01 October 2003
Near-term International Aid Called Very Important for Iraq
Private sector support will also be sought, State's Wayne says
By Stephen Kaufman
Washington File Staff Writer
Detroit -- The reconstruction of Iraq presents a strategic and unique opportunity for the international community to contribute to a new start for that country, says Assistant Secretary of State for Economic and Business Affairs E. Anthony Wayne.
Wayne, speaking September 30 at a plenary session of the U.S. -- Arab Economic Forum, said that at the upcoming Iraq Donors Conference in Madrid October 23-24 "it will be very important that there is a generous and vigorous contribution from the entire international community."
"It is a huge task," said Wayne. "In the next few years, Iraq's oil revenues and private sector activity can make a difference. ... But in the very near term, we have to be very frank that they are not going to be enough to close the gaps that will be needed to help get reconstruction going, and there, it is going to have to be the international community that helps out in this period of time."
International institutions will soon be releasing a needs assessment for Iraq. Wayne hopes this will form the basis for other countries to consider what their contributions can and should be in preparation for the Madrid conference.
Wayne announced that a meeting would be held October 23 between international private sector representatives, their Iraqi counterparts, and Iraqi officials.
That meeting, said Wayne, will provide an opportunity "where Iraqis will come and talk about their approach, their appreciation of the importance of the private sector in the economic rebuilding ... of their country that will take place."
Wayne said the October 23 meeting was called at the behest of Iraqi private sector representatives who want to begin a dialogue with potential international private investors and allow Iraqi officials to explain their functions to the private sector.
"People are really trying to think through the kind of policies, the kind of approaches that will make a difference and get the economy functioning again," said Wayne.
The assistant secretary also mentioned that officials from former east bloc countries and Russia were invited to a recent meeting in Baghdad to discuss their experiences during their economic transitions from a centralized economy toward a more free market system in the early 1990s. Wayne said that although the situation in post-Ba'athist Iraq is not identical, good lessons were shared with the Iraqi participants.
The European representatives suggested that Iraqis get "the right legal and judiciary framework in place, [put] sound fiscal and taxation policies and approaches to budgets in place early on, and called for taking a comprehensive approach to economic reform rather than a piecemeal approach."
Youssef Slieman, managing director of Iraq for the Harris Corporation, said he believes that Iraq is now at its lowest economic point, anticipating that oil would soon begin to flow and that production and exports would increase within six months.
He spoke of a "second invasion" of Iraq, this time by private contractors, that would be seeking to cash in on an Iraqi economic boom, and told his audience to bear in mind the recent economic recoveries of Lebanon and Kuwait after armed conflict.
Iraq, he said, "has a great potential." He urged the incremental and gradual privatization of state owned industries. But Slieman said only Iraqis should make the economic decisions. "Above all, it has to be done by Iraqis and not to Iraqis," he said. "We cannot replace one welfare state with another."
Slieman listed several developments that would ensure economic success in Iraq. "When shops open, businesses resume, when banks open and a new currency is established, when ports of entry accept goods and exports start flowing, when foreign investment begins, property rights respected, when buyers and sellers agree to terms and live up to their commitments ... it will not be long before free and orderly trade will take hold and Iraq joins the international economic community."
Richard Greco, special assistant to Defense Secretary Donald Rumsfeld, who spoke on behalf of the Coalition Provisional Authority in Iraq at the plenary session, warned against expecting too much economic and political progress in Iraq in a short period.
Greco compared post-conflict Iraq with the United States in the first years of its independence, with its chaotic period under the Articles of Confederation and its year-long constitutional debates in 1787, and said that Iraq is progressing much more quickly toward an effective, functioning system only a few months after Saddam Hussein's removal.
"The point is that no nation in memory that has made the transition from tyranny to a free society -- whether America in 1783, Poland or Romania in 1989 or Iraq in 2003 -- has been immune to the difficulties and challenges from taking that path," he said.
Greco also said that the long-term prosperity of Iraq depends upon investment from the private sector, and he told his audience that privately owned businesses, representing several sectors, constitute 30 percent of the economy.
"That says a lot," he said. "[F]or a long time to come there will be plenty of investment opportunity in Iraq. The Iraqi people are resourceful and energetic and they embrace their new freedom and want to help themselves. And they want us to help them help themselves."
Amr Moussa, secretary general of the League of Arab States, urged the international community to work together to restore Iraq to self-rule and to help with reconstruction efforts despite lingering debates over whether the U.S.-led coalition war was justified.
He warned, however, that Iraqis need to clearly see the designed end of reconstruction and political reform efforts, and need a time table for their return to self-rule.
He welcomed the desire to have a reconstructed Iraq serve as a model for the Middle East region, but, he said, "you have to start, because every minute you lose, Iraq is going in the opposite direction."
Iraqis, he said, are already capable of ruling themselves and deserve a voice in their future. "The regime of Saddam Hussein is gone," Moussa said. "Don't be afraid -- open up, give the Iraqis the opportunity to help themselves, to rule themselves."
He said a new United Nations resolution on Iraq "should be the embodiment of an international consensus on how to help Iraq" based upon a framework with a timeline for its return to self-rule, with a parallel program for reconstruction.
"The Arab world, I am sure, will go along with any plan that will end the existing situation, moving toward a sovereign Iraq that will be a positive addition to the Arab family of nations and a positive power or a positive force in international cooperation," said Moussa.
(The Washington File is a product of the Bureau of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)
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