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US Confident of Donor Nations' Generosity for Iraq Reconstruction - 2003-10-23


Senior U.S. officials say they're confident donor nations gathered in Madrid will heed the call by U.N. Secretary-General Kofi Annan for generous contributions for post-war Iraq reconstruction. But they're making no forecasts on what the pledge total will be when the two-day conference ends Friday.

Bush administration officials have refused to be pinned down by reporters about their expectations for the Madrid conference in terms of total pledges. But they insist that informal soundings of other delegations, including previously uncommitted European and Gulf states, indicate that contributions to be announced Friday will exceed the expectations of many analysts.

The U.S. administrator for Iraq, Paul Bremer, told reporters here the process received a major boost last week with the unanimous approval by the U.N. Security Council of a resolution calling on members to step up contributions to Iraqi reconstruction and peacekeeping.

He said the Madrid meeting had attracted delegations from 70 countries, more than any previous meeting of its kind. And he said the U.N. resolution, coupled with the pending approval of $20 billion in Iraqi aid by the U.S. Congress have put a "lot of momentum" behind the rebuilding effort.

"Having more countries than any conference before shows a very broad support by the international community for the reconstruction of Iraq, and an engagement by many, many countries in that process," he said. "It's too early to know what the donations will be. We'll find that out in 24 hours. We can all ring down the curtain on the conference and see what it is.

"But I think we're already seeing on the part of Japan and the World Bank and so forth some substantial agreements for donations," continued Mr. Bremer. "So as I say, I'm very confident."

Though it is not on the agenda at the conference here, Mr. Bremer put heavy emphasis on the need to restructure Iraq's foreign debt, which he said exceeded $100 billion and is nearly twice that much when obligations for post-Gulf War reparations are factored in.

The G-7 grouping of major industrial countries has agreed to a moratorium on Iraqi debt payments through next year. But Mr. Bremer said there will have to be substantial reduction after that if Iraq, even with a revived oil industry, is to avoid being overwhelmed by debt-servicing obligations.

He warned of a parallel between a newly-democratic Iraq and Germany's Weimar Republic of the 1920s, where a fledging democracy was crushed by inflation and post-World War I reparation debts, leading to the rise to power of Adolf Hitler.

"Remember that Hitler was elected, the election of Adolph Hitler as Chancellor in 1933," he said. "Iraq has no experience with democracy. We're going to try to put in place, and we will put in place, a constitution and an elected government. But given the history, and obvious tensions in Iraq, it would be a mistake to lay on them an unpayable debt that will become a cause of friction within Iraq and with its neighbors."

Mr. Bremer said inflation in Iraq, which reached Weimar-like levels in the final year of Saddam Hussein's rule, has been tamed through budget balancing and the issuance of a new currency.

He acknowledged under questioning that the frequency of attacks on U.S. troops in Iraq, which he attributed almost entirely to die-hard supporters of the former regime, has increased in recent days, though he said they are concentrated in a small part of the country and pose "no strategic threat" to the U.S.-led coalition.

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