Cablegate: Planning for the October U.S.-Iraq Dialogue On
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RR RUEHWEB
DE RUEHGB #2223/01 2291452
ZNR UUUUU ZZH
R 171452Z AUG 09
FM AMEMBASSY BAGHDAD
TO SECSTATE WASHDC 4351
UNCLAS BAGHDAD 002223
SENSITIVE
SIPDIS
STATE PASS TO COMMERCE FOR SUSAN HAMROCK MANN
E.O. 12958: N/A
TAGS: ECON EINV PREL PGOV IZ
SUBJECT: PLANNING FOR THE OCTOBER U.S.-IRAQ DIALOGUE ON
ECONOMIC COOPERATION AND BUSINESS AND INVESTMENT CONFERENCE
REF: A. STATE 77718
B. STATE 80762
1. (SBU) Summary: Embassy offers our perspective on
planning for the two events announced during PM Maliki's
recent visit to Washington: The October 19 U.S.-Iraq
Dialogue on Economic Cooperation (DEC) and the October 20-21
U.S.-Iraq Business and Investment Conference. Both events,
but particularly the business conference, have the personal
attention of the Prime Minister and his senior advisors. We
are working intensively with the GOI to prepare for the
business conference, primarily to accelerate visa processing
for the Iraqi business delegation. The Iraqi government and
public will likely interpret the level of USG engagement in
both events as a sign of future USG commitment to Iraq under
the Strategic Framework Agreement (SFA). As national
elections approach in January, the GOI will also look for a
domestic political boost from the Washington events. This is
an opportunity for the GOI to announce deliverables that
improve the investment climate. Our challenge will be to
ensure that the Washington conference achieves more than
previous investment conferences supported by Task Force for
Business and Stability Operations (TFBSO) and Commerce, and
that the GOI comes to Washington prepared for both
substantive government-to-government discussions and serious
dialogue with potential investors, including specific
investment opportunities. Post recommends that the President
give the opening speech at the conference along with
participation from other senior administration economic
officials. End summary.
Business and Investment Conference
2. (SBU) The October 20-21 U.S.-Iraq Business and Investment
Conference was announced during the Prime Minister's visit to
Washington in July. The U.S. Chamber of Commerce will host
the conference and has reserved its entire facility for the
event. Up to 200 Iraqi participants are expected, of which
approximately 35 will be GOI officials. To ensure strong
provincial representation, the GOI will invite the Governor,
Chairman of the Provincial Investment Commission (PIC), and
the Chairman of the Provincial Council from each province.
Most of the Iraqi delegation will consist of executives from
both state-owned and private businesses (plus representatives
from the major state-dominated business chambers). The USG,
through DoD's TFBSO, is funding much of the DEC and the
conference, including expenses for 100 Iraqi participants.
TFBSO is also involved in planning for the conference.
3. (SBU) Dr. Sami al Araji, Chairman (designee) of the
National Investment Commission (NIC), is pulling together the
Iraqi delegation and has already provided the Embassy with
roughly 100 names for visa processing. A constant concern
for Dr. Sami as he composes the Iraqi delegation is "balance"
-- balance between government and private sector
participants, balance among provinces and regions, and
political and ethnic/sectarian balance. While he has taken a
very possessive approach to determining the Iraqi delegation
-- and has consulted with the Prime Minister -- Dr. Sami has
agreed to consider suggestions of business participants from
PRTs and the Embassy. (Comment: Dr. Sami has emphasized
that the first tranche of Iraqi businessmen are all prominent
and well-financed figures. End comment.)
4. (SBU) The head of the GOI delegation has not been
determined. According to Dr. Sami, the Prime Minister is
considering attending the conference. We also understand
that Deputy PM Barham Salih may lead the delegation. In
Qthat Deputy PM Barham Salih may lead the delegation. In
either event, Dr. Sami will handle planning for the
conference and serve as master of ceremonies, reprising the
role he played in the April investment conference in London.
Working with Dr. Sami presents considerable challenges: he
does not delegate to NIC staff, and he is overly focused on
form over substance, seeking a conference that produces a
&big splash8 that will generate media attention. All USG
interlocutors need to consistently remind Dr. Sami that the
goal of the conference is to generate real U.S. investment in
Iraq.
5. (SBU) The principal U.S. agencies and organizations
involved in the conference planning, along with the Embassy
of Iraq Commercial Attache, have drafted a preliminary
agenda, which we have shared with Dr. Sami for his input.
