This record is a partial extract of the original cable. The full text of the original cable is not available.

C O N F I D E N T I A L  ROME 004957 
 
SIPDIS 
 
 
E.O. 12958: DECL: 10/30/2013 
TAGS: EAID ECIN ECON PREL IZ IT EUN
SUBJECT: IRAQ RECONSTRUCTION: ITALY'S SPECIAL ENVOY 
COMMITTED BUT CONCERNED 
 
REF: A. ROME 4438 
     ¶B. STATE 301383 
     ¶C. ROME 4904 
     ¶D. ROME 2148 
     ¶E. ROME 1678 
     ¶F. ROME 1660 
     ¶G. STATE 138587 
     ¶H. ROME 4764 
 
Classified By: Economic Minister Counselor Scott Kilner for reasons 
1.5 b and d. 
 
¶1. (U) This cable contains an action request in paragraph 15. 
 
¶2. (C) SUMMARY: Italy's Special Envoy to Iraq, Ambassador 
Antonio Armellini, met with EmbOffs on October 27 to discuss 
the reconstruction process to date and Italy's pledge of Euro 
200 million at the Madrid Donors Conference.  Armellini 
characterized the reconstruction effort so far as a "mixed 
bag:" he acknowledged that the Madrid conference went far 
better than expected and that the well-being of Iraqis 
continues to improve.  He underscored, however, the critical 
need to focus on the "psycho-economic" factor: the perception 
that the lack of security in Iraq is undermining the 
reconstruction process. 
 
¶3. (C) Armellini noted that while the more than 3,000 Italian 
personnel represent the third largest civilian and military 
contingent in Iraq, they are not widely recognized as such. 
He also detailed how Italy had to overcome a problematic 
selection process to place nearly 40 Italian experts in CPA 
and in new Iraqi ministries and provincial authorities.  He 
specifically requested that CPA provide clear security 
instructions to all Italian personnel working with CPA. 
Armellini also provided an update of five reconstruction 
projects in the areas of transportation, health, environment, 
media and communications.  END SUMMARY. 
 
MADRID'S MESSAGE MUTED BY SECURITY CONCERNS 
------------------------------------------- 
 
¶4. (SBU) EcMin, EconOff and PolOff met October 27 with 
Italy's Special Envoy to Iraq, Ambassador Antonio Armellini, 
and his MFA assistant, Dr. Cajati, to take their pulse on 
Iraq reconstruction in the aftermath of the Madrid Donors 
Conference.  EcMin expressed strong USG appreciation for 
Italy's generous pledge of Euro 200 million over three years, 
recognizing that for the GOI to contribute such an amount in 
the face of significant budget pressures, represents a major 
effort (Ref A).  EcMin also noted that we look forward to 
working with Italy in the context of the Paris Club on the 
crucial matter of Iraqi debt restructuring (Ref B). 
Armellini reflected that the Madrid conference had gone far 
better than expected.  He noted that the Donors Conference, 
while always about money, "also sends a signal about 
re-engaging in Iraq, but unfortunately that signal was muted 
by (high profile) security problems."  Armellini acknowledged 
that the GOI pledge represents a major effort, but added that 
"it is consistent with the existing major efforts that Italy 
has made in Iraq." 
 
¶5. (C) Armellini offered his impression of progress to date 
in Iraq, with the caveat that his view is the product of six 
or seven recent trips to the country since his appointment as 
Special Envoy, rather than from having been based there 
continuously (Ref C).  Following the war, the Iraqi people 
had benefited from steadily increasing well-being through 
about July, he said, at which point progress seemed to level 
off.  Things began picking up again about a month ago, 
Armellini continued, as CPA and Iraq's ministries have begun 
to manage more effectively the running of the country, and as 
tribal leaders in the provinces have begun retaking control. 
But, also recently, there has been an upsurge in the number 
of attacks, Armellini said.  Baghdad, he observed, feels like 
a schizophrenic city where there are plenty of products in 
stores and residents enjoy outdoor cafes, but wonder when the 
next bombing will occur. 
 
