VZCZCXRO5001
PP RUEHDE RUEHDH RUEHDIR RUEHIHL RUEHKUK RUEHTRO
DE RUEHBC #0061/01 3251358
ZNY SSSSS ZZH
P 211358Z NOV 09
FM REO BASRAH
TO RUEHC/SECSTATE WASHDC PRIORITY 0943
INFO RUEHGB/AMEMBASSY BAGHDAD PRIORITY 0521
RUCNRAQ/IRAQ COLLECTIVE
RUCNIRA/IRAN COLLECTIVE
RUEHBC/REO BASRAH 0981

S E C R E T SECTION 01 OF 03 BASRAH 000061 
 
SIPDIS 
 
E.O. 12958: DECL:  11/21/2019 
TAGS: PREL PGOV ETRD PTER SOCI KDEM IZ IR
SUBJECT: IRANIAN SOFT POWER IN BASRA: EASY TO SEE; HARD TO GAUGE 
 
REF: A. A) BASRAH 060     B) BASRAH 021 
     ¶B. C) BAGHDAD 366    D) BAGHDAD 2899 
 
BASRAH 00000061  001.2 OF 003 
 
 
CLASSIFIED BY: John Naland, Leader, PRT Basra, Dept of State. 
REASON: 1.4 (c), (d) 
==================== 
Introduction/Summary 
==================== 
 
¶1. (C) In examining the scope and depth of Iran's influence in 
Basra, a nuanced picture emerges. Based on information from 
Basrawi and international contacts, it appears that Iranian 
influence here is both overt and covert, direct and indirect, 
welcome and unwelcome.  The most visible form of Iranian 
influence in Basra is economic.  It takes the form of imported 
Iranian goods, and a growing number of Iranian businesses, whose 
motives are sometimes suspect.  While examples of Iranian soft 
power are not hard to find (tourism, Iran-sponsored education, 
training and medical care), their effects are hard to gauge. 
Iran's efforts to exploit gaps in essential services by 
providing water and electricity have not had their intended 
effect.  Meanwhile, efforts by the Iranian Consul General in 
Basra to improve Iran's image have been undercut by his actions, 
which raised suspicions about him and Iran.  Because of 
lingering resentments, Iran remains a ready scapegoat for a raft 
of local problems.  Despite efforts to re-brand its image, Iran 
still faces a Basrawi population suspicious of its intentions 
and seemingly immune to its attempts wield soft power.  End 
summary. 
 
====================================== 
Economic Influence: Trade and Business 
====================================== 
 
¶2. (C) The most visible form of Iranian influence in Basra is 
economic.  One hundred percent of the cargo traffic at the 
Shalamsha border crossing east of Basra city originates in Iran 
(Ref A).  Iran feeds Basra's demand for industrial and consumer 
goods.  Construction companies routinely source steel rebar, 
cement, bricks, glass, and ceramics from Iran.  Consumers shop 
Iranian too.  Visits to Basra's markets reveal that many of the 
products being sold are manufactured in Iran.  These include 
appliances, household goods, carpets, and food (fruits, 
vegetables, and dairy products).  Local contacts report that 
several years ago, Iranian products constituted the vast 
majority of products for sale.  Now, a rising level of imports 
from Asia and other countries in the region have reduced the 
Iranian share of products in local shops. 
 
¶3. (C) While informal discussions with shoppers in Basra's 
markets indicate a general preference for Asian products 
(especially electronics), there is an appreciation for low-cost 
Iranian produce.  That said, Basrawis are concerned that the 
abundance of Iranian agricultural produce is hurting local Iraqi 
farmers.  Locals also harbor theories that Iran is deliberately 
damming tributaries to the Shaat al-Arab waterway to destroy 
southern Iraq's agriculture sector.  Consumers also grouse that 
Iranian suppliers "dump" packaged food on the market past the 
expiration date.  Nonetheless, demand for Iranian products 
remains high.  Over the past year, two attempted boycotts of 
Iranian goods promoted by a local Sunni politician, Awad 
al-Abdan, formerly head of the southern branch of the Dialogue 
Front, fell flat. 
 
