Iraq 'needs $5bn from donors'

Reconstruction is underway in Umm Qasr

Iraq will need $5bn from international donors at a conference in October just to keep essential services going, the United Nations has said.

But continuing security problems could scare potential donors away, said Ramiro Lopez Da Silva, a UN humanitarian aid co-ordinator in Iraq.

His words came as an American civilian working with the US army in Iraq was killed when a bomb went off beneath his vehicle.

Besides attacks on soldiers, ambushes in the last three months have also claimed the lives of a British journalist, a Sri Lankan technician for the International Committee of the Red Cross, and an Iraqi driver for the UN.

Living standards

Iraq's finance ministry has calculated the country will need $20bn in 2004 to keep basic services running.

But income from Iraq's crippled oil industry and other sources is unlikely to exceed $15bn. Donors would need to supply the rest.

"That is just to keep things going," Mr da Silva said.

"If you want a qualitative leap, a quantum leap in living standards and conditions, you would need much more."

Even if money is pledged in October it may not materialise - much of the cash promised to Afghanistan has yet to arrive, he added.

"If we want to attract something close to $5bn as support for Iraq next year, donors will have the present security environment very much in mind," da Silva said.

If the current level of lawlessness persists, few countries will be willing to commit cash.

No-go areas

Lack of security was having a "very serious impact" on humanitarian efforts, Mr da Silva added.

"There are areas where we cannot allow staff to go," he told Reuters.

These no-go areas included the "Sunni triangle" west and north west of Baghdad, where support for Saddam Hussein is widespread.

Mr da Silva said the goal of bringing living standards back up to the level of before the war by the end of 2003 was still achievable.

But there had to be a rapid improvement in law and order.

And the likelihood of a return to the relative prosperity of the 1980s was a distant prospect.

World Bank assessment

The US and its coalition partners may turn to the UN to ask more countries for help.

Mr da Silva said a new UN mandate - demanded by some countries as the price of aid - would not be necessary to raise $5bn.

But countries would want the money to be administered by a multilateral agency rather than by the occupying coalition.

The World Bank is making its own assessment of Iraq's economic needs and will make its findings known at the October conference.