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Cablegate: Report On the Informal Meeting of the Irffi

VZCZCXRO9621
PP RUEHNP
DE RUEHC #9144/01 2982126
ZNR UUUUU ZZH
P 252109Z OCT 07
FM SECSTATE WASHDC
TO RUEHGB/AMEMBASSY BAGHDAD PRIORITY 3556
RUEHRO/AMEMBASSY ROME PRIORITY 3600
RUCNDT/USMISSION USUN NEW YORK PRIORITY 9288
INFO RUEHAK/AMEMBASSY ANKARA PRIORITY 1799
RUEHOT/AMEMBASSY OTTAWA PRIORITY 8301
RUEHIT/AMCONSUL ISTANBUL PRIORITY 1351
RUEHNP/AMCONSUL NAPLES PRIORITY 1196
RUEHBS/USEU BRUSSELS PRIORITY

UNCLAS SECTION 01 OF 02 STATE 149144

SIPDIS

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: CA EAID ECIN ECON EUN IT IZ TU
SUBJECT: REPORT ON THE INFORMAL MEETING OF THE IRFFI
DONORS COMMITTEE, OCTOBER 11


1. (SBU) This cable reports on discussions at the informal
meeting of the International Reconstruction Fund Facility for
Iraq (IRFFI) Donors Committee (DC) held at the United Nations
(UN) in New York on October 11, 2007.

2. (SBU) Summary: The purpose of the meeting was to prepare
for the full IRFFI DC meeting in Bari, Italy on October
28-29. Participants reviewed the findings of an expert study
and recommendations on revisions to the IRFFI Terms of
Reference (ToR) and discussed the inter-relatedness of the
IRFFI, Iraq's National Development Strategy (NDS), the
International Compact with Iraq (ICI), and the UN's expanded
role in Iraq under UNSCR 1770. Donor delegates concurred
that the ICI clarifies and provides priorities for the NDS,
that the work of the IRFFI and the IRFFI ToR should be
aligned to support the goals of the ICI, and that real and
effective Iraqi leadership will be essential to the success
of the IRFFI and the ICI. The United States and Turkey urged
that the IRFFI ToR should be expanded to allow IRFFI
resources to be used for humanitarian relief and support for
Iraq's internally displaced persons. End summary.

3. (U) The meeting was co-chaired by Italy's Ambassador for
Iraqi Reconstruction, Mr. Gianludovico de Martino, and the
Special Advisor to Iraq's Minister of Planning and
Development Cooperation, Dr. Faik Abdul Rasool.

4. (SBU) Co-chair De Martino opened by recapping developments
since the last full IRFFI DC meeting (Istanbul, Mar 07). The
IRFFI Facilities Coordination Committee (FCC) has met three
times (Rome, Baghdad and the day before in Washington). He
reported that SCAN (the Norwegian experts in reconstruction
fund facilities) had finalized its review of the IRFFI ToR
and expressed thanks for inputs from eight of the DCs 19
members.

5. (SBU) The SCAN ToR Review emphasized the importance of
Iraqi ownership; suggested streamlined procedures; noted that
several donors were interested in adding financial resources;
recommended that IRFFI activities be integrated with the ICI
and NDS.

6. (SBU) Speaking as co-chair for the Government of Iraq
(GoI), Dr. Rasool also emphasized the importance of enhanced
roles for Iraqis. He noted that the ICI goes beyond the NDS
to lay out an agenda of reforms and initiatives in economic
and social policies as well as for security and
reconciliation. He said the IRFFI should concentrate on
supporting ICI benchmarks. To this end, both the IRFFI and
the ICI needed active participation from Sectoral Working
Groups (SWGs) involving GoI ministries and provinces.
Reaching back into their respective ministries, the SWGs must
formulate Sectoral Development Strategies, including roles
for donors. A central aim of these strategies is to put
Iraqi resources to work and pointed to Iraq's large
accumulated financial reserves. He wants to develop foreign
investment, putting Iraq's new investor-friendly policies to
work.

