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Cablegate: Action Request: Increasing World Bank

VZCZCXRO2559
PP RUEHBC RUEHDA RUEHDE RUEHDH RUEHIHL RUEHKUK
DE RUEHGB #3112/01 3340952
ZNR UUUUU ZZH
P 300952Z NOV 09
FM AMEMBASSY BAGHDAD
TO RUEHC/SECSTATE WASHDC PRIORITY 5588
INFO RUCNRAQ/IRAQ COLLECTIVE PRIORITY
RUEATRS/DEPT OF TREASURY WASHDC PRIORITY

UNCLAS SECTION 01 OF 02 BAGHDAD 003112

AIDAC
SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: EFIN EAID ECON IZ
SUBJECT: ACTION REQUEST: INCREASING WORLD BANK
EFFECTIVENESS IN IRAQ

REF: A. BAGHDAD 1045
B. 08BAGHDAD2768

This cable is sensitive but unclassified; please protect
accordingly.

This is an Action Request. Please see para 4.

1. (SBU) Summary: Overall assistance funding to Iraq is
decreasing and the GOI is increasingly looking for technical
assistance and capacity development from all donors,
including multilateral institutions. The UN and World Bank
will both be critical partners for Iraq's future, and while
UNAMI has made significant progress in expanding its presence
and effectiveness, the World Bank lags behind. Post requests
that an appropriate senior-level USG official meet with
senior leadership at the World Bank, including World Bank
Vice President for Middle East and North Africa Shamshad
Akhtar, to press the Bank to strengthen its presence in Iraq.
End Summary.

Background: World Bank in Iraq
==============================

2. (U) The World Bank has been active in Iraq since 2003
through participation in the International Reconstruction
Fund Facility for Iraq (IRFFI), under which the World Bank
Trust Fund collected $493 million from 17 donors, including
$5 million from the United States. The Bank's projects are
primarily in the areas of health, sanitation and public
financial management. On November 24, the Council of
Ministers approved the World Bank-supported Poverty Reduction
Strategy (to be reported septel).

3. (SBU) The World Bank office should be a source of neutral
support and unbiased advice for local authorities on a wide
range of economic topics. Current World Bank staffing in
Iraq is weak, ineffective, and does not have the confidence
of the GOI and international community. The World Bank
Baghdad office is thinly staffed with a Country Manager, one
Task Team Leader for the Public Finance Management project,
and one or two additional staff in the pipeline. Senior
World Bank management had resisted increasing staff levels,
but the new Vice President for Middle East and North Africa,
Shamshad Akhtar, the former Governor of the Pakistan State
Bank, is more favorably disposed toward Iraq. Since assuming
her position in July she has been supportive of a proposed
Development Policy Loan (DPL) to complement the IMF's
proposed Stand By Arrangement. The Bank's increasing
activities that include private sector development, public
financial management and state bank restructuring suggest
that the time is right to send a senior, experienced official
to lead a solid local staff. The Bank can then become a
respected source of information, provide quick responses to
the many economic policy questions that arise among Iraqi
authorities, and provide daily support and encouragement for
effective development reforms. Other donors share our views
on the World Bank's presence in Iraq. Together, we have been
pressing the case for a strengthened Bank presence here for
the past two years with little result (reftels).

Action Request: Suggested Talking Points for
Meetings with World Bank Officials
============================================

4. (SBU) Post requests that an appropriate senior-level USG
official meet with senior leadership at the World Bank,
including World Bank Vice President for Middle East and North
Africa Shamshad Akhtar, and deliver the suggested points
below. (Note: These points have been discussed here in
Baghdad with other donors, and some have indicated that they
will make similar approaches to the World Bank leadership.)

-- The World Bank needs to strengthen its presence in Iraq
Q-- The World Bank needs to strengthen its presence in Iraq
through increased on the ground expert staff led by a senior
Bank official who is willing to engage the GOI
authoritatively over a wide range of issues.

-- We understand that any significant increase in staffing
will take time, but there are some immediate steps that could
be taken to send the right signal to the GOI about the Bank's
commitment to Iraq.

-- First, a resident Country Director (CD) should be assigned
to Baghdad. This would demonstrate the seriousness of the
Bank's commitment to Iraq and give the Bank presence the
authority it needs to accomplish the vital tasks at hand.

-- Second, a Deputy Country Manager (or Deputy Country

BAGHDAD 00003112 002 OF 002


Director if a CD has been named) should be named to help in
running the office. This would allow the WB to maintain
continuity of its activities in Iraq and its engagement with
the GOI when the current Country Manager is out on R&R or
other travel.

-- Third, the Bank should ensure that all staff who are
working "on Iraq," regardless of where they are based, are
available to come to Iraq and be here on the ground as
needed. The GOI needs to see that Bank staff are willing to
come here, whenever needed and as needed.

-- Finally, there are currently a number of regional staff
outside of Iraq that are providing back office administrative
support and other logistical support to the World Bank
presence in Iraq. Where possible, and understanding the need
to minimize disruption, these staff could be replaced by
Iraqi employees working in Iraq.
FORD

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