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

051112Z Jan 06

UNCLAS SECTION 01 OF 02 BAGHDAD 000041 
 
SIPDIS 
 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: ECON EPET PGOV PINS KCOR IZ
SUBJECT: AN IRAQI PUBLIC-EDUCATION STRATEGY FOR ECONOMIC 
REFORM 
 
REF: A. BAGHDAD 0020 
     ¶B. BAGHDAD 4559 
     ¶C. BAGHDAD 5079 
 
Sensitive - Not for internet distribution. 
 
¶1.  (SBU) Summary:  Embassy, the British Department for 
International Development (DFID) in Baghdad, and the GOI 
are developing an economic-reform public-education 
strategy.  To date, we have established that an effective 
campaign would address three areas:  1) fuel-subsidy 
reform; 2) social safety net implementation; and 3) basic 
economic issues.  We believe the campaign must have simple 
messages and mainly target the average Iraqi, who typically 
does not understand basic economic issues.  We have already 
engaged the Iraqi media on the necessity for fuel-price 
increases, have gotten GOI agreement to take the same 
message to the public, and are working this with the 
Ministry of Finance (MOF).  The creation of a 
public-education strategy must have Iraqi ownership, and it 
will be an on-going process, requiring flexibility to 
change tactics as the public responds.  End summary. 
 
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Educating on Reforms That Are Happening Now 
------------------------------------------- 
 
¶2.  (SBU) Fuel-price increases went into effect on December 
18 in order to satisfy requirements for the IMF Standby 
Arrangement (SBA).  In initial response to the price 
increases, certain segments of the general public 
demonstrated in protest.  These protests were mostly 
non-violent and measured, and there has been no upswell of 
opposition among the general population of Iraq.  The 
insurgent and criminal elements of Iraq have taken a 
different approach, using violence and threats of violence 
to intimidate refiners, truckers, and ordinary Iraqis into 
cutting production and distribution and into protesting 
against the price hikes.  This terrorist activity has 
caused severe supply problems throughout Iraq, which in 
turn has caused further public unrest.  Urgent 
public-education efforts are needed to explain the price 
increases to the general public, and the GOI has been 
taking measured actions (Reftel A), both on its own 
initiative and in response to our encouragement.  However, 
no amount of aggressive public education will convince the 
terrorists and criminals that they should relinquish their 
violent actions and allow fuel supplies to flow freely.  We 
should make fuel-subsidy education an integral part of the 
public-education effort, but we need to set the strategy 
with the Iraqis in the lead, having the key officials at 
the planning table. 
 
¶3.  (SBU) USAID and the Embassy have worked with the 
Ministry of Labor and Social Affairs (MOLSA) to create new 
social safety net legislation that has been put into 
operation (Reftel B).  While not specifically addressed by 
the SBA, many ordinary Iraqis believe it is linked.  In any 
case, the basic messages about the economic distortions and 
corruption caused by continued subsidies are the same. 
This new Safety Net will provide money, career counseling, 
and job training to approximately one million Iraqi 
households, or that 20% of the population that lives in 
extreme poverty.  USAID plans to use World Bank funding to 
launch a public-education campaign in the mid-March 
timeframe to teach the public about the benefits and 
necessity of the new Safety Net.  This new Safety Net is 
critical (and revolutionary for Iraq) in that it creates a 
means-tested welfare system on which Iraq can base future 
subsidy reductions, especially critical as Iraq begins 
reforming its Public Distribution System (PDS) (Reftel C). 
 
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Educating on Reforms to Come 
---------------------------- 
 
¶4.  (SBU) Possibly the most important part of an 
economic-reform public education campaign will be to 
prepare the Iraqi public for the necessary changes that 
will come, and State has $3 million that should be put 
toward this program.  Post believes that this program 
should be based on three main objectives of economic reform 
in Iraq:  1) Subsidy reductions; 2) Privatization; and 3) 
Anti-corruption.  Under each of these subjects, there 
should be three simple messages that the Iraqis push out to 
their people, and these messages should be crafted both to 
educate the recipient on basic economics and to influence 
his current beliefs about the Iraqi economy.  (Our current 
discussions with the MOF are focused on this strategy, and 
we will be using the US/Iraq Joint Task Force on Economic 
and Financial Issues as a structure to continue developing 
and refining it.) 
 
¶5.  (SBU) While the campaign will need to address 
government, business, and social leaders, the main audience 
of the campaign should be the average Iraqi, who currently 
believes that the government owes him handouts because of 
Iraq's oil reserves and who quite possibly benefits from 
some form of corruption in his daily life.  Only by 
influencing the attitudes and opinions of average Iraqis 
can we truly ensure that the GOI is taking actions that 
will be understood and supported.  If we focus our efforts 
on the leadership and intelligentsia of Iraq, whatever 
positive actions they might take run the risk of falling on 
the deaf ears of unwilling citizens. 
 
¶6.  (SBU) Post believes that the GOI should hire Iraqi 
media companies to design and implement the public 
education campaign.  This is necessary to avoid the 
impression that outsiders are forcing change on a sovereign 
Iraq.  Post, through the Public Affairs Office, can assist 
with the design and publication of posters, but only with 
the agreement and buy-in of the GOI.  However, according to 
Embassy media sources, the best way to reach the average 
Iraqi audience is through television, and Iraqi media 
companies are in the best position to utilize this medium. 
 
---------------- 
Media Engagement 
---------------- 
 
¶7.  (SBU) Discussion with the media and government on the 
subjects of reform and subsidies has already begun. 
EconMinCouns and Commercial Counselor participated in an 
on-the-record press conference for the domestic and 
international media January 4 in Baghdad.  EconMinCouns 
emphasized the linkages between corruption, fuel blockages, 
and protest actions.  He also provided an outline of the 
budgeting impact of subsidies on security and a large 
variety of social services valued by the public.  Later, 
during a discussion between Acting DCM Litt and DPM 
Chalabi, the latter said he would: 
 
a)  Provide a brief explanatory paper for the media on 
subsidies; 
 
b)  Release to the press a paper on the reasons for unrest 
contributing to the fuel crisis at Bayji; and, 
 
c)  Initiate a public discussion of Iraqi consumption of 
refined products, focused on the need to cut imports owing 
to negative budget impact.  (Parenthetically, Chalabi 
observed that consumption has dropped in Baghdad from 10 
million liters to 6 million liters per day.  As we see 
Baghdad as better supplied than the rest of the nation, we 
tend to agree with Chalabi that this is a price-related 
drop in demand.) 
 
¶8.  (SBU) Public Affairs will be holding press conferences 
on a regular basis with Embassy Econ and Commerce to inform 
the Western and Iraqi/Pan-Arab media on economic issues. 
EconMinCouns and Commercial Counselor participated in the 
first of these on December 27.  These press conferences 
will serve as one medium through which to educate the Iraqi 
public on the need for subsidy reductions and 
anti-corruption efforts. 
KHALILZAD