A donors’ conference to help war-ravaged Iraq opened on Thursday in Madrid amid high hopes of important financial pledges, but United Nations Secretary General Kofi Annan made clear that such contributions would not amount to a wholesale endorsement of United States policies in Iraq.
European External Affairs Commissioner Chris Patten said donors other than the US could pledge $9-billion at the conference, which brought experts from 74 countries and more than 20 international organisations to the Spanish capital.
The conference was scheduled to culminate in a ministerial meeting, which will announce financial pledges on Friday.
The conference was regarded as the first real test whether the international community is behind the American effort to stabilise Iraq after a war that many countries opposed.
Patten said donors such as Japan, European countries and the World Bank could meet the target of $9-billion set by the World Bank for the reconstruction of Iraq next year.
With the US expected to contribute $20-billion, the conference could yield about $30-billion, more than half of the estimated need of $55-billion through 2007.
Annan downplayed excessive expectations, stressing that the reconstruction of Iraq was a ”long- term challenge”, which will ”require our attention and engagement for many years”.
Spanish Foreign Minister Ana Palacio also said that the Madrid conference was only ”the start of a process”.
Many countries would ”reflect what they are able to contribute, or maybe they are just there to provide presence and solidarity”, US Secretary of State Colin Powell was quoted as saying during the flight to Madrid.
In his opening speech, Annan called on donors to contribute generously towards Iraq’s ”monumental needs” after the ”terrible era” of Saddam Hussein’s dictatorship, but also made clear that such pledges would not amount to a blanket approval of US policy.
Annan implicitly criticised the US-led occupiers on several fronts, stressing the importance of security and the need for Iraqis to set their own priorities and manage their activities.
”Changes in Iraq’s legal norms and economic and fiscal framework must have legitimacy, especially since such changes will affect future generations,” Annan added.
He was seen as referring to the rapid liberalisation of the Iraqi economy, which has prompted criticism that the US was turning the country into a ”banana republic” for its companies.
A new money pledge meanwhile came from Belgium, where Development Minister Marc Verwilghen said Brussels would channel €4-million to €5-million to Iraq through the UN.
In the Philippines, Cabinet sources said the cash-strapped government would announce a contribution of $1-million in
Madrid.
Japan has pledged $1,5-billion, Britain $840-million, Spain $300-million, Canada $260-million, South Korea $200-million, Denmark $100-million and India $40-million.
The European Parliament voted in favour of a European Commission proposal to pledge $230-million. Patten said the total European Union contribution in 2003-04 could amount to $1,4-billion including reconstruction and humanitarian aid from the EU budget and member countries.
The World Bank is considering loans of up to $5-billion, while the International Monetary Fund will lend $40-million.
The conference was preceded by heavy lobbying by the US, which wants other countries to join the financial and military effort amid a rising American death toll and lawmakers’ reluctance to spend unexpectedly large sums on rebuilding Iraq at a time of record deficits at home.
On the eve of the conference, US President George Bush threatened to face down a rebellious Congress that wants half of the US contribution to be converted into loans rather than grants.
Many governments see funding as Washington’s responsibility after it overrode their objections to launch the war and shut the UN out of post-war administration.
The recently approved UN resolution backing reconstruction has helped Washington press its case, but countries such as France, Germany and Russia remain uneasy over the refusal of the US to cede significant military and political control.
France and Germany declined to make new financial contributions and did not send Cabinet-level ministers to the meeting.
Donors are also concerned about volatile security in Iraq, and some are reluctant to make loans to Iraq before decisions are made on the $130-billion in outstanding debt it owes to other countries.
According to US government data, Iraq sits atop the world’s second-largest oil resources after Saudi Arabia, but the country’s oil rigs are in need of urgent repair. The Iraqi budget assumes an oil income of $12-billion in 2004, but it may not reach that figure.
After three wars and more than a decade of UN sanctions, the economy is in shambles, with the average income at just $450 to $610 in 2003 and more than half of the population dependent on government food aid.
”We have inherited a totally ruined country,” said Mowaffak Al-Rubaie of Iraq’s US-appointed Iraqi Governing Council. ”We are not starting from zero, but below zero.”
Al-Rubaie said more than half of the population did not have regular access to drinking water.
”Eradicated diseases such as malaria have also resurfaced,” he explained.
Many donors are concerned about control over their aid money, and the conference will set up a multilateral reconstruction fund, managed by the World Bank and UN separately from the US-controlled Development Fund for Iraq.
Patten said the US would not channel its contribution through the new fund, but most other countries would.
Washington is expected to continue using the Development Fund, which has been criticised as opaque. Critics also claim that the Development Fund earmarks most lucrative contracts for US companies.
The British-based charity Christian Aid said $4-billion transferred to Iraq’s US-led administration had gone missing, a situation it described as ”little short of scandalous”.
After conducting a study of the financial affairs of the Coalition Provisional Authority, Christian Aid said only a fifth of at least $5-billion handed over to the authority remained accounted for.
Christian Aid said lack of transparency would increase suspicion that US firms were receiving the money in reconstruction projects.
About 5 000 police were mobilised to protect ministers or officials from more than 70 countries, more than 20 international organisations and 13 non-governmental organisations.
Separate from the conference, about 300 representatives of companies and business associations met with Iraqi officials to discuss investment opportunities. — Sapa-DPA