BAGHDAD, 18 August 2003 — Iraq will need billions of dollars from donors to finance reconstruction and prevent a budget crisis next year, the head of a new body charged with coordinating international rebuilding efforts said yesterday.
Marek Belka, a former deputy prime minister of Poland, said revenue from oil exports would not meet general government costs, let alone reconstruction needs, and that pledges from international donors would have to serve as a lifeline.
“The reconstruction demands of Iraq are immense, far larger than can be covered by revenue from oil exports, so the financing gap is huge,” Belka told delegates at the first meeting of Iraq’s Council for International Coordination (CIC). The United States says it hopes to get output up to two million barrels per day, worth $12-14 billion a year, by the end of 2003, near to pre-war levels. But current output is only around an eighth of that, with infrastructure problems and continuing sabotage making prospects of a rapid increase less and less likely. Sabotage has also dogged attempts by the US-led administration to restore basic services.
Around 50 countries are due to meet in Madrid on Oct. 23-24 to discuss reconstruction efforts in Iraq. Belka said he expected many to step forward with pledges of support or actual donations ahead of the conference. The CIC, which currently has 13 members — those in the “coalition of the willing” as well as a United Nations representative — is charged with drumming up international donor funds and coordinating their distribution.
Belka said conservative estimates suggested Iraq would generate about $12 billion from oil exports next year — virtually the country’s only form of revenue — while the budget requirement would be several billion more. “Most reconstruction needs will have to be financed from outside, from donors and the US Congress,” he said. Paul Bremer, the US governor of Iraq, said the CIC would have to work closely with Iraq’s Governing Council, which is drawing up next year’s budget. “The CIC will need to take account of those budget forecasts when it sits down at the donor conference in Madrid in October,” Bremer said.
