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Japan is making final preparations to provide Iraq with grants worth $1.5 billion in 2004, the first in a series of handouts that could total $5 billion over a four-year period, government sources said Tuesday.

During meetings with senior government officials, Prime Minister Junichiro Koizumi and Chief Cabinet Secretary Yasuo Fukuda stepped up their efforts to finalize the amount before the planned visit Friday by U.S. President George W. Bush.

They also discussed the likely destination of a dispatch of Self-Defense Forces troops to Iraq, the sources said.

Tokyo had initially planned to provide Baghdad with $2 billion in grants in 2004.

The Finance Ministry voiced misgivings over this amount, however, in light of the nation’s tight fiscal situation, the sources said.

Koizumi told reporters that he would announce the final amount as soon as he has made a decision on the matter, though he failed to specify a timetable.

Fukuda suggested, however, that the government could unveil the amount before Bush’s visit, stating that the details would hopefully be revealed later in the week.

He was speaking after a meeting with Shigeru Ishiba, director general of the Defense Agency; Zembei Mizoguchi, vice finance minister for international affairs; and Ichiro Fujisaki, deputy foreign minister for economic affairs.

Koizumi is expected to brief Bush on Japan’s contribution toward Iraq’s rehabilitation during their meeting in Tokyo on Friday evening.

According to Finance Ministry officials, some 100 billion yen — $908 million given a yen exchange rate of 110 to the dollar — of the planned $5 billion of total assistance between 2004 and 2007 will be financed via the fiscal 2003 budget.

The 100 billion yen is expected to come from appropriations for official development assistance and from a reserve fund in the budget for fiscal 2003, the officials said.

Meanwhile, Fukuda said that the government believes there is a noncombat area in Iraq to which Japan can dispatch SDF troops in order to provide the war-torn country with humanitarian and reconstruction assistance.

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