Iraq said on Saturday it had won assurances for a 60 percent cut in the $120 billion it owes and urged the world community to back its recovery with $4 billion in funding for key projects over the next 12 months.
Iraqi Planning Minister Mehdi al-Hafedh made the announcement to reporters on the sidelines of a meeting in Abu Dhabi to start committing cash to Iraq's reconstruction.
He said the country had had a good response to its campaign to write off debt accumulated under the government of captured Iraqi leader Saddam Hussein.
"In principle, we have a 60 percent reduction in our debts," Hafedh said, adding that the figure had not been previously announced.
However, an official close to the Iraqi debt talks said he was surprised by Hafedh's assessment which he said might be "too rosy".
Iraq's debt burden has been the subject of sustained lobbying by the United States, which sent special envoy James Baker last year to countries like France, Russia, China, Saudi Arabia and Japan to aks for a reduction.
Subsequently, France, Britain, Germany and Japan all promised a "substantial" cut in debt to Iraq, which is trying to reach a debt reduction deal before a moratorium on payments runs out at the end of the year.
Russia, owed $8 billion in principal and interest by Iraq, has said it was willing to forgive two-thirds of the amount as long as the cut comes within the framework of the Paris Club of 19 mainly Western creditor nations.
Paris Club officials recently said no debt deal can be finalised until there is an internationally recognised leadership in Iraq that can sign legal debt relief papers. No one was available at the Paris Club on Saturday to comment on Hafedh's remarks.
Several Gulf Arab countries, who are not members of the Paris Club and are owed about $45 billion, have said they would consider either a write-off or reduction after an Iraqi government takes power.
With US presidential elections in November, the administration of President George W. Bush says it will stick to a June 30 deadline for the handover of power to Iraqis.
Iraq's most revered Shi'ite cleric, who opposes the plans to grant sovereignty to an unelected body, has insisted elections take place and said polls should be held by the end of 2004.
Hafedh asked delegates from 27 donor nations and several aid groups that had pledged about $15 billion in non-US funds at a Madrid conference in October to consider about 700 projects, including infrastructure, health, and education costing $4 billion of this money.
"It is time to carry out the pledges made in Madrid...Iraq is ready, we have the capacity," Hafedh said.
The United States, which has pledged $18.6 billion in additional funds, made a separate presentation to donors explaining where it was going to spend that amount in Iraq.
"We have started, but just started," said Admiral David Nash, head of the US agency in charge of disbursing US funds and contracts in the Arab country.
Nash told journalists that by the time a new Iraqi government takes over on July 1 some $10 billion in US funds will have been committed to specific contracts roughly divided between construction and non-construction projects.
Iraq presented proposals covering infrastructure, education, health and other areas that could be implemented quickly and would have profound impact on a country ravaged by decades of war, corruption, and neglect under Saddam Hussein.
"The $4 billion will not accomplish all of Iraq's projects but will be a sound beginning. We attempted to focus on projects that could begin quickly and be accomplished in 12 months," he said.
Comments
Comments are closed.