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Worldbank to rebuild Original Source Link: (May no longer be active)
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World Bank to help rebuild Iraq - Monday 14, April-2003
WASHINGTON – The World Bank is prepared to help with the rebuilding of Iraq once the war is over but major new loans will require authorisation from the United Nations, the institution’s president said Thursday.
The comments by James Wolfensohn put the institution on the side of European nations who have been arguing that any reconstruction programme should be done with United Nations authorisation.
President George W. Bush’s administration has argued that the United States and its allies in the war initially should play the lead role in running Iraq.
However, Wolfensohn said the World Bank can only deal with legitimate governments recognised by the United Nations. He said to lend to any other authority would complicate repayment questions.
“We are limited to dealing with recognised governments and that is a decision for the United Nations to take,” Wolfensohn said. “From a practical point of view it is important. We have to lend to somebody who is willing to repay.”
Wolfensohn said the World Bank may dispatch assessment teams to Iraq to determine what the greatest needs are before there is any formal United Nations vote, but he said a decision to grant loans would have to wait for United Nations authorisation.
He deflected questions about how much money the World Bank, the world’s largest provider of loans to developing countries, would be willing to extend to Iraq. He said Iraq needs to clear up US$82 million in past-due payments on old World Bank loans before any new loans could be made. However, he said Iraq’s oil revenues and other resources could easily cover this amount.
Wolfensohn said reopening the country’s schools and establishing basic services would be top priorities based on loans the World Bank has made to other post-conflict countries.
“In Afghanistan, the first step was to try to get the kids back in school,” Wolfensohn said. “There are many things you can do, from our past experience, to make a country more peaceful, more manageable.”
But Wolfensohn said the bank’s experience in post-conflict countries such as East Timor, Bosnia and Afghanistan showed that each country presented different challenges.
Wolfensohn met with reporters to preview the upcoming spring meetings of the 184-nation World Bank and its sister lending organisation, the International Monetary Fund.
The Bush administration is hoping to use the finance meetings, which begin with talks Friday among the world’s seven richest countries, to generate commitments for funds for rebuilding Iraq. The administration also wants to explain efforts to preserve as much as possible of its proposed US$726 billion in tax cuts designed to jump-start the United States economy.
However, the IMF on Wednesday challenged whether it was appropriate to push for new tax cuts when the United Staes federal budget deficit is soaring. (AP)
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