VZCZCXRO0549
OO RUEHBC RUEHDA RUEHDE RUEHIHL RUEHKUK
DE RUEHGB #3325/01 2791640
ZNR UUUUU ZZH
O 061640Z OCT 07
FM AMEMBASSY BAGHDAD
TO RUEHC/SECSTATE WASHDC IMMEDIATE 3725
RUEHGB/AMEMBASSY BAGHDAD 0020
INFO RUCNRAQ/IRAQ COLLECTIVE PRIORITY

UNCLAS SECTION 01 OF 02 BAGHDAD 003325 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ECON IZ PGOV PINR PREL PTER
SUBJECT: ANBAR PRT: ANBAR PROVINCE PUBLIC EXPENDITURES AND 
THE PRT TRANSPARENCY TOOL BOX 
 
REF: CLASSIFIED BY: AMBASSADOR RYAN C. CROCKER FOR 
     REASONS 1.4 (B) AND (D). 
 
¶1. (U)  This is a PRT Anbar reporting cable. 
 
¶2. (U) Summary.  The transition between the FY 2007 and FY 
2008 capital expenditure budgets presents the occasion to 
take stock on where Anbar Province stands on public 
expenditure issues, and on those areas where the PRT is 
engaged.  The province is admittedly behind the curve on 
developing a transparent budget allocation and monitoring 
process, but considering that it is emerging from years of a 
violent insurgency, the budget process is remarkably 
serviceable.  The PRT,s transparency tool box has 
initiatives in train with regard to project management, 
resource allocation, and public outreach (para. 14 below). 
End Summary. 
 
Recent Developments 
------------------- 
 
¶3. (U) Anbar Province is in the final stage of spending its 
FY 2007 capital expenditure budget and plans are moving 
forward on preparing next year,s capital expenditure (capex) 
budget, the first in which the province will make a spending 
request of the central government, rather than passively 
receive a GOI allowance as it had in 2006 and 2007. 
 
¶4. (U) Anbar Governor Ma,amoun Sami Rasheed signed 28 
construction contracts valued at $9 million at a ceremony at 
his Ramadi office on October 2, and expects to sign 89 
additional contracts in the next few weeks, which would 
effectively obligate all of Anbar,s $107 million FY 2007 
budgetary allotment. 
 
¶5. (U) Meanwhile, provincial officials are moving ahead on 
two other fronts:  spending the $80 million FY 2007 
supplemental promised by the GOI on September 6 at the Anbar 
Forum in Ramadi, and planning for next year,s capital 
budget.  On the latter score, Ma,amoun has written to 
Finance Minister Jabr, alerting him to expect a request for 
225 billion ID ($182 million) for next year,s capital 
expenditure budget.  If funded, that would be a 70 percent 
increase over the 2007 budget. 
 
¶6. (U) Emerging from years of a violent insurgency, Anbar is 
in some respects playing catch up with other provinces in 
developing a budget process.  However, in other aspects, the 
province has a serviceable system, hobbled by flaws, to be 
sure, but overall it has a solid foundation for future 
reform.  The transition between the FY 2007 and FY 2008 
budgets presents an opportune occasion to take stock on where 
the province stands on fiscal issues and where the PRT can 
help. 
 
The Pluses 
----------- 
 
¶7. (U) On the plus side, the Directors General returned to 
their jobs last spring as security improved.  They had 
previously been absent for more than a year due to al-Qaeda 
violence.  Back on the job, they now play a role in 
de-conflicting projects proposed by the municipalities with 
central government spending plans.  That is particularly 
important because central government ministries control 
operations and maintenance budgets, whereas provincial 
spending is earmarked for capital expenditures only. 
Recently, the governor,s office issues a circular to the 
municipal-level DGs on the process for submitting project 
proposals for the FY 2008 capex budget.  The PRT provided 
advice. 
 
¶8. (U) On project management, the Provincial Council has 
established a four-committee system of directors general, 
with the first committee charged with advertising the 
requests for proposals, and the second with reviewing the 
bids for compliance with the terms of reference.  The 
technical committee analyzes the offers and recommends the 
winner, with preference given to qualified bidders located in 
the locale of the project.  The fourth committee, perhaps the 
weakest link, is charged with ensuring compliance.  The 
Governor plays no role until the third committee recommends 
the winning bidder.  The Governor is also the signatory for 
all contracts. 
 
 
¶9. (U) Virtually all accounting is done in long hand, but 
appears good enough. 
 
The Down Side 
------------- 
 
BAGHDAD 00003325  002 OF 002 
 
 
 
¶10. (U) The municipalities are not empowered to spend.   The 
GOI has not designated cities as "spending units,8 and 
consequently they do not have contracting authority. 
Municipalities may recommend project proposals to the 
provincial government, but project lists as such are not 
budgets.  The trouble is that while most sources of project 
financing come from the federal government, nearly all uses 
are at district and sub-district levels.  Obviously, the 
solution to this problem must be addressed at the national 
level among factions seeking greater or lesser degrees of 
decentralization. 
 
¶11. (U) Anbar lacks a long-term vision to guide capital 
expenditures.  The provincial government has had experience 
with capital expenditure budgets for only three annual 
budgets (2006-08).  This has put the emphasis on short-term, 
year-to-year decision making.  A longer term view on public 
investment, which would engage the municipalities, needs to 
be developed. 
 
¶12. (U) There is a lack of transparency.  Anbar lacks 
reliable telephone and internet service, and has practically 
no media outlets.  Thus, information about spending plans and 
priorities is passed up and down the Euphrates by word of 
mouth. 
 
¶13. (U) The provincial government has limited ability to hire 
and fire civil servants.  Funds to hire are controlled by the 
various central government ministries, and strictly speaking 
the provincial Directors General are central government 
employees.  They may coordinate their activities with the 
provincial government, but they are not directly accountable 
to the governor. 
 
The PRT,s Transparency Tool Box 
-------------------------------- 
 
¶14. (U) The following are several PRT initiatives aimed at 
addressing public expenditure issues. 
 
-- We are developing a computerized project tracking data 
base, which would organize capital projects by locale, 
infrastructure sector, and other key characteristics.  Such a 
technique may not be new to other provinces, and Anbar is 
admittedly behind the curve. 
 
-- In November, some 100 Anbari notables are expected to 
attend a four-day Provincial Development Strategy training 
module facilitated by USAID contractor RTI.  This exercise 
will produce a long-term economic vision statement, and 
accordingly would address the capital investment needs of the 
cities and towns. 
 
-- We have a public relations initiative aimed at improving 
the provincial government,s communication with local 
residents.  &Branding8 projects that are under construction 
would be one way of informing the public of the use of 
provincial funds. 
 
-- We are moving forward on an e-government initiative, and 
expect to have a prototype web page ready for review by 
provincial officials soon. 
 
-- With PRT urging, Gov. Ma,amoun has agreed to convoke a 
meeting of the province,s mayors later in October to discuss 
procedures for allocating and monitoring the execution of the 
FY 2008 capex budget. 
 
-- Finally, the PRT and MNF-West will continue our nine-month 
long &helicopter engagement8 initiative, in which 
provincial government officials are flown to Anbar,s 
far-flung cities and towns to re-connect with local 
officials.  Because of Anbar,s large geographic expanse, 
such trips will promote communication between key provincial 
directors general and their municipal counterparts. 
 
CROCKER