BAGHDAD, July 30: The World Bank will eventually offer Iraq assistance to help revive its economy, but wants a constitution drafted first, World Bank President James Wolfensohn said on Wednesday.

Asked whether the Bank would offer aid, he said: “At some point that will, I am sure, happen. But as you know there is a need first to have a constitution, to have a government, to re-establish Iraq as the Iraqi people would like to have it.”

Mr Wolfensohn was in Baghdad for talks on reconstruction with Iraq’s US-led administrator, Paul Bremer, and the US-backed Governing Council.

The World Bank has been given the task of putting together an assessment of how much the rebuilding of Iraq is likely to cost, before a meeting of donors scheduled for October.

Wolfensohn, who said he hoped to re-establish a working relationship with Iraq, said Baghdad had to “clean up” $88 million it owes the Bank before it can receive aid.

“When a country is in default, by the laws of the Bank, you can’t do additional lending. We don’t think that’s a huge problem,” Wolfensohn told a news conference. “We think it can be dealt with.”

The World Bank says its analysis of Iraq’s needs should be completed by the end of next month.

But Wolfensohn said the security issue, a constraint both on doing the analysis and on the economy in general, was being addressed.

“People invest where they have confidence both in the protection of the investment and in the protection of themselves, which is a security issue. So the security issue is fundamental. It needs to be addressed. I believe from our discussions it is being addressed,” he said.

US-led troops have been struggling to restore order to Iraq and face daily attacks that have killed 50 US soldiers since US President George W. Bush declared major combat operations over on May 1.

Iraqis complain that since the formal end of hostilities, the US-led authority has not done enough to restore security or basic services to Baghdad, where only half the telephones work and power outages occur daily.

Demand for jobs: Several hundred unemployed demonstrated for the second straight day outside the US-led forces headquarters in Baghdad, giving voice to mounting frustration over the dire economic conditions in Iraq.

The protesters, who were parked outside Saddam Hussein’s former Republican Palace, demanded 100 dollars a month in unemployment benefit.

Nineteen demonstrators had been jailed by US forces overnight for having violated the curfew by refusing to leave the palace gates at 11pm, but were freed on Wednesday morning, some of them said.—Reuters/AFP