Telegram 1 dfid to iraqrep iraq reconstruction cabinet discussions on 11 september

MessageFrom: MODEV Thursday, September 11, 2003 11:13:49 AM UND - All Staff FW: INFO: 00 MODEV/IRAQR 1: IRAQ RECONSTRUCTION: CABINET DISCUSSION on 11 SEPTEMBER Auto forwarded by a Rule wift incoming Telegrams (Machine 1 hursday, September 11, 2003 11:13:49 AM Subject: INFO: 00 MODEV/IRAQR 1: IRAQ RECONSTRUCTION: CABINET DISCUSSION on 11 SEPTEMBER Auto forwarded by a Rule ZCZC MDDPAN 0061 OELNAN 1995 CONFIDENTIAL 00 FCOLN FM MODEV TO IRAQR 110957Z SEP GRS 1305 CONFIDENTIAL FM DFID LONDON TO IMMEDIATE IRAQ REP TELNO 1 OF 110957Z SEP 03 AND TO IMMEDIATE BASRA, FCO LONDON For Jeremy Greenstock (Baghdad) and Hilary Synott (Basra) from Departmement for International Development, London QUOTE ... From the Secretary of State The Rt Hon Tony Blair MP Prime Minister 1223 DECLASSIFIED social transition required in Iraq is enormous. 2. We should not lose sight of what we have helped achieve over the past five months, including the restoration of the public distribution system, containment of a cholera outbreak in the south, restarting of child vaccination campaigns, some significant improvements to regional electricity supply (though not enough), re-employment of 38,000 police, establishment of the Governing Council and Constitutional Committee, and appointment of Interim Ministers. But our overali approach has been predicated on CPA delivering more than it has, and we have had negligible influence on them, or the Pentagon, to try and turn it round. Immediate measures are now needed to maintain the Iraqi population's consent. Immediate Operational Priorities and DFID action in hand 3.We have started the emergency infrastructure project in the South. This will help improve electricity, water and fuel supply. But it will not solve the underlying problems of Irag's infrastructure needs: that will require billions of dollars and an Iraqi Government to determine policy. Systemic problems with CPA (US) procedures have continued to hold up the approval and handing over of promised CPA resources for the South. If CPA HQ and US Government fail to get its act together quickly, then we can only plug the gap if my reserve claim (now with Paul Boateng) is approved. We have now committed #200 million: more than three times what we spent in Afghanistan after 11 September, and approaching our annual spend in India (population 1 billion and very much poorer). 4.We continue to support humanitarian activities through UN agencies, the ICRC and NGOs: they have the delivery expertise and they have achieved a great deal, for which we should rightly take some of the credit. We have offered additional support for security measures, and remain committed to doing all we can to make sure the UN in particular returns as close as possible to its pre-19 August capability quickly: this will be important for the Madrid Donors' conference and is crucial for service delivery. Objectives for the Madrid Donors Conference 5.We want the Iraqis to be in the driving seat: Minister of Finance at the top table, and Iraqis leading on presentation of the draft 2004 Budget. We need the international community to endorse an Iraqi timetable and process for the political transition. This in turn will require the Coalition to give up some control to the Governing Council. We need to get the Americans planning for an exit strategy now. Jeremy Greenstock has suggested working towards 2 DECLASSIFIED the margins of the General Assembly in New York, while Suma will have similar contacts in the World Bank/IMF Annual Meetings in Dubai. Medium term agenda 8. While immediate measures are put in place and efforts to improve CPA effectiveness continue, we have begun thinking about the next stage in deploying our technical expertise to support Iraq's development in the medium-term, as part of what needs to be an international effort. Clearly this will need to build on HMG's efforts so far through the CPA, UN agencies and NGOs, and the UK 9. The priorities are self-evident: robust macro-economic policy planning and budget management; reform of the public service; encouragement of civil society; and facilitation of private investment. So are the key challenges: transforming a bureaucracy used to rule by diktat; replacing the high dependence on food me on breaucracy rations with a needs-based social safety net; and building accountable security institutions. 10.As a first step, we need to engage now with the Iraqi Interim Ministers and look to provide direct support to them and to the Governing Council - bilaterally or through the UN - in order to help establish their executive credentials. Specific activities will be informed by the sectoral assessments now being completed by the World Bank, IMF and UN agencies, and will have a multi-year timescale. It is important that UK short-term actions (on the Civil Defence Corps, police training, media) are designed with a view to developing systems that will enable the Iraqis to take charge as soon as possible -- and with running costs included in the budget. 11. But we should not mislead ourselves about how much we can hope to achieve bilaterally. Despite all our efforts, the UK's influence on CPA economic and development policy making has so far been very limited. Whatever resources we bring to bear, they are going to be a fraction of what will be needed. And there is bound to be some resistance on the part of the Iraqis to one of the Occupying Powers offering advice on how to structure the government machine. Resource implications for 2004 and beyond 12.We need to see the detailed assumptions of the draft budget, and the findings of the needs assessment. The numbers presently being talked about ($15-20 billion) beg lots of questions. But it is clear that there will be a large external financing need for Iraq 3 DECLASSIFIED 13 MAIN IRAQ/KUWAIT 13 IRAQ POLICY UNIT 0 0 CONSULAR D 0 PROTOCOL D//PALACE 0 PS MR RAMMELL 0 ADDITIONAL 1 IRAQ/KUWAIT 0 (IRA) 1 ATT GEN//C ADAMS 0 BANKE 0 BT12 0 CAOFF1 0 CAOFF2 0 DFID1 0 DFID2 0 ECGD FSA 0 HMT 0 MOD NO 10 [GV Lane ] OELNAN 1995 NNNN DECLASSIFIED