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27 October 2003

Madrid Conference "Tremendous Success," Treasury Official Says

Goal of $55 billion over four years achieved

By Judy Aita
Washington File United Nations Correspondent

New York -- Calling the international donors conference for Iraqi reconstruction "a tremendous success," U.S. Under Secretary of the Treasury John Taylor said October 27 that the amount pledged has reached $18 billion. These pledges combined with $20.3 billion from the U.S. supplemental budget request in the final stages of congressional approval and future Iraqi oil revenues will achieve the goal of $55 billion over four years, he said.

Taylor, the Treasury Department's under secretary for international affairs, said that "it is something we need to be very grateful to the international community for. ... Now the objective is to make this work on the ground to bring a successful reconstruction in Iraq."

"We're now getting more information in, and to summarize the combination of the International Monetary Fund (IMF), the World Bank, the Japanese, and the Europeans, and many other countries around the world, we have got a total close to $18 billion of funding," Taylor said at a press conference.

Figuring into the sum are the pledges of $5 billion from the World Bank and $4.25 billion from the IMF, he said. "For the remainder of 2003 and for 2004, the oil revenue generated will go to the operating budget of Iraq to pay Iraqi salaries, pay for the oil-for-food program -- all the things that are in the operating budget of the government. In 2005, 2006, and 2007, etcetera, the expectation of the World Bank and other forecasters is that the revenues will begin to exceed the operating costs of the budget and can therefore be used for reconstruction, thereby achieving the $55 billion target."

One of the highlights of the conference, which was held in Madrid October 23 and 24, was the daylong session devoted to the private sector, the first ever at such a donor conference, Taylor said.

"A whole day was devoted to the opportunities ... of private sector development -- both Iraqis starting firms, building firms, expanding firms, as well as participants from other countries," he said. "Over 300 firms participated, listening to the presentation by the Iraqis of their open investment policies, their tax policies, and customs policies."

The under secretary said that 47 countries from Europe, Japan and around the world participated in the conference. The Iraqis "indicated that they welcomed this interest from abroad in improving their economy," he said.

"All of that is welcome if the goal is to improve the well being of the Iraqi people," he said.

Taylor said that the United States will continue working to increase the contributions. "This is going to be a job for which there are plenty of opportunities to participate. I'm very much hoping that people who didn't participate as much now as they might have will participate more in the future," he said.

One of the "most satisfying" aspects of the conference, Taylor added, was "the great sacrifices that very small countries have made -- like Sri Lanka -- in contributing to this effort."

Taylor also said that the Central Bank of Iraq's currency exchange is going "very well." The six denominations of the new Iraqi dinar were printed in several different countries and flown into Iraq on 27 cargo 747 airplanes, he said.

"It is going to make a difference in respect to the overall well-being of the Iraqi people and their economy," the undersecretary said.

The increase in terrorist attacks in Iraq has not affected the dinar, Taylor said. "We see that the new Iraqi dinar is maintaining a stable value," he said. "That is very important for stability in Iraq."

"What we see is a great amount of business activity going on in the street, shops opening, people enjoying themselves. These [terrorist] incidents are a terrible issue that we are addressing, but basically in all the analysis of the market we see a great degree of stability in the global markets," he said.

(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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