Donors Plan Iraq Fund Independent of U.S.

Published September 03, 2003

| Associated Press

The United States and other donors pushed ahead Wednesday with plans to channel billions of dollars in reconstruction aid to Iraq through an international fund independent of the U.S.-led administration in Baghdad, officials said Wednesday.

Donors said they were determined to get reconstruction projects up and running despite the security concerns stoked by last month's deadly bombing of the U.N. headquarters in Baghdad and other strikes on foreign targets.

The new fund will be "separate but coordinated" with the work of the U.S.-led Coalition Provisional Authority (search), which is using Iraq oil revenues to pay for reconstruction, said Chris Patten, the European Union's (search) external affairs commissioner.

The creation of the fund, which is expected to be managed by the World Bank (search) and the United Nations, should make it easier to raise contributions from, among others, France and Germany, which opposed the U.S.-led war to topple Saddam Hussein and were wary of bankrolling occupation authorities.

 "We are prepared to help ... provided there is an adequate multilateral umbrella for our contribution," Patten told the EU's parliament in Strasbourg, France.

The United States is seeking international contributions — even at the cost of ceding some control over Iraq's rebuilding — as the cost of its military mission approaches $3.9 billion a month and as sabotage stalls efforts to get Iraq's oil exports flowing.

Washington also is seeking support for a new U.N. resolution giving the world body more authority in Iraq while clearing the way for military assistance from nations reluctant to participate in the current U.S.-led operation.

During talks at EU headquarters, experts from a "core group" of donors — including the United States, EU, Japan and World Bank — discussed Iraq's needs and the trust fund plan.

Those discussions will continue Friday in New York with a broader group of potential donors. A final decision on creating the fund is expected at an Oct. 23-24 conference in Madrid, Spain, where more than 50 nations and international organizations are expected to make cash pledges.

No new figures were released at Wednesday's meeting, but officials believe tens of billions of dollars will be needed through 2004.

L. Paul Bremer, the U.S. civilian administrator in Iraq, has estimated that rebuilding costs could reach $100 billion, including $16 billion for upgrading the water system and $13 billion for repairing the electrical grid.

European nations want to see greater involvement in the reconstruction plans by the fledgling Iraqi authorities, believing that could help stabilize the country and reduce attacks on foreign targets.

"The sooner we can transfer real authority to Iraqis in government to manage their own affairs the better," Patten said.

The donors meeting at EU headquarters stressed that adequate security was necessary to rebuild Iraq's economic infrastructure and allow for the transition to a democratic Iraqi government.

But Patten stressed that the EU agreed with the United States that violence should not delay aid.

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