Madrid, Oct. 24 (Reuters): Some brought billions for Iraq, some brought hundreds of millions, some brought food and drink. Neighbouring Iran promised a tourist bonanza.
International donors pledged around $33 billion in aid and loans over the next five years to help rebuild war-ravaged Iraq today as the response to a US-led drive for funds smashed expectations.
Donors other than the US promised some $20 billion at the two-day conference in Madrid, Iraqi planning minister Mahdi Hafez said. “This is an excellent start...Most of the pledges are grants but the exact percentage will be announced later,” he said.
That is on top of $20 billion promised by Washington and is far in excess of what had been expected a few weeks ago, when political divisions threatened the existence of the meeting.
“If you take the American contribution which is hopefully totally a grant, then we have at least $33 billion, of which $25 billion is grants,” said Marek Belka, a former Polish finance minister who is spearheading the fund raising efforts of the US-led Coalition Provisional Authority. He said the figure took the lowest likely contribution from the International Monetary Fund and World Bank and excluded trade finance and grants in kind.
US officials, who had lobbied hard to persuade reluctant donors to chip in more cash, were fulsome in their praise for the conference which they said marked a turning point in international support for Iraq. “The Iraqi people will long remember the assistance we’ll provide them at this critical moment of challenge and hope,” US secretary of state Colin Powell told the conference.
Among the assistance pledged was 100 tonnes of tea from Sri Lanka and rice worth $500,000 from Vietnam. Iran, which fought Iraq for eight years in the 1980s but retains strong cultural ties, made one of the most unusual offers — 100,000 tourists and pilgrims a month, whom foreign minister Kamal Kharrazi expected to spend $500 million a year. Iraq contains some of the holiest shrines for Shia Islam, the majority faith in Iran.
The World Bank said it would make between $3-5 billion available up to 2008, while the IMF promised support of up to $4.25 billion over three years.
But optimism over the rash of pledges was clouded by the treacherous security situation in Iraq, from where international agencies, including the UN, have pulled out or reduced their staffing to a minimum.
Two US soldiers were killed in a mortar attack near Samarra today, a US military spokeswoman said, bringing to 108 the number of US soldiers killed since Washington declared major combat operations over on May 1.
The aid conference had struggled against scepticism from war critics and fault lines opened by the conflict were still apparent, with war opponents France, Germany and Russia making no new promises of aid.