MADRID — Nudged by the United States, international donors came through with pledges of $19 billion in grants and loans Friday to rebuild Iraq but were falling short of the estimated $56 billion needed to rebuild the country.
After the $20 billion package now before the U.S. Congress, Japan offered the biggest pledge: $1.5 billion in grants for 2004 and $3.5 billion in loans for 2005-2007, Foreign Minister Yoriko Kawaguchi said.
The amount will account for roughly 10 percent of the $55 billion in reconstruction costs estimated by the World Bank.
“Reconstruction of Iraq is vital for peace and stability of the Middle East region,” Chief Cabinet Secretary Yasuo Fukuda said. “The world community must unite to work on Iraqi reconstruction.”
The grant will be used to cover basic needs, such as providing electricity, water, sanitary and medical assistance, as well as for education-related assistance.
The government decided that aid in the initial year should be provided in the form of grants, as there is no formal government in Iraq at the moment, Fukuda said.
“But once the Iraqi government is established, we can negotiate with that government regarding loans, and Iraq is expected to be able to make repayments with its oil revenues,” he said.
Saudi Arabia pledged $500 million through the Saudi Development Fund, with another $500 million to be used to “finance and guarantee exports to Iraq.”
Italy added 200 million euros ($232 million) over three years, in addition to the 3,000 troops it has stationed in Iraq.
In all, the European Union will give 700 million euros ($812 million) next year.
The first Persian Gulf state to come forward, the United Arab Emirates, announced a pledge of $215 million.
Iran later offered its former enemy an oil swap arrangement that could help Baghdad boost crude export revenues, promised a credit facility of up to $300 million and offered cross-border electricity and gas supplies.
Kuwait offered $500 million on top of the $1 billion it has already spent.
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