Cablegate: International Compact, Update From Baghdad

DE RUEHGB #1475/01 1211914
R 011914Z MAY 07




E.O. 12958: N/A


1. (SBU) Summary: Against the backdrop of intense diplomacy
on the Neighbors' Conference and a difficult political
environment, the Government of Iraq (GOI) has done a good job
of getting international support for the Compact lined up.
Given the relatively short lead time following the decision
to launch the Compact on May 3, various parts of the GOI
deployed in a generally well-coordinated effort to secure
high level attendance and the greatest possible debt relief.
They have set the stage for what should be a successful
Compact event. Overall, the Compact is a good document and a
solid plan for Iraq's future economic course, supporting
progress in the political and security tracks. The Iraqis
have gradually moved away from selling the Compact to their
public as a way to get additional donor commitments to
presenting the Compact as an abiding vehicle for
international support for Iraq through the continuing
difficult transition to a prosperous, pluralistic future. In
this cable we underscore the message that should be shared on
the importance of the Compact, highlight the recent steps the
GOI has taken, and suggest follow-on actions. The goal is
for the GOI and the Compact process to build on this
encouraging progress of the last few weeks. End Summary.

Significant Step for Iraq

2. (U) The mission of the International Compact with Iraq is
to 'build a secure, unified, federal and democratic nation,
founded on the principles of freedom and equality, and
providing peace and prosperity for its people.' In this
document, Iraq has committed to the core economic reforms
that will promote an open economy integrated with the
regional and international community. This commitment will
immediately improve bilateral Iraqi relations with several
countries, and lay the groundwork for normalizing its
financial relationship with the rest of the world. In
signing this document, the international community commits to
supporting Iraq as it rebuilds and reforms its economy, by
way of debt relief, technical assistance, capacity building
training, and high-level representation at the launch on May
3. The partnership reflected in the International Compact
with Iraq is critically important because it shows that even
under tremendously stressful circumstances this year-old
government has the ability to commit to an economic framework
that will facilitate its political and security goals, with
significant regional and international support.

Overview of GOI's Coordinated Outreach

3. (SBU) Over the last week the GOI has made a number of
efforts to engage the international community in advance of
the launch of the International Compact on May 3 in Sharm
el-Sheikh. During the last week, Prime Minister Maliki
visited Egypt and Kuwait (King Abdullah of Saudi Arabia
declined Maliki's request for a meeting), Central Bank
Governor Shabibi and UN Special Representative Gambari
visited the UK, Kuwait, Bulgaria and Brussels and Foreign
Minister Zebari visited Iran and Turkey. Deputy Prime
Minister Barham Salih made calls to or met with ambassadors
from the EU/EC, Italy, Russia and Turkey, among others.
Finance Minister Jabr met with China's ambassador, directed
Iraq's ambassador to Russia to engage Russia's Ministry of
Foreign Affairs and wrote to Egypt's Minister of Finance.
For detailed information on the specific outcomes of this
efforts on a country and institutional basis please see
reftel. Overall, these efforts have produced good progress
securing agreements to send ministerial-level delegations
from most of the countries targeted apart from Russia (and
Japan, because of a prior commitment to meet with Russia on
May 3). Progress lining up specific commitments to debt
relief or new concessional lending that can be announced on
May 3 has also been made, most notably with Saudi Arabia.
Bulgaria, Turkey, and Poland have indicated to DPM Salih that
they may be ready to make a contribution. Additionally, an
agreement with the Arab Fund for Economic and Social
Development is within reach. Negotiations with Egypt and
Russia, however, do not seem close to completion.

Follow-on Recommendations

4. (SBU) Embassy Baghdad suggests that during discussions at
Sharm el-Sheikh Principals should emphasize the importance of
the International Compact as the foundation for further
cooperation between Iraq, its neighbors, and the

BAGHDAD 00001475 002 OF 002

international community in promoting stability and economic
revitalization. Momentum from the launch should be used to
press the UN and other donor countries to increase the UN
presence in Baghdad, which will assist the implementation
process of the Compact. For European partners of Iraq, part
of the Compact implementation will require not only a
functioning secretariat but also sufficient UN and World Bank
expertise to help the GOI with putting the Compact priorities
into practice. Ambassador Crocker has raised this issue with
the UN Special Advisor on Iraq Gambari and the UN Ambassador
to Iraq Qazi. We request continued engagement with Egypt as
the host to press for a lasting contribution to the Compact

5. (SBU) We also suggest USG highlight the GOI's outreach
efforts on behalf of the Compact with Iraq's regional
partners, whose support for the Compact process is needed and
which goes beyond debt forgiveness and reparations issues.
Getting strong Gulf support for the Compact is an important
element in the overall regional outreach strategy. The
Compact has been a success story, and that message should not
be obscured by any media focus on the Neighbors' conference
and Iran's role.

Public and Media Themes

6. (U) The adoption of the Compact resolution is a
significant step for the Government of Iraq. The May 3 event
represents an important opportunity to highlight this
commitment for U.S., Iraqi and international audiences, and
serves as a roadmap for future progress. We suggest
emphasizing the following themes.

- The launching of the International Compact with Iraq
represents a major step forward for Iraq and its relations
with its neighbors and the world.

- The International Compact with Iraq is built on a firm
economic foundation, but its mission goes much further - to
'build a secure, unified, federal and democratic nation,
founded on the principles of freedom and equality, and
providing peace and prosperity for its people.'

- Given the tremendous challenges that Iraq has faced, with
a government that has only been in power for one year, the
Compact is a significant achievement. A united Iraqi front
is committing to specific, practical economic objectives that
will support its political and security goals.

- In this document, Iraq has committed itself to core
economic reforms that will promote an open economy integrated
with the regional and international community. This
commitment will immediately improve bilateral Iraqi relations
with a number of countries, and lay the groundwork for
normalizing its financial relationship with the rest of the

- In return, the international community has stated its firm
commitment to support Iraq as it rebuilds and reforms its
economy, through debt relief, technical assistance, and
capacity building training.

- High-level participation in this event demonstrates the
importance of Iraq for the entire world, and the commitment
of their nations to provide serious, sustained support to the
Government and citizens of Iraq.

© Scoop Media

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