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THE WORLD

U.S. Foresees Generous Iraq Funds

At a donors conference, an American official predicts a 'snowballing effect.' But a top EU figure says Europeans aren't eager to pitch in.

October 24, 2003|Paul Richter | Times Staff Writer

MADRID — U.S. officials predicted Thursday that contributors would be more generous than expected in funding Iraqi reconstruction, despite the latest international divisions over American stewardship that burst into view at a donors conference.

Even as a senior U.S. official cited a "snowballing effect among donors," Chris Patten, European Union commissioner of external affairs, defended many Europeans' reluctance to chip in.

"You can't expect European taxpayers who felt pretty hostile to military intervention to feel highly enthusiastic about spending a large amount of money in Iraq," Patten said at a news conference during the first day of the two-day event. He said it was "crazy" for organizers to be gathering money for later years, given the murky situation, and that the authorities would have trouble spending even $5 billion because of the security risks.

"These security problems, if you look at the figures, do not appear at the moment to be getting better," he said.

Diplomats said they expected that the meeting, by raising money and drawing international attention, would strengthen the hand of the U.S.-led coalition in reshaping Iraq. Yet Patten's comments were taken as a proof of the world's deep ambivalence -- especially because his organization is one of the "core sponsors" of the event.

Mark Malloch Brown, leader of the United Nations Development Group, said the event was much like the U.N. Security Council's 15-0 vote last week on Iraq aid, which masked sharp differences of opinion.

Though total collections won't be known until late today, Malloch Brown predicted that the conference would bring $20 billion to $30 billion -- or $5 billion to $15 billion more than the $15 billion that President Bush is asking U.S. taxpayers to fund over the next 15 months.

It was not clear how much of the money would be upfront cash, how much in loans, or pledges for later years when they may not be needed.

Senior U.S. officials, while declining to make specific predictions, said the forecasts of the proceeds have been far too gloomy. One of them insisted that U.S. officials have succeeded in increasing donations every time they have held talks with other nations. "We're feeling very good about this," said the official, who asked not to be named.

World Bank economists said in an analysis that Iraq might be able to absorb spending of only about $6 billion next year. But U.S. officials disputed this, saying that rehabilitating infrastructure requires large amounts of money in the first year.

L. Paul Bremer III, administrator of the U.S.-led occupation, described the event to reporters as part of a Bush administration winning streak that included last week's vote on the U.N. resolution for Iraq aid and recent congressional votes to give the administration almost all of what it has requested for Iraq.

"We've had a really good couple of weeks," said Bremer, who appeared with at least 80 officials of the Iraqi transitional government to talk about the country's needs.

U.S. officials also disclosed that they intended this to be the first of a series of donors conferences for the United Nations. "This is a beginning, not an end," one senior official said.

The event is important to the United States because it appears to show that the U.S. is not isolated and that even the United Nations is behind Washington on the rebuilding, diplomats said.

The United States got a boost from U.N. Secretary-General Kofi Annan's strong appeal.

Although Annan has been openly critical of the United States and had mixed feelings about attending the event, he urged participants to "give generously" to the rebuilding.

But among the humanitarian and other nongovernmental groups who came to discuss Iraq's needs, there were complaints that the U.S. team has not done enough to deal with insecurity in the country, and has not been forthcoming about its rebuilding efforts.

Brendan Paddy, an official of Save the Children Fund (U.K.), said that, in a meeting of aid groups and potential donors, there was "wide agreement" that more transparency was needed, along with a bigger role for the U.N. and a quicker transfer of power.

Another group, Christian Aid of the United Kingdom, released a report charging that the Americans could not account for billions of dollars in lost Iraqi assets, a charge U.S. officials strongly denied.

U.N. officials expressed concern that Iraq, a potentially wealthy country with an estimated 112 billion barrels of oil reserves, should not absorb international aid that is urgently needed elsewhere.

Malloch Brown, the U.N.'s development chief, said it was "key that this should be viewed as a bridging year" and that the country should be able to start relying afterward on loans, so that the scarce grant money could go elsewhere.

Much of Thursday's session was taken up with a discussion of Iraq's needs and how they should be addressed. Representatives of a number of companies met with Iraqi officials to discuss possibilities for commercial development, which have been held back by physical dangers as well as the absence of rules governing such things as credit and contracts.

A three-hour period has been set aside this afternoon for national representatives to address the group, one by one, on what they believe Iraq needs and what they will give to help it.

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