Keep Us Strong WikiLeaks logo

Currently released so far... 51122 / 251,287

Articles

Browse latest releases

Browse by creation date

Browse by origin

A B C D F G H I J K L M N O P Q R S T U V W Y Z

Browse by tag

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Browse by classification

Community resources

courage is contagious

Viewing cable 09BASRAH14, BASRAH INVESTMENT COMMISSION CHALLENGES U.S. TO INVEST IN

If you are new to these pages, please read an introduction on the structure of a cable as well as how to discuss them with others. See also the FAQs

Understanding cables
Every cable message consists of three parts:
  • The top box shows each cables unique reference number, when and by whom it originally was sent, and what its initial classification was.
  • The middle box contains the header information that is associated with the cable. It includes information about the receiver(s) as well as a general subject.
  • The bottom box presents the body of the cable. The opening can contain a more specific subject, references to other cables (browse by origin to find them) or additional comment. This is followed by the main contents of the cable: a summary, a collection of specific topics and a comment section.
To understand the justification used for the classification of each cable, please use this WikiSource article as reference.

Discussing cables
If you find meaningful or important information in a cable, please link directly to its unique reference number. Linking to a specific paragraph in the body of a cable is also possible by copying the appropriate link (to be found at theparagraph symbol). Please mark messages for social networking services like Twitter with the hash tags #cablegate and a hash containing the reference ID e.g. #09BASRAH14.
Reference ID Created Released Classification Origin
09BASRAH14 2009-03-20 15:28 2011-08-24 01:00 UNCLASSIFIED//FOR OFFICIAL USE ONLY REO Basrah
VZCZCXRO5579 
RR RUEHBC 
DE RUEHBC #0014/01 0791528 
ZNR UUUUU ZZH 
R 201528Z MAR 09 
FM REO BASRAH 
TO RUEHC/SECSTATE WASHDC 0839 
INFO RUCPDOC/DEPT OF COMMERCE WASHINGTON DC 
RHMFISS/DEPT OF ENERGY WASHINGTON DC 
RUEATRS/DEPT OF TREASURY WASHINGTON DC 
RUEHAM/AMEMBASSY AMMAN 0004 
RUEHKU/AMEMBASSY KUWAIT 0010 
RUEHGB/AMEMBASSY BAGHDAD 0422 
RUEHDM/AMEMBASSY DAMASCUS 0001 
RUEHLO/AMEMBASSY LONDON 0061 
RUEHAK/AMEMBASSY ANKARA 0002 
RUEHBC/REO BASRAH 0876
UNCLAS SECTION 01 OF 03 BASRAH 000014 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ECON EINV EWWT EPET ETRD IZ IR SY KU JO TU UK
SUBJECT: BASRAH INVESTMENT COMMISSION CHALLENGES U.S. TO INVEST IN 
PROVINCE 
 
REF: A. BAGHDAD 435 
B. BAGHDAD 346 
C. 08 BAGHDAD 91 
D. 08 BASRAH 91 
E. 08 BAGHDAD 2891 
F. 08 BAGHDAD 2851 
G. 08 BASRAH 61 
 
1. (SBU) Summary. Basra Investment Commission (BIC) 
representatives Haider Ali Fadhel and Ihsan Abdul-Jabar Isamaael 
touted Basra Province's investment prospects and progress during 
a March 8 visit to the Basra Regional Embassy Office (REO). 
Haider plugged Basra Province's strategic location, 
infrastructure, and natural and human resources. He reviewed 
past and future BIC-related foreign investment conferences as 
well as proposals that he said have been submitted by investors 
from many parts of the world. He pointed out that the U.S. was 
notably missing from this list, and asked, "What is the U.S 
waiting for?" Haider expressed optimism about the imminent 
transition from a UK to a US-led Basra Provincial Reconstruction 
Team (PRT). Despite the many challenges facing the Province, 
Basra and the BIC appear ever more serious and hungry about 
attracting investment to spur economic development. There has 
been some real progress, as increasingly frequent -- and serious 
-- investor visits to Basra were unthinkable even six months 
ago. End summary. 
 
BIC's Mission 
------------- 
 
2. (U) The Basra Investment Commission (BIC) is the statutory 
Iraqi body charged with promoting investment in Basra (refs B 
and C, and www.investbasrah.com.) Created in July 2008 and 
commencing operations in October 2008, BIC is one of 18 
Provincial Investment Commissions (PIC) begun under the Iraqi 
Investment Law No. 13 of 2006, along with the GOI National 
Investment Commission (NIC). BIC reports to the Basra 
Governorate but also falls under the oversight of the Basra 
Provincial Council. BIC, like other PICs, strives to be a 
one-stop shop for investment promotion, granting investment 
licenses, identifying and securing strategic investment 
opportunities, and implementing provisions of the investment 
law. BIC aims to be the point of contact for all areas of Basra 
investment with the exception of oil, gas, banking, antiquities, 
and insurance (handled by national line ministries), and any 
non-central government project under USD 250 million. 
 
