Donors pledge $33 billion to rebuild Iraq

Iraqi workers help reconstruct a building in Baghdad Keystone

A two-day donor conference in Madrid has ended with governments and international agencies pledging more than $33 billion (SFr43.14 billion) in aid to rebuild Iraq.

But Switzerland warned that security would have to be restored before meaningful reconstruction could take place.

The pledges, including humanitarian and reconstruction aid, export credits and project finance, are a first step towards the $56 billion target set by the United Nations and World Bank for rebuilding Iraq over the next four years.

Switzerland offered no new money, instead pledging to continue its humanitarian projects in Iraq.

“We have already spent $16 million so far this year and we will continue with this next year,” Walter Fust, head of the Swiss Agency for Development and Cooperation, told swissinfo.

“We are ready to engage more financial means as soon as a number of questions are answered,” he continued.

Switzerland was one of several countries demanding a clearer explanation as to how the new International Reconstruction Facility for Iraq – in charge of managing funds for reconstruction projects – would operate.

Bern is also waiting to learn the fate of the oil-for-food programme, before digging into its pockets.

Security

Security – or the lack of it – is another factor that has undermined countries’ willingness to contribute to reconstruction efforts in Iraq.

“Many delegations said that we can only distribute credit for projects when there is adequate security to ensure the projects can be implemented,” noted Fust.

“We must first invest in security, and only then can we move to ensure basic needs,” agreed Martin Aeschbacher, a Swiss diplomat based in Baghdad.

Fust pointed out that the UN was among several aid organisations that had scaled back their presence in Iraq due to ongoing violence.

The Swiss-based International Council of Voluntary Agencies, which attended the donor conference, said establishing security was pivotal to effective nation-building.

“Clearly the security situation is still very precarious and in fact humanitarian staff have paid the highest toll. In that sense, what we need for our security is contact with the local population, which is why we feel the Iraqi people should be at the centre of the reconstruction effort,” Ed Schenkenberg, the organisation’s chief coordinator, told swissinfo.

Priorities

In his address to the conference, Fust told representatives from more than 70 countries that moves to address basic needs could only start once security had been restored.

“That would mean the functioning of the oil-for-food programme or its substitution, second the health services, third the reopening of the schools and rehabilitation of the education system, and then, of course, job creation,” said Fust.

While Iraq was not in the grip of a humanitarian crisis, Schenkenberg said reconstruction efforts attempted so far had not been very successful.

“Services are starting to work but they are not adequate and once again the ongoing war in some places obviously makes life harder,” he said.

Donors in Madrid pledged around $13 billion, which comes on top of the $20 billion promised by the United States.

“The Iraqi people will long remember the assistance we’ll provide them at this critical moment of challenge and hope,” US Secretary of State Colin Powell told delegates in Madrid.

Fust was similarly upbeat about the outcome of the conference. “The meeting was extremely useful to… exchange experiences and also to mobilise further support for Iraq.”

swissinfo, Samantha Tonkin and Joanne Shields

In brief

Around $13 billion has been raised an international donor conference to rebuild Iraq.

The money comes on top of a US pledge of $20 billion.

The World Bank and United Nations estimate that reconstruction efforts will cost $56 billion over the next four years.

Switzerland did not promise any new funds, but said it would continue providing humanitarian aid to the tune of $16 million a year.