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Cablegate: U/S Jeffery's Meeting with Planning Minister Baban

VZCZCXRO2228
RR RUEHBC RUEHDA RUEHDE RUEHIHL RUEHKUK
DE RUEHGB #4066 3481608
ZNR UUUUU ZZH
R 141608Z DEC 07
FM AMEMBASSY BAGHDAD
TO RUEHC/SECSTATE WASHDC 4852
INFO RUCNRAQ/IRAQ COLLECTIVE

UNCLAS BAGHDAD 004066

SIPDIS

SBU
SIPDIS

E.O. 12958: N/A
TAGS: ECON EFIN ENRG IZ POL
SUBJECT: U/S JEFFERY'S MEETING WITH PLANNING MINISTER BABAN

1. (SBU) Minister of Planning and Development Cooperation
(MoPDC) Ali Baban's key message to the U/S Reuben Jeffery
during a December 6 meeting was that the current government's
lack of decisionmaking undercuts Iraq's political and
economic development. He stressed that the Iraqi government
needs to make the difficult decisions and that delay makes
the problems bigger. Baban said he had given a "strategic
economic plan" to the Council of Ministers 40 days ago, which
included a 4 to 5 year budget plan for some larger projects
as well as proposals for streamlining public sector staffing
and some food subsidies. However, Baban said he has received
no feedback on the MoPDC draft plan. Baban also bemoaned the
MoPDC's "very limited authority in implementing the capital
budget" and said that capital budget execution will be "very
low this year, not exceeding 40 percent".

2. (SBU) When asked by U/S Jeffery what was the major
stumbling block to passing the hydrocarbons legislation,
Baban described the problem as "100 percent political".
Although Baban claimed to have a "direct line" to Prime
Minister Nuri Al Maliki, he said there would not be much he
could do because PM Maliki is constrained by the political
situation and has some "conflicts of interest". Baban then
noted that even though he was a Kurd, he believed if the
Kurds were successful in developing their own resources then
other regions, like Basrah, which currently has 80 percent of
production, would follow and this would "destroy Iraq".
Baban opined that the best way to get the hydrocarbons
legislation passed would be to offer the Kurds "some
incentive" to buy into a national plan. In particular, he
said whatever incentive should be channeled to political
leaders to get buy-in as quickly as possible.

3. (SBU) Baban closed the meeting by stressing "Iraq's
fortune and unity depend on oil," because 96-97 percent of
the resources for the budget come from that resource. In
order to reach a hydrocarbons legislation agreement, he once
again noted the role parties play and said it is up to the
political leaders. Baban noted this is a unique opportunity
for Iraq to invest in its economy with historically high
world oil prices, but unless the hydrocarbons legislation is
passed the opportunity will pass by his country.
BUTENIS

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