Highlights: Iraqi PM sees no investor risk from impasse

BAGHDAD (Reuters) - Iraqi Prime Minister Nuri al-Maliki said in an interview with Reuters he was still determined to serve a second term despite an impasse with his allies in talks to form a coalition government.

Following are excerpts of the interview.

INVESTMENT RISK DUE TO IMPASSE?

Q - How long will the government delay take to impact investor confidence in Iraq?

A - "First, why is there a feeling of risk for investors? We have many investment projects ongoing and 50 global electricity companies came and presented offers to build up an electricity sector."

"We don't have any problem. Investments were not affected and will not be affected."

GOVERNMENT FORMATION

Q - Is there any chance that you may step down and allow another person to continue your projects?

A - "They are saying there is a broad objection to Maliki. But I know that there will be greater objections to (other) candidates."

Q: Are you part of the problem in forming a new cabinet?

A: "Yes, I am part of problem but I didn't create the problem. I want to solve the problem. I want to continue to find a solution. I have a big bloc which was formed free of any foreign or domestic wish (influence)."

"There is a serious and strong dialogue with the Kurdish Alliance, with Iraqiya, and also a serious talk with the Tawafuq."

"Yes, we stopped talks with the Iraqi National Coalition (INA) but we don't want to terminate them forever. We don't want to exclude them from the coalition formation. They should come and take their share if we form the government."

"Everyone wants to hold the other party responsible for the crisis."

ECONOMY

Q: Is the delay in forming a government in Iraq affecting the economy? Contracts with foreign firms?

A: "There is a clear path in front of us. There are no troubles regarding the economy, administrative issues, diplomatic affairs or how to act with budget issues."

"There are some issues relating to appointments. But they are not essential. We cannot appoint advisors, assistant ministers, a minister, a general or head of security services but we have a head of security and an army commander. They work normally. Yes, it would be better if we had a government and parliament."

"Any issue regarding parliament we cannot do. If we need extra budget for any projects, power or other services, any extra budget, we must get it from parliament."

"It would be better if the government and parliament had been formed ... but the friction is not to an extent, like some citizens think, that the government has ended, is paralyzed or ineffectual, does not exist at all."

SECURITY

Q: Is the delay in forming a government affecting security?

A: The security situation has not worsened. The attacks like the ones against soldiers and policemen show our success in ending the efforts of al Qaeda and Baathists. The attacks, which were not big, show that they want to prove they are still there."

"The security situation is stable. I don't say there are no attacks, there are. But there is no deterioration. Rather there is progress."

"They (attackers) want to reveal through some attacks that they are happening because a governmental vacuum exists. But in fact, it is not like that."

Q: What are the risks if there is no strong prime minister for the state of economy, security and relations to neighbors?

A: "I am convinced if there is a weak prime minister, someone who does not have the support of the majority of the political leadership and political blocs, the risks will be big for the unity of Iraq, for security. The militias will return, al Qaeda will come back, there will be conflicts."

"We need a man who knows the truth about the challenges, be it about diplomatic relations, foreign, domestic issues or relating to the unity of Iraq."

"The threats are there. If there is no better progress in the performance of the security forces, political and administrative issues, we will go back to zero."

U.S. WITHDRAWAL

Q: Is Iraq ready for the U.S. troop pullout?

A: "Our security forces have greatly improved. They control the security situation now, not the U.S. forces. We are 100 percent in charge and controlling the situation. Has the security situation collapsed since June 2009 (U.S. troop pullout from cities) as they expect? On the contrary. There has been great progress. This means that now we have qualified forces and they are trained properly."

"Yes there are shortcomings too, and we are taking this into consideration. Within the coming time, our Navy forces will be set up. God willing, before the end of 2011 our Navy fleet will be completed. The same goes for the Air Force. The process of arming our forces is continuing according to our needs. It needs time."

Q: Will the next PM ask U.S. troops to stay longer?

A: The U.S. cannot keep bases (in Iraq) unless parliament decides they will stay, the locations, numbers, the formation. The prime minister cannot decide on this. It is not his authority to decide that. He can make a proposal and parliament will decide on this.

"I don't want to talk about this. It's too early. We still have a year and 4 or 5 months. God willing the situation will change and the next prime minister will not have to make such a proposal."

(Reporting by Baghdad newsroom; Editing by Philippa Fletcher)