Aid Bonanza Promised for Iraq, But Questions Remain

Thu October 23, 2003 03:08 PM ET

By John Chalmers

MADRID (Reuters) - U.S. and World Bank officials promised Thursday that Iraq was heading for a reconstruction aid bonanza as money started to flow in earnest on the eve of a deadline for formal pledges.

But there was no word on how much wealthy Arab states would stump up at the Madrid conference, and there were questions over both how much aid would be in loans and whether the process had any meaning without addressing Iraq's massive debts.

"If you look at the commitments coming, there is plenty of money to kickstart this reconstruction process," Nick Krafft, the World Bank's Iraq country manager, told Reuters. "If you compare them to anywhere else in the world, it's staggering."

But skeptics wary of donor conferences will await the final announcement of pledges due Friday.

So far $2-3 billion has been pledged in addition to the $20 billion Washington plans to contribute over 18 months.

"Tomorrow I think we will surprise some in the press when the size of the outpouring of support is made visible," U.S. Treasury Secretary John Snow said at a meeting with investors.

The World Bank will make around $4 billion available and the International Monetary Fund will also provide financial support.

The total falls well short of the $56 billion estimated to be needed over the next four years to rebuild a nation torn by years of war, sanctions and neglect. But it will come within the $17.5 billion required to get the process going next year.

"Every time we have had discussions they have exceeded expectations," a senior U.S. official said. "Japan, Canada, Spain and Britain came back with higher numbers."