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Japan will provide Iraq with grants worth $1.5 billion in 2004 to support the country’s reconstruction, the government announced Wednesday.

The announcement came ahead of a visit to Japan on Friday by U.S. President George W. Bush, a move designed to show that Japan’s pledge was not made under pressure from Washington.

“We have decided to announce the amount today because of the importance of reconstruction in Iraq and stability in the Middle East, and to show our stance to the international community,” Chief Cabinet Secretary Yasuo Fukuda told a news conference.

Fukuda said the timing was aimed at urging other countries to declare generous contributions at a donors’ conference on Iraqi reconstruction scheduled to be held in Madrid on Oct. 23 and 24.

“We put out (the figure) a little early in order to influence other countries’ contributions,” he said.

The initial pledge is part of a four-year $5 billion package that Japan will likely announce at the Madrid conference.

The $5 billion accounts for roughly 10 percent of the $55 billion reconstruction cost estimated by the World Bank and the United Nations. The cost estimate for the initial year stands at some $17.5 billion.

Fukuda said the government took these figures into consideration in deciding the amount of the initial pledge.

Fukuda said the money that will be disbursed between 2005 and 2007 will take the form of loans, with Iraq expected to be capable of repayment once it establishes its own government and generates oil revenues.

“We will decide on the four-year figure by the Madrid conference,” the government’s top spokesman said.

Of the $1.5 billion, $400 million will be spent on providing electricity, $500 million will be used on water, sanitary and medical assistance and $100 million will be spent on education assistance.

The rebuilding of hospitals and power plants forms part of the humanitarian and reconstruction assistance plans. The remainder of the money will go toward an employment program, maintaining security and other assistance, Fukuda said.

Most of the initial pledge will be covered by the fiscal 2004 official development assistance budget.

The government was initially planning to officially announce its contribution during a meeting Friday evening between Prime Minister Junichiro Koizumi and Bush.

“We decided to do it a little earlier to avoid an impression that we have yielded to pressure,” a government source explained.

Another source said Washington was hoping Japan would share its financial burden “in terms of billions of dollars, and not millions.”

Bush and Koizumi are scheduled to talk over an unofficial dinner. The U.S. president will leave Saturday morning to continue his Asian tour, and will attend the summit meeting of the Asia-Pacific Economic Cooperation forum in Thailand next week.

Later in the day, Koizumi stressed that the timing of the announcement was not directly linked to Bush’s visit or the Nov. 9 general election of the House of Representatives.

“Some may have thought that the government would not announce the financial burden before the election, but it has nothing to do with election,” Koizumi said.

On a separate note, the government is also in the final stages of drawing up plans to dispatch Self-Defense Forces units to Iraq.

A government fact-finding team that returned from Iraq last week reported to Koizumi earlier in the day that there are high expectations in Iraq over the SDF’s prospective role in providing water, transporting relief materials and providing medical assistance.

The team added that a role of this kind is possible in southern Iraq, where the security situation is relatively stable.

“I got the impression that there is a lot Japan can do in Iraq,” Koizumi told reporters after hearing from the team.

“We cannot fail the Iraq reconstruction effort,” Koizumi said. “I want to tell (Bush) that we are fully aware of our role in making the reconstruction a success and that he can count on us to do what we can.”

About 100 members of the SDF will likely be dispatched by the end of the year, followed by about 600 at a later date, government sources said.

Baker grateful for aid

Staff report

U.S. Ambassador Howard Baker expressed gratitude Wednesday after hearing Japan’s announcement that it will provide Iraq with grants worth $1.5 billion in 2004.

“I think it is generous and appropriate,” Baker told reporters after a meeting with Foreign Minister Yoriko Kawaguchi at the Foreign Ministry. “I think it will contribute significantly to the peace and stability of the region.”

Baker also expressed hope that Tokyo will dispatch the Self-Defense Forces to Iraq, adding that it was up to Japan to make the decision.

He said the issue is expected to be addressed when U.S. President George W. Bush meets with Prime Minister Junichiro Koizumi during his stopover in Japan on Friday night.

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