VZCZCXYZ0001
RR RUEHWEB

DE RUEHGB #2223/01 2291452
ZNR UUUUU ZZH
R 171452Z AUG 09
FM AMEMBASSY BAGHDAD
TO SECSTATE WASHDC 4351

UNCLAS BAGHDAD 002223 
 
SENSITIVE 
SIPDIS 
 
STATE PASS TO COMMERCE FOR SUSAN HAMROCK MANN 
 
E.O. 12958: N/A 
TAGS: ECON EINV PREL PGOV IZ
SUBJECT: PLANNING FOR THE OCTOBER U.S.-IRAQ DIALOGUE ON 
ECONOMIC COOPERATION AND BUSINESS AND INVESTMENT CONFERENCE 
 
REF: A. STATE 77718 
     ¶B. STATE 80762 
 
¶1.  (SBU) Summary:  Embassy offers our perspective on 
planning for the two events announced during PM Maliki's 
recent visit to Washington:   The October 19 U.S.-Iraq 
Dialogue on Economic Cooperation (DEC) and the October 20-21 
U.S.-Iraq Business and Investment Conference.  Both events, 
but particularly the business conference, have the personal 
attention of the Prime Minister and his senior advisors.  We 
are working intensively with the GOI to prepare for the 
business conference, primarily to accelerate visa processing 
for the Iraqi business delegation.  The Iraqi government and 
public will likely interpret the level of USG engagement in 
both events as a sign of future USG commitment to Iraq under 
the Strategic Framework Agreement (SFA).  As national 
elections approach in January, the GOI will also look for a 
domestic political boost from the Washington events.  This is 
an opportunity for the GOI to announce deliverables that 
improve the investment climate.  Our challenge will be to 
ensure that the Washington conference achieves more than 
previous investment conferences supported by Task Force for 
Business and Stability Operations (TFBSO) and Commerce, and 
that the GOI comes to Washington prepared for both 
substantive government-to-government discussions and serious 
dialogue with potential investors, including specific 
investment opportunities.  Post recommends that the President 
give the opening speech at the conference along with 
participation from other senior administration economic 
officials.  End summary. 
 
Business and Investment Conference 
 
¶2.  (SBU) The October 20-21 U.S.-Iraq Business and Investment 
Conference was announced during the Prime Minister's visit to 
Washington in July.  The U.S. Chamber of Commerce will host 
the conference and has reserved its entire facility for the 
event.  Up to 200 Iraqi participants are expected, of which 
approximately 35 will be GOI officials.  To ensure strong 
provincial representation, the GOI will invite the Governor, 
Chairman of the Provincial Investment Commission (PIC), and 
the Chairman of the Provincial Council from each province. 
Most of the Iraqi delegation will consist of executives from 
both state-owned and private businesses (plus representatives 
from the major state-dominated business chambers).  The USG, 
through DoD's TFBSO, is funding much of the DEC and the 
conference, including expenses for 100 Iraqi participants. 
TFBSO is also involved in planning for the conference. 
 
¶3.  (SBU) Dr. Sami al Araji, Chairman (designee) of the 
National Investment Commission (NIC), is pulling together the 
Iraqi delegation and has already provided the Embassy with 
roughly 100 names for visa processing.  A constant concern 
for Dr. Sami as he composes the Iraqi delegation is "balance" 
-- balance between government and private sector 
participants, balance among provinces and regions, and 
political and ethnic/sectarian balance.  While he has taken a 
very possessive approach to determining the Iraqi delegation 
-- and has consulted with the Prime Minister -- Dr. Sami has 
agreed to consider suggestions of business participants from 
PRTs and the Embassy.  (Comment:  Dr. Sami has emphasized 
that the first tranche of Iraqi businessmen are all prominent 
and well-financed figures.  End comment.) 
 
¶4.  (SBU) The head of the GOI delegation has not been 
determined.  According to Dr. Sami, the Prime Minister is 
considering attending the conference.  We also understand 
that Deputy PM Barham Salih may lead the delegation.  In 
Qthat Deputy PM Barham Salih may lead the delegation.  In 
either event, Dr. Sami will handle planning for the 
conference and serve as master of ceremonies, reprising the 
role he played in the April investment conference in London. 
Working with Dr. Sami presents considerable challenges:  he 
does not delegate to NIC staff, and he is overly focused on 
form over substance, seeking a conference that produces a 
&big splash8 that will generate media attention.  All USG 
interlocutors need to consistently remind Dr. Sami that the 
goal of the conference is to generate real U.S. investment in 
Iraq. 
 
¶5.  (SBU) The principal U.S. agencies and organizations 
involved in the conference planning, along with the Embassy 
of Iraq Commercial Attache, have drafted  a preliminary 
agenda, which we have shared with Dr. Sami for his input. 
The conference will focus on eleven sectors:  Oil/Gas, 
Electricity, Industry (SOEs), Transportation, 
Banking/Finance, Health & Education, Agriculture, Housing, 
Telecommunications, Tourism, and Defense Cooperation.  Over 
the conference's two days, time allowance for speeches is 
limited to the opening session on the first morning and 
closing remarks the final afternoon.  The remainder of the 
 
agenda is broken into smaller sessions for match-making, 
one-on-one meetings, and panel discussions.   We will meet 
with Dr. Sami during the third week of August to discuss this 
in detail; we can expect he will have strong views about the 
conference format and agenda. 
 
