All eyes turn to Madrid

24 October 2003
Representatives from more than 70 countries and international organisations arrived in Madrid on 23 October for a two-day conference to raise money for the reconstruction process in Iraq. Despite UN Secretary-General Kofi Annan's opening plea for donors to 'give and give generously', total contributions were expected to fall short of Washington's stated target of more than $30,000 million.

A World Bank pledge of between $3,000 million-5,000 million helped to boost US efforts to rally support ahead of the meeting, but earlier pledges by some of the world's largest economies had brought the total to less than $8,000 million on 23 October. Three of the largest potential donors - France, Germany and Russia - have responded coolly to US requests for aid. The three countries opposed attempts to gain a UN mandate for the March invasion, and they have indicated that concerns over the US-drafted text of a Security Council resolution regulating the political future of Iraq mean they are unlikely to provide any additional funding or troops to the occupying coalition. 'At this stage we don't plan any additional aid,' said French Foreign Minister Dominique de Villepin. 'To us, the starting point is truly the full and complete recognition of Iraqi sovereignty.'

The White House is also likely to highlight the issue of debt forgiveness, after running into fundraising difficulties in Washington in mid-October, when the Senate defied President Bush by voting to convert half of a $20,000 million aid package into a loan. However, there is a caveat attached to the decision, which proposes reconverting the $10,000 million back into a grant if other governments agree to waive debts owed to them by the former Iraqi regime. At least 90 per cent of the estimated $130,000 million Iraqi debt pile would have to be forgiven. Major creditors include France, Russia and Saudi Arabia.

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