VZCZCXYZ0010
PP RUEHWEB

DE RUEHGB #0316/01 0371828
ZNR UUUUU ZZH
P 061828Z FEB 09
FM AMEMBASSY BAGHDAD
TO RUEHC/SECSTATE WASHDC PRIORITY 1595
INFO RUEKJCS/SECDEF WASHINGTON DC PRIORITY
RHEHAAA/WHITE HOUSE WASHINGTON DC//NSC// PRIORITY

UNCLAS BAGHDAD 000316 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: EAGR EAID ECON IZ PGOV PREL
SUBJECT: FOREIGN ASSISTANCE BUDGET PRIORITIES FOR IRAQ 
 
REF: BAGHDAD 286 
 
 ¶1.  (U) Summary:  U.S. assistance to Iraq has changed 
substantially, moving from "bricks and mortar" projects to 
improving Iraq's ability to govern effectively and 
democratically. Our assistance will help the GOI meet the 
needs of its citizens, preserve security, reform its 
economy, and foster political reconciliation. At this 
critical juncture, our assistance will reinforce our 
message of continued support and demonstrate that we want 
to shift emphasis over time from security to economic and 
humanitarian cooperation.  Providing the building blocks to 
 
sustainment, capacity-building, and responsibility will 
ensure the Iraq government is truly accountable to its 
people. Our focused assistance, as outlined in this cable 
for FY2009 and FY2010, will allow us to get the job done 
and build upon the significant gains we have made in Iraq. 
End Summary. 
 
¶2.  (SBU) U.S. assistance to Iraq has changed 
substantially. Originally, we focused heavily on Iraq's 
security and reconstruction needs.  With an improving 
security environment, we are moving from "bricks and 
mortar" projects to improving Iraq's ability to govern 
effectively and democratically.  Our assistance is designed 
to help the GOI meet the needs of its citizens, preserve 
security, reform its economy, and foster political 
reconciliation.  Our assistance is still necessary.  Last 
year's temporary spike in oil prices raised the question: 
were U.S. dollars essential to oil-rich Iraq? The answer is 
yes - and not just because oil prices have declined, 
limiting Iraq's 2009 budget.  U.S. foreign assistance funds 
remain essential to a democratic and stable Iraq.  This 
will be especially important as we reinforce our message of 
continued support and demonstrate that we want to shift 
emphasis over time from security to more economic and 
humanitarian cooperation.  It is time for Iraqis to invest 
more in their own future as we transition to a strong 
bilateral partnership and strategic engagement in the 
region. 
 
¶3.  (U) Our funding is critical for three key reasons. 
First, it increases Iraq's ability to govern itself 
effectively and take control of its future.  Efforts will 
focus on building institutional capacity at national and 
provincial levels and to strengthen the role of civil 
society in partnership with the Iraqis to empower them to 
sustain and expand the work that we have begun. Second, our 
assistance also gives us the ability to respond quickly to 
local needs, which is why our Quick Response Funds used by 
our Provincial Reconstruction Teams (PRT) and USAID's 
Community Action Program must be robust.  Democratic 
governance does not begin and end in Baghdad; we need to 
build governing capacity at the provincial and local level 
to ensure improving the lives of all Iraqis.  Third, our 
assistance helps Iraq pursue the long-term reform essential 
to a healthy economy, full utilization of its natural 
resources, and the health of its citizens. We have made 
significant gains in the past five years, and as we move 
forward from this critical juncture, we seek assistance in 
key priority areas as outlined in this cable. 
 
Democracy and Civil Society 
--------------------------- 
¶4.  (U) Democracy and civil society programs are at the 
core of our objectives to strengthen an open and democratic 
system. This includes USAID's follow-on election support 
and the Legislative Strengthening Program supporting the 
Council of Representatives (COR) in targeted areas of the 
legislative process. Law-making, oversight and 
Qlegislative process. Law-making, oversight and 
representative functions of the COR require our expertise 
and assistance.  The Access to Justice program will support 
critical institutions that provide citizens an alternative 
to violent resolution of disputes and improve the legal 
framework of civil and criminal codes.  DRL's programs 
through the National Democratic Institute (NDI) and 
International Republican Institute (IRI) will also 
strengthen democracy-building. 
 
Rule of Law and Anti-Corruption 
----------------------------------- 
¶5.  (U) Our assistance to Iraq will ensure an 
accountability to laws that are enforceable and 
independent.  Rule of Law programs include legal education, 
support of lawyers and the Iraqi bar, and civil justice 
programs that will provide the Iraqis the building blocks 
to gain confidence in a fair, transparent legal system. 
This is closely tied to anti-corruption initiatives, 
particularly training provincial councils on 
anti-corruption strategies, investigations, and 
enforcement.  Funding to civil society organizations to 
conduct watchdog activities and provide technical 
assistance to law faculty and students through the 
Constitutional and Legislative Development Project will 
reinforce the rule of law fundamentals throughout the 
country. 
 
