Britain has announced its plan to assist the reconstruction of Iraq during the next two years.
Britain's International Development Department says $124 million will be given to a reconstruction fund operated by the United Nations and the World Bank for public service projects in Iraq.
The money will be taken from Britain's previous commitment to spend $1 billion on Iraqi aid projects through March of 2006.
Officials say Britain's aid package for Iraq will help support democratic institutions, public administration, community organizations and small businesses. Britain will also fund a poverty reduction program in southern Iraq, which fell under British control during last year's invasion.
International Development Secretary Hilary Benn told reporters Iraq has a lot of catching up to do.
"What this is about is trying to make up for 30 years of underinvestment, impoverishment, trauma, political oppression that the people of Iraq has suffered," she said. "And one just needs to remember that Iraq 30 years ago had a GDP [gross domestic product] per head the same as South Korea. Iraq today is a very impoverished country."
Mr. Benn said Iraq still faces major political and security challenges as the U.S.-led coalition moves to restore sovereignty to the Iraqi people.
"Getting the political process right, I think, is fundamental, as well as effective security, to providing the right circumstances, in which Iraq can develop for itself," he said. "Because I think it has great potential, and it is in nobody's interest that those who are trying to destroy this process should succeed."
He said the anti-coalition militants who continue carrying out attacks in Iraq bear a "heavy responsibility" because they are trying to destroy economic recovery and political stability. But Mr. Benn says reconstruction is progressing and life is beginning to get better for most Iraqis.