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Cablegate: Maysanis Continue to Engage with Prt

VZCZCXRO5979
PP RUEHBC RUEHDA RUEHDE RUEHIHL RUEHKUK
DE RUEHGB #3396/01 2831742
ZNR UUUUU ZZH
P 101742Z OCT 07
FM AMEMBASSY BAGHDAD
TO RUEHC/SECSTATE WASHDC PRIORITY 3815
INFO RUCNRAQ/IRAQ COLLECTIVE

UNCLAS SECTION 01 OF 02 BAGHDAD 003396

SIPDIS

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: PGOV IZ
SUBJECT: MAYSANIS CONTINUE TO ENGAGE WITH PRT


1. (SBU) This is a PRT Maysan report.

2. (SBU) Summary and Comment: We have seen a dramatic
turnaround in the willingness of Maysan officials to engage
with the Provincial Reconstruction Team (PRT), beginning in
late May. On September 13, we hosted a substantive meeting
with the PRDC Chairman and two other provincial officials at
Tallil AB. On September 19, the First Deputy Governor
dropped in for a short-notice visit to Tallil, conveying
Governor al-Maliki's strongest indication yet of his interest
in working closely with the PRT and the UN, with an earnest
effort to reassure us of his control of security in the
province. They have emphatically pledged to provide full
security and protection for any (including US or UK)
investors, companies, or other entities working on projects
in the province and have shared a written security strategy
signed by the Governor. When pressed, they also welcomed a
visit by the PRT to the province. The delegation also
provided wish-list papers on their education strategy and
ideas on expanding private sector finance.

3. (SBU) We believe that Maysan provincial officials now
recognize the PRT as a resource that can assist them both in
projects and in building capacity that will help them deliver
services to the Maysan electorate. We assess that they are
closely watching news speculation of a US drawdown and want
to extract as much benefit from PRT engagement before this
happens. We also believe that the Maysanis - as the only
Sadrist-controlled province - are committed to demonstrating
their governing acumen and ability to create jobs and deliver
services to the people, particularly as there are no
Coalition forces in-province to blame. Our strategy is to
engage broadly with the Maysan Government in support of the
current basket of reconstruction projects, as well as planned
efforts to expand public administration capacity and gestures
to demonstrate the province's importance to the Coalition.
End Summary and Comment.

READY TO ENGAGE
---------------

4. (SBU) During a September 13 meeting, the PRDC Chairman
opened with complimentary words about the difference they
felt in their relationship with us from that of previous
donor groups with which they have dealt. They specifically
appreciated the fact that we communicated with them mostly in
Arabic. (Comment: The PRT has only recently concluded the
hiring process for two LES interpreters, and this was our
first meeting with their assistance. End Comment.) The
meeting was a fairly pedestrian but productive review of
ongoing USG projects and gave us an opportunity to discuss
proposed FY07 PRDC projects. We used this opportunity to
inquire about interest in other areas of possible engagement,
including private sector handicraft sales (locally woven
carpets), wheelchair donations, journalist training,
alternative energy technology for off-grid areas, and
vocational training. The Regional USAID officer added
valuable input on potential support opportunities.

5. (SBU) On September 18 and 19 we met with United Nations
Office for Project Services (UNOPS) Project Manager Ewelina
Pusz, who was exploring suitable opportunities for the UN in
Southern Iraq. On the second day of her meetings with us, we
received an emailed notification that Governor al-Maliki had
dispatched a small delegation to meet with the PRT at Tallil
AB within two hours. Shortly afterward, we received First
Deputy Governor al-Rafaie and two close aides of the
Governor.

6. (SBU) Al-Rafaie opened by passing the Governor's warm
greetings for both the UN and the PRT. He observed that they
have had many productive planning meetings with the UN, but
that there has been slow follow-through. He claimed that
there had been USD 7.9 Million allocated three years ago, but
that they had not received it. (Comment: While he did not
describe the ostensible purpose for such funding, he assented
when Pusz suggested that it may have represented early
British development planning. We note that in both this and
the last meeting with al-Rafaie, he opened with a vague,
generalized complaint. We had no sense that this was serious
or that he expected resolution of this funding matter. End
Comment.) Seeking to reinforce their seriousness, he added,
"After you go, we must depend upon ourselves".

