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UNCLAS STATE 071896 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: EAID ECON IZ PGOV PREL
SUBJECT: DELEGATION GUIDANCE FOR THE 7 JULY IRFFI DONORS 
COMMITTEE MEETING IN BAGHDAD 
 
REF: A. (REFTEL A) 2007STATE154955 
     ¶B. (REFTEL B) 2008STATE60125 
     ¶C. (REFTEL C) 2008BAGHDAD1814 
 
¶1. (U) This is an action cable for Embassy Baghdad. See 
guidance in paragraphs 3 through 12. 
 
¶2. (U) Along with Iraq and the U.S, EU/EC, UN, and World 
Bank, the info addressee countries of this cable constitute 
the membership of the International Reconstruction Fund 
Facility for Iraq Donors Committee (IRFFI DC). 
 
¶3. (SBU) Summary:  Reflecting the high importance he attaches 
to Iraq's international partnerships, Prime Minister Maliki 
will deliver the welcoming address to the Seventh Meeting of 
the IRFFI Donors Committee.  The U.S. delegation should 
endorse the progress reports and plans of the United Nations 
Development Group (UNDG) and World Bank (WB) for their 
respective Iraq Trust Funds (ITFs).  Both organizations are 
working to align their activities with the International 
Compact with Iraq (ICI).  The delegation may want to suggest 
a number of priorities for the ITFs (for example, to help GoI 
develop effective programs for IDPs and returning refugees). 
The delegation should support extending the lifetime of the 
IRFFI by another two years (through 2012) to match the ICI. 
Also worthy of support are the UN efforts for restructuring 
the UN Country Team (UNCT).  On co-financing, the delegation 
should counsel against Iraq adopting an overly detailed and 
restrictive "one-size-fits-all" approach in favor of arriving 
at approaches tailored to the needs and strengths of each 
donor.  The delegation should seek to end the temporary 
arrangement adopted in Istanbul for the DC to be co-chaired 
by both Iraq and a donor.  Rather, the DC should return to 
the conventional arrangement for a single chairperson chosen 
from among the Donors.  The delegation may use its discretion 
in choosing the next IRFFI chairperson.  Washington agencies 
would welcome Italian Ambassador De Martino continuing as 
full Chairman, should this be his wish.  Alternatively, 
Australia, Sweden or Denmark would be good candidates.  End 
Summary. 
 
¶4. (U) Current Status:  At the end of May 2008, Donor 
commitments to the UNDG-ITF and WB-ITF reached $1,338 million 
and $494 million, respectively, or $1,832 million in total. 
In addition, the ITFs report interest and investment earnings 
of $45-50 million each.  Recalling the DC decision reached in 
Bari to align the IRFFI with the ICI (reftel A), the ITF 
operators will present their findings about the amounts that 
may be available for reprogramming and recommendations for 
how they can support the ICI. 
 
¶5. (U) Multi-Donor Stocktaking:  The DC will receive a report 
reviewing progress with efforts to take stock of donor 
activities and expenditures.  We should encourage efforts to 
determine how the Donor Assistance Database (DAD) and the 
Capital Budget Reporting Tracking (CBRT) system could do more 
to track, analyze and report upon donor contributions in 
support of IRFFI and ICI goals and benchmarks.  There will 
also be discussion of donor field trips and donor activities 
at the provincial level. 
 
¶6. (SBU) Co-Financing: There is much to commend in the 
co-financing discussion that appears in the main body of the 
ICI Annual Report.  For example, it is possible to see how 
U.S. assistance could contribute to a "co-financed" project 
by providing technical assistance for studies and designs 
while Iraq provides the main funding, contracting and project 
management.  However, it is difficult to see how the U.S. 
approach to assistance could be reconciled with the overly 
detailed and restrictive guidelines for co-financing that 
were presented in the co-financing annex.  Iraq should be 
prepared to tailor its co-financing arrangements to the 
strengths and requirements of each individual donor. 
¶7. (SBU) UN Country Team (UNCT) - ICI Secretariat Issues: The 
UN will report and invite discussion on the issues 
surrounding its efforts to restructure and strengthen its 
Country Team.  As reported so well in reftel C, the UN is 
having to contend with the fact that GoI has not implemented 
the inter-ministerial coordination and policy-planning 
mechanisms suggested in the original ICI document, favoring 
instead its own approaches.  The delegation should support 
efforts to ensure that ICI mechanisms and GoI implementation 
efforts are both effective, such as for policy planning, 
without mandating a review or a solution that lacks GoI 
support. 
 
¶8. (SBU) World Bank Third Interim Strategy Note:  It has been 
three years since the World Bank last updated its Interim 
Strategy Note for Iraq.  The World Bank's activities in Iraq 
appear to be at a low ebb.  In view of the new Strategy Note, 
the delegation should encourage the World Bank to maintain a 
high level of interest in Iraq, including as an IRFFI ITF 
manager and as an important partner to the ICI. 
 
¶9. (U) Uses of Interest Income; New ICI-Aligned Projects:  If 
the delegation finds an opportunity to suggest ways for IRFFI 
resources to be allocated, it may wish to point to the Bari 
decision to permit IRFFI funds to be used in support of 
internally displaced persons and returning refugees, as well 
as to the statement by PM Maliki in Stockholm that $195 
million has been allocated to these efforts.  Your suggestion 
would be that, working with the relevant Iraqi ministries, 
the UNDG should develop a program of technical assistance 
aimed at designing and executing effective programs in 
support of IDPs and returning refugees. 
 
¶10. (U) Lifetime of the IRFFI:  At Istanbul in February 2007 
the DC decided to extend the lifetime of the IRFFI to 
December 2010.  The lifetime of the ICI is for five years 
from when it was adopted in mid-2007 through 2012.  The UN 
and others favor aligning the lifetimes of the IRFFI and the 
ICI.  The delegation should support such a proposal. 
 
¶11. (U) Next DC Chairperson:  The temporary joint Iraq-Donor 
co-chairmanship arrangement should revert to a single 
chairmanship held by a donor country, although a compromise 
on this point may be unavoidable.  U.S. Del should heartily 
support Italian Ambassador DeMartino if he is willing to 
extend for another year as Chairman of the Donors Committee. 
Alternatively, candidacies from Australia, Sweden or Denmark 
would be suitable.  The U.S. is not prepared to offer a 
candidate for DC Chairperson. 
 
¶12. (U) Next DC Meeting:  While recognizing the value in 
holding more frequent informal IRFFI meetings, Washington 
agencies would support holding the next full IRFFI DC meeting 
in approximately five-six months (November-December 2008), 
ideally in the home country of the next Donor Chairperson. 
RICE