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Cablegate: Anbar Acting Governor Ready to Help "Anbar Bankers"

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RR RUEHBC RUEHDA RUEHDH RUEHKUK
DE RUEHGB #0273/01 0331430
ZNR UUUUU ZZH
R 021430Z FEB 10
FM AMEMBASSY BAGHDAD
TO RUEHC/SECSTATE WASHDC 6422
INFO RUCNRAQ/IRAQ COLLECTIVE
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UNCLAS SECTION 01 OF 02 BAGHDAD 000273

SENSITIVE
SIPDIS

STATE FOR NEA/I/ECON

E.O.12958: N/A
TAGS: EFIN ECON EAID PGOV PREL IZ

SUBJECT: ANBAR ACTING GOVERNOR READY TO HELP "ANBAR BANKERS"

SENSITIVE BUT UNCLASSIFIED. PLEASE PROTECT ACCORDINGLY.

1. (SBU) SUMMARY: Acting Governor of Anbar Province Fuad Jatab Hamad
and Deputy Governor for Administrative Affairs Hikmat Jasim Zaidan
spoke at PRT Anbar's Monthly Bankers' Roundtable January 28. The
two publicly confirmed banks' vital role in attracting investment to
the province and pledged to remove provincial-level obstacles to
business in the banking sector. PRT Anbar had been hosting banker
roundtable meetings for about a year, and the Iraqi participants
took ownership of their organization at this meeting and renamed it
"Anbar Bankers." Although PRT Anbar still plans to engage regularly
with the "Anbar Bankers," the birth of this provincial bankers'
committee shows how a little PRT coaching can assist Iraqi
stakeholders in creating an entity that will endure after the USG
draws down in the provinces. END SUMMARY.

ACTING GOVERNOR: BANKS ARE IMPORTANT FOR INVESTMENT

2. (SBU) PRT ANBAR invited Acting Governor of Anbar Province Fuad
Jatab Hamad and Deputy Governor for Administrative Affairs Hikmat
Jasim Zaidan as guests of honor at its Monthly Bankers' Roundtable,
January 28. They told representatives from Rafadain, Dar Es Salaam,
and North Banks that Anbar's budget for 2009 and 2010 is less than
the 2007 and 2008 budgets. The officials said their government
wanted to work with the banks to attract investment to foster
provincial growth. Fuad said, "Investment projects and security
support each other to help build Anbar's economy" and emphasized
that the government and the banks should become "one team" to help
create jobs that keep people from joining insurgent groups. He said
the provincial government had approved 24 of the 85 projects it was
considering and would be able to "double that" if banks cooperated
with the investors.

PROVINCIAL GOVERNMENT PLEDGES TO HELP BANKS

3. (SBU) To show his commitment to partner with the banks, Acting
Governor Fuad asked the bankers what obstacles they faced in doing
business and promised that the provincial government would help
where it could. All of the bankers described the types of loans
they offer. The managers of both North Bank and Dar Es Salaam Bank
(both private) asked for the Acting Governor's help in securing
parcels of land upon which they could build branch offices. Fuad
replied that he would "use the province's power to give land to
state and private banks any way he can." He suggested that the
banks build a large building, use part of it for a branch, and lease
the rest out as a rental property to other entrepreneurs.


4. (SBU) The Rafadain Bank manager said that he wished that
state-owned banks like his had the same technology as the private
banks so they could provide better customer service. The Deputy
Governor said he had written a letter to the Minister of Finance
(MOF) to see how the state-owned banks could benefit from the
experience of private banks. PRT Anbar also distributed a survey
written in conjunction with the Governor's office on the kinds of
technologies each bank is using.

5. (SBU) The Dar Es Salaam Bank manager wanted the Provincial
Government's help to push for more electronic funds transfer (EFT)
payments throughout the province. He argued that it was hard on
pensioners to wait in long lines at state banks to collect their
payments and that Anbar should follow Baghdad in making these
payments electronically. He asked the Acting Governor to lobby the
MOF to allow the private banks to also distribute funds to
pensioners under the "Smart Card" electronic payment system. Fuad
Qpensioners under the "Smart Card" electronic payment system. Fuad
said he was already in talks with the Ministry of Finance to make as
many government payments as possible by EFT.

6. (SBU) The Dar Es Salaam bank manager also expressed concern that
banks were never allowed to foreclose on houses, even if they were
offered as collateral for a loan and the loan was never repaid. He
said that prior to 2004, foreclosure was never a problem, but in
2004 a new law was passed that makes the repossession process very
difficult for the banks. He said his bank had approximately 2,000
such non-performing loans, a real disincentive for it to lend any
more money. He asked Fuad to lobby Parliament to allow the
foreclosure of houses so real estate can be viable as collateral.
Fuad said he would look into the issue.

AFTER A YEAR OF PRT COACHING,
"ANBAR BANKERS" TAKES ON LIFE OF ITS OWN

7. (SBU) For almost a year, PRT Anbar has been hosting these monthly
bankers' roundtables, with the eventual goal of getting the bankers
to formalize and take ownership of their group, independent of the
PRT. With little debate, the bankers decided at this meeting that
they would be known henceforth as "Anbar Bankers," and that they
would meet next month with additional bankers to decide how to

BAGHDAD 00000273 002 OF 002


organize the group. They also resolved to have at least one meeting
open to the public so that they could hear exactly what customers
want from their banks.

USD-C DISTRIBUTES ANTI-COUNTERFEIT PENS

8. (SBU) The United States Forces Iraq Central Division (USD-C)
distributed to all the bankers anti-counterfeit posters, flyers, and
special currency pens that can detect fake notes. The bankers were
very appreciative and interested in the technology. They said help
detecting counterfeit checks would be even more beneficial because
check denominations are generally higher than the largest Iraqi bill
(about $21USD).

COMMENT

9. (SBU) One year ago, the Provincial Government had little nice to
say about the banking sector, and certainly would never have thought
of the private banks as "partners." The Acting Governor's offer to
help remove some of the obstacles that banks face may indicate a
serious commitment to factor them into the province's investment
strategy. Equally remarkable, the birth of this provincial bankers'
committee may show how a little PRT coaching can help Iraqi
stakeholders create something that will sustainably outlast the USG
presence. PRT Anbar still plans to engage regularly with the "Anbar
Bankers," even as they move forward on their own. PRT Anbar will
continue to help organize a web-based seminar sponsored by J.P.
Morgan Chase for the Anbar Bankers.

HILL

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