Madrid: International donors pledged around $40 billion in aid and loans over the next five years to help rebuild war-ravaged Iraq yesterday as the response to a US-led drive for funds smashed expectations.
Donors other than the US promised some $20 billion at the two-day conference in Madrid, Iraqi Planning Minister Mr Mahdi Hafez told reporters. "This is an excellent start . . . Most of the pledges are grants but the exact percentage will be announced later."
As the delegates from the 70 countries prepared to return home last night after their two days of discussions there was a mood of optimism that the conference had been a success. Delegates were pleased they had raised a large amount and more importantly had set up a mechanism to administer it.
"We have established a solid base in the form of a multinational trust fund to effectively channel the funds," said EU External Affairs Commissioner, Mr Chris Patten.
The Spanish government desperately wanted the conference to be a success. Prime Minister Mr Jose Maria Aznar staked his reputation on the controversial and unpopular decision to join the Bush-Blair alliance, even when more than 90 per cent of the country was bitterly opposed to the invasion. Mr Aznar hopes that a successful conference will vindicate him and prove him to be a major player on the world stage.
Although no Spanish troops took part in the invasion, there are currently 1,300 troops based in Iraq and Spain has pledged a donation of $300 million to the rebuilding of the country, making it the second largest donor nation in Europe.
As in previous days, there was criticism from many of the non-governmental organisations in Madrid who have criticised the Coalition Provisional Authority (CPA) for a lack of transparency as to how it has spent the Iraqi money after the invasion.
The charity Christian Aid accused the CPA of faulty accounting and a failure to account for some $4 billion of oil for food funds.
Speaking on behalf of the aid organisation, Ms Catherine Nightingale said they were not accusing them of misappropriation of the money, "They have only accounted for one billion out of a total of five billion," she said. Mr Patten said this showed why an international trust fund to administer funds was so important.
As the delegates talked money in the main congress palace a parallel conference was taking place in an adjoining building for representatives of some 300 private and multinational companies and financial organisations to learn about the opportunities for investment.
Mr Paul Bremer, the US administrator in Iraq, said he was optimistic about the future of the region. "Iraq is a rich country temporarily poor. It was destroyed by 35 years of a cruel dictatorship."
While admitting security is a major problem, he believesconditions are improving and will continue to do so.
"With a better economic situation security will improve. The attacks and violence are sign of desperation [by the terrorists]," he said.
Many of these meetings were behind closed doors, when representatives of the Iraqi interim government explained the needs of their country. Some of those present at these sessions said they had found it helpful to hear directly from the Iraqis and not via the CPA.
Mr John Snow, the US Treasury Secretary, was part of the large delegation campaigning for financial and practical support from the business community.
"I am not trying to minimise the \ risk. The risk is present, but business opportunities are also present. I firmly believe that the threat from those opposed to a free Iraq is diminishing. Resistance isn't growing. It is dying," he told a group of businessmen.
Although officials stressed this was not a contracts fair and it was unlikely that firm deals would be signed and sealed this week, some businessmen were sceptical about the possibility of lucrative contracts in Iraq.
They fear that many of the most favourable ones will be given to US companies like Halliburton and Bechtel, both of which are closely associated with the Bush government.
Mr Javier Zarzalejos, the general secretary of the prime ministers office, said he believed the best opportunities for Spanish investors were in infrastructure, public services and agriculture. But Mr Manuel Azpilicueta, of the Circle of Spanish Businessmen, said many of his members were not convinced and saw more favourable opportunities in the eastern European nations which are soon to become partners in the EU.