VZCZCXRO0549
OO RUEHBC RUEHDA RUEHDE RUEHIHL RUEHKUK
DE RUEHGB #3325/01 2791640
ZNR UUUUU ZZH
O 061640Z OCT 07
FM AMEMBASSY BAGHDAD
TO RUEHC/SECSTATE WASHDC IMMEDIATE 3725
RUEHGB/AMEMBASSY BAGHDAD 0020
INFO RUCNRAQ/IRAQ COLLECTIVE PRIORITY
UNCLAS SECTION 01 OF 02 BAGHDAD 003325
SIPDIS
SIPDIS
E.O. 12958: N/A
TAGS: ECON IZ PGOV PINR PREL PTER
SUBJECT: ANBAR PRT: ANBAR PROVINCE PUBLIC EXPENDITURES AND
THE PRT TRANSPARENCY TOOL BOX
REF: CLASSIFIED BY: AMBASSADOR RYAN C. CROCKER FOR
REASONS 1.4 (B) AND (D).
1. (U) This is a PRT Anbar reporting cable.
2. (U) Summary. The transition between the FY 2007 and FY
2008 capital expenditure budgets presents the occasion to
take stock on where Anbar Province stands on public
expenditure issues, and on those areas where the PRT is
engaged. The province is admittedly behind the curve on
developing a transparent budget allocation and monitoring
process, but considering that it is emerging from years of a
violent insurgency, the budget process is remarkably
serviceable. The PRT,s transparency tool box has
initiatives in train with regard to project management,
resource allocation, and public outreach (para. 14 below).
End Summary.
Recent Developments
-------------------
3. (U) Anbar Province is in the final stage of spending its
FY 2007 capital expenditure budget and plans are moving
forward on preparing next year,s capital expenditure (capex)
budget, the first in which the province will make a spending
request of the central government, rather than passively
receive a GOI allowance as it had in 2006 and 2007.
4. (U) Anbar Governor Ma,amoun Sami Rasheed signed 28
construction contracts valued at $9 million at a ceremony at
his Ramadi office on October 2, and expects to sign 89
additional contracts in the next few weeks, which would
effectively obligate all of Anbar,s $107 million FY 2007
budgetary allotment.
5. (U) Meanwhile, provincial officials are moving ahead on
two other fronts: spending the $80 million FY 2007
supplemental promised by the GOI on September 6 at the Anbar
Forum in Ramadi, and planning for next year,s capital
budget. On the latter score, Ma,amoun has written to
Finance Minister Jabr, alerting him to expect a request for
225 billion ID ($182 million) for next year,s capital
expenditure budget. If funded, that would be a 70 percent
increase over the 2007 budget.
6. (U) Emerging from years of a violent insurgency, Anbar is
in some respects playing catch up with other provinces in
developing a budget process. However, in other aspects, the
province has a serviceable system, hobbled by flaws, to be
sure, but overall it has a solid foundation for future
reform. The transition between the FY 2007 and FY 2008
budgets presents an opportune occasion to take stock on where
the province stands on fiscal issues and where the PRT can
help.
The Pluses
-----------
7. (U) On the plus side, the Directors General returned to
their jobs last spring as security improved. They had
previously been absent for more than a year due to al-Qaeda
violence. Back on the job, they now play a role in
de-conflicting projects proposed by the municipalities with
central government spending plans. That is particularly
important because central government ministries control
operations and maintenance budgets, whereas provincial
spending is earmarked for capital expenditures only.
Recently, the governor,s office issues a circular to the
municipal-level DGs on the process for submitting project
proposals for the FY 2008 capex budget. The PRT provided
advice.
8. (U) On project management, the Provincial Council has
established a four-committee system of directors general,
with the first committee charged with advertising the
requests for proposals, and the second with reviewing the
bids for compliance with the terms of reference. The
technical committee analyzes the offers and recommends the
winner, with preference given to qualified bidders located in
the locale of the project. The fourth committee, perhaps the
weakest link, is charged with ensuring compliance. The
Governor plays no role until the third committee recommends
the winning bidder. The Governor is also the signatory for
all contracts.
9. (U) Virtually all accounting is done in long hand, but
appears good enough.
The Down Side
-------------
BAGHDAD 00003325 002 OF 002
10. (U) The municipalities are not empowered to spend. The
GOI has not designated cities as "spending units,8 and
consequently they do not have contracting authority.
Municipalities may recommend project proposals to the
provincial government, but project lists as such are not
budgets. The trouble is that while most sources of project
financing come from the federal government, nearly all uses
are at district and sub-district levels. Obviously, the
solution to this problem must be addressed at the national
level among factions seeking greater or lesser degrees of
decentralization.
11. (U) Anbar lacks a long-term vision to guide capital
expenditures. The provincial government has had experience
with capital expenditure budgets for only three annual
budgets (2006-08). This has put the emphasis on short-term,
year-to-year decision making. A longer term view on public
investment, which would engage the municipalities, needs to
be developed.
12. (U) There is a lack of transparency. Anbar lacks
reliable telephone and internet service, and has practically
no media outlets. Thus, information about spending plans and
priorities is passed up and down the Euphrates by word of
mouth.
13. (U) The provincial government has limited ability to hire
and fire civil servants. Funds to hire are controlled by the
various central government ministries, and strictly speaking
the provincial Directors General are central government
employees. They may coordinate their activities with the
provincial government, but they are not directly accountable
to the governor.
The PRT,s Transparency Tool Box
--------------------------------
14. (U) The following are several PRT initiatives aimed at
addressing public expenditure issues.
-- We are developing a computerized project tracking data
base, which would organize capital projects by locale,
infrastructure sector, and other key characteristics. Such a
technique may not be new to other provinces, and Anbar is
admittedly behind the curve.
-- In November, some 100 Anbari notables are expected to
attend a four-day Provincial Development Strategy training
module facilitated by USAID contractor RTI. This exercise
will produce a long-term economic vision statement, and
accordingly would address the capital investment needs of the
cities and towns.
-- We have a public relations initiative aimed at improving
the provincial government,s communication with local
residents. projects that are under construction
would be one way of informing the public of the use of
provincial funds.
-- We are moving forward on an e-government initiative, and
expect to have a prototype web page ready for review by
provincial officials soon.
-- With PRT urging, Gov. Ma,amoun has agreed to convoke a
meeting of the province,s mayors later in October to discuss
procedures for allocating and monitoring the execution of the
FY 2008 capex budget.
-- Finally, the PRT and MNF-West will continue our nine-month
long engagement8 initiative, in which
provincial government officials are flown to Anbar,s
far-flung cities and towns to re-connect with local
officials. Because of Anbar,s large geographic expanse,
such trips will promote communication between key provincial
directors general and their municipal counterparts.
CROCKER