BRUSSELS, 4 September 2003 — International donors opened talks to assess Iraq’s reconstruction needs yesterday, facing a bill likely to run into tens of billions of dollars as violence hampers efforts to restore the country’s vital oil industry.
US officials were meeting with delegates from the European Union, the United Arab Emirates, Japan, the World Bank and the United Nations in Brussels to prepare for a donors conference next month in Madrid.
Diplomats acknowledge receipts from Iraq oil exports, expected to reach around $12 billion next year, will fall well short of the country’s reconstruction needs, forcing international donors to cover the shortfall through the end of 2004.
“We don’t know how much money will be needed,” said Emma Udwin, a spokeswoman for the EU, which was hosting the talks. “It’s too early, people are awaiting to see needs assessments.”
Central to the talks are proposals for a fund, run by the United Nations and the World Bank, to channel aid toward restoring key services — from paying the teachers’ salaries and equipping looted hospitals to re-establishing the banking system and rebuilding roads.
Differences over reconstruction between the US and countries that opposed the war in Iraq have narrowed, with Washington warming to calls for a wider UN role in the rebuilding and France and Germany considering contributing to the international fund.
The World Bank is drawing up an initial assessment of the reconstruction costs which donors will be asked to match at the Madrid conference. The US civilian administrator in Iraq, Paul Bremer, told The Washington Post last week that “several tens of billions” of dollars would be needed.
With its military expenses in Iraq running at $3.9 billion a month, and a federal deficit heading for a record $480 billion next year, Washington faces a pressing need to find partners to cover the costs. Democrats and Republicans alike have been telling US President George W. Bush he must get international help.
Officials stressed that yesterday’s meeting, which was being held behind closed doors, was to prepare for the Oct. 23-24 talks in Madrid and was unlikely to produce any firm decisions on how to foot the bill for Iraq.
Many potential donors insist on international control over any recovery program and open access to reconstruction contracts. Some nations already have announced contributions.
Denmark has allocated $44 million for projects that include a training program for Iraqi police; Thailand is sending 442 soldiers to rebuild roads, buildings and utilities; Turkey has offered to repair hospitals in the northern city of Kirkuk.
But while many see the urgency of investment to stabilize the country, donors are reluctant to commit cash to projects threatened by terrorist strikes.
Potential donors also are looking anxiously at the security situation following the bombing that killed 23 people at UN headquarters in Baghdad Aug. 19 and other attacks on foreign aid organizations.
“Clearly what you can do is affected by the security situation,” the EU’s Udwin said ahead of the talks.
