ANBAR ACTING GOVERNOR READY TO HELP "ANBAR BANKERS"

UNCLAS SECTION 01 OF 02 BAGHDAD 000273 SENSITIVE SIPDIS STATE FOR NEA/I/ECON E.O.12958: N/A TAGS: EFIN ECON EAID PGOV PREL IZ SUBJECT: ANBAR ACTING GOVERNOR READY TO HELP "ANBAR BANKERS" SENSITIVE BUT UNCLASSIFIED. PLEASE PROTECT ACCORDINGLY. ¶1. (SBU) SUMMARY: Acting Governor of Anbar Province Fuad Jatab Hamad and Deputy Governor for Administrative Affairs Hikmat Jasim Zaidan spoke at PRT Anbar's Monthly Bankers' Roundtable January 28. The two publicly confirmed banks' vital role in attracting investment to the province and pledged to remove provincial-level obstacles to business in the banking sector. PRT Anbar had been hosting banker roundtable meetings for about a year, and the Iraqi participants took ownership of their organization at this meeting and renamed it "Anbar Bankers." Although PRT Anbar still plans to engage regularly with the "Anbar Bankers," the birth of this provincial bankers' committee shows how a little PRT coaching can assist Iraqi stakeholders in creating an entity that will endure after the USG draws down in the provinces. END SUMMARY. ACTING GOVERNOR: BANKS ARE IMPORTANT FOR INVESTMENT ¶2. (SBU) PRT ANBAR invited Acting Governor of Anbar Province Fuad Jatab Hamad and Deputy Governor for Administrative Affairs Hikmat Jasim Zaidan as guests of honor at its Monthly Bankers' Roundtable, January 28. They told representatives from Rafadain, Dar Es Salaam, and North Banks that Anbar's budget for 2009 and 2010 is less than the 2007 and 2008 budgets. The officials said their government wanted to work with the banks to attract investment to foster provincial growth. Fuad said, "Investment projects and security support each other to help build Anbar's economy" and emphasized that the government and the banks should become "one team" to help create jobs that keep people from joining insurgent groups. He said the provincial government had approved 24 of the 85 projects it was considering and would be able to "double that" if banks cooperated with the investors. PROVINCIAL GOVERNMENT PLEDGES TO HELP BANKS ¶3. (SBU) To show his commitment to partner with the banks, Acting Governor Fuad asked the bankers what obstacles they faced in doing business and promised that the provincial government would help where it could. All of the bankers described the types of loans they offer. The managers of both North Bank and Dar Es Salaam Bank (both private) asked for the Acting Governor's help in securing parcels of land upon which they could build branch offices. Fuad replied that he would "use the province's power to give land to state and private banks any way he can." He suggested that the banks build a large building, use part of it for a branch, and lease the rest out as a rental property to other entrepreneurs. ¶4. (SBU) The Rafadain Bank manager said that he wished that state-owned banks like his had the same technology as the private banks so they could provide better customer service. The Deputy Governor said he had written a letter to the Minister of Finance (MOF) to see how the state-owned banks could benefit from the experience of private banks. PRT Anbar also distributed a survey written in conjunction with the Governor's office on the kinds of technologies each bank is using. ¶5. (SBU) The Dar Es Salaam Bank manager wanted the Provincial Government's help to push for more electronic funds transfer (EFT) payments throughout the province. He argued that it was hard on pensioners to wait in long lines at state banks to collect their payments and that Anbar should follow Baghdad in making these payments electronically. He asked the Acting Governor to lobby the MOF to allow the private banks to also distribute funds to pensioners under the "Smart Card" electronic payment system. Fuad Qpensioners under the "Smart Card" electronic payment system. Fuad said he was already in talks with the Ministry of Finance to make as many government payments as possible by EFT. ¶6. (SBU) The Dar Es Salaam bank manager also expressed concern that banks were never allowed to foreclose on houses, even if they were offered as collateral for a loan and the loan was never repaid. He said that prior to 2004, foreclosure was never a problem, but in 2004 a new law was passed that makes the repossession process very difficult for the banks. He said his bank had approximately 2,000 such non-performing loans, a real disincentive for it to lend any more money. He asked Fuad to lobby Parliament to allow the foreclosure of houses so real estate can be viable as collateral. Fuad said he would look into the issue. AFTER A YEAR OF PRT COACHING, "ANBAR BANKERS" TAKES ON LIFE OF ITS OWN ¶7. (SBU) For almost a year, PRT Anbar has been hosting these monthly bankers' roundtables, with the eventual goal of getting the bankers to formalize and take ownership of their group, independent of the PRT. With little debate, the bankers decided at this meeting that they would be known henceforth as "Anbar Bankers," and that they would meet next month with additional bankers to decide how to BAGHDAD 00000273 002 OF 002 organize the group. They also resolved to have at least one meeting open to the public so that they could hear exactly what customers want from their banks. USD-C DISTRIBUTES ANTI-COUNTERFEIT PENS ¶8. (SBU) The United States Forces Iraq Central Division (USD-C) distributed to all the bankers anti-counterfeit posters, flyers, and special currency pens that can detect fake notes. The bankers were very appreciative and interested in the technology. They said help detecting counterfeit checks would be even more beneficial because check denominations are generally higher than the largest Iraqi bill (about $21USD). COMMENT ¶9. (SBU) One year ago, the Provincial Government had little nice to say about the banking sector, and certainly would never have thought of the private banks as "partners." The Acting Governor's offer to help remove some of the obstacles that banks face may indicate a serious commitment to factor them into the province's investment strategy. Equally remarkable, the birth of this provincial bankers' committee may show how a little PRT coaching can help Iraqi stakeholders create something that will sustainably outlast the USG presence. PRT Anbar still plans to engage regularly with the "Anbar Bankers," even as they move forward on their own. PRT Anbar will continue to help organize a web-based seminar sponsored by J.P. Morgan Chase for the Anbar Bankers. HILL