¶6.  (SBU) Comment:  The conference will receive a great deal 
of publicity in Iraq; it will be seen as an early sign of 
non-security cooperation and engagement under the SFA.  Our 
hope is that the conference will translate into new U.S. 
investment and other business deals that will benefit both 
Iraq and U.S. firms.  Given the current investment climate 
and Iraq's poor reputation in international business circles, 
this will be a significant challenge.  We will continue to 
work closely with Dr. Sami and NIC staff in the coming weeks 
to make sure the GOI is prepared with necessary materials to 
engage in substantive discussions with potential U.S. 
investors.  We will also work with senior GOI officials and 
parliament to try to focus the GOI on deliverables to 
announce to the U.S. business community during the conference 
-- with ratification of the OPIC agreement and passage of 
amendments to the National Investment Law as the two most 
promising deliverables.  Such deliverables and sound 
investment proposals would help ensure that the conference is 
more than a public relations exercise.  Post recommends that 
the President give the opening speech at the conference.  We 
will likewise need participation from Commerce Secretary 
Locke and other senior administration economic officials. 
Such engagement will send a powerful signal to the GOI and 
Iraqi public that the USG remains committed to supporting 
Iraq.  End comment. 
 
Dialogue on Economic Cooperation 
 
¶7. (SBU) The bilateral Dialogue on Economic Cooperation (DEC) 
has met for several years for a high-level overview of 
economic issues.  The October 19 meetings will be the first 
since February 2008 when the DEC convened in Baghdad.  Not 
only will this be the first DEC with the new U.S. 
Administration, but it will be the first since the SFA and 
Security Agreement took effect this year.  Many of the issues 
that would naturally be covered at the DEC are part of the 
SFA, and one task is to work out the formal linkage between 
the SFA and the DEC.  Advanced planning, particularly with 
respect to the agenda for substantive discussions, level of 
representation, and number of participants, has been 
complicated by the GOI's delay in determining the 
delegation's lead. 
 
¶8. (SBU) Deputy PM Barham Salih, who has led the GOI 
delegation to the DEC in recent years, has said he intends to 
continue with this role, even if he becomes PM of the KRG 
before that time.  This would have the benefit of ensuring 
continuity with past DECs, as well as with the SFA (Salih 
chairs the Economic and Energy JCC, while Deputy PM Rafi 
Issawi chairs the Services JCC which also includes many 
issues that will be raised at the DEC).  However, with DPM 
Salih resident nearly full-time in Erbil, coordination with 
his staff will be difficult, as will be follow-up on DEC 
implementations. 
 
¶9. (SBU) The DEC is important to draw attention to many 
troubling trends in GOI economic policy.  Whereas the 
investment conference will be public and highlight 
opportunities in Iraq, the government-to-government talks are 
the place for a frank discussion on the need for economic 
reform and more coherent economic decision-making.  In 
addition to pressing for progress on pending issues like 
hydrocarbons legislation and World Trade Organization 
Qhydrocarbons legislation and World Trade Organization 
accession, we need to use the high-level dialogue to confront 
the GOI's recent troubling trend of turning back the clock on 
economic policy (e.g., exerting monopoly rights for their 
national airline and weakening competition in the mobile 
phone market) and addressing corruption issues in doing 
business.  We should also use the opportunity for a general 
discussion of future USG engagement in Iraq (e.g., trends in 
assistance levels, as well as specific priorities of the 
Obama administration). 
 
¶10. (SBU) As with the investment conference, the GOI will use 
the DEC to gauge the level of continued USG interest in Iraq. 
 It is important that we have senior-level (Under Secretary 
or above) representation from a range of USG agencies.  In 
addition to the Deputy PM, there are more than a dozen GOI 
ministers or deputy ministers expected to attend.  While the 
delegation is not yet formed, we expect that the Ministers of 
Oil and Finance will attend, as well as ministers 
representing the ministries handling the topics mentioned in 
para 5.  This is an excellent opportunity to reinforce the 
USG message on the importance of business-friendly economic 
 
policies directly to the top tier of Iraqi leadership. 
 
¶11. (SBU) Post will coordinate closely with NEA/I on planning 
the DEC.  We are aware of discussions already launched with 
the Middle East Institute regarding a lunch on October 19. 
We recommend a full day of meetings at the State Department. 
A welcoming speech by Secretary Clinton, touching on her 
vision for the SFA, would be an excellent start.  Ideally, 
Deputy Secretary Steinberg would have a prominent role 
(perhaps speaking at lunch), and the incoming U/S for 
Economic Affairs would head the U.S. delegation. 
HILL