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| July 8, 2004 |
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| IMF, World Bank To Lend Iraq Billions |
WASHINGTON - July 8, 2004. Clearing the route for future loans to Iraq, the International Monetary Fund said on Wednesday it had formally recognized the battered nation's
new interim government, Reuters reports.
The move follows the June 28 handover of power by American-led coalition
forces to the interim Iraqi government, creating an official entity that the rest of the world acknowledges and with whom the institution can do business. But any program to help rebuild the country must first wait for creditors of the Paris Club - a group of country lenders that meets in the French capital - to agree an Iraqi relief package for its $120 billion in
debts. Recognizing the country also allows Baghdad, which became a member
of the IMF on December 27, 1945, to send a representative to the Fund.
Dow Jones adds Iraq owes the IMF about $81 million of overdue payments.
Once these arrears are cleared, the IMF has said it could provide around
$850 million of new loans under its post-conflict assistance program. At a
donor conference for Iraq in Madrid last year, the IMF said it could lend
Iraq between $2.5 billion and $4.25 billion over three years.
Xinhua further notes that the World Bank has also indicated that it was
prepared to lend Iraq between $3 billion and $5 billion over the next five years.
In other news, The Financial Times reports Iraq's Finance Ministry is to
auction 150 billion dinars ($10 million) of treasury bills on July 18 in a move to establish a bond market and kickstart Iraq's domestic capital
markets. The T-bill issue will be used to repay outstanding debt issued by
the previous regime of Saddam Hussein, 1,300 billion dinars of which is
estimated to be held by Iraqi domestic banks. That is seen as a way to
bring funds back into Iraq's banking sector, much of which would otherwise
face bankruptcy.
The Associated Press meanwhile notes that ambassadors from the
Netherlands, Romania, Britain and Italy met with Iraqi President Ghazi
al-Yawer and Foreign Minister Hoshyar Zebari on Wednesday to officially
present their credentials, while the US ambassador officially opened his
administration's consulate in the southern port city of Basra. British
ambassador Edward Chaplin is his country's first diplomatic envoy to serve in Iraq since ties between the two countries were severed in 1991.
Separately, The Associated Press reports the Iraqi government announced
plans Wednesday to conduct a national census in October, a politically
sensitive and potentially dangerous undertaking. The United Nations has
said the census is a necessary first step to prepare for national
elections scheduled for January. Iraq's Planning Minister Mahdi al-Hafidh, however, rejected any help from the international community. The last time an official census occurred in Iraq was in 1997. Iraq's population stood then at 19 million. That count, however, did not include three Kurdish-run provinces in the north, which have been outside the control of the central
government in Baghdad since shortly after the 1991 Gulf War. This month,
US authorities estimated Iraq's population at 25.3 million.
The Guardian (UK) and The Daily Star (Lebanon) further report Iraq's new
prime minister, Ayad Allawi, was yesterday given sweeping powers to
counter insurgents, including the right to declare a state of emergency
and impose nationwide curfews. The comprehensive package of measures will
also allow him to appoint military governors to take charge of cities or
provinces, close the country's borders, seize the assets of suspects and monitor their phone calls and emails. The emergency law has several
built-in safeguards to prevent the risk of another one-man dictatorship.
Article 12 states that it cannot be used to delay the national elections
set for January. Article 11 says it cannot abrogate the interim
constitution agreed in March.
Source: The World Bank |
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