Bush to partners in Iraq: Pay up

For nations that in the past have pledged to help Iraq rebuild, the United States has this message: Get out your checkbook.

In recent days, administration officials, from President Bush on down, have insisted repeatedly that it is time for others to live up to monetary commitments to Baghdad, most of them made in 2003.

"The international community has pledged about $13 billion to help this new government. Yet only $3.5 billion has been paid," said Mr. Bush on Monday in a commencement address to the US Merchant Marine Academy.

Iraq's security situation has discouraged many donors from pouring cash into the country. They don't want their aid used to pay for gun-toting guards, or for clinics or courthouses that might get blown up.

But the White House argues that the elimination of insurgent leader Abu Musab al-Zarqawi shows security is improving. The renewed push for international contributions also comes at a time when it is becoming clear just how expensive rebuilding Iraq will be.

"There's a convergence of events at this point in time leading to this," says Robert Pfaltzgraff, a professor of international security at the Fletcher School at Tufts University.

In coming months, non-US donor nations and international institutions should become increasingly important to the reconstruction of Iraq, according to US officials. Money in the main US reconstruction account, the Iraq Relief and Reconstruction Fund, is dwindling. The new Iraqi government will increasingly take over reconstruction management duties from the US.

The United Nations has already agreed to step up its activity. Earlier this week, Secretary-General Kofi Annan, responding to a plea from Iraqi officials, said he would help organize international economic and political support for Iraq.

Given all this, it's time for nations to make good on promised reconstruction donations, insists the White House. Pledges are fine, and many nations have made generous promises, say US officials. But Iraq now needs the money.

Bush has mentioned the issue often in public in recent days. And the administration has sent Deputy Treasury Secretary Robert Kimmitt and State Department counselor Philip Zelikow to visit world capitals and figuratively rattle the tin cup.

"We need to get these amounts paid in, and then we need to look here in a three- or four-month time ... [at] what additional amounts need to be pledged," said National Security Adviser Stephen Hadley at a briefing for reporters last week.

It's true that the international community could step up its Iraqi aid activity, say experts outside the administration. But the situation is more complicated than the White House is portraying it, they say.

The bulk of aid pledges, $13.6 billion, were made at a donor conference in Madrid in October 2003. Of this, some $4 billion was offered as outright grants. The rest – $9.6 billion – was proffered as loans, not straight handouts.

Of these pledges, about 25 percent, worth $3.5 billion, have been paid, according to the US Special Inspector General for Iraq Reconstruction. In addition, the International Monetary Fund and World Bank have begun providing some of their promised loans. (Later pledges have raised the total amount of money promised by the international community to $14.6 billion.)

Some nations have moved quickly to provide their promised aid. Japan and Britain have been "notably active" in this regard, says a recent Congressional Research Service report.

Japan – the second-largest donor to Iraq after the United States – has spent most of its pledged $1.5 billion in grant aid, and is close to launching the first phase of a $3.5 billion loan, according to CRS. Japanese funds have paid for power-station rehabilitation, water tankers, fire trucks, and irrigation equipment. (Tuesday, Japan announced it would withdraw its 600 troops in Iraq but hoped to increase noncombat air operations there.)

Britain has helped pay for reconstruction of the Iraqi justice system, among other things.

Other nations have moved more slowly. Iraq's neighbors have made generous pledges, for instance, but so far little of the promised money has shown up.

"Kuwait ... has not moved much of its $565 million pledge," says the most recent Special Inspector General quarterly report to Congress. "Similarly, Saudi Arabia and the United Arab Emirates are holding off on expenditures."

Lack of security is one big cause of this reluctance. Currently, between 16 and 22 percent of Iraqi reconstruction aid pays for armed guards and other security-related costs. Many non-US nations don't want a large percentage of their donations to be devoted to such items. In general, they have not been eager to rebuild a war zone while the war was still going on.

Iraqi politics has been another concern. Saudi Arabia and other largely Sunni Muslim nations have kept their checkbooks closed while they wait to see how Sunnis will fare in the new Iraq.

"These countries want to see whether a stable political democratic system can be established in Iraq that will include the Sunni Arabs as well as the Shia Arabs and the Kurds," said James Jeffrey, Department of State coordinator for Iraq policy, at a June 8 House hearing.

With the establishment of the new Iraqi government, this criteria has been met, according to Mr. Jeffrey. Other US officials argue that with the death of the terror figure al-Zarqawi, the security situation is improving as well.

Pressing for reconstruction pledges to be made good may thus be an attempt by the Bush administration to help build on the momentum they say has been generated in Iraq in recent weeks – though Al Qaeda in Iraq has named a new leader, and insurgent attacks continue.

"The US has every interest in promoting international contributions to post-conflict stability in Iraq," says professor Pfaltzgraff of the Fletcher School.