraq from re-writing the Iraqi Constitution and re-imposing centralized, authoritarian governance. They have repeatedly asked the United States to assist in resolving Article 140 (of the Iraqi Constitution) before we leave, but in a way that is consistent with that Article, and which respects the final authority of the people on the ground as to whether they wish to be a part of the Kurdistan Region or not. They sense with concern that that special post-invasion relationship has faded and are uncertain what comes next. As a staunchly pro-American redoubt in the Middle East, they had hoped to have a durable "special relationship" - the example most often cited: "as you have with Israel." ¶10. (C) In our forced march to wrap up business in Iraq, the perception from RRT Erbil is that the Kurds are seen by the USG as stumbling blocks - unwilling to recognize that the logic of power requires them to make deeply unpalatable concessions and "get over" the past. The United States wants them to have a plan to resolve the territorial and security issues which stand in the way of achieving a clear and recognized border, but - alarmingly - they do not appear to have one. For their part, Kurdistan Region leaders see the United States becoming increasingly distant, passing off responsibility to the UN - and worse - suffering from amnesia Qresponsibility to the UN - and worse - suffering from amnesia on just how events combined to create - and seemingly perpetuate - the disputed internal boundaries in what they consider part of the Kurdish homeland. ¶11. (C) Maintaining political leverage with Kurdistan Region leadership requires more than an academic understanding of the passion and stubbornness that these issues evoke. Forcing them into a corner will be counter-productive and could provoke dangerous reactions. President Barzani was severely chided in May 2009 when Kurdish forces threatened the entry of the Governor of Ninewa into Bashiqa. His response was angry and resentful. Sustained high-level civilian engagement with Kurdistan Region leadership is needed - particularly over the next two years. This engagement should mirror and complement the ongoing comprehensive and effective engagement of MNC-I with Kurdistan Region security forces. Keeping USG Assistance Consistent with our Message -------------- -------------- ¶12. (C) Centrifugal forces will continue to push the BAGHDAD 00001933 003 OF 003 Kurdistan Region away from Iraq, as language, laws and ways of doing business diverge. Ironically, the same sees to be true of the USG. This year has been spent dutifully noting the unique environment in the Kurdistan Region; asking that U.S. statements or reports on Iraq include information on the region; and reminding that nine-times-out-of ten, USG programming does not include the Kurdistan Region. (For example, there are no USG anti-corruption programs in the Kurdistan Region). The USG has missed numerous opportunities to promote the same kind of democracy and transparent governance in the Kurdistan Region that we tout in the rest of Iraq. This is not a plug for new resources. On the contrary, what we frequently hear from KRG officials is "we don't need money, but we do need advice." But the Kurdistan Region should be fairly represented in USG Iraqi programming with particular focus on those activities such as Rule of Law which will reinforce the ties of law and justice which still unite the Kurdistan Region with Iraq. Hydrocarbons and Revenue Sharing -------------- ¶13. (C) When the Kurdistan Region started auctioning oil blocks on the basis of its regional hydrocarbons legislation (passed soon after national legislation stalled in Baghdad), the USG told U.S. companies that they "incurred significant political and legal risk by signing any contracts with any party before national laws governing oil and gas are passed by the Iraqi Parliament." This message eventually became "in the absence of an agreement, our policy is to advise against striking deals with the KRG on oil or gas development." Now that the KRG has started production, and output from Kurdistan wells is boosting Iraq's sagging oil revenues, it might be time to reassess the latter position, and move back to something closer to the former. It might also be time to remember one of the original USG benchmarks, which has still not been achieved: revenue sharing. Without a revenue sharing law, the Kurdistan Region continues to be dependent on late and arbitrary pass-over of the Region's 17% of the national budget. Putting revenue sharing into law will alleviate Kurdish concerns that they may one day be cut off - as in 1991. It will solidify the framework of laws that tie the Region to Iraq. It may also help lay the groundwork for completion of outstanding legislation on management of hydrocarbons, by putting to rest concerns that Kurdistan's exploitation of its hydrocarbon resources is for its own benefit, rather than for the benefit of the Iraqi people. The Question of a Consulate -------------- ¶14. (C) The KRG seeks the establishment of a U.S. consulate - not because this validates aspirations for an independent state, but because it would formally recognize a relationship which has had unique characteristics over the last 17 years. A U.S. Consulate would reassure them that we will not fold our tents and fade away when the surge ends. A U.S. consulate affirms the importance of the Kurdistan Region as a hub for business, tourism and bilateral exchanges. ¶15. (C) Like Janus, the Kurds are looking backwards as much as forwards. What they see in the rear-view mirror is genocide and betrayal. The early establishment of a U.S. Consulate in the Kurdistan Region would reassure the people and leadership of this region of our continued partnership with them. Taking this step would be seen by them as assurance that the past will not repeat itself. With this in hand, they may be able to focus more confidently on the Qhand, they may be able to focus more confidently on the future and make the compromises necessary to put their relationship with Baghdad on a better long-term footing. HILL