PRESS CONFERENCE ON IRAQ RECONSTRUCTION SP0NSORED BY UNITED STATES

“We are here to say to the international community that Iraq is back”, members of a team of senior experts from key sectors in Iraq announced today to correspondents, at a Headquarters press conference sponsored by the United States Mission.

The Iraqi leaders from the Coalition Provisional Authority, appearing to answer questions on the Technical Consultation on the Reconstruction Needs for Iraq being held tomorrow at Headquarters, were:  Akila Al Hashimi, Spokesperson, Ministry of Foreign Affairs; Faris Abdulrazzaq Alasam, Acting Mayor, Baghdad; Fakhridin M.H. Rashan, Ministry of Trade; and Nasreen Sideck Barwari, Regional Minister for Reconstruction and Development.  Marek Belka, Chairman of the Iraq-based Council for International Coordination, also participated.

Turning immediately to questions, Ms. Hashimi said the team was here for the donor conference -- the Inter-agency Humanitarian Appeal for Iraq launched this morning at Headquarters -- and to tell everybody that “Iraq is back”.  Iraq was willing to participate in all United Nations and international activities.  It sought the assistance of donor countries to help Iraq in that period of transition.  The Iraqi people needed a lot of help from friendly countries to make a start towards the reconstruction, she added.

Responding to a question about concerns expressed by senior United Nations officials about the continuing looting and absence of law and order, and the lack of a representative Iraqi administration, she said that looting and disorder could happen anywhere in the world.  The dimension of what was happening in Iraq would not affect donations.  It was not as big as the correspondents had imagined.  One day, that looting would end.  The Iraqi people were a disciplined people and could put an end to that activity.  The creation of a new government was ongoing and would soon be settled.

Ms. Barwari added that those two issues were integrated.  Iraq needed help from the international community to “stand on its feet”.  That support, in turn, would contribute to security and economic welfare, which might be one reason for the looting.

Mr. Rashan said he did not think the situation in Iraq had been properly reflected.  The Coalition had started coordination with almost all Iraqi sectors, and most of them and their ministries had started to work.  Among those was his Ministry, the Ministry of Trade.  Since that had also been looted, an alternative headquarters had been chosen.  It had now started procuring wheat for distribution to the Iraqi population and, on 1 June, it began distributing the rationing basket.

Asked how much money Iraq would need over the coming years to rebuild itself, he stressed that Iraq was a relatively rich country, with the second largest proven oil reserves in the world, after Saudi Arabia, and with the potential to become the largest oil reserve in the world.  His expectation was to try to work out a short-term investment plan.

He said he was here to ask the international community to help the Iraqi institutions rebuild, specifically the oil sector, which needed a lot of investment.  Once Iraq stood on its own feet, within a short period of time it would start depending on itself and upon international financial institutions to support its development.

He added that work had also begun on transforming the Iraqi economy from a completely controlled centralized economy to a free market economy.  That, by itself, would provide the opportunity for foreign direct investment, through which Iraq could really build up its country and look forward to a better future for its people.

To a question about how he and others had had the authority to take such a fundamental decision about economic reform without a government in place, he said he was working together, as an interim administrator, with the Authority to see how they could invite foreign investment.  That, first and foremost, needed a legal framework.  The Arab investment law, issued one year ago, was in place and it was possible, therefore, to make use of that framework to encourage foreign investment.  Eventually, an Iraqi national government would take up that decision.

Responding to a further question about foreign investment, he said he agreed that foreign investment should have a stable and secure environment, but he had been approached by countries, including the United States and in Europe, about investing in Iraq.  A legal framework was a necessity for any foreign investment.  During the past two weeks, the Authority and the Trade Ministry had been working on developing a business facilitation centre in Iraq, which would encourage investors into Iraq and encourage Iraqi companies to enter into joint ventures with foreign investors.  The private sector in Iraq was very weak, owing to the controlled economy.

