US embassy cable - 05BAGHDAD4838

C O N F I D E N T I A L BAGHDAD 004838 
 
SIPDIS 
 
E.O. 12958: DECL: 11/27/2015 
TAGS: ECON, PGOV, IZ 
SUBJECT: RAMADI'S AGRICULTURAL DEVELOPMENT BANK: SADDAM'S 
SOCIALISM ALIVE AND WELL IN ANBAR 
 
Classified By: Michael J. Adler, Acting Political Counselor 
for reasons 1.4 (b),(d). 
 
1. (C) Summary.  Managers of the Ramadi branch of the 
Agricultural Bank admitted they issued few loans and were 
bureaucratically constrained by parent institution Ministry 
of Finance from more creative means of increasing their 
financing.  Nonetheless, employees bustled about doling out 
slips of stamped and signed papers, with no overt signs of 
cash at hand.  Perhaps a mechanism to revitalize the 
depressed Anbar economy through microfinancing, significant 
reform is necessary to salvage this archaic institution. 
End Summary. 
 
2. (C) On November 27 PolOff accompanied a Civil Affairs 
team for a site survey of the Ramadi branch of the 
Agricultural Bank.  At a small building a short walk from 
the downtown government center, roughly a dozen customers 
crowded in front of a bank of windows in the run-down 
building.  In conversations with the assistant bank 
manager, and later, branch manager, neither appeared 
intimidated by the CF presence.  Both readily responded in 
detail to questions of the bank's activities and customer 
base.  Neither, would however, firmly commit to an 
invitation to join a business development council to advise 
 
Ramadi City Council, citing security as a main impediment. 
3. (C) None of the four 'loan officers'' desks contained 
computers.  When a customer presented a check for cashing, 
the Assistant Manager Abdulhameed Khader reminded his clerk 
to check the paper records to confirm an adequate account 
balance; the branch did not have electricity to consult an 
unseen computer.  Khader noted the branch maintained 12 
employees and seven guards, an additional two employees 
held temporary status.  Khader stated most of the bank's 
loans were for between 10-20 million Iraqi dinar (7,000- 
14,000 USD), and depending on the maturity of the loan 
ranged from 8-14 percent interest.  He identified three 
main categories of loans: agricultural, 'industrial' and 
'trading'.  The Assistant Manager said no one of late had 
applied for loans to purchase agricultural equipment, 
livestock or seed.  He observed (evidently referring to 
prior to the regime's fall), the bank had been a hub of 
activity; he gave no explanation for the decline in 
agricultural borrowers. 
 
4. (C) Upon his arrival, Branch manager Isam Yassam 
Abdullah, politely requested the military officer to 
summarize the purpose of the visit.  Noting the 
Agricultural Bank maintained another branch in Falluja, he 
attributed the dearth of agricultural borrowers to the 
security situation.  He obliquely referred (as did the 
Assistant Manager) to issuance of loans to bank employees, 
noting they made payments via a deduction to their monthly 
salaries.  (Comment.  The references raised suspicions 
whether this practice led to a backdoor 're-lending' 
process.  End Comment.)  Abdullah, contended the 
Agricultural Bank was similar to 'regular' (but also Saddam 
era state-owned) institutions like Rafidan and Rasheed 
banks.  The Ministry of Finance 'owned' the bank, supplied 
its capital and issued mandatory guidance on what category 
of loans his branch was permitted to offer customers.  The 
Branch manager added that the Ministry of Agriculture had a 
signed agreement with the Ministry of Finance to provide 
agricultural loans (for irrigation improvements, livestock 
etc.) at a subsidized interest rate of 7-8 percent.  He did 
not elaborate on why this mechanism was currently unused. 
Atmospherics and Comment 
 
------------------------ 
 
5. (C) Well dressed and courteous, Abdullah looked the part 
of a former regime technocrat against the backdrop of an 
outmoded and decaying institution.  It was not apparent 
where or if the branch stored cash deposits.  Beyond the 
counter was an old walk-in safe, doors ajar and stuffed 
with disorganized and falling paper files.  The customers 
crowding the window at our arrival, slipped away gradually 
and -- interpreting this as a signal -- we cut our visit 
short.  The managers intimidated they had little control 
over lending policies, which were determined at the 
Ministry in Baghdad.  Neither were they apparently forward- 
leaning in stimulating new business opportunities. 
Antiquated and poorly maintained infrastructure plagues the 
province from water plants to electricity grids, the 
agricultural and irrigation networks are mostly likely face 
similar straits.  The question is whether an injection of 
new funds and flexible lending guidelines could infuse this 
institution with sufficient vitality to shed its leaden 
atmosphere of former Soviet Union decrepitud 
SATTERFIELD