¶4. (S) Iranian businesses operate openly in Basra.  Companies 
like Persian Green arrange Iraqis' travel to Iran for medical 
treatment.  Others, like Karman (Ref B), construct housing. 
U.S. military officials here have received unconfirmed reports 
from local sources that perhaps as many as 21 businesses are 
Iranian front companies, suspected of housing Iranian 
intelligence operations and/or funneling money or lethal aid to 
insurgent operations in Iraq. 
 
¶5. (S) Some local business people see only ill intentions even 
from legitimate Iranian companies.  They suspect that the 
government of Iran is supporting expansion of Iranian business 
in Basra to dominate the Basra economy or sectors of it (e.g., 
construction materials).  They see Iran's expansion of economic 
power as strategic.  They believe Iran is seeking to quickly 
establish a robust presence to minimize investment by other 
foreign investors, especially Europeans and Americans.  For its 
part, Iran is trying to counter such suspicions.  Iranian 
information operations, according to U.S. military reporting, 
are promoting Iranian business influence as a positive 
development for Iraq. 
 
======================================== 
Soft Power: Expanding but How Effective? 
======================================== 
 
¶6. (C) Examples of Iranian soft power are not hard to find; its 
effectiveness is hard to gauge.  Cross-border visits for 
tourism, education, training, and medical treatment are becoming 
more common.  According to officials at the Shalamsha land port, 
 
BASRAH 00000061  002.2 OF 003 
 
 
some 90% of people entering Iraq there are tourists (Ref A). 
Likewise, low transportation costs and simple entry requirements 
make it easy for Iraqis to visit Iran.  A number of Iranian 
companies in Basra specialize in organizing visits to Iran for 
tourism or medical treatment.  A contact at Basra University 
noted that Iran provides educational training to Basrawis (Ref 
C).  Recently, local tribal Sheikh Abu Radh told PRT officials 
that an Iranian delegation had offered to build a medical clinic 
in his area.  The sheikh said he would much prefer the clinic to 
be built by the GOI or the U.S. instead. 
 
¶7. (S) Some of the PRT's sources are skeptical of increased 
contacts with Iranians in whatever form they take.  They are 
particularly suspicious of a growing presence of Iranian 
professionals, especially doctors.  Some of our contacts fear 
that the growing number of Iranian professionals in Basra comes 
at the expense of Iraqi professionals.  A deputy commander of a 
local Iraqi Army brigade, according to U.S. military sources, 
shared his suspicions that Iranian-backed militants were 
targeting Iraqi professionals precisely to create dependence on 
Iranian professionals.  While somewhat far-fetched, such fears 
do point out a deep-seated distrust of Iranian involvement in 
Basra and bring into question its effectiveness. 
 
============================================= ======= 
Other Kinds of Power: Essential Services as Leverage 
============================================= ======= 
 
¶8. (C) The government's failure to provide an adequate level of 
essential services leaves Basrawis frustrated and critical of 
their leaders.  Iran has exploited the situation by trying to 
use water problems (Ref D) to score public opinion points with 
Basrawis.  Recently Iran publicized its delivery a barge of 
water to the hard-hit city of Al-Faw.  According to the Director 
General of Water, impurities in the water made it unusable. 
Basrawis we questioned had heard of the delivery, but not about 
the contamination of the water.  This isolated Iranian effort is 
not sufficient to win over the local population.  Most Basrawis 
blame Iran for the water problem, repeating accurate media 
reports that Iran is damming tributaries that have long fed into 
the Shaat al-Arab waterway.  The drought, Turkey's reduction of 
water flowing into Iraq, and the GOI's poor management of its 
water resources are as much to blame.  But in Basra, it is Iran 
that takes the heat. 
 
¶9. (C) Given Iraq's pressing need for electrical power, Iran's 
ability to export electricity should provide an avenue for 
commerce and influence.  Basrawis are generally aware that Iran 
provides Basra with electricity; the completion of a 
transmission line from Khorramshahr, Iran to Basra province was 
marked with much Iranian-generated fanfare in 2008.  In various 
media interviews, the Iranian Consul General cited the line as 
evidence of Iran's interest in helping Iraq rebuild. 
 
