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Cablegate: Delegation Guidance for the 7 July Irffi Donors

VZCZCXYZ0000
PP RUEHWEB

DE RUEHC #1896 1851834
ZNR UUUUU ZZH
P 031837Z JUL 08
FM SECSTATE WASHDC
TO RUEHGB/AMEMBASSY BAGHDAD PRIORITY 0000
INFO RUEHAK/AMEMBASSY ANKARA PRIORITY 0000
RUEHTH/AMEMBASSY ATHENS PRIORITY 0000
RUEHRL/AMEMBASSY BERLIN PRIORITY 0000
RUEHBS/AMEMBASSY BRUSSELS PRIORITY 0000
RUEHBY/AMEMBASSY CANBERRA PRIORITY 0000
RUEHCP/AMEMBASSY COPENHAGEN PRIORITY 0000
RUEHDO/AMEMBASSY DOHA PRIORITY 0000
RUEHHE/AMEMBASSY HELSINKI PRIORITY 0000
RUEHKU/AMEMBASSY KUWAIT PRIORITY 0000
RUEHLO/AMEMBASSY LONDON PRIORITY 0000
RUEHMD/AMEMBASSY MADRID PRIORITY 0000
RUEHNE/AMEMBASSY NEW DELHI PRIORITY 0000
RUEHNY/AMEMBASSY OSLO PRIORITY 0000
RUEHOT/AMEMBASSY OTTAWA PRIORITY 0000
RUEHRO/AMEMBASSY ROME PRIORITY 0000
RUEHUL/AMEMBASSY SEOUL PRIORITY 0000
RUEHSM/AMEMBASSY STOCKHOLM PRIORITY 0000
RUEHTC/AMEMBASSY THE HAGUE PRIORITY 0000
RUEHKO/AMEMBASSY TOKYO PRIORITY 0000
RUCNDT/USMISSION USUN NEW YORK PRIORITY 0000
RUEHBS/USEU BRUSSELS PRIORITY

UNCLAS STATE 071896

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: EAID ECON IZ PGOV PREL
SUBJECT: DELEGATION GUIDANCE FOR THE 7 JULY IRFFI DONORS
COMMITTEE MEETING IN BAGHDAD

REF: A. (REFTEL A) 2007STATE154955
B. (REFTEL B) 2008STATE60125
C. (REFTEL C) 2008BAGHDAD1814

1. (U) This is an action cable for Embassy Baghdad. See
guidance in paragraphs 3 through 12.

2. (U) Along with Iraq and the U.S, EU/EC, UN, and World
Bank, the info addressee countries of this cable constitute
the membership of the International Reconstruction Fund
Facility for Iraq Donors Committee (IRFFI DC).

3. (SBU) Summary: Reflecting the high importance he attaches
to Iraq's international partnerships, Prime Minister Maliki
will deliver the welcoming address to the Seventh Meeting of
the IRFFI Donors Committee. The U.S. delegation should
endorse the progress reports and plans of the United Nations
Development Group (UNDG) and World Bank (WB) for their
respective Iraq Trust Funds (ITFs). Both organizations are
working to align their activities with the International
Compact with Iraq (ICI). The delegation may want to suggest
a number of priorities for the ITFs (for example, to help GoI
develop effective programs for IDPs and returning refugees).
The delegation should support extending the lifetime of the
IRFFI by another two years (through 2012) to match the ICI.
Also worthy of support are the UN efforts for restructuring
the UN Country Team (UNCT). On co-financing, the delegation
should counsel against Iraq adopting an overly detailed and
restrictive "one-size-fits-all" approach in favor of arriving
at approaches tailored to the needs and strengths of each
donor. The delegation should seek to end the temporary
arrangement adopted in Istanbul for the DC to be co-chaired
by both Iraq and a donor. Rather, the DC should return to
the conventional arrangement for a single chairperson chosen
from among the Donors. The delegation may use its discretion
in choosing the next IRFFI chairperson. Washington agencies
would welcome Italian Ambassador De Martino continuing as
full Chairman, should this be his wish. Alternatively,
Australia, Sweden or Denmark would be good candidates. End
Summary.

