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Cablegate: Iraq Vice President Al-Mahdi - Lack of Strategy

VZCZCXRO9558
RR RUEHBC RUEHDA RUEHDE RUEHIHL RUEHKUK
DE RUEHGB #3060 2671439
ZNR UUUUU ZZH
R 231439Z SEP 08
FM AMEMBASSY BAGHDAD
TO RUCNRAQ/IRAQ COLLECTIVE
RUEHC/SECSTATE WASHDC 9553
NONE

UNCLAS BAGHDAD 003060

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: ECON ENRG EAIR EINV EAGR PREL IZ
SUBJECT: IRAQ VICE PRESIDENT AL-MAHDI - LACK OF STRATEGY
SLOWED PROJECTS

REF: A. A. BAGHDAD 2770
B. B. BAGHDAD 3007

1. (SBU) Summary: Iraqi Vice Predident Adel Abdul Al-Mahdi
told EMIN on September 16 that progress in the energy sector
was impaired by a lack of overall strategy, but is now moving
ahead with large contracts. Problems in the Nasariyah water
supply plant were gradually being addressed, he added.
Al-Mahdi expressed enthusiasm for the Nasariyah airport. He
is also keen to revitalize agriculture, noting it employs
25-30 percent of the labor force. End summary.

2. (SBU) In an initial courtesy call, EMIN Marc M. Wall met
Iraqi Vice President Adel Abdul Al-Mahdi on September 16.
Dr. Zuhair A.G. Humadi, Senior Advisor for the Vice
President, also joined the meeting.

Strategies Still Lacking
------------------------

3. (SBU) Vice President Al-Mahdi said he looked forward to
working with EMIN and had teams for specific issues to work
with the Embassy. EMIN noted Iraq's achievements over the
last two years. Al-Mahdi responded, "We have made great
progress on security, but now we need to make progress on the
economy. The money is there, but we lack strategies for
different sectors." In the energy sector, the lack of an
overall strategy has created delays. "That is why it took so
long to issue big contracts in the oil and electricity
sector," he noted. "We are very late, including some
contracts pending since 2006." The Vice President and his
advisor Dr. Humadi agreed on the need to move forward on the
GE turbine deal. (See Reftel A.)

Investment Ideas
----------------

4. (SBU) The Vice President noted that, "We organized two
good conferences in Dubai and Cairo on investment." EMIN
said that the Embassy was very interested in helping the
Government of Iraq (GOI) attract more private investment.
There may be sector specific areas in particular where the
Embassy could provide assistance.

Nasariyah Water Supply Problems
-------------------------------

5. (SBU) EMIN raised the issue of the Nasariyah water supply
project, the subject of a letter from Ambassador Crocker to
Al-Mahdi on July 24, 2008. (Al-Mahdi was born in Nasariyah.)
Al-Mahdi responded that problems with the water plant were
gradually resolving. The facility was getting staffed up and
spare parts were now available. Unreliable electricity
remained a problem with the facility, however, as it is in
much of the country. (Note: The USG is providing support for
equipment that has failed since turnover. End Note.) Other
water projects also needed attention and follow-up.

Nasariyah Airport
-----------------

6. (SBU) Vice President Al-Mahdi was enthusiastic about the
Nasariyah Airport project and was pleased with the close
assistance of the U.S. Embassy's Transportation Attache's
office. "Not just because it is in my hometown, but because
it is an important project," he stated. The initial cost
will be $75 million. It will have a cargo area and help
revitalize infrastructure in the province. Al-Mahdi also
wants to improve Basra airport. "There is tourism potential
there, with many historic sites, including the ancient city
of Ur." (Comment: At this time, there are no formal plans for
an airport in Nasiriyah. The Transportation Attach,s
Office has recommended a feasibility study to determine if an
airport would be economically viable: a master plan for the
airport should be produced prior to development of the
airport. There is approximately $360,000 in the GOI's
proposed FY09 budget to begin such a study. End Comment.)

Agriculture Sector Needs Help
-----------------------------

7. (SBU) Al-Mahdi noted that the agriculture sector employs
25-30 percent of Iraq's population. "We must take care of
this sector, otherwise, people will join the urban
unemployed," he stated. Iraq currently does not have food
self-sufficiency, importing around 70 percent of its food.
EMIN noted the continued assistance of USAID and the
Agriculture Attache to help the GOI with this sector.
CROCKER

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