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Published on TaipeiTimes http://www.taipeitimes.com/News/biz/archives/2003/10/12/2003071420 Limit aid to Iraq: World Bank
SATURATION POINT: A recently-released report by a number of NGOs has said that the destitute country can only handle US$52 billion in donations next year
AP , WASHINGTON Sunday, Oct 12, 2003,Page 11
A study by the World Bank and other international organizations estimates that Iraq could handle only US$5.2 billion in foreign reconstruction aid next year without problems arising.
That financial reality, though, should not discourage countries from making larger contributions that Iraq needs on both a short-term and long-term basis until its oil industry recovers, the report said.
Prepared jointly by the World Bank with the UN and the IMF, the report estimates that Iraq needs US$55 billion in economic aid overall, in the next several years, to finance its reconstruction until the oil industry gets on its feet.
In two weeks, these groups and some 70 nations will gather in Madrid for a donor's conference sponsored by the Spanish government.
A US official on Friday dismissed reports that the conference set for Oct. 23 to Oct. 24 might be delayed amid faltering US efforts to secure UN Security Council approval of a resolution designed to attract more peacekeeping troops as well as financial aid.
There have been reports that Japan has offered US$3 billion or US$1 billion and that the US was pressuring the EU to expand its initial pledge of US$230 million.
The US$55 billion estimate coincides roughly with the Bush administration's conclusion that Iraq would need US$50 billion to US$75 billion to recover from the rule of ousted President Saddam Hussein and repair war damage. Congress is in the midst of acting on a request for US$20.3 billion in reconstruction spending, including US$5 billion for Iraq's emerging security force.
Only American companies are eligible for contracts financed by US contributions, but foreign companies may obtain contracts under non-US international assistance, said the official, who spoke on condition of anonymity.
For instance, a British firm is being engaged to print new currency for Iraq, this time without Saddam's picture.
US Treasury Undersecretary John Taylor said Friday that the new Iraqi currency, which will be put into circulation next Wednesday, involved the printing of 2,086 tonnes of new bills at printing facilities around the world. He said the currency was flown into Iraq on Boeing 747s and delivered by convoy to 250 distribution points, mainly banks, around the country.
Taylor said a US Treasury team working in the country over the last several months had made major progress in getting Iraq's banking system back into operation.
The country's two biggest banks, Rafidain and Rasheed, now have more than 280 branches open, almost back to the level of operations before the US-led invasion, Taylor told a banking conference in Washington.
"Due to careful planning, individual Iraqis now have access to their deposits and there were no bank runs," he said. "These banks will play important roles in the currency exchange and they have already been instrumental in facilitating the payment of civil servants and pensioners."
The Bush administration's proposed UN resolution is designed to gain international financial and military support by giving the UN a larger role in Iraqi reconstruction. But widespread demands for a rapid end to the US military occupation, and the turning over of control to Iraqis, have posed hurdles to Security Council approval.
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