Sat, Oct 25, 2003 - Page 7 News List

Madrid pledges top US$15 billion for rebuilding Iraq


Donors other than the US were expected to stump up a minimum of US$15 billion for the reconstruction of war-ravaged Iraq at a Madrid conference of 75 donor countries and more than 20 international organizations yesterday.

Analysts said the sum left a shortfall in Iraq's needs, but was more than had initially been expected.

The contribution includes pledges by individual countries, the World Bank and the International Monetary Fund (IMF).

With an additional contribution of US$20.3 billion from the US, the conference was expected to garner more than half of Iraq's estimated e first real test of international backing for the American effort in stabilizing Iraq.

Kuwait and Saudi Arabia announced pledges of US$ 1 billion each. Iran said it would contribute US$300 million, partly in the form of commercial credits.

Riyadh said it would channel half of its contribution through a Saudi Development Fund for purposes such as health and education, while the other half would be used for guaranteeing Saudi exports to Iraq.

Japan pledged US$5 billion, making it the second biggest contributor after the US.

The IMF said its total assistance could range from US$2.5 billion to US$4.25 billion over three years, substantially more than it had been expected to lend.

The World Bank confirmed an earlier pledge of US$3 to US$5 billion in loans.

Donations were seen as reflecting the international divisions over the Iraq war, with pro-war countries such as Japan, Britain and Spain among the most generous nations.

War opponents France and Germany did not give any new money. French Junior Foreign Trade Minister Francois Loos reiterated criticism that the recent UN resolution on Iraq did not go far enough in ensuring a rapid transfer of sovereignty from the U.S.-led occupiers to Iraqis.

Companies investing in Iraq needed to deal with independent Iraqi authorities, Loos argued.

The EU confirmed a modest pledge of US$230 million. External Affairs Commissioner Chris Patten emphasized the need for a "realistic" timetable for a handover of power to Iraqis.

US Secretary of State Colin Powell said the conference would draw a larger sum than any previous such gathering.

"The republic of fear is over" in Iraq, Powell said, urging the international community to "get started now" to rescue Iraq from the "colossal wreckage" left by Saddam Hussein's dictatorship.

The US pledge of US$20.3 billion is pending final approval by Congress which wants to make half of it a loan. It will be channelled separately from the multilateral Reconstruction Fund, which was to be set up at the Madrid conference.

World Bank, IMF and U.S. representatives stressed the need to relieve Iraq's debt burden of US$120 billion. World Bank president James Wolfensohn said talks were underway with the Paris Club of donors about restructuring the debt.

"Absent substantial debt relief, the country has no prospect of restoring its creditworthiness and of regaining access to private capital to finance future growth," said IMF Managing Director Horst Koehler.

Speakers stressed the importance of international help in creating a free, peaceful and prosperous Iraq and in restoring it to regional leadership.

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