¶10. (C) The project does not appear to have yielded the positive 
response Iran expected.  Without a noticeable improvement in 
service, Basrawis now blame Iran as well as their own government 
for the frequent blackouts.  A source inside the Ministry of 
Electricity confirms that the 200 megawatt line has not 
performed as expected.  Shortly after the line was put into 
operation, it was shut down by Iran for one month with no 
explanation. (Note: Presumably, the reason for the shutdown was 
the significant domestic electricity shortage and resultant 
blackouts that occurred in Iran in 2008. End note.) Since then, 
it has operated well below capacity (averaging 132 megawatts), 
and the supply has been sporadic.  Our source cited one day 
where the flow of electricity was interrupted 11 times. 
Moreover, the different electrical cycles of the Iranian and 
Iraqi currents cause problems in feeding Iran's electricity into 
the Iraqi electrical grid.  But the ministry official predicted 
that the GOI would continue to pay for the electricity until 
better alternatives became available. 
 
======================================== 
The Face of Iran: Consul General Baghban 
======================================== 
 
¶11. (C) The Iranian Consul General, Mohamed Reza Naseer Baghban, 
has been very active in Basra since assuming his duties in 2006. 
 He stated in a July 2008 Newsweek interview that he maintains 
contacts with all the important political parties in Basra, and 
we hear that he is a fixture at local events.  Recently Baghban 
attended a large Iraqi-Turkish investment conference hosted by 
the Turkish prime minister and Basra Governor Shiltagh, where he 
mingled with guests, including the UK Consul General. 
 
¶12. (C) Basra's political elite presumes that Baghban's 
diplomatic title is merely a cover for intelligence activities. 
Some of his actions have only served to reinforce this view.  In 
the summer 2008, the Consul General used his influence with 
certain Basra Provincial Council members to engineer a 
 
BASRAH 00000061  003.2 OF 003 
 
 
no-confidence vote against then-governor Wa'eli, whose Fadillah 
party had staked out an anti-Iranian position.  The vote failed, 
but earned Baghban a rebuke from numerous Provincial Council 
members for interfering in an internal Iraqi matter.  Though 
Baghban recently told the British Consul General that he had 
been credentialed to observe the January 2009 provincial council 
elections, all media reports and our political contacts at the 
time claim he was not.  Whatever the truth, his attempts to 
enter Basra polling stations on election day provoked outrage in 
the local media and drew sharp criticism from local politicians. 
 Nonetheless, Governor Wa'eli and his Fadillah party were routed 
in the provincial elections, suggesting that antipathy toward 
Iran did not trump voter perceptions of the governor's 
short-comings. 
 
======= 
Comment 
======= 
 
¶13. (S) Iran's information operations, which the U.S. military 
reports Iran employs to improve its image in Iraq, are not 
resonating in Basra.  Many Basrawis still harbor resentment 
against Iran, blaming it for casualties inflicted during the 
Iran-Iraq war and for its support of militias during the 
violence prior to the 2008 "Charge of Knights" campaign.  Iran 
remains a ready scapegoat on a raft of other local problems. 
Locals blame Iran's oil facilities for pollution problems in the 
Shaat al-Arab waterway.  Basrawis pin the trouble they have 
selling their goods on Iranian businesses dumping goods into the 
local market.  They fault Iran's damming of tributaries for 
Iraq's water shortage and the decline of Basra's agricultural 
sector.  Perhaps most tellingly, Iran is widely seen as meddling 
in Iraq's political process -- both nationally and locally. 
When pressed, average Basrawis cannot always name specific local 
politicians under Iranian influence, but they state 
categorically that such influence exists.  Individual Basrawis 
may develop favorable views of Iran because of help received or 
positive personal experiences in Iran, and shoppers may welcome 
Iranian goods in the markets.  Overall, however, Iran's efforts 
to re-brand its image appear to have failed thus far.  Iran 
still faces a Basrawi population suspicious of its intentions 
and seemingly immune to its attempts to wield soft power. 
NALAND