Steve Quayle News Alerts

October 24, 2003

MADRID, Spain — Countries around the world continued donating millions of dollars Friday toward efforts to rebuild Iraq and put it on the road to democracy.

Nudged by the United States, donors inched their way up toward the $36 billion the World Bank says Iraq needs over four years on top of the $20 billion the United States has already pledged. Friday is the last day of the two-day conference.

"All of us are here today to make a strategic investment in hope," Secretary of State Colin Powell told delegates from 77 countries. "Now is the time for all of us to be generous with money, with training, with opportunity."

After hearing accounts of Iraq's dire needs, delegations from Austria to Vietnam were coming forward Friday to announce what if anything they will contribute to Iraq's reconstruction.

The current president of Iraq's U.S.-appointed Governing Council, Ayad Allawi, jump-started the pledging session -- which took place almost telethon style -- with promises that his country would not forget those who helped it in its hour of dire need.

Neither would they forget countries who were donating nothing -- notably, France and Germany. Those two leading opponents of the U.S.-led war were holding back to make known their disapproval of the U.S. blueprint for restoring Iraqi sovereignty.

After the $20 billion package now before the U.S. Congress, Japan offered the biggest pledge: $1.5 billion in grants for 2004 and $3.5 billion in loans for 2005-2007, Foreign Minister Yoriko Kawaguchi said.

Italy added $232 million over three years -- in addition to the 3,000 troops it has stationed in Iraq.

In all, the European Union is giving $812 million next year, said Italian Foreign Minister Franco Frattini, whose country holds the EU presidency.

That's less than the $931 million the 15 nation bloc offered to Afghanistan last year, reflecting the absence of France and Germany.

In an interview with European newspapers published Friday, Powell expressed regret that France and Germany weren't pledging new funds, but said it would "not mean it's a disaster" if the event doesn't raise the entire $36 billion.

The first Gulf state to come forward -- United Arab Emirates -- announced a pledge of $215 million but gave no timeframe. Saudi Arabia pledged $1 billion in loans through 2007 and export credits and said it's also willing to consider forgiving some of the $24 billion in Iraqi debt owed to it.

Kuwait pledged $500 million, on top of the $1 billion it's already spent.

International Monetary Fund director Horst Koehler said the fund could lend Iraq as much as $4.25 billion over three years. It would be the IMF's first loan ever to the oil-rich nation.

But Koehler stressed Iraq needs economic stability and reforms, as well as debt relief, to lure private investment and lower a staggering 60 percent unemployment rate.

"These results will not come overnight," he said. "And we know that these reforms will only succeed if there is ownership by the Iraqi people" -- a reference to Washington's continued control of the country.

Prime Minister Jose Maria Aznar of host country Spain said the conference was about much more than building hospitals and schools and providing clean drinking water.

"We want to recover the dignity of a people, the stability of a region," he said.

Much of the conference Thursday was dedicated to reports on what Iraq needs, which is just about everything.

Mouwaffek al-Rabii, a Council member, said more than two-thirds of Iraqis depend on food rations, less than half have access to pure drinking water, 20 percent of children under age 5 are malnourished, maternal mortality has quadrupled and diseases such as malaria are recurring in Iraq.

The IMF has estimated Iraq owes about $120 billion, mainly to European and Gulf countries, plus reparations from the 1991 Gulf War.

In other pledges announced so far, South Korea has agreed to $200 million over four years on top of the $60 million it already committed this year, and Canada $230 million, most of which was already spent. The Philippines promised $1 million and Slovakia committed $290,000.

The World Bank has said it will lend Iraq $3 billion to $5 billion over the coming five years.

Powell said the amount of donations will be the largest ever raised at such an event.

The donors conference on Afghanistan in Tokyo in 2002 raised $4.5 billion, which indicates that Spanish Foreign Minister Ana Palacio's prediction that the conference will raise $5-6 billion in grants was close to the mark. This is in addition to loans promised by World Bank of up to $5 billion.

American officials stressed that the United States would administer all U.S. contributions -- not the new fund set up here to be managed by the World Bank, the United Nations and Iraqis.

The U.N. Development Program said that Iraq should get grants only next year, but this should shift to loans after that so that other needy countries are not deprived of aid.

Director Mark Malloch Brown also endorsed the White House drive to make all of the planned $20 billion package for next year a grant rather than half in loans, as sought by some lawmakers. President Bush says loans will make it look the United States wants to profit from Iraq's misery.

"For the U.S. to convert its generosity to a tied loan would surely risk terrible resentment and opposition in Iraq in today's circumstances," Malloch Brown said.

The Associated Press contributed to this report.

http://www.foxnews.com/story/0,2933,101098,00.html