Cablegate: Michael Wareing Visits Basra

DE RUEHGB #2851/01 2490446
R 050446Z SEP 08



E.O. 12958: N/A
SUBJECT: Michael Wareing Visits Basra

1. (U) Summary: Michael Wareing, CEO of KPMG International and
Co-Chairman of the Basra Development Commission (BDC), visited Basra
on August 27 and was pleasantly surprised by the favourable
conditions he found in the city. He visited the Abu Al Khasib
Vocational Training Center and then co-chaired a meeting of the BDC,
held at its new office in central Basra. The Iraqi interlocutors
from the BDC were well-prepared and eager to work with the GOI to
promote economic development in Basrah. Wareing was accompanied by
a camera team from the BBC, a Financial Times journalist and a
British member of PRT Basrah. According to our UK counterparts at
PRT Basrah, this was a successful and timely visit. End Summary.

2. (U) Michael Wareing, CEO of KPMG International, who also serves
as the British Co-Chairman of the Basra Development Commission
(BDC), paid a visit to Basra on August 27, most of which was spent
in the city center. Jon Moss, the PRT Economic Adviser, and
journalists from the BBC and the Financial Times, accompanied
Wareing throughout the visit. Wareing and Moss (who was last in
central Basra in October 2006), were struck by the generally
improved conditions they saw in the city. Moss remarked that the
city was far cleaner and more orderly. Wareing commented that the
main roads appeared to have been re-surfaced, shrubs planted
extensively, and plenty of construction activity underway. He also
found people on the streets friendly and welcoming.

3. (U) Wareing first visited the Abu Al Khasib Vocational Training
Center, where he met with: Mohammed Hassan Ali, Director of the
Center, and his staff; representatives of the Basra branch of the
Ministry of Labor and Social Affairs (MoLSA); members of the Basra
Provincial Council (PC) and the Abu Al Khasib municipal council;
employers and trainees. The Center, which was partially renovated
by the U.S. Army Corps of Engineers/Gulf Region South (GRS) with
funding from USAID, has six classrooms with a capacity of up to 500
trainees (it could accommodate far more if fully refurbished).
Equipment in the classrooms and workshops was very sparse. Wareing
was shown a domestic science laboratory, intended to support the
dairy industry, but containing no equipment. On the day of the
visit, there were classes in light engineering and plumbing.
Wareing spoke to a number of trainees, one of whom told him he had
been unemployed for six years, but expected to start full time
employment after completing his course.

4. (U) Next, Wareing participated in a round-table discussion on the
issues surrounding youth unemployment, which included the challenges
facing small-medium size enterprises (SMEs); the need for specific
training that addresses the needs of the private sector, and the
shortage of resources. Under the BDC, the Youth Unemployment Task
Force (YUTF), sponsored by the UK, works jointly with MoLSA on a
pilot program to identify local businesses willing to offer
twelve-month work placement and training for unemployed youth.
UK-DFID (Department for International Development) funding has been
approved for additional training to be provided by the Center. In
the past month, 30 companies have offered a total of 120 training
placements. The YUTF is confident it will have placements offers
for an initial 500 trainees by mid-September 2008, and is compiling
a database of employers which will be passed to MoLSA.

5. (U) After a guided tour of the new BDC office in central Basra,
Wareing -- along with Iraqi Co-Chair Munadhil Abd Khanghir -- led a
meeting of the BDC, which was attended by four of the six BDC
commissioners. The meeting focused on the progress of the Basra
Economic Development Strategy (BEDS). The first part of BEDS, known
as BEDS 1 - short-term projects in support of economic development
to be achieved in a one-year period - will be completed in
September. There was broad agreement that BEDS 2 - economic
regeneration initiatives over a longer period - would be finalized
by early 2009. BDC commissioners were keen to push ahead key
elements of BEDS 1 for which they were responsible, including the
above-mentioned YUTF pilot program. The commissioners also reviewed
the activity of the BDC working groups on investment policy and
business-enabling environment. The commissioners agreed to set up a
new working group on education.

6. (U) The commissioners also discussed the work of the BDC Inward
Investment Adviser (UK contractor Coffey who, through the PRT, acts
as a consultant to bring in foreign investment), and were anxious
for good follow-up to the successful Invest Basra 2008 event that
took place in Kuwait last March. It was noted that a number of
inward investment visits had already taken place: Three from the UK
and one each from Luxembourg, Kuwait, UAE, and a joint UK-Turkish
visit; areas of interest included logistics, steel, oil, ports,
agriculture, and petro-chemicals. The lead adviser is preparing a
program of follow-on visits to take place in September.

7. (U) Comment: A sign of increasing communication with the PRT,
this cable was made possible by an account of Wareing's visit given
by UK PRT Team Leader Fionna Gibbs to REO Director. According to
our UK counterparts, this was a successful and timely visit. The
Iraqis were pleased that the BDC meeting took place in their new
offices. The commissioners clearly prepared for the meeting and
seemed eager to develop their role as ambassadors for economic
development in Basra, especially at the GOI level. They told
Wareing they would like to be more closely involved in lobbying the

BAGHDAD 00002851 002 OF 002

GOI, i.e., to accompany him on visits to Baghdad. Wareing agreed
that it was important that they do so, as the BDC needed to be seen
as an Iraqi institution. The next BDC meeting will take place in
November in London and UK Deputy Consul General, Fionna Gibbs, said
she will aim to include Iraqi commissioners in Wareing's next visit
to Iraq in early 2009. Gibbs noticed a growing capacity in the BDC,
which she found encouraging. The visit to the Vocational Training
Center highlighted the myriad of problems yet to be overcome in
developing further education in Basra, but the trainees were
enthusiastic and committed. Wareing commented that they were a more
promising group than he was used to encountering in the UK.

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