Grand plans for the Province, and mega-port in Al-Faw 
--------------------------------------------- -------- 
 
3. (U) Haider said Basra can be the "focal point of global 
trade," and has all the ingredients for success, given its 
strategic location, and natural and human resources." Having 
just returned from an investment promotion trip to Japan, Haider 
said there was an increasing number of investor visits coming to 
the province and submitting increasingly serious proposals. He 
said that Basra is the "only city in the world that can change 
the map of international economics, and be a transit station for 
global trade." He expressed his vision that someday East-West 
trade currently transiting the Suez Canal could instead go 
through the Persian Gulf and a revitalized Basra, the latter 
with a new multimodal transport hub, and from there, through 
Iraq, Turkey or Syria to the Mediterranean. This new route would 
permit, in his view, a "considerable saving of time and expense, 
and create thousands of badly-needed jobs." 
 
4. (SBU) Haider also eagerly described an oft-discussed goal in 
Basra port circles, a multi-billion dollar "Grand Port" project 
in Al Faw peninsula. Still in early planning stages, such a 
future mega-port (on the Persian Gulf, between Iran and Kuwait, 
and less than 50 miles southeast of Basra city) would be a key 
component of the envisioned multimodal transport hub and play an 
integral role in a future Asia-Europe trade route. (Comment: 
Aside from a hefty price tag and the fact that it is many years 
away, the project's location could be problematic. Given its 
proximity to Iran and that some of the fiercest fighting of the 
1980-88 Iran-Iraq War took place in Al Faw, the insurance risk, 
and therefore additional cost, could be significant. Port 
consultants with whom Emboffs have spoken uniformly agree that 
for the medium term, while not closing the door on a port in 
Al-Faw someday, contend Iraq is better served by focusing its 
energies on improving the capacity of its deep-water port at Umm 
Qasr, 30 miles south of Basra city. End comment.) 
 
Foreign investor interest increasing 
----------------------------------- 
 
5. (SBU) Haider reviewed several BIC-sponsored or BIC-related 
investor conferences (refs B and E), and said that many 
countries have visited and expressed interest in Basra, with 
some already opening civil engineering offices and conducting 
surveys, but did not specify which ones. Basra PRT's investment 
advisor said the number of firms visiting Basra is now roughly 
six per month, compared to about two in the same period six 
months ago. While BIC representatives expressed pleasure at the 
increased interest in Basra, they also said that "we do not want 
domination [of Iraq] by any one nation," meaning Iran, and 
singled out U.S.-based firms as ones they would warmly welcome 
in order to diversify investor origin. 
 
6. (SBU) Haider hailed a December 2008 Istanbul investor 
conference that he said focused mainly on southern Iraq, 
particularly the oil, gas, construction, and housing sectors. He 
said an October 2008 delegation from Dubai World that included 
the senior representatives from Dubai Ports and the Emirates 
Islamic Bank expressed interest in ports (ref C). He expressed 
particular satisfaction with his recent trip to Japan, where he 
said officials and private sector leaders expressed interest in 
oil and gas ventures. He expressed optimism about a 24 February 
high-level visit of several senior HMG officials to Basra, and 
noted a 30 April Iraqi investor forum in London. Haider 
expressed optimism about Royal Dutch Shell's joint venture with 
South Gas Company to develop a natural gas production system to 
end gas flare-offs (ref D), and a joint U.K.-based John 
Moore/Kuwait-based Agility Logistics proposal for a new steel 
mill, and a logistics hub at Umm Qasr port (refs E and F.) 
Haider also expressed optimism about US-based Baker Hughes's bid 
to provide oilfield services. (The REO has also met with 
executives from UK-based Deutschland, who want to develop a 
hotel next to Basra airport.) Strictly protect: REO learned that 
Lord Peter Mandelson, U.K. Secretary of State for Business, will 
be in Basra on or about April 6, to lead an investor forum. 
 