¶6. (C) EcMin asked whether sensational events are 
overwhelming other more positive news in Iraq.  Armellini 
replied that most of Iraq is quiet, apart from Baghdad and 
the Tikrit triangle, but that the increasingly heavy 
fortification of buildings conveys the image of a fortress 
that is, nonetheless, vulnerable, as the Al Rasheed Hotel 
proved to be over the weekend.  One does not know, Armellini 
said, whether the increased attacks are the final acts of 
 
 
opposition or the reflection of an increasingly potent 
resistance to the occupation.  In any event, the current 
scenario is not a good one.  We need to focus, he admonished, 
on "what could be called the psycho-economic element" of the 
situation: failing to convey a more secure and stable image 
of Iraq could deter participation in the reconstruction 
process. 
 
ITALY: "THE THIRD LARGEST COALITION PRESENCE" 
--------------------------------------------- 
 
¶7. (C) Armellini went to some length to describe Italy's 
civilian and military contingent in Iraq, which he maintained 
is the third largest in the Coalition (Ref D).  Armellini 
noted that Italy has over 3,000 military personnel in Iraq, 
including: 300-400 Carabinieri involved in law enforcement, 
1,700 infantry, a naval contingent aboard an Italian vessel 
based in Kuwait, and a helicopter unit (Ref E).  Armellini 
said that the GOI will soon have embedded approximately 40 
experts in CPA and with new Iraqi authorities.  He described 
the process, however, as "excruciating," noting that many 
highly qualified applicants were lost due to delays in the 
review process, during which Italy "was not always treated 
initially as a part of the coalition of the willing." 
 
¶8. (SBU) Armellini specified that half of the total number of 
Italian experts are in Baghdad working on transportation, 
higher education, culture, health, justice, public finance, 
irrigation, and military training.  He added that there are 
some 15 experts in Basra, where an Italian is serving as 
Deputy Governor while others are working in the areas of 
transportation, health, political affairs, media, water and 
sanitation.  Finally, in Dhi Qar, Armellini noted, a second 
Italian holds the post of Deputy Governor, while another four 
experts are working in the areas of media, agriculture, 
health and transportation. 
 
¶9. (C) Armellini reviewed five bilateral projects that are 
pending in Iraq.  The first he described as a proposal from 
Telecom Italia to supply fixed-line telephone service to Iraq 
by way of its Mediterranean/Nautilus link which runs through 
Israel and Jordan.  According to Armellini, this proposal 
could complement, rather than compete with, a proposed link 
through Kuwait.  While Armellini noted that he had heard some 
opposition in Iraq to the idea of using telephone links that 
run through Israel, he suggested that because the lines also 
run through Jordan, there could be a wide mutual interest in 
promoting such a venture.  He added that he looked forward to 
USG support for the proposal. 
 
¶10. (SBU) A second Italian project that Armellini described 
-- a 12-15 month, Euro 1.3 million proposal to develop a 
national transportation infrastructure plan -- has reportedly 
already received a green light from CPA and the Iraqi 
Infrastructure Ministry.  Armellini said that, having 
completed several advance team visits, an initial project 
team of ten people is en route to Iraq.  This group 
reportedly includes representatives of Italy's Ministry of 
Infrastructure, national rail company, air traffic 
controllers, Italy's major energy company (ENI), and the 
national road builders' association.  The project, according 
to Armellini, is based on the national transportation plan 
that Italy developed some years ago and which is now a 
blueprint for the EU transportation plan.  The plan will 
reportedly identify and prioritize transportation 
infrastructure projects, which will stimulate investment and 
commerce.  Given that the success of the project will depend 
upon in-depth assessments of intermodal transportation 
capabilities throughout the country, Armellini stressed the 
importance of realizing a high-degree of coordination with 
CPA. 
 
