Iraq aid pledges 'to reach $18bn'

War and sanctions crippled the Iraqi economy

A summit of international donors has reportedly raised pledges for the reconstruction of Iraq totalling around $18bn, on top of $20bn promised by the United States.

The estimated total, in the form of grants and loans from countries and international agencies falls short of the estimated $56bn needed to rebuild the war-torn country.

But the two-day conference in Madrid has proved more generous than expected.

Japan became the biggest donor after the United States by pledging $3.5bn in low-interest loans, on top of $1.5bn in grants already announced.

Saudi Arabia and Kuwait each pledged $1bn, while the US has already promised $20bn.

HAVE YOUR SAY The US and Britain should pay for it all. Why should any of the countries who were against the war pick up the bill? We broke it and we should fix it Janice Wheeler, US Send us your comments

The final total is due to be officially announced later on Friday.

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.

Continuing violence and disputes over the running of Iraq have also made some potential donors reluctant to commit themselves financially at this stage.

US Secretary of State Colin Powell acknowledged security issues that concern many people in the development and business communities.

But he said the pledges at the conference were a strategic investment in hope.

"The Iraqi people will long remember the assistance we provide them at this critical moment of challenge and hope," he said.

A guide to living conditions and the reconstruction effort in Iraq

In detail

"Success will take time, hard work and generous assistance from all of us and we must get started now."

The World Bank has said $36bn is needed for rebuilding Iraq, while the US-controlled Coalition Provisional Authority says nearly $20bn more will have to be spent on security and the oil sector.

Countries such as France, Germany and Russia, which opposed the US-led war with Iraq, have said they will not donate more than they have already pledged.

Huge task

Iraq's planning minister Mahdi Hafez told reporters he was pleased with the amount pledged.

"We had no initial figure in mind," he said. "This is an excellent start. It is around $20bn now. Most of the pledges are grants but the exact percentage will be announced later."

Pledges already made include:

• $20bn from the United States
• $5bn from Japan
• $3bn-$5bn from the World Bank
• $4.35bn over three years from International Monetary Fund
• $1bn from Saudi Arabia
• $1bn from Kuwait
• $835m from Britain
• $300m from Spain
• $231m from the European Union
• $200m from South Korea
• $174m from Italy
• $150m from Canada
• $32.6m from Sweden
• $5.9m from Belgium

For the UK's Secretary for International Development, Hilary Benn, the most significant outcome of the conference was the way the international community has come together "whatever differences of the past".

Iraq is still wracked by instability Starting from scratch

"We leave Madrid in a much stronger position to continue to support the reconstruction of Iraq in the interests of its people," he said.

BBC's Chris Morris, in Madrid, says the pledges must now be made good.

Previous experience in places such as Afghanistan suggests donors do not always meet their obligations, he said.

But Iraqi politicians are determined that reconstruction will go ahead and say the country will emerge as a free and democratic nation.