International donors gathered in Madrid have pledged $33 billion in aid and loans over the next four years to help rebuild war-torn Iraq. The response to a U.S.-led lobbying effort to elicit contributions exceeded expectations.
Combined estimates by the World Bank and the United States of what Iraq needs in aid over the next four years totaled $55 billion. The donors conference was never given a chance to reach that sum, but it produced far more money than what was expected of it.
Spanish Finance Minister Rodrigo Rato made the announcement at the end of two days of discussions. "We're talking about total financial resources of $33 billion - $33 billion - and we need to add to this the export loans, technical assistance and other aid in kind which has been collected."
The biggest pledge comes from the United States, which has committed $20 billion, mostly to reestablish security and to rebuild Iraq's oil industry.
Japan, which had already pledged $1.5 billion in grants to Iraq, supplemented that contribution Friday with an additional $3.5 billion, mostly in the form of low-cost loans. Saudi Arabia said it would offer $1 billion in loans and export credits. Other donors, rich and not-so-rich, offered contributions large and small.
Iraqi officials, who had outlined their country's pressing needs for everything from health services to housing over the past two days, were elated at the donors' response.
The president of the U.S.-sponsored Iraqi Governing Council, Ayad Allawi, called the results of the pledging conference an historic occasion for his country and recalled that, barely six months ago, Iraq was considered what he called the black sheep of the international community.
"Today, I am proud again to be an Iraqi," he said. "My colleagues and I came to Madrid to ask for support in the huge task ahead of us in rebuilding our country. And the support has been outstanding. Iraq has made many new friends in the last few days. In years to come, the Iraqis will remember who came forward to help them and to help us in our time of need."
Secretary of State Colin Powell called the pledges a demonstration of the international community coming together to help Iraq. But he and U.S. Treasury Secretary John Snow expressed concern that much of the money committed Friday will be in the form of loans, which will add to Iraq's already burdensome debt load. Mr. Snow says Washington will try to convince other nations to reduce Iraq's debt, which now stands at more than $100 billion.
The World Bank says donors will not have to provide all of the money needed to rebuild Iraq because the country's oil revenues and private investment could cover a big part of its needs after 2004.