Iranian Housing Project 
----------------------- 
 
7. (SBU) Participants discussed a recently announced, if not yet 
detailed, Government of Iran-sponsored USD 1.5 billion, 
5,000-unit housing project in Basra city. Haider said that the 
project would also include facilities related to healthcare, 
education, business, communication, water, electricity, and 
recreation. He noted a recent Iranian business delegation to 
Basra, which covered a range of investment ideas, including 
banking services (ref A and F). According to Haider, the Iranian 
Consulate receives many inquiries from Iranian investors. He 
noted that these and other efforts are led by former Iranian 
president Rafsanjani, about whom he said: "Don't underestimate 
him; he is a good businessman." 
 
BIC challenges U.S.-based investors to come to Basra 
--------------------------------------------- -------- 
 
8. (SBU) Haider and Ihsan said many other nations are coming to 
Basra - Iran, Turkey, Jordan, Kuwait, UAE, UK, as well as local 
Iraqis - and asked: "What are you [U.S.] waiting for?" They 
stressed the importance that U.S. investment would represent, 
noting that U.S. companies are "distinguished in all areas," and 
any U.S. firm would be a "partner to create stability." 
(Comment: It was clear they thought such a presence could assist 
Basra's reputation as a serious international player. End 
comment.) Ihsan also made a distinction between potential U.S. 
investment in Iraq, which he said would be based on mutual 
economic interests, and Iranian and Kuwait investment, in that 
for the latter cases, their governments support investment for 
"political reasons." 
 
Optimism about PRT transition, but laments "destruction" of 
industrial sector 
--------------------------------------------- -- 
 
9. (SBU) Haider expressed optimism about the imminent transition 
from a UK to a US-led Basra PRT. He said that the UK-led PRT -- 
which has worked with the province extensively since 2003 in the 
areas of investment, development and infrastructure -- "helped 
us a lot." Nevertheless, Haider said that all of UK's efforts 
were "not enough," and more generally lamented the "destruction" 
of Basra's industrial and agricultural sectors" due to years of 
neglect and war. Glancing at the bottled water on the table, he 
said, "we have the two great rivers [Tigris and Euphrates], but 
our bottled water comes from Saudi Arabia and Kuwait." He added 
that "one goes to the Basra market, and little or nothing is 
made in Iraq, only goods from Iran, Syria, Kuwait, and Saudi 
Arabia. There is no [GOI] support for industry, yet we have it 
all here - skills, natural resources, and location." He cited 
the example of what he claimed was a once-strong Basra polymer 
industry (plastics, rubber, adhesives), which "no longer 
exists," and that "these materials are now imported from Iran 
and Saudi Arabia." He said the province also has potential in 
petrochemicals and fertilizers, "but the factories are not 
working." Haider also tallied the decline of the Province's 
agricultural sector: he said that in 2003, there were 7,000 
farms, today only 2,000, and many of these are only partially 
functioning. He said actions to address these problems would 
have a "big impact on unemployment." 
 
Background of BIC Representatives 
--------------------------------- 
 
10. (SBU) According to UK PRT officials, BIC Chairman Haider is 
anxious to promote the culture of economic investment in Basra. 
Relatively young for his position at 35, he holds a Masters 
Degree in Mechanical Engineering from the University of Basra, 
where he currently teaches while pursuing a doctorate in the 
same field. Haider told us he has carried out several 
engineering studies related to electricity generation and tower 
construction, and has supervised projects relating to water, 
roads, and electricity distribution. REO business contacts tell 
us that Haider is close to outgoing Basra Governor Mohammed 
Wa'eli, from the Fadhilah party, and it is therefore unclear 
whether he will retain this position when the new Provincial 
Council and Governor are seated next month. BIC Advisor Ihsan 
Abdul-Jabar is a biochemical engineer, and a Secretary to the 
Governor. He was nominated to his post by the Fadhilah Party, 
the party of the outgoing Governor. 
 
Comment 
------- 
 
11. (SBU) BIC, which only became operational in late October, 
faces the daunting challenge of attracting investors to a 
province that faces huge obstacles to move the economy to the 
level needed to adequately tackle the vast levels of 
unemployment, corruption, poor provision of essential services 
(including education), and a stifling bureaucracy. The BIC is 
also frustrated by what it considers a stifling grip of the 
central government bureaucracy over key economic sectors such as 
hydrocarbons and transport. Basrawi companies also face tough 
regional competition much better attuned to modern global 
business practices, and amidst a world financial crisis. BIC's 
board, which is made up of political appointees, could also 
change significantly with the new provincial government, though 
for the moment Dr. Haider's position seems secure. Nevertheless, 
Basra and the BIC appear serious about attracting investment to 
spur economic development. The increasingly frequent -- and 
serious -- investor visits were unthinkable even six months ago 
due to security concerns. Translating these visits in to actual 
investments will be the measure of true progress. 
 
 
NEGRON