October 23, 2003	Thursday	Sha’aban 26, 1424

BAGHDAD: Iraqi officials leave for the donors conference in Madrid this week hoping for the best but prepared to return empty-handed.

More than 1,000 delegates are expected at the conference called by the Spanish government on Thursday and Friday to discuss and fund the reconstruction of Iraq.

The delegates will include representatives from the United Nations, the World Bank, the International Monetary Fund, the United States, the European Union and Japan.

Iraq is sending a 100-member delegation, including a third of the governing council and half the cabinet ministers. The Coalition Provisional Authority (CPA) is also sending a large delegation.

According to World Bank and IMF studies, Iraq will need about $55 billion over the next five years to rebuild many of its economic and social sectors.

That is both the good news and the bad news.

The good news is that Iraq has already received pledges for about half of that amount. The United States is due to give Iraq $20 billion next year, and Japan $1.5 billion. Tokyo is expected to announce its pledge during the conference.

The bad news comes from multiple fronts.

Aside from the United States and Japan, only the EU is expected to offer any firm pledges of support in Madrid.

Also, half the $20 billion from the United States will take the form of a loan, adding to the massive foreign debt Iraq accumulated during 35 years of Saddam Hussein’s reign.

There is no exact figure for how much the Saddam-era Iraq owed the world, but official estimates place it around $130 billion. Iraq hopes to renegotiate much of those debts. But some countries, including Arab countries, have said they will not reopen the issue.

Attending the Madrid conference presents risks for the Iraqi delegation because its case for additional funding rests on the assumption that the security situation will improve dramatically over the next 12 to 18 months.

“We realize that a lot of this depends on the security situation in the country, but we hope that as that improves and we start exporting some of our own oil, it would become much easier for us to go back to donor countries to seek additional money,” planning minister Mehdi Hafez told a press conference this week.

That may be too optimistic in a country which witnesses at least a dozen attacks on coalition forces every day, though US military officials point out that the number of attacks has declined over the past few months.

The 140,000 US troops are the bulk of the coalition forces. Washington has been trying hard to replace as many of those troops as possible with soldiers from other countries.

The United States managed to convince Turkey to send up to 10,000 troops to Iraq, but many Iraqi officials and citizens say they want foreign troops out, not replaced by others.

Another risk for the Iraqi delegation is that its members would be asking not just for grants but also for loans based on the assumption that Iraq would soon be able to sell large quantities of oil.

Before the war, Iraq sold about 3 million barrels a day. Since the invasion, Iraq’s two main oil and gas arteries have witnessed constant acts of sabotage. As a result, Iraq has barely sold any oil in the past seven months.

According to budget estimates provided by the coalition forces, Iraq is expected to generate as much as $12 billion in oil revenue next year. Many consider this estimate too high.—Dawn/The InterPress News Service.