VZCZCXRO9621
PP RUEHNP
DE RUEHC #9144/01 2982126
ZNR UUUUU ZZH
P 252109Z OCT 07
FM SECSTATE WASHDC
TO RUEHGB/AMEMBASSY BAGHDAD PRIORITY 3556
RUEHRO/AMEMBASSY ROME PRIORITY 3600
RUCNDT/USMISSION USUN NEW YORK PRIORITY 9288
INFO RUEHAK/AMEMBASSY ANKARA PRIORITY 1799
RUEHOT/AMEMBASSY OTTAWA PRIORITY 8301
RUEHIT/AMCONSUL ISTANBUL PRIORITY 1351
RUEHNP/AMCONSUL NAPLES PRIORITY 1196
RUEHBS/USEU BRUSSELS PRIORITY

UNCLAS SECTION 01 OF 02 STATE 149144 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: CA EAID ECIN ECON EUN IT IZ TU
SUBJECT: REPORT ON THE INFORMAL MEETING OF THE IRFFI 
DONORS COMMITTEE, OCTOBER 11 
 
 
¶1. (SBU)  This cable reports on discussions at the informal 
meeting of the International Reconstruction Fund Facility for 
Iraq (IRFFI) Donors Committee (DC) held at the United Nations 
(UN) in New York on October 11, 2007. 
 
¶2. (SBU) Summary:  The purpose of the meeting was to prepare 
for the full IRFFI DC meeting in Bari, Italy on October 
28-29.  Participants reviewed the findings of an expert study 
and recommendations on revisions to the IRFFI Terms of 
Reference (ToR) and discussed the inter-relatedness of the 
IRFFI, Iraq's National Development Strategy (NDS), the 
International Compact with Iraq (ICI), and the UN's expanded 
role in Iraq under UNSCR 1770.  Donor delegates concurred 
that the ICI clarifies and provides priorities for the NDS, 
that the work of the IRFFI and the IRFFI ToR should be 
aligned to support the goals of the ICI, and that real and 
effective Iraqi leadership will be essential to the success 
of the IRFFI and the ICI.  The United States and Turkey urged 
that the IRFFI ToR should be expanded to allow IRFFI 
resources to be used for humanitarian relief and support for 
Iraq's internally displaced persons. End summary. 
 
¶3. (U) The meeting was co-chaired by Italy's Ambassador for 
Iraqi Reconstruction, Mr. Gianludovico de Martino, and the 
Special Advisor to Iraq's Minister of Planning and 
Development Cooperation, Dr. Faik Abdul Rasool. 
 
¶4. (SBU) Co-chair De Martino opened by recapping developments 
since the last full IRFFI DC meeting (Istanbul, Mar 07).  The 
IRFFI Facilities Coordination Committee (FCC) has met three 
times (Rome, Baghdad and the day before in Washington).  He 
reported that SCAN (the Norwegian experts in reconstruction 
fund facilities) had finalized its review of the IRFFI ToR 
and expressed thanks for inputs from eight of the DCs 19 
members. 
 
¶5. (SBU) The SCAN ToR Review emphasized the importance of 
Iraqi ownership; suggested streamlined procedures; noted that 
several donors were interested in adding financial resources; 
recommended that IRFFI activities be integrated with the ICI 
and NDS. 
 
¶6.  (SBU)  Speaking as co-chair for the Government of Iraq 
(GoI), Dr. Rasool also emphasized the importance of enhanced 
roles for Iraqis.  He noted that the ICI goes beyond the NDS 
to lay out an agenda of reforms and initiatives in economic 
and social policies as well as for security and 
reconciliation.  He said the IRFFI should concentrate on 
supporting ICI benchmarks.  To this end, both the IRFFI and 
the ICI needed active participation from Sectoral Working 
Groups (SWGs) involving GoI ministries and provinces. 
Reaching back into their respective ministries, the SWGs must 
formulate Sectoral Development Strategies, including roles 
for donors.  A central aim of these strategies is to put 
Iraqi resources to work and pointed to Iraq's large 
accumulated financial reserves.  He wants to develop foreign 
investment, putting Iraq's new investor-friendly policies to 
work. 
 
¶7. (SBU)  Joseph Saba (World Bank - WB) recapped WB programs 
in Iraq asking retrospectively, "What has worked and what 
not?" 
 
