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Last Updated: Thursday, 23 October, 2003, 22:13 GMT 23:13 UK
Fears over Iraq aid shortfall
An Iraqi sells fuel on the roadside in Baghdad
War and sanctions crippled the Iraqi economy

Concerns are mounting that a major conference to raise money for the reconstruction of Iraq may fall far short of the $36bn sought by Washington.

"Nobody for a moment thinks that we're going to see pledges of $36bn. What everybody hopes is that we'll see pledges which meet what Iraq could spend," Chris Patten the EU commissioner for external affairs told the BBC.

More than 70 countries and multilateral organisations are attending the two-day meeting in Madrid, Spain, which has the strong backing of the US.

Pledges from countries and international donors are due to be made public on Friday.

But officials are already attempting to lower expectations that donors will pledge the full amount and have pointed to the difficulties of spending money given the prevailing insecurity in Iraq.

HAVE YOUR SAY
The USA and UK caused the damages, they should foot the bill for reconstruction
Norman E. Harper, USA

"It may take time to meet the goal" of $50bn set by the World Bank, said US Secretary of State Colin Powell.

The top US administrator, Paul Bremer, told the French newspaper Le Figaro that "putting in place a budget for reconstruction projects will take time".

But Nick Kraft, the World Bank's Iraq country manager, was more optimitistic.

He told the Reuters news agency: "If you look at the commitments coming, there is plenty of money to kickstart this reconstruction process. If you compare them to anywhere else in the world, it's staggering."

'Urgency'

Iraqi Governing Council representative Mowaffaq al-Rubaie told a press conference on the sidelines of the two-day summit that Iraq needed an "immediate infusion of cash".

"The Iraqi people need finance, not promises," he said.

Iraqi woman and US soldier
Iraq is still wracked by instability

He said the task ahead of the Iraqis was "huge", pointing to the re-emergence of previously eradicated diseases such as bilharzia and malaria.

He also blamed unemployment in Iraq for "nurturing terrorism".

The United States has already pledged $20bn and some potential donors, including wealthy Gulf states, have yet to announce their contributions.

Countries such as France, Germany and Russia, which opposed the US-led war on Iraq, have already said they will not provide any more money beyond what they have already promised.

Other countries - such as Belgium which said it will contribute up to 5m euros for infrastructure and education programmes - are stipulating clearly what their money may be used for.

Most of the funds being raised in Madrid are to go into a trust managed by the World Bank, the UN and a committee of Iraqis.

The new fund is designed to lure donors wary of US control, although some aid groups have reportedly questioned whether it will be able to make decisions on the ground.

Iraq's assets overseas

BBC News Online's world affairs correspondent Paul Reynolds says Iraqi debt is one big issue which is not on the formal agenda but which will certainly be on the delegates' minds.

A guide to living conditions and the reconstruction effort in Iraq

Saddam Hussein ran up foreign debts of between $95bn and $150bn, according to figures compiled by Jubilee Iraq, a London-based network of Iraqi exiles and sympathisers who are calling for the debt to be written off.

The BBC's Washington correspondent, Jon Leyne, says until a few weeks ago it looked as if this conference would be a major embarrassment, with the rest of the world only offering a tiny fraction of that amount.

But, he says, in recent weeks Washington has been working hard to increase donations and to lower expectations.

The pledges already made include:

  • $20bn from the United States
  • $3bn-$5bn from the World Bank
  • $1.5bn from Japan
  • $835m from Britain
  • $300m from Spain
  • $231m from the European Union
  • $32.6m from Sweden
  • $5.9m Belgium
  • $174m Italy
  • $200m South Korea
  • $150m Canada

The meeting comes days after the UN Security Council passed a US resolution calling for a multinational force and aid for Iraq from the world community.




WATCH AND LISTEN
The BBC's Tristana Moore reports from Madrid
"Donor countries want to be reassured that any money they pledge will be well spent"



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