National Capacity Development and PRTs 
--------------------------------------- 
¶6.  (U) USAID's Tatweer project emphasizes building the 
capacity of provincial Directors General from line 
ministries as part of a comprehensive approach to enhance 
the linkages between local, provincial, and central 
government structures.  This technical assistance will 
institute transparent systems for civil service 
regulations, service delivery to provinces, and budget 
designs.  Tatweer will also shift its focus to more 
sector-specific capacity development. Infrastructure 
sustainment through O&M support will enable Iraqis to make 
full use of the infrastructure projects we have built for 
them. Building this culture of maintenance and 
accountability to its people will be critical as Iraq 
assumes full responsibility for providing essential 
services to its people.  Assistance to PRTs and local 
governments through the Quick Response Funds and USAID's 
Community Action Programs also follow this line of 
strategic assistance. 
 
Capital Development and Financial Markets (PEG) 
--------------------------------------------- -- 
¶7.  (U) Oil and the public sector will likely continue to 
play dominant roles in the economy.  The prospects for 
employment creation and growth rest predominately with the 
private sector. Working together with partners in the 
international community, the Provincial Economic Growth 
(PEG) program will assist the GOI to improve the policy and 
institutional environment to stimulate private sector 
investment and employment to further Iraq's integration 
into the global economy.  By providing coordinated policy 
and capacity building support, we will assist Iraq's 
efforts to gain accession to the World Trade Organization. 
Economic Growth and Legal and Regulatory Reforms programs 
will help sustain these efforts. 
 
Agriculture private sector development 
-------------------------------------- 
¶8.  (U) Agriculture private sector development through the 
Inma program aims to reverse the effects of decades of 
command and control policies in Iraq's largest non-oil 
economic sector.  Our assistance will help create a 
functioning agricultural credit system among private Iraqi 
banks, improve crop productivity through better water 
management, provide access to improved genetics, and expand 
value-added processing and access to markets.  These 
advances contribute to increased farmer income, greater 
rural employment, and improved stability in traditionally 
volatile areas of the country. 
 
Investing in People 
------------------- 
¶9.  (U) Iraq's education system has been battered by more 
than two decades of war and underinvestment.  The FY2010 
budget will initiate a program to help strengthen Iraq's 
education system so that it serves as a source of skills 
critical for employment, democratic participation, and 
peaceful conflict resolution, rather than becoming 
institutions of anti-Western ideology and sectarian 
extremism subject to the influence of hostile, violent 
ideologies.  A long-term program in education will help 
diminish the underlying conditions that terrorists seek to 
exploit.  Assistance to health professionals and the public 
health infrastructure will also aid these efforts. 
 
Anti-Terrorism Assistance (ATA) training and demining 
--------------------------------------------- -------- 
Q-------------------------------------------- --------- 
¶10.  (U) Support for ongoing contracts for humanitarian 
demining, mine risk education, victim assistance, 
unexploded ordnance removal, and capacity building of 
indigenous humanitarian demining NGOs will help Iraqis 
rebuild the security and humanitarian structures in this 
critical area. In addition, our ATA program will support 
the integration of 500 Iraqi Police and Security Forces 
into the Embassy's dignitary protection operations.  Vital 
installations security, terrorist crime scene 
investigations, and border training will strengthen this 
corps and reduce reliance on private security companies. 
International Military Education and Training (IMET) will 
also continue to be a small and essential part of our 
normalization efforts to strengthen Iraq's professional 
military. 
 
Treasury's Office of Technical Assistance (OTA) for budget 
execution 
--------------------------------------------- --------------- 
-------- 
¶11.  (U) Office of Technical Assistance (OTA) through the 
Department of Treasury will strengthen capacity for budget 
execution efforts that ensure budgeting for operating and 
maintenance expenditures, medium-term planning, and a 
banking system with IT structures to handle government 
transfers and letters of credits for budget procurements. 
Responsible budget planning and execution will allow Iraqis 
to better strategize their long term needs and priorities. 
 
Internally Displaced Persons and Returnees 
------------------------------------------ 
¶12. (SBU) Per reftel, successful reintegration of Iraq's 
displaced is critical to the stability of Iraq and the 
region. Adequate funding will be necessary to create 
conditions for the voluntary return of refugees and support 
these communities for long term stability. Assistance will 
be essential to support returns with shelter, health, 
education, water sanitation, and psycho-social counseling. 
 
CROCKER 
CROCKER