¶11.   (SBU) Armellini briefly mentioned three other projects. 
 One is a marshland reclamation project being carried out by 
the Iraqi Foundation and the Italian and Iraqi Environment 
Ministries.  Another is the transformation of Italy's 
erstwhile field hospital into a base from which Italian 
medical professionals work on the structural rehabilitation 
of the Iraqi health care system  (Ref F).  As noted, Italians 
are also assisting with public health in the Basra region. 
Finally, Armellini mentioned a project in which Italy's state 
broadcasting network, RAI, would provide content and training 
support to its Iraqi counterpart.  (In a separate, October 29 
discussion with EcMin, RAI's newly-appointed President, Lucia 
Annunciata, said that RAI has already developed some 300 
hours of content, including sports and cultural programming, 
 
 
for delivery to the Iraqi broadcasting network.  RAI has also 
lined up journalists and support technicians to help train 
Iraqi counterparts.  EcMin expressed appreciation for RAI's 
offer to contribute its expertise to Iraq during this 
critical period.  "We must do something," Annunciata stated 
forcefully, adding, however, that the project is temporarily 
on hold, pending clarification of whether the security 
situation permits sending additional personnel to Baghdad.) 
 
ITALIAN PRIVATE SECTOR ENGAGEMENT STILL LIMITED 
--------------------------------------------- -- 
 
¶12. (SBU) During their meeting, EcMin asked Armellini for his 
reaction to a recent newspaper article which claimed that 
there are nearly 200 Italian firms ready to work in Iraq. 
"There may in fact be a couple hundred Italian companies 
waiting in the wings," Armellini said, "but the current view 
is that they will wait to engage in Iraq until basic security 
and telephone service is available."  He noted that, for the 
time being, Jordanian, Lebanese and Syrian businesses are 
booming in Iraq, while a number of Italian companies have 
opted to work out of regional offices in Kuwait and Oman. 
 
¶13.   (SBU) Armellini noted that an Italian presence is 
"completely lacking" among Bechtel subcontractors, despite a 
great deal of interest on Italian firms' part.  EcMin replied 
that the Embassy was well aware of the problem of reaching 
Bechtel, besieged by offers at the time of solicitations, 
and, in reporting it back to Washington, found that the 
phenomena was not unique to Italy (Ref G).  Armellini 
affirmed, however, that several smaller Italian firms with 
experience in Iraq that had managed to return to the country. 
 Armellini also mentioned that ENI was already working with 
the Oil Ministry and was in the process of opening an office 
in Baghdad.  Ansaldo, a diversified power plant and 
transportation construction company and part of the 
Finmeccanica Group, is also already active in Iraq, according 
to Armellini. 
 
COMMENT 
------- 
 
¶14. (C) Armellini on several occasions made the point that 
the GOI is very much looking forward to the reconstruction 
process beginning in earnest.  Through significant post-war 
military participation, development of multiple 
reconstruction projects, embedding a sizable complement of 
experts with CPA and Iraqi authorities, and, most recently, 
through active participation in and promotion of the Madrid 
Donors process, Italy, he said, has sought to show itself as 
a close US ally and as a leader within the EU on Iraq issues. 
 But the GOI, Armellini emphasized, has also sought to 
position Italy to reap the fruits of these political, 
military and human capital investments.  This was clearly in 
evidence in the large, multi-sector delegation Italy sent to 
the Madrid private sector meeting (Ref H).  Within the GOI, 
Armellini is championing an activist approach in Iraq, but he 
is also making clear that this approach generates significant 
anticipation, if not expectation.  In Armellini's words, the 
GOI "anticipates -- yes, I would say 'anticipates' rather 
than 'expects' -- receiving recognition" commensurate with 
its contributions. 
 
¶15. (C) Action Requested:  Apart from his general request for 
USG support for Telecom Italia's proposal, Armellini 
specifically requested that CPA provide clear instructions on 
security to any and all Italian personnel working with CPA. 
Embassy asks that the Department please provide us with the 
appropriate points of contact within CPA with whom Armellini 
can discuss and clarify security procedures.  End Action 
Request. 
SEMBLER 
 
 
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 2003ROME04957 - Classification: CONFIDENTIAL