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International Community Pledges Billions for Iraqi Reconstruction

Promises of money for Iraqi reconstruction have begun to flow at a donors conference in Madrid, after delegates heard accounts of the country's widespread needs ranging from health to housing. Although the total pledged so far falls short of what the World Bank says Iraq requires, officials at the conference say it is at least a start.

The first country to make a pledge Friday was Italy, which offered $230 million over three years. Then, Japan, which had already promised $1.5 billion in grants, announced it would offer an additional $3.5 billion in low-interest loans through 2007.

After that, it was the turn of Iraq's neighbors. Saudi Arabia said it would pledge $1 billion, half in loans and the rest in export credits. Kuwait also announced a contribution of $1 billion. The United Arab Emirates promised to give Iraq $215 million.

The money will mainly go to rebuilding Iraq's infrastructure, damaged by three wars, 12 years of sanctions and 30 years of dictatorship. But, according to the meeting's host, Spanish Prime Minister Jose Maria Aznar, the Madrid conference was about much more than building hospitals and schools, or providing clean drinking water to needy Iraqis.

"We are committing not just to material reconstruction," said Mr. Aznar. "We want to recover the dignity of a people, the stability of a region. We want to restore our credibility as free and peace loving societies."

Mr. Aznar was a strong ally of the United States during the war in Iraq. But European nations that opposed the conflict, notably France and Germany, are not eager to help foot the bill for the country's reconstruction until the U.S. role in Iraq is reduced.

Horst Kohler, the head of the International Monetary Fund, said Iraq needs not only immediate reconstruction aid, but also needs economic stability and reforms to lure private investment and lower a staggering 60 percent unemployment rate.

"These results will not come overnight in Iraq, where the economy has been badly damaged," said Mr. Kohler. "It will require comprehensive reforms to the economy and the development of sound institutions and policy-making processes. And we all know that these reforms will only succeed if there is ownership by the Iraqi people."

The U.S. administrator in Iraq, Paul Bremer, said Iraq must have a constitution and then elect a new government, before the U.S.-led coalition can turn power over to the Iraqis. Even though he said that process is on track, he acknowledged that differences over the war and its aftermath still linger.

"The countries represented in this hall may have disagreed in the past," he said. "We may disagree today on one point or another, but by our presence today, we signify that we agree on one major point, and that is that the Iraqi people need help to realize their future of hope."

The pledges made in Madrid will go into a donors fund, sponsored by the World Bank and the United Nations. A $20 billion pledge made by the United States will come under the control of a separate fund.