Global financial leaders papered over differences on rebuilding Iraq at their weekend meetings and pledged to attack sluggish economic growth rates in their countries and poverty worldwide.
The agreement to support a new UN Security Council resolution to rebuild Iraq came after the United States dropped its insistence that no such prerequisite was needed to initiate International Monetary Fund and the World Bank action.
In turn, the Americans won approval to begin talks on reducing Iraq’s massive foreign debt burden, estimated at between $60-billion and $100-billion.
Resolving Iraq differences allowed the finance ministers and central bank governors to turn their attention to what World Bank President James Wolfensohn has called the other war, alleviating poverty in developing countries.
Wolfensohn and South African Finance Minister Trevor Manuel were to preside on Sunday over a meeting of the bank’s policy-setting development committee. On the table were debt relief for poor countries, combatting HIV/Aids and increasing African representation on the executive boards of the IMF and World Bank.
The meeting will discuss a bank report that says global poverty still can be halved by 2015 if rich countries lower trade barriers and increase foreign aid and poor countries invest more in health and education.
The report warns, however, that while economic conditions will improve for many countries, the number of Africans who live in poverty will increase in from 315-million in 1999 to 404-million in 2115. It said poverty also is on the rise in the Middle East.
The IMF’s policy-making panel, chaired by British Chancellor of the Exchequer Gordon Brown, had already addressed industrial nations’ sluggish economies. ”We must remain vigilant with each of us asking what contributions we can make to achieve greater stability and growth,” he said.
Much of Iraq’s debt is owed to France, Germany and Russia, which opposed the US-led invasion of Iraq and want the United Nations closely involved in postwar Iraq.
Brown said the new UN resolution on Iraq would deal with such issues as lifting the existing UN sanctions and unfreezing the country’s assets.
”We are all agreed on the need for a further Security Council resolution,” Brown said.
US Treasury Secretary John Snow had said earlier week the demand for the resolution ”baffled” him, but on Saturday he described the discussions as ”excellent.”
He told reporters that as soon as it was safe to tour the country, the IMF and the World Bank would determine critical needs and start the flow of billions of dollars in loans. Officials have said the first assistance would focus on food, medical needs, water and sanitation and getting children back to school.
IMF Managing Director Horst Koehler said the IMF and the World Bank have substantial experience in assessing needs in post-conflict countries, including Afghanistan, Bosnia and East Timor.
Iraq’s needs are expected to be massive, ranging from $20-billion per year for the first several years to $600-billion over a decade.
President George Bush’s administration, anxious about the rising American costs of war and reconstruction, has promised Congress to involve other wealthy countries and international financial organisations in reconstruction.
”The UN has a vital role to play in the reconstruction of Iraq,” the White House said in a statement issued on Saturday. ”We will be talking to Security Council members, friends and allies about that role.”
Russian President Vladimir Putin, French President Jacques Chirac and German Chancellor Gerhard Schroeder, wrapping up two days of talks in St. Petersburg, made it clear on Saturday they believe the United Nations should have the key role in rebuilding Iraq. – Sapa-AP