The conference will focus on eleven sectors: Oil/Gas,
Electricity, Industry (SOEs), Transportation,
Banking/Finance, Health & Education, Agriculture, Housing,
Telecommunications, Tourism, and Defense Cooperation. Over
the conference's two days, time allowance for speeches is
limited to the opening session on the first morning and
closing remarks the final afternoon. The remainder of the
agenda is broken into smaller sessions for match-making,
one-on-one meetings, and panel discussions. We will meet
with Dr. Sami during the third week of August to discuss this
in detail; we can expect he will have strong views about the
conference format and agenda.
6. (SBU) Comment: The conference will receive a great deal
of publicity in Iraq; it will be seen as an early sign of
non-security cooperation and engagement under the SFA. Our
hope is that the conference will translate into new U.S.
investment and other business deals that will benefit both
Iraq and U.S. firms. Given the current investment climate
and Iraq's poor reputation in international business circles,
this will be a significant challenge. We will continue to
work closely with Dr. Sami and NIC staff in the coming weeks
to make sure the GOI is prepared with necessary materials to
engage in substantive discussions with potential U.S.
investors. We will also work with senior GOI officials and
parliament to try to focus the GOI on deliverables to
announce to the U.S. business community during the conference
-- with ratification of the OPIC agreement and passage of
amendments to the National Investment Law as the two most
promising deliverables. Such deliverables and sound
investment proposals would help ensure that the conference is
more than a public relations exercise. Post recommends that
the President give the opening speech at the conference. We
will likewise need participation from Commerce Secretary
Locke and other senior administration economic officials.
Such engagement will send a powerful signal to the GOI and
Iraqi public that the USG remains committed to supporting
Iraq. End comment.
Dialogue on Economic Cooperation
7. (SBU) The bilateral Dialogue on Economic Cooperation (DEC)
has met for several years for a high-level overview of
economic issues. The October 19 meetings will be the first
since February 2008 when the DEC convened in Baghdad. Not
only will this be the first DEC with the new U.S.
Administration, but it will be the first since the SFA and
Security Agreement took effect this year. Many of the issues
that would naturally be covered at the DEC are part of the
SFA, and one task is to work out the formal linkage between
the SFA and the DEC. Advanced planning, particularly with
respect to the agenda for substantive discussions, level of
representation, and number of participants, has been
complicated by the GOI's delay in determining the
delegation's lead.
8. (SBU) Deputy PM Barham Salih, who has led the GOI
delegation to the DEC in recent years, has said he intends to
continue with this role, even if he becomes PM of the KRG
before that time. This would have the benefit of ensuring
continuity with past DECs, as well as with the SFA (Salih
chairs the Economic and Energy JCC, while Deputy PM Rafi
Issawi chairs the Services JCC which also includes many
issues that will be raised at the DEC). However, with DPM
Salih resident nearly full-time in Erbil, coordination with
his staff will be difficult, as will be follow-up on DEC
implementations.
9. (SBU) The DEC is important to draw attention to many
troubling trends in GOI economic policy. Whereas the
investment conference will be public and highlight
opportunities in Iraq, the government-to-government talks are
the place for a frank discussion on the need for economic
reform and more coherent economic decision-making. In
addition to pressing for progress on pending issues like
hydrocarbons legislation and World Trade Organization
Qhydrocarbons legislation and World Trade Organization
accession, we need to use the high-level dialogue to confront
the GOI's recent troubling trend of turning back the clock on
economic policy (e.g., exerting monopoly rights for their
national airline and weakening competition in the mobile
phone market) and addressing corruption issues in doing
business. We should also use the opportunity for a general
discussion of future USG engagement in Iraq (e.g., trends in
assistance levels, as well as specific priorities of the
Obama administration).
10. (SBU) As with the investment conference, the GOI will use
the DEC to gauge the level of continued USG interest in Iraq.
It is important that we have senior-level (Under Secretary
or above) representation from a range of USG agencies. In
addition to the Deputy PM, there are more than a dozen GOI
ministers or deputy ministers expected to attend. While the
delegation is not yet formed, we expect that the Ministers of
Oil and Finance will attend, as well as ministers
representing the ministries handling the topics mentioned in
para 5. This is an excellent opportunity to reinforce the
USG message on the importance of business-friendly economic
policies directly to the top tier of Iraqi leadership.
11. (SBU) Post will coordinate closely with NEA/I on planning
the DEC. We are aware of discussions already launched with
the Middle East Institute regarding a lunch on October 19.
We recommend a full day of meetings at the State Department.
A welcoming speech by Secretary Clinton, touching on her
vision for the SFA, would be an excellent start. Ideally,
Deputy Secretary Steinberg would have a prominent role
(perhaps speaking at lunch), and the incoming U/S for
Economic Affairs would head the U.S. delegation.
HILL