The Report
of the Iraq Inquiry
meant it
would be difficult to increase employment significantly by the end
of the
year, but
donors and the CPA should:
a. maximise
use of local labour, as already stipulated in US
reconstruction
contracts;
DFID would aim to do the same;
b. provide
finance for small business;
c.
fund
employment creation schemes; USAID programmes should
be
targeted at
“higher risk” locations; DFID would consider options for
the
south with
CPA (South) in February;
d.
ensure
pension payments were up to date.
•
Disruption to
the supply of cheap (subsidised) fuel.
•
Electricity
supply. Demand was estimated at 5,700MW and rising rapidly,
supply
at about
4,000MW. It was likely the US would not meet its target of
6,000MW
by June
2004. Outside the South there was little the UK could do to help.
In
the South,
the Essential Services Plan would help to ensure demand was
met.
The
priority should be to implement US-funded programmes and
encourage
Japanese
investment in the power sector, recognising that little would
be
delivered
by the middle of 2004. DFID would consider in February
whether
further UK
investment was needed in the South.
905.
The paper
proposed that, in the run-up to transition, the UK should give
priority
to
improving Iraqi economic policy making, preparing Iraqi ministries
for the decisions
they would
need to make on subsidies and state-owned enterprises, and
determining
the
structure that would succeed the CPA. It warned that the UK should
be prepared for
three or
four months of Iraqi Government inaction after 30 June, which might
produce
rising
levels of discontent.
906.
The paper was
endorsed by the ISG.521
907.
DFID
circulated a first draft of its Interim Country Assistance Plan
(I-CAP) for
Iraq to
members of ISOG for comment on 19 December 2003.522
908.
A “final
draft” was discussed at the 20 January 2004 meeting of ISOG,
before
being
submitted to the 22 January meeting of the AHMGIR.523
At the ISOG
meeting,
an FCO
official expressed concern about the apparent exclusion of Kurdish
areas from
DFID’s
plans.
909.
ISOG agreed
that, on the assumption that the AHMGIR agreed to the
publication
of the
I-CAP, the FCO and the Cabinet Office would “help sanitise the
paper”.
521
Minute Dodd
to Sheinwald, 2 February 2004, ‘Iraq Strategy Group’.
522
Letter
Drummond to Bowen, 19 December 2004, ‘Iraq: DFID Country Assistance
Plan’.
523
Minute Dodd
to Buck, 21 January 2004, ‘Iraq: Senior Officials
Group’.
156