4. (U) Current Status: At the end of May 2008, Donor
commitments to the UNDG-ITF and WB-ITF reached $1,338 million
and $494 million, respectively, or $1,832 million in total.
In addition, the ITFs report interest and investment earnings
of $45-50 million each. Recalling the DC decision reached in
Bari to align the IRFFI with the ICI (reftel A), the ITF
operators will present their findings about the amounts that
may be available for reprogramming and recommendations for
how they can support the ICI.

5. (U) Multi-Donor Stocktaking: The DC will receive a report
reviewing progress with efforts to take stock of donor
activities and expenditures. We should encourage efforts to
determine how the Donor Assistance Database (DAD) and the
Capital Budget Reporting Tracking (CBRT) system could do more
to track, analyze and report upon donor contributions in
support of IRFFI and ICI goals and benchmarks. There will
also be discussion of donor field trips and donor activities
at the provincial level.

6. (SBU) Co-Financing: There is much to commend in the
co-financing discussion that appears in the main body of the
ICI Annual Report. For example, it is possible to see how
U.S. assistance could contribute to a "co-financed" project
by providing technical assistance for studies and designs
while Iraq provides the main funding, contracting and project
management. However, it is difficult to see how the U.S.
approach to assistance could be reconciled with the overly
detailed and restrictive guidelines for co-financing that
were presented in the co-financing annex. Iraq should be
prepared to tailor its co-financing arrangements to the
strengths and requirements of each individual donor.
7. (SBU) UN Country Team (UNCT) - ICI Secretariat Issues: The
UN will report and invite discussion on the issues
surrounding its efforts to restructure and strengthen its
Country Team. As reported so well in reftel C, the UN is
having to contend with the fact that GoI has not implemented
the inter-ministerial coordination and policy-planning
mechanisms suggested in the original ICI document, favoring
instead its own approaches. The delegation should support
efforts to ensure that ICI mechanisms and GoI implementation
efforts are both effective, such as for policy planning,
without mandating a review or a solution that lacks GoI
support.

8. (SBU) World Bank Third Interim Strategy Note: It has been
three years since the World Bank last updated its Interim
Strategy Note for Iraq. The World Bank's activities in Iraq
appear to be at a low ebb. In view of the new Strategy Note,
the delegation should encourage the World Bank to maintain a
high level of interest in Iraq, including as an IRFFI ITF
manager and as an important partner to the ICI.

9. (U) Uses of Interest Income; New ICI-Aligned Projects: If
the delegation finds an opportunity to suggest ways for IRFFI
resources to be allocated, it may wish to point to the Bari
decision to permit IRFFI funds to be used in support of
internally displaced persons and returning refugees, as well
as to the statement by PM Maliki in Stockholm that $195
million has been allocated to these efforts. Your suggestion
would be that, working with the relevant Iraqi ministries,
the UNDG should develop a program of technical assistance
aimed at designing and executing effective programs in
support of IDPs and returning refugees.

10. (U) Lifetime of the IRFFI: At Istanbul in February 2007
the DC decided to extend the lifetime of the IRFFI to
December 2010. The lifetime of the ICI is for five years
from when it was adopted in mid-2007 through 2012. The UN
and others favor aligning the lifetimes of the IRFFI and the
ICI. The delegation should support such a proposal.

11. (U) Next DC Chairperson: The temporary joint Iraq-Donor
co-chairmanship arrangement should revert to a single
chairmanship held by a donor country, although a compromise
on this point may be unavoidable. U.S. Del should heartily
support Italian Ambassador DeMartino if he is willing to
extend for another year as Chairman of the Donors Committee.
Alternatively, candidacies from Australia, Sweden or Denmark
would be suitable. The U.S. is not prepared to offer a
candidate for DC Chairperson.

12. (U) Next DC Meeting: While recognizing the value in
holding more frequent informal IRFFI meetings, Washington
agencies would support holding the next full IRFFI DC meeting
in approximately five-six months (November-December 2008),
ideally in the home country of the next Donor Chairperson.
RICE

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