7. (SBU) Joseph Saba (World Bank - WB) recapped WB programs
in Iraq asking retrospectively, "What has worked and what
not?"

- Public Financial Management: The seminars of the ongoing
joint WB-GoI "Public Expenditure and Institutions Review"
(PEIR) are making real progress bringing order and best
practices to government finance in the central bank, Ministry
of Finance, line ministries, and the provinces.

- Sectoral Development Strategies: The results are mixed at
best. Future efforts should be linked to the ICI.

- Social Protection: The WB is conducting a Household
Survey, gathering data in support of the GoI Social Safety
Net and subsidies reform.

- Rule of Law: This effort is supported by PEIR work on
procurement policies and practices for ministries and
provinces. Effective methods for allocations and
accountability are emphasized. Also emphasized is

STATE 00149144 002 OF 002


development of the financial sector and banking.

- Country Portfolio Reviews. The WB recommends that the
project portfolios undergo reviews where projects are
evaluated more systematically as to their costs, benefits and
methodologies.

8. (SBU) Bisrat Aklilo (director for the UN Development
Group - UNDG - in Iraq) spoke about IRFFI and the ICI in
relation to the UN's newly expanded role in Iraq under UNSCR
1770. He pointed to its assistance for the political
process, economic reconstruction, and humanitarian
assistance. He characterized the role that the UN plays as a
joint leader for the ICI as, "the sort of high value-added
contribution that the UN seeks to make." Its humanitarian
assistance seeks to support the vulnerable and provide
emergency aid inside Iraq.

9. (SBU) In open discussions statements were made by the
European Commission (EC), USA, Canada and Turkey with
responses from Dr. Rasool (GoI).

10. (SBU) The EC emphasized the central role of the GoI. It
called for greater donor visibility (recognition); urged
closer monitoring and reporting of activities and close
coordination of UN agency activities in view of UNSCR 1770
and through the IRFFI Clusters (the UN's mechanism for
allocating project resources). On the future of IRFFI, the
EC looks to UNSCR to provide guiding principles while the
goals and benchmarks of the ICI provide the future agenda.
ICI implementation must be GoI-driven - "the center of
gravity must be in Iraq." The EC recommends that the IRFFI
DC should meet at least quarterly in Baghdad and that both
IRFFI and ICI topics could be discussed.

11. (SBU) USA: The United States expressed appreciation for
the informal DC meetings in Brussels and New York. It said
that the ICI provides a framework and guidelines to which the
NDS and Sectoral Strategies should be merged. It noted the
ambitious agenda of the SWGs and emphasized the importance of
efforts for capacity development / technical assistance, and
foreign investment. He urged that the IRFFI and ICI
secretariats should at least be co-located or preferably

SIPDIS
merged. He proposed that the IRFFI ToR should be broadened
to cover support for IDPs.

12. (SBU) Canada noted that the meeting in Bari will provide
an opportunity to bring strategic vision to the IRFFI
projects lists. It requested to see the progress reports of
the Iraq Trust Funds operators (the UNDG and the WB) in
advance of the Bari meeting.

13. (SBU) Turkey urged IRFFI to address IDPs and refugees.
It looked to the GoI Ministry of Planning and Development
Cooperation (MoPDC) to be the "focal point" for IRFFI
activities.

14. (SBU) GoI: Dr. Rasool said the GoI can help IDPs inside
Iraq by realigning the distribution of welfare food baskets,
health care and education. He feels the refugees outside
Iraq need compensating support in the form of funds transfers
to Syria and Jordan, and that all should assume the refugees
will return to Iraq. He called for greater coordination and
integration of efforts within IRFFI and complained about
competition among UNDG Clusters.

15. (SBU) The USA offered final remarks, emphasizing the
need for closer coordination among UNDG Clusters, GoI
ministries and the provinces. It suggested realigning the
Clusters along ministry and provincial lines, and looking at
"co-sharing" where the GoI and UNDG could both contribute
financial and perhaps other resources to projects. Finally,
more work needs to be done to collect and standardize donor
data, and for more effective and comprehensive donor
coordination.
RICE

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