VZCZCXRO5324
RR RUEHBC RUEHDA RUEHDE RUEHDH RUEHIHL RUEHKUK
DE RUEHGB #1635/01 1730551
ZNR UUUUU ZZH
R 220551Z JUN 09
FM AMEMBASSY BAGHDAD
TO RUEHC/SECSTATE WASHDC 3578
INFO RUCNRAQ/IRAQ COLLECTIVE

UNCLAS SECTION 01 OF 02 BAGHDAD 001635 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV EINV SOCI IZ
SUBJECT: ERBIL RRT: PRICE WATERHOUSE ADVISES KURDISTAN REGIONAL 
GOVERNMENT ON GOOD GOVERNANCE AND TRANSPARENCY 
 
REFTEL: 09 BAGHDAD 796 
 
¶1. (U) SUMMARY:  On July 17, the results of an 11-month "good 
governance assessment" conducted by private consultant 
PricewaterhouseCoopers (PWC) were presented to the Kurdistan 
Regional Government (KRG) Prime Minister and KRG Council of 
Ministers.  The next step is a comprehensive strategy for "Good 
Governance and Transparency," to be released to the public in late 
June/early July which will track with UN Convention on Corruption 
pillars.  While acknowledging that the Region presents many gaps and 
deficiencies, the PWC also commended the KRG for self-funding this 
project, for providing unfettered access to all information 
requested, and for Prime Minister Nechirvan Barzani's strong support 
of the PWC team and implementation of their recommendations.  END 
SUMMARY 
 
¶2. (U) On June 17, the findings of a PricewaterhouseCoopers (PWC) 
assessment of Kurdistan Regional Government (KRG) public 
administration were released to KRG Prime Minister Nechirvan Barzani 
and the KRG Council of Ministers.  On June 18, RRT Team Leader and 
RRTOff met with representatives of the PricewaterhouseCoopers (PWC) 
team and representatives of the KRG Good Governance and Transparency 
(GGT) team to discuss reception of the assessment results and 
planned next steps.  During the meeting, the KRG GGT representatives 
stated their intention to combine the PWC assessment results with 
the results of other GGT initiatives (including work with UNDP, 
World Bank and Dubai School of Government) into a comprehensive, 
"multi-year, multi-work stream strategy for Good Governance and 
Transparency."  The KRG GGT plans to publicly release this strategy 
in late-June/early-July.  (Comment: The KRG has not released the 
results of the PWC assessment to the RRT.)  KRG GGT representatives 
regretted that the timing of the roll-out would make it appear that 
the initiative was linked in a calculating way to the upcoming IKP 
elections; they noted that the original time-frame had been set up 
when the KRG elections were to have been held in May. 
 
¶3. (U) PWC representatives reported that PM Barzani received the 
results of their assessment warmly.  Although the summary pulled no 
punches in describing the many gaps and deficiencies that needed to 
be addressed, they reported that the Prime Minister did not disagree 
with any of the finding.  According to PWC representatives, PM 
Barzani discussed the results of the assessment with the KRG Council 
of Ministries, and pointedly remarked that while the KRG had 
undertaken similar initiatives in the past there was little to show 
for its efforts.  He pledged that the same fate would not befall 
this initiative.  PM Barzani said that whether he or any other 
ministers were still in their positions after the coming Kurdistani 
parliamentary and presidential elections, the implementation of the 
assessment results would go on. 
 
¶4. (U) PWC representatives said that in their recommendations, they 
did not want to repeat the mistakes of the GoI Commission on 
Integrity (CoI), which they said started off enforcement-focused and 
went about "thumping people on the heads" for violating concepts 
that did not yet have a foundation in Iraqi culture.  They believed 
that this approach had inflamed hostilities and was ultimately 
unable to retain the local government officials who were associated 
with it.  Instead, the PWC assessment has recommended a "sequencing 
plan" that builds knowledge of anti-corruption principles and 
provides ground-level training, before creating anti-corruption 
institutions like the CoI.  They cited the absence of several words 
Qinstitutions like the CoI.  They cited the absence of several words 
in the anti-corruption lexicon from the Kurdish language as an 
example of the groundwork that needed to be done before more 
advanced, enforcement-based institutions could succeed in the KR. 
 
¶5. (U) PWC representatives admitted that their assessment identified 
many "significant gaps" and that "where the rubber meets the road is 
in the implementation of their recommendations."  But they also 
affirmed that PM Barzani set a very strong tone from the top, and 
expressed confidence that he is committed to the reform process, 
regardless of how difficult it may be.  PWC representatives 
commended PM Barzani for the level of support he provided to them as 
they conducted the assessment, and noted that they had unfettered 
access to all levels of government and all needed information.  They 
noted that even though this was a KRG-contracted project, it was 
quite similar to a United Nations Convention against Corruption 
(UNCAC) project (inclusive of an assessment, gap analysis, and work 
plan to address issues raised in the assessment.)  It was the first 
time in this team's experience that a government had self-funded its 
own UNCAC-like project.  While contractual issues are still under 
negotiation, PWC plans to work with the KRG on implementation of the 
assessment's recommendations.  PWC also disclosed plans to open an 
office in the KR for additional private consulting in the near 
future. 
 
Comment: 
-------- 
 
¶6.  (SBU) The challenge is large:  creating a culture of good 
governance and setting standards of ethical behavior - as well 
putting in place enforcement mechanisms.  In this, as in other 
 
BAGHDAD 00001635  002 OF 002 
 
 
areas, the Kurdistan Region is neither waiting for donor assistance 
nor bemoaning the lack of international support - they have decided 
to go out and buy their own advice.  These are positive steps so 
far.  But the painful next steps, including divesting the government 
of conflict-of-interest business dealings, enforcing new codes of 
conduct for government officials, and prying the party away from the 
workings of government will test the commitment of the KRG 
leadership - whoever it may be. 
 
FORD