ABU DHABI, 29 February 2004 — Iraq’s planning minister yesterday asked for $3.9 billion to fund reconstruction projects in the next 12 months and expected creditors to forgive his country some $72 billion in debts.
An official of the US-led occupation authority in Iraq, meanwhile, told the meeting of financial donors’ on Iraq that about $10 billion in funds pledged by the US will go into reconstruction projects in the country by July 1 when sovereignty reverts to Iraqis.
The two-day meeting in Abu Dhabi, capital of the United Arab Emirates, is a followup working session to an Iraq reconstruction conference in Madrid where a total of more than $33 billion was promised in grants and loans, including $18.4 billion already pledged by the US. The Abu Dhabi meeting aims to discuss where the pledges would go and what projects are priority.
Iraqi Planning Minister Mehdi Hafedh proposed yesterday specific projects to rebuild educational, health and government institutions, rehabilitate water and electricity services, and support programs on human rights, the environment and the return of refugees.
The $3.9 billion cost of the projects wouldn’t meet the pressing needs of Iraq but it “would be a sound beginning,” he told the meeting.
“It also represents a set of activities that Iraq realistically has the capacity to implement in a 12-month time frame,” he said.
Hafedh said negotiations with creditors indicate that they are willing to forgive 60 percent of his country’s total $120 billion debt - $72 billion - inherited from the fallen regime of Saddam Hussein.
“There are indications of (this) based on negotiations with respective governments,” he told reporters.
In its recovery efforts, Iraq is appealing for debt forgiveness. Iraq owes the so-called Paris Club of major creditors nations $40 billion, and Arab governments $80 billion.
US officials said they expected to reach agreement on debt forgiveness by year’s end. World Bank President James Wolfensohn said last year that the US and other rich nations would need to forgive two-thirds of Iraq’s debt burden for the country to have a chance at economic recovery.
Addressing the meeting, Admiral David Nash, a director of Iraq Program Management Office, working with the occupation’s Coalition Provisional Authority, said he expected more than half of the $18.4 billion pledged by the US for rebuilding Iraq to be in use by the time the CPA hands over sovereignty to an Iraqi transitional government on June 30. “We expect to have somewhere in the range of $5 billion engaged in various construction sectors by July 1,” he said. Another $5.3 billion will go to non-construction sectors, such as training and services as well as for purchases of equipment, Nash said.
“We are started. We are hoping for a collaboration with others, with all of you (donors). We are committed to helping Iraq, we will be there to continue our program, so that Iraq can fulfill its potential,” Nash said.
Andrew Goledzinowski, the CPA’s director for donor cooperation, said that the impact of both US and non-US funds being committed at the Abu Dhabi conference will be felt on the ground by ordinary Iraqis.
“The employment impact of this will be tremendous,” Goledzinowski told The Associated Press. “The country will start humming, the people will start feeling the impact,” he said. Creating jobs is one of the key goals of the CPA, which estimates that unemployment is now at 28 percent, down from over 50 percent last summer.
Qatar announced yesterday it has committed $10 million, according to its deputy foreign minister, Mohammed Al-Rumeihi. “This is humanitarian aid. You can’t wait for another government that will come along one day,” the Qatari official said.
Britain said before the meeting it will give $122.8 million of previously earmarked reconstruction money for Iraq as part of Britain’s total pledge of $1.03 billion.
