World Bank, Washington 11.10.2003 — The United Nations and the World Bank have provided the first official estimates of the size of the reconstruction task in Iraq, ahead of a major meeting of donor nations, the BBC reports.
The World Bank says that over the next three years, $35.6bn is needed to rebuild Iraq’s infrastructure in 14 key areas, including
telecommunications, electricity, and water supply. It also reports that, according to the Coalition Provisional Authority (CPA), an additional $19.4bn investment is needed in other critical sectors, notably investment in the oil industry and improvements in security. „You need to read the two together, total together amounting to about $55bn,“ said Christian Portman, the World Bank’s vice-president for the Middle East.
The World Bank says that „Iraq’s overall reconstruction needs are vast and are the result of nearly 20 years of neglect and degradation of the country’s infrastructure, environment and social services“. It says that $7bn is needed for health and education, $24bn for transport, water, and electricity infrastructure, and $3bn for agriculture.
Reuters meanwhile reports that turning Iraq’s economy around will take longer than the four years recently estimated because the country is so unsafe, a World Bank and United Nations report said on Thursday. And without security, progress to improve health, education, electricity and clean water may be too slow convince Iraqis of the benefits of an open and democratic society, the two institutions warned.
In their final assessment of the cost of rebuilding Iraq’s economy, the bank and UN have estimated it will take $36 billion over four years to get the war-torn economy up and running again. The report, which fleshes out a brief summary issued last week containing those numbers, said this assumed Iraq would be safe for staff and consultants to go about rebuilding the country. „When work on the assessment commenced, a main underlying assumption was that there would be a stable security environment,“ said the report, released by the World Bank. „This clearly is not the case at the time this Needs Assessment is being finalized.“
The Financial Times reports that elements of US spending plans for Iraq are over-ambitious and could be disrupted by the unstable security situation, according to the United Nations and World Bank report. The report covers 14 sectors, providing estimates for water and power that are less than half the amount the Bush administration is seeking from Congress.
The discrepancy between the figure sought by the administration and the lower estimates of the UN-World Bank report was explained by Republicans on Capitol Hill who said President George W. Bush was seeking funding for more than a year, to prevent going back to Congress for more just before the presidential election in November 2004.
Agence France Presse adds that the report also stresses the critical role Iraq’s oil resources will play in rebuilding Iraq’s economy and restoring per capita income, which dropped from more than $3,600 in the early 1980s to less than $1,000 by 2001. A draft budget for 2004 assumes $12 billion in oil revenues will be available to help meet Iraq’s needs, and the report says government revenues are expected to play an increasing role in rebuilding as the country’s economy stabilizes.
Meanwhile, the Washington Post reports that President Bush stared down a US House Republican bid to convert some of his proposed Iraqi
reconstruction aid into loans yesterday, as the House Appropriations Committee easily approved an $86.7 billion bill to finance military and rebuilding efforts in Iraq and Afghanistan. The House bill trims Bush’s Iraq rebuilding request by $1.7 billion, removing items that had become politically embarrassing to Republicans, such as programs to establish Zip codes revamp Iraqi radio and television business operations, buy $50,000 garbage trucks and build a maternity hospital.
Committee Republicans beat back a Democratic effort to radically revamp the president’s emergency spending plan. Rep. David R. Obey (D-Wis.) proposed slashing the rebuilding fund to $14 billion, half of which would be made a loan administered by the World Bank and contingent on matching funds from U.S. allies. The savings would have been plowed into the military part of the bill. The package’s cost would have been financed by raising the top income tax bracket back to the pre-Bush level.
Kyodo notes that Japan is likely to provide $2 billion in grants for rebuilding Iraq in 2004, the first year of a four-year period during which it is considering contributing a maximum of $5 billion in total, Japanese government sources said Thursday.
In other news, the Associated Press reports that Spain, due to host an Iraqi reconstruction conference that has failed to draw outspoken public support, denied Thursday that a postponement was under consideration.
AFP notes also notes that the US said Thursday it expects an international donors conference for Iraqi reconstruction to go ahead as planned this month in Madrid, despite suggestions it should be postponed. The White House and State Department both said they were unaware of any plan to delay the October 23-24 meeting until after the adoption of a now uncertain UN resolution on Iraq.
Handelsblatt (Germany) notes that Russian President Vladimir Putin said Thursday he wanted a new UN resolution on Iraq adopted before the Madrid conference is called to discuss financial aid for the war-ravaged country. „Iraq needs a lot of money. But funds can only flow once the political framework is stable,“ he said, stressing the need for a transfer of power in Iraq to the UN.
In other news, Reuters reports that nearly five months after the UN Security Council ordered an independent board to monitor American spending of Iraq’s oil revenues, the US on Thursday reported progress in talks aimed at setting it up. John Negroponte, the US ambassador to the United Nations, said recent talks between Iraq’s US administration and three international agencies had resolved all but „two or three issues“ about how the oil money watchdog should operate.
Neue Zürcher Zeitung (Switzerland) reports that Iraqi bank notes will be exchanged in mid-October, though this was a pure cosmetic process and not a monetary reform. The Iraqi central bank announced in early October that the new bank notes would not bear Saddam Hussein’s portrait anymore. The bank hopes to complete the exchange process by January 15, 2004. The new notes‘ paper will be of higher quality and will be more difficult to counterfeit. The bank also says the new dinar will be convertible according to prevalent exchange rates-in the past few months, one US dollar would fetch about 1050 old dinars.
In a related story, The Washington Post reports that the shipment of funds to Iraq since April constitutes the largest physical movement of US currency abroad.
The Independent (UK) reports that six months on, Iraq has 300 petrol outlets for Iraq’s 25 million people. Officially cheap and available but most rely on the black market. Three out of five Iraqis depend on food aid. Safe drinking water is now available to 60 percent of the population, compared with 85 percent before the war. The US says 7,000 schools needed repair before the war. So far, 175 have been repaired. The number of newspapers and magazines being published since Saddam’s fall is 189. This compares with 39 under Saddam, all of which were tightly controlled and censored.
In another story, The Independent reports that a project has begun to reverse one of the greatest humanitarian and ecological disasters of recent times, the draining of the wetlands that were home to Iraq’s 250,000 Marsh Arabs. Saddam Hussein drained the wetlands after the Marsh Arabs, whose world of reed houses, water buffalo and canoes captivated the writer Sir Wilfred Thesiger, supported the Shia revolt in the early Nineties. Some experts believe it may not be possible to recreate a way of life which had existed for 5,000 years in the largest wetlands in the Middle East.
The New York Times writes in an editorial that prolonging unilateral American rule [in Iraq] serves no obvious security purpose and guarantees that the US will remain the primary target of postwar Iraqi resentments. Washington should be listening more attentively to proposals that promise to open the door to substantial international help. President Bush has repeatedly said that American forces came to Iraq as liberators, not occupiers. He should follow through on the logic of those words and begin arrangements for transferring power to an interim Iraqi government.