DEVELOPMENT FUND FOR IRAQ SUCCESSOR PLANNING

C O N F I D E N T I A L BAGHDAD 000210 SIPDIS E.O. 12958: DECL: 01/27/2020 TAGS: EFIN PGOV ECON SUBJECT: DEVELOPMENT FUND FOR IRAQ SUCCESSOR PLANNING REF: 2009 BAGHDAD 125 Classified By: John Desrocher, Minister Counselor for Economic Coordina tion for reasons 1.4 (b) and (d) for reasons 1.4 (b) and (d) ¶1. (U) Summary: MFA Coordinator of Support and Deputy Director of International Organizations, Ambassador Mohammed Al-Humaimidi, described the state of GOI planning for the successor to the Development Fund for Iraq (DFI) to Emboffs on January 21. UNSCR 1905 requires the GOI to put in place an action plan and transition timeline for a post-DFI mechanism by April 1, and a report is required at the meeting of the International Advisory and Monitoring Board (IAMB) in Amman on January 31. The Ministry of Finance, the Central Bank of Iraq (CBI),and the Committee of Financial Experts (COFE) are working on the action plan and the summary report. GOI PLANNING MILESTONES -------------- ¶2. (U) Al-Humaimidi explained that the GOI faces two major milestones in planning for a DFI successor mechanism. UNSCR 1905 calls for the GOI to put in place an action plan and timeline by April 1, 2010 and to ensure the timely and effective transition to a post-DFI mechanism by December 31, ¶2010. UNSCR 1905 requires the GOI through the head of COFE to report to the Security Council on a quarterly basis, and to provide a first report with an action plan and timeline no later than April 1, 2010. Aside from the requirements of UNSCR 1905, the GOI must present a summary of its first quarterly report at the IAMB meeting in Amman on January 31. Al-Humaimidi stated that the Ministry of Finance and the CBI are working on the summary report to be submitted at the IAMB meeting. ORGANIZATION OF GOI PLANNING -------------- ¶3. (U) Al-Humaimidi downplayed the January 19 announcement that the Council of Ministers (COM) had decided to form an inter-ministerial committee to work on a plan for a DFI successor and emphasized that work on UN Chapter VII issues has been ongoing in such an inter-ministerial committee since November 2009. He pointed out that the Ministry of Finance, CBI, and COFE have already been working on the plan for a DFI successor. Comment -------------- ¶4. (C) The GOI appears unlikely to be well prepared to deliver a report on its DFI successor planning to IAMB on January 31. The Governor of the CBI stated to the Acting Treasury Attache on January 7 that the CBI had not begun to consider planning for the successor to the DFI. The Minister of Finance and his Special Advisor told the Economic Counselor and Acting Treasury Attache on January 13 that the Ministry of Finance had initiated contact with the CBI and was starting to consider its approach to the DFI successor arrangement. The GOI has a history of not addressing annual renewals of the DFI until as late as possible in December, and then only with U.S. prompting. The Ministry of Finance and the CBI appear to be continuing the habit of last-minute action in their planning for the successor to the DFI. HILL