US embassy cable - 03ABUDHABI4508

C O N F I D E N T I A L ABU DHABI 004508 
 
SIPDIS 
 
DEPT FOR NEA/ARP, EB/IFD/ODF 
 
E.O. 12958: 9/28/08 
TAGS: ECON, EFIN, PGOV, IZ, TC 
SUBJECT:  NEW IRAQI ECONOMIC PACKAGE AND DONORS' CONFERENCE 
 
REF:  A) STATE 280324, B) ABU DHABI 4372 
 
1. Classified by Ambassador Marcelle M. Wahba for reasons 
1.5 (b and d). 
 
2. (C) Econchief and econoff discussed Iraqi economic 
reforms and the Madrid donors' conference with Ministry of 
Finance Assistant Undersecretary for Revenue and Budget 
Khalid Al-Bustani (protect).  Al-Bustani said that in his 
personal view, the best thing for Iraq to do would be to 
rebuild its system from the ground up, i.e., privatize 
services such as airports, seaports, and the railroads from 
the beginning and regulate them.  This way the Iraqis would 
avoid recreating an inefficient bureaucracy and "get it 
right" the first time.  (Note: Dubai Ports Authority is 
currently the subcontractor to manage the Iraqi port of Umm 
Qasr.  End Note) 
 
3. (C) Al-Bustani also said that he thought that there was a 
great deal of pent up demand in the UAE for investment 
opportunities in Iraq that would be realized when "the time 
was right."  He noted that UAE businesses were concerned 
about both the security environment and the investment 
climate in Iraq.  In his view, businesses were reluctant to 
invest in Iraq without some sort of guarantee (insurance) 
against wholesale nationalization by a future government. 
He welcomed hearing from Econchief that the new regulations 
resulted from discussions between the CPA and the IGC, 
saying that this helped indicate the view of the Iraqi 
people.  He also welcomed the fact that the CPA published 
the orders on its website as a necessary transparency. 
 
4) (SBU) Al-Bustani also suggested that the U.S., UAE, and 
Iraqis work together to facilitate private investment and 
business opportunities in Iraq by holding business 
development roundtables and, eventually, business tours or 
trade fairs.  He stressed, however, the U.S. would need to 
determine the best time to start these exchanges, in order 
to avoid raising private sector expectations too early. 
 
5) (C) Econchief asked about UAEG plans for the upcoming 
Madrid donors' conference.  Al-Bustani said that the MFA has 
been taking the lead on preparations for the donors' 
conference, but that the Ministry of Finance was well aware 
of the meeting.  He told Econchief that the UAE was 
discussing who would be the head of the UAE delegation and 
speculated that it might be MinState for Finance Khirbash. 
Al-Bustani also noted that the Abu Dhabi Fund for 
Development had been closely involved in all of the UAE's 
reconstruction efforts in Iraq and that it would likely be 
part of the delegation as would he.  Al-Bustani also 
expressed concern about the lukewarm commitments that the EU 
had made.  Although he did not discuss any potential UAE 
commitment, he did note that a stable and economically 
prosperous Iraq was in everyone's best interests. 
 
6. (U) CPA minimize considered. 
 
Wahba