Wolfenson
Following the Bread Crumb Trail
Wed Oct 22 12:36:30 2003
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Iraq to Get World Bank Aid

Wednesday, October 22, 2003; Page E02


The World Bank will offer as much as $5 billion in aid over the next five years to help finance Iraq's reconstruction. The bank's executive board also said it backed the creation of the International Reconstruction Fund Facility for Iraq, which would be made up of two trust funds overseen separately by the World Bank and the United Nations. The program would provide an alternative to the U.S.-backed Development Fund for Iraq.
World Bank - donors must be flexible on Iraq fund


By Anna Willard (sept. 8,03)

WASHINGTON (Reuters) - Donors who put money into a fund to rebuild Iraq's economy must be as flexible as possible over how the cash is used, World Bank President James Wolfensohn said on Monday.

At a meeting in Brussels last Wednesday, the bank presented donors with different options for how such a fund could be run based on experience of rebuilding in other post-conflict economies such as Afghanistan and East Timor.

"It is being asserted by some that if they put up money they want to control it and others I think would be prepared to put it into a general pot," Wolfensohn told reporters at a briefing.

"The sort of funding you need in post-conflict is flexible funding without too many strings attached."

Donors are due to discuss the form the fund will take at a meeting in Spain on Oct. 23-24. Some donors are expected to want to bankroll specific projects to avoid any appearance of funding the U.S.-led occupation of Iraq. U.S. undersecretary of state for economic affairs, Alan Larson, said last week donors would not be allowed to earmark money for different projects.

Wolfensohn also said he had not been told whether the bank would control the donor fund. Larson said the bank will control one fund. The United States is the bank's most powerful shareholder.

"We've heard that the World Bank is going to be running it but we have not yet been formally asked," he said. "But if we were, what I think we would hope to be able do is to use the funds working very closely with our Iraqi counterparts."

Wolfensohn said having local involvement is crucial for a successful reconstruction.

He also said those controlling the donor fund should work closely with the Development Fund for Iraq. This fund, located in the New York Federal Reserve and which holds revenues from oil sales from the oil-for-food program, is under the control of the U.S.-led Coalition Provisional Authority (CPA).

Spending from that fund is supposed to be monitored by a board made up of representatives from the World Bank, United Nations, International Monetary fund and Arab Fund for Social and Economic Development.

"So whatever be the (donor) fund and the form of its management, it really can't be done without a very close cooperation with that large one," Wolfensohn said.

The official said this rebuilding differs from previous ones because "the politics is a level above us at this moment".

He said he had no idea how much the donors are likely to provide.

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