Annan, Powell Have Mixed Expectations Ahead of Iraq Reconstruction Conference

MADRID, Spain – U.S. and Iraqi officials pleaded for billions to rebuild Iraq at a donors conference that opened Thursday with calls for generosity and warnings that they might not get all they need right away.

Despite the approval last week of a new U.N. resolution setting out Iraq's future course, U.N. Secretary-General Kofi Annan (search) acknowledged that lingering divisions over Washington's role in running the country might deter some donors.

But in his opening remarks Thursday, Annan urged that such concerns be set aside, saying "the long-term challenge of reconstruction has to be faced by all of us."

Security remains a primary constraint "both now and into the foreseeable future," he said.

"But a start to reconstruction cannot be deferred until that day," he said. "It demands our urgent attention now. I appeal to donors to give and give generously."

France and Germany, leading opponents of the U.S.-led war, have both cited concerns about the slow pace of restoring Iraq's sovereignty for their refusal to pledge any new money now.

Ahead of the meeting, Annan and Secretary of State Colin Powell (search) sought to lower expectations that Washington would come away with the entire $35.8 billion through 2007 it hopes to raise to jump-start Iraq's economic recovery.

Powell acknowledged "it may take time to meet the goal" of more than $55 billion set by the World Bank, which includes the Bush administration's nearly $20 billion pledge.

"I don't expect governments to announce everything they are going to do for Iraq in the future tomorrow," Annan said Wednesday night. "But tomorrow and the day after will be an important beginning."

Iraqi Foreign Minister Hoshyar Zebari said his country was looking for "serious contributions in funds and not loans" when pledges are announced Friday, adding "the sooner the better."

Fears about safety and stability in Iraq, where U.S.-led coalition forces are coming under daily attack, should not be an obstacle, he told The Associated Press.

"It is our belief that reconstruction contributes to improving security conditions," Zebari said. "These funds will create job opportunities and in an indirect way will contribute to consolidating stability and providing more confidence."

He also said he expected Arab Gulf states to contribute, adding it would be "shameful" if they didn't. Kuwait promised a "generous" package, but did not specify how much.

Talking to reporters as he flew to Madrid from Egypt, Powell also set his sights on Iraqi assets held in Syrian banks, saying he may take the matter up with Syrian delegates at the meeting.

An estimated $3 billion is reported to be in Syrian banks, but Powell said he had not "heard a number quite that high."

But, he said, there were "certainly numbers of significant magnitude" and that it was "Iraqi money and we would like to get it back to the Iraqi people."

Although pledges announced so far total just a few billion dollars, the host of the conference, Spain, tried to sound upbeat.

"The Iraqi people are looking to us," said Foreign Minister Ana Palacio in her opening remarks. "We won't let them down"

So far, Japan has pledged $1.5 billion for 2004; South Korea has agreed to $200 million, and Canada, $150 million. The World Bank has said it will lend Iraq $3 billion to $5 billion over the coming five years.

Spain pledged $300 million through 2007 and Britain $439 million for 2004-2005. Both were firm supporters of the war.

The European Union's head office has limited its contribution to one year, promising $233 million.

A separate $20 billion package is now before the U.S. Congress, and will go mainly toward security in Iraq and resurrecting its oil industry.

Pressed why the Bush administration was not counting on Iraqi oil revenues to pay for reconstruction, Powell said the infrastructure "was more damaged than we expected, and not as a result of the war, but as a result of 30 years of abuse by this dictatorial regime."

"We'll have to see how Iraqi revenues start to generate in a couple of years' time after we make the initial investments that get the oil infrastructure built," he said.

The United States also wants foreign troops to help subdue guerrillas who are supporters of Saddam Hussein, but for now is concentrating on getting support for less controversial work like rebuilding electrical lines, water supply, and infrastructure like courts, post offices and schools.

The centerpiece of the meeting is the creation of a new reconstruction fund managed by the World Bank, the United Nations and a committee of Iraqis. The fund is designed to lure donors wary of a U.S.-controlled fund.