VZCZCXRO1923
PP RUEHBC RUEHDA RUEHDE RUEHIHL RUEHKUK RUEHNP
DE RUEHC #3703/01 0441647
ZNR UUUUU ZZH
P 131631Z FEB 09
FM SECSTATE WASHDC
TO RUEHGB/AMEMBASSY BAGHDAD PRIORITY 4177
RUEHRO/AMEMBASSY ROME PRIORITY 9536
RUEHNP/AMCONSUL NAPLES PRIORITY 1506
RUEATRS/DEPT OF TREASURY WASHINGTON DC PRIORITY
INFO IRAQ COLLECTIVE PRIORITY

UNCLAS SECTION 01 OF 03 STATE 013703 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: EAID ECON IT IZ DA PGOV PREL
SUBJECT: CORRECTED CABLE: DELEGATION GUIDANCE FOR THE 
EIGHTH IRFFI DONORS COMMITTEE MEETING (17-18 FEBRUARY, 
NAPLES) 
 
REF: A. 2009STATE12794 
     ¶B. 2008STATE71896 
     ¶C. 2008BAGHDAD1615 
     ¶D. 2008BAGJDAD2162 
 
¶1. (U) This cable corrects references, background and certain 
guidance points appearing in reftel State 12794. 
 
¶2. (U) This is an action cable for the U.S. delegation to the 
eighth formal meeting of the Donors Committee that oversees 
the International Reconstruction Fund Facility for Iraq 
(IRFFI) to be held in Naples, Italy on February 18 with 
pre-meetings on February 17.  Paragraph 10 contains specific 
points of guidance. 
 
¶3. (SBU) The delegation is comprised of Ambassador Marc Wall 
(Head of Delegation, Coordinator for Economic Transition in 
Iraq, Embassy Baghdad), Mark Erickson (Economic Officer, 
Embassy Baghdad), Kevin Taecker (Senior Advisor, NEA/I-Econ), 
Jeanne Pryor (Deputy Office Director, USAID-ME/IR), Samantha 
Vinograd (Iraq Desk Officer, Treasury), Christopher Curran 
(Econ Officer, Embassy Rome), and Robert Carlson (Econ 
Officer, Consulate Naples). 
 
¶4. (U) The main purpose of this meeting is to plan for the 
close out of the IRFFI by December 31, 2010.  The meeting 
marks a milestone for Committee members in that they are 
becoming as much "partners in" as "donors to" Iraq's future 
sustainable economic development. 
 
¶5. (U) Established in February 2004, the IRFFI has 
accomplished its mission of involving a large number of 
donors in Iraq's economic reconstruction by providing donors 
with an effective multilateral mechanism for identifying 
needed projects and administering their contributions.  About 
85 percent, or about USD 1.55 billion of the total USD 1.85 
billion, in IRFFI financial resources have been committed to 
projects that are in various stages of completion.  In 
combination with the bilateral assistance programs of the 
United States and other major donors (e.g., Japan, the UK and 
Korea), the IRFFI projects help to rebuild Iraqi 
infrastructure, support the establishment of a means-tested 
social safety net, establish good governance, strengthen 
anti-corruption measures and provide assistance to internally 
displaced persons and returning refugees.  Looking to the 
future, once IRFFI closes out, donors will administer their 
assistance bilaterally or give directly to purpose-specific 
international agencies or non-governmental organizations. 
The International Compact with Iraq (ICI - launched in May 
2007) has taken over much of IRFFI's earlier role of 
coordinating the assistance activities of Iraq's 
international partners.  In October 2007, the IRFFI Donors 
Committee decided that the remaining uncommitted IRFFI 
resources should be expended in support of Iraq achieving its 
goals under the ICI and National Development Strategy.  Under 
this arrangement, Iraq will continue to live up to its ICI 
commitments for achieving sustainable economic development 
while receiving donor/partner support. 
 
¶6. (U) The IRFFI is comprised of two Iraq Trust Funds (ITFs) 
operated by the World Bank (WB) and United Nations 
Development Group (UNDG).  At this meeting, the WB and UNDG 
will present their respective Eighth Progress Reports, which 
will give detailed information on completed and ongoing 
projects and programs, including amounts committed, 
contracted and disbursed.  The reports will quantify any 
remaining unobligated resources and provide recommendations 
for how these resources should be allocated (e.g., to provide 
cushions to meet possible unexpected close-out expenses). 
Oversight activities, including audits, inspections and other 
measures to ensure transparency and accountability of the 
ITFs will also be discussed.  The WB will present its "Third 
Interim Strategy Note," which will lay out its broader plans 
for future engagement and programs in Iraq.  In August, 2008, 
Iraq and the UN Assistance Mission for Iraq (UNAMI) adopted a 
joint strategy covering their economic cooperation through 
¶2012. 
 
