US companies to be big gainers from Iraq outlay
By Alan Beattie in Washington
Financial Times, UK
Published: October 17 2003 21:24 | Last Updated: October 17 2003 21:24
Much of the US financial contribution to Iraqi reconstruction will be earmarked for American companies, according to the top international official at the US Treasury.
Congress on Friday prepared to approve around $20bn (?18bn, £12bn) of spending on Iraqi reconstruction ahead of next week's international donors' conference in Madrid.
Speaking to reporters, John Taylor, Treasury international undersecretary, said that while the US would make some contribution to an international trust fund, "a lot of it will be through bilateral aid".
Under the "tied aid" rules of the US Agency for International Development, which have repeatedly been criticised as unfair and inefficient by most development experts, bilateral aid is reserved for contracts for US companies.
Mr Taylor said the precise breakdown of aid would be announced around the Madrid talks, but said it would follow the Afghan reconstruction model, where by far the largest part of American aid is bilateral. The rest will go to the trust fund set up at the insistence of other donors, which will have open tendering.
Mr Taylor added that he hoped much of the subcontracting from US bilateral aid would go to Iraqi companies. "The most important thing is expediting the process," he said.
Mr Taylor called the passage of the UN resolution on Thursday a great success, saying it showed the international community was rallying round Iraqi reconstruction. Though he played down the importance of large sums of money being announced at the Madrid conference, saying a lot had already been pledged, he continued to call for more donations.
"I can't think of a single more important thing for people around the world to be contributing to," he said.
The UN resolution called on the World Bank and IMF to extend their full lending services to Iraq, which may go some way to resolving legal questions about their ability to lend to the occupying authority. "Progress has been amazingly fast" on resolving issues holding back IMF lending, Mr Taylor said.
The IMF's executive board was due to discuss Iraq on Friday. Officials from other governments say that earlier discussions envisaged the fund not lending to Iraq until well into next year, perhaps in nine months' time. US Treasury officials said on Friday it could be quicker than that.
Mr Taylor also defended the decision to seek $20.3bn from Congress - more than the joint World Bank-IMF-UN needs assessment implies can productively be spent next year in Iraq.
"I don't really believe there is the capacity issue that many have stressed. If the international community puts its mind to it, a lot can be done soon." >>>>>> |