- Public Financial Management:  The seminars of the ongoing 
joint WB-GoI "Public Expenditure and Institutions Review" 
(PEIR) are making real progress bringing order and best 
practices to government finance in the central bank, Ministry 
of Finance, line ministries, and the provinces. 
 
- Sectoral Development Strategies:  The results are mixed at 
best.  Future efforts should be linked to the ICI. 
 
- Social Protection:  The WB is conducting a Household 
Survey, gathering data in support of the GoI Social Safety 
Net and subsidies reform. 
 
- Rule of Law:  This effort is supported by PEIR work on 
procurement policies and practices for ministries and 
provinces.  Effective methods for allocations and 
accountability are emphasized.  Also emphasized is 
 
STATE 00149144  002 OF 002 
 
 
development of the financial sector and banking. 
 
- Country Portfolio Reviews.  The WB recommends that the 
project portfolios undergo reviews where projects are 
evaluated more systematically as to their costs, benefits and 
methodologies. 
 
¶8.  (SBU)  Bisrat Aklilo (director for the UN Development 
Group - UNDG - in Iraq) spoke about IRFFI and the ICI in 
relation to the UN's newly expanded role in Iraq under UNSCR 
¶1770.  He pointed to its assistance for the political 
process, economic reconstruction, and humanitarian 
assistance.  He characterized the role that the UN plays as a 
joint leader for the ICI as, "the sort of high value-added 
contribution that the UN seeks to make."  Its humanitarian 
assistance seeks to support the vulnerable and provide 
emergency aid inside Iraq. 
 
¶9. (SBU)  In open discussions statements were made by the 
European Commission (EC), USA, Canada and Turkey with 
responses from Dr. Rasool (GoI). 
 
¶10. (SBU)  The EC emphasized the central role of the GoI.  It 
called for greater donor visibility (recognition); urged 
closer monitoring and reporting of activities and close 
coordination of UN agency activities in view of UNSCR 1770 
and through the IRFFI Clusters (the UN's mechanism for 
allocating project resources).  On the future of IRFFI, the 
EC looks to UNSCR to provide guiding principles while the 
goals and benchmarks of the ICI provide the future agenda. 
ICI implementation must be GoI-driven - "the center of 
gravity must be in Iraq."  The EC recommends that the IRFFI 
DC should meet at least quarterly in Baghdad and that both 
IRFFI and ICI topics could be discussed. 
 
¶11. (SBU) USA:  The United States expressed appreciation for 
the informal DC meetings in Brussels and New York. It said 
that the ICI provides a framework and guidelines to which the 
NDS and Sectoral Strategies should be merged.  It noted the 
ambitious agenda of the SWGs and emphasized the importance of 
efforts for capacity development / technical assistance, and 
foreign investment.  He urged that the IRFFI and ICI 
secretariats should at least be co-located or preferably 
 
SIPDIS 
merged.  He proposed that the IRFFI ToR should be broadened 
to cover support for IDPs. 
 
¶12. (SBU) Canada noted that the meeting in Bari will provide 
an opportunity to bring strategic vision to the IRFFI 
projects lists.  It requested to see the progress reports of 
the Iraq Trust Funds operators (the UNDG and the WB) in 
advance of the Bari meeting. 
 
¶13. (SBU) Turkey urged IRFFI to address IDPs and refugees. 
It looked to the GoI Ministry of Planning and Development 
Cooperation (MoPDC) to be the "focal point" for IRFFI 
activities. 
 
¶14.  (SBU) GoI:  Dr. Rasool said the GoI can help IDPs inside 
Iraq by realigning the distribution of welfare food baskets, 
health care and education.  He feels the refugees outside 
Iraq need compensating support in the form of funds transfers 
to Syria and Jordan, and that all should assume the refugees 
will return to Iraq.  He called for greater coordination and 
integration of efforts within IRFFI and complained about 
competition among UNDG Clusters. 
 
¶15.  (SBU) The USA offered final remarks, emphasizing the 
need for closer coordination among UNDG Clusters, GoI 
ministries and the provinces.  It suggested realigning the 
Clusters along ministry and provincial lines, and looking at 
"co-sharing" where the GoI and UNDG could both contribute 
financial and perhaps other resources to projects.  Finally, 
more work needs to be done to collect and standardize donor 
data, and for more effective and comprehensive donor 
coordination. 
RICE