¶7. (U) A "Multi-Donor Stocktaking Review" evaluating how the 
ITFs have performed against the goals and objectives stated 
in IRFFI's Terms of Reference will be presented by the 
Norwegian consultancy, Scanteam.  By and large, the Scanteam 
 
STATE 00013703  002 OF 003 
 
 
¶8. (U) The WB and UNDG have provided a joint "Concept Note" 
giving timelines and mechanisms for closing the IRFFI. The 
separate ITF operators must abide by their own sets of rules 
and regulations governing close-out related activities.  Both 
concur, however, that the IRFFI should stop collecting new 
contributions before July 1, 2009, should complete all final 
project approvals before the end of 2009, and finalize all 
contract commitments by the end of 2010. The WB and UNDG have 
somewhat different procedures for terminating their ITFs, but 
both agree that such final steps should be taken before the 
end of 2013. 
 
¶9. (U) Denmark (Ambassador Mikael Winther) has agreed to take 
over as Chairman of the Donors Committee for the remaining 
lifetime of the IRFFI.  Italy (Ambassador Gianludovico De 
Martino) will be stepping down, having served as Chairman of 
the DC for two years since February 2007.  The Chairman of 
the IRFFI Executive Committee is the Minister of Planning and 
Development Cooperation, Dr. Ali Baban.  For a period after 
2007, Baban served as Co-Chairman of the IRFFI with the 
Italian Ambassador. 
 
¶10. (SBU) Delegation Guidance: 
 
-- Compliments to the Host and the Minister for their 
guidance and contributions in support of IRFFI's successes. 
Thanks for this opportunity to plan the closing chapter. 
 
-- Recall that at the last Donors Committee meeting in 
Baghdad Deputy Prime Minister Saleh said: "More than your 
donations what we seek is your partnership in helping Iraq 
develop its capacity to use its resources in an efficient 
manner."  This meeting will help to chart the course for 
Iraq's "donors" to become "partners" in Iraq's future 
development. 
 
-- This Eighth Donors Committee Meeting respects that Iraq 
has fully regained its sovereignty; it is therefore 
appropriate to focus on the orderly closure of the IRFFI. 
 
-- Express appreciation for Scanteam findings that the IRFFI 
has accomplished "significant achievements" that have made "a 
real and meaningful impact" toward normalizing conditions in 
Iraq in such areas as education, healthcare and 
infrastructure. 
 
-- Acknowledge the difficulties and added costs associated 
with the security situation, but highlight that the security 
situation has greatly improved and continues to do so. 
 
-- Note Iraq's recent success in conducting provincial 
elections, signifying true progress in both political 
reconciliation and general stability. 
 
-- Emphasize that donors can take pride and satisfaction in 
how their contributions have been applied.  The IRFFI 
provides an excellent model and "lessons learned" for future 
international cooperation in post-conflict environments. 
 
-- Urge the UNDG and WB to apply the highest standards in 
spending the remaining IRFFI funds.  Ensure that such 
expenditures support the goals of the ICI.  Encourage active 
discussion involving all DC members to arrive at broad 
consensus for how the remaining IRFFI resources should be 
spent. 
 
-- Welcome the new UNAMI-Iraq Strategy for Economic 
Cooperation and the WB's new "Third Interim Strategy Note" 
 
-- Explain that plans for future U.S. assistance to Iraq will 
be developed with respect to the new Strategic Framework 
Agreement, which provides Joint Coordinating Committees and 
Working Groups in a number of areas. 
 
-- Emphasize that the SFA is designed to work within and 
support the framework of the International Compact with Iraq, 
and the programs and goals of the World Bank and UNAMI. 
 
-- Encourage Iraq to streamline and update the Joint 
Monitoring Matrices of the ICI to take account of recent 
changes and challenges in the global economy, including for 
the price of oil and the outlooks for the major economies. 
 
-- Recognize the positive value of the new Iraq Partners 
Forum as a vehicle for information sharing and coordination 
among Iraq and its international partners. 
 
STATE 00013703  003 OF 003 
 
 
-- Support Denmark's candidacy to take over the Chairmanship 
of the IRFFI for its remaining years. 
. 
¶11. (U) Questions and concerns in regard to the Eighth IRFFI 
DC Meeting should be directed to Kevin Taecker, Senior 
Advisor, NEA/I-Econ, TaeckerKR2(at)State.Gov,  1-202-647-6314. 
CLINTON