SECURITY COMMITMENT
-------------------

7. (SBU) After these generalized opening remarks, al-Rafaie
got to the heart of his message: conveying a sense of
commitment to protecting projects in the province. Noting
that Maysan's security situation is much better than that in
most other provinces in the country (thanks partly to a

BAGHDAD 00003396 002 OF 002


uniformly Shia population), he said that Maysani officials
were committed to providing protection to any project or
entity involved in reconstruction work being done to the
benefit of the Maysani people. He volunteered that while
they could not claim that they could control everything "100
percent" and that there could be others opposing, that they
could, without hesitation, give a 100 percent guarantee of
provincial government commitment to security for project
work, supplies, and people. He noted, however, that they had
a successful track record and that they had provided security
for a Brazilian firm in the installation of a 400 kilovolt
(kV) substation, and that they had likewise protected a
Kuwaiti firm involved in a water treatment plant, as well as
a Turkish firm in another project. When we asked if this
offer of protection specifically included American and
British entities, al-Rafaie replied, "Yes. All of them." He
passed us a document signed by Governor al-Maliki, indicating
their commitment to:
--Ensure the safety of the people and materials of the
project site until completion
--Provide permanent site protection by Iraqi police with
checkpoints
--Allow contractors to retain their own on-site guards and
issue weapons permits for the guards' use
--Provide secure storage for project materials and equipment
--Provide protection for the transport of materials from
ports and airports to the governorate

OTHER MAYSAN PRIORITIES
-----------------------

8. (SBU) Turning to education, al-Rafaie said, "developing
the Maysani mind is more important than building (physical)
bridges." He offered a letter describing the province's
strategy for developing education. Noting that considerable
funding had been allocated for education at the primary and
secondary levels since 2005, the document asked for
assistance in support of enhancing the operations of the
recently established Maysan University. It specifically
asked for UN and/or PRT assistance with one of the following:
--Funding/ building colleges within the university
(engineering, administration, law, and education)
--Research centers (in agriculture and on the marshes)
--University facilities (such as a library or student center)
--Staff housing and child care
--A teacher training institute
--University technical support (including a twinning
relationship with an American university, new reference
materials, equipment, and planning assistance).

9. (SBU) Al-Rafaie told us that they had already taken
considerable steps forward on the university. According to a
document he gave us, they have already secured funding from
the central budget for the first stage of the engineering
(civil and mechanical) college's departments. They have also
identified and performed a land survey of the best site.
Engineering consultants from Baghdad University have prepared
designs for optimal site usage. They have received a
commitment from the Ministry of Education to fund the design
of the university's main gate and fence. (Comment: Pusz
suggested that UNICEF may be able to support the teacher
training institute. End Comment.)

10. (SBU) Al-Rafaie turned to banking and observed that a key
factor in the development of the Gulf Countries was their
focus on the development of financial institutions. He said
that the Iraqi economy needed to be connected to worldwide
investment and that the Maysan Government is focusing on
widening the role of banks in the province. Mr. Zaid Khalaf
Hoshi, a delegation member and advisor to the Governor then
observed that the banking system in the country is backward,
indicating that the banks suffer from limited capital and few
branches; that they lack industrial banks and have only one
agricultural bank; that loans are limited by size, numerous
guarantees, and high (up to 20 percent) interest rates; and
that they have no ability to issue letters of credit (LOCs).
It was clear from their comments that they are acutely aware
that the paucity of financial intermediaries would continue
to constrain the growth and maturity of the presently
moribund private sector in Maysan. While there was no
explicit appended banking wish-list, their document on
banking policy in Maysan reported that they would need to:
--Capitalize banks
--Increase the numbers of branches of government banks and
encouraging private banks to do the same
--Increase the number of loans issued
--Have banks adopt loan policies with softer conditions and
lower interest rates


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