Asked for clarifications about the Arab investment law and whether the decision to move towards a free market economy, a political decision by its nature, had been made by the panel of Iraqis or by the Authority, Mr. Belka reminded correspondents that it was just the ninth week after the end of the hostilities.  Clarification would be provided in due course.  It was too early for final solutions.

He said the hope was for Iraqi companies to become private, competitive.  He wanted to be pragmatic and to proceed with improving the companies.  It was very early; he was not waiting for privatization, but he was thinking of schemes to apply to those companies, leading, eventually or very soon, to their privatization.

Replying next to a series of questions about whom the team represented, which nation or entity flew them to New York, and whether they had been in contact with their former mission here, Ms. Hashimi said they were Iraqis, Iraqi technicians working in close cooperation with the Authority.  They represented their country here and had had contacts with their mission in New York.  As soon as there was an Iraqi government in place, “everything will be okay”.  She added that the Authority had facilitated their trip.

She said she could not give a date about how soon the Iraqi Government would be in place and when the first elections might occur, in response to another question.  But, the process of forming Iraqi transitional government was under way, she added.

Asked what each person did before the conflict and what role they envisaged for themselves in a permanent government, Mr. Alasam said he used to be Director-General in charge of water, sewage supervision and planning in Baghdad.  His task during the war was to keep the water supply flowing.  That was how he made the first contact with the Coalition forces in April.  He had started to cooperate in securing water facilities and transferring fuel for standby generators.  All of his colleagues had had similar contact.

The team knew their sectors and was well aware of the “ins and outs”.  The leaders here today could identify priorities and conduct an excellent assessment of the situation.  “We are here to say to the international community that Iraq is back”, he said.  After all, the team represented the senior staff in different sectors in Iraq.  In terms of any role in future government, he intended to fulfil his job.  Being part of any new government was the decision of that government.

Mr. Rashan said that, throughout his work in the ministries, he had been serving the Iraqi people.  Now, through his work in coordination with the Authority, he was still serving the Iraqi people.  He used to be the Director General of Foreign Economic Relations in the Trade Ministry.  His concern, after the military campaign ended, was how to preserve food security in Iraq.  The Ministry was used to distribute the rationing baskets across Iraq, and late in April he had met with Jay Garner to talk about that subject.  Then, discussions began about how to reconstruct and rehabilitate the Ministry.  The same had been the case with the other ministries. 

Ms. Barwari said she had come from the north, from the Kurdish part of the country.  She continued to serve as Regional Minister for Reconstruction and Development.  She had had a successful history of reconstruction, since the Kurds had been freed from the regime 12 years ago.  Now, as an Iraqi, she was involved with the Authority as a consultant on reconstruction and development.

Ms. Hashimi said she had been head of the ministry in charge of relations with the United Nations.  She was continuing with the same work.

With all due respect, as directors of departments within the “Saddam regime”, had they backed that regime and now saw the light? another correspondent asked.

Mr. Belka said that he was a Polish citizen and his country had gone through a similar transition some 14 years ago.  He used to ask himself similar questions.  He concluded that if someone who ran the sewage system in Warsaw under what was called communism was replaced by someone who had nothing to do with sewage system, then the whole country would break down.  There should be continuity at the level of “technocracy”.

Mr. Rashan explained that they were, at the end of the day, technocrats and capable of continuing their work.

Pressed in a follow-up question, Ms. Hashimi stressed that they were technicians, and, as such, did not make political decisions.  That was up to the new Government.

Mr. Alasam added that, in many cases, directors of the departments had been removed, owing to corruption or some relationship to criminal activities.  But, it was not valid to apply the same “rule of thumb” to everybody.  The process was in an interim stage.  When the time came for a future government to decide who would go and who would stay, he did not expect that everyone would be replaced.

Asked whether Mr. Rashan was buying wheat now and had previously been involved in the wheat purchases of the “old” government, when that was covered under the “oil-for-food” programme, Mr. Rashan said payment for wheat was continuing through the oil-for-food programme, adding that barley was also being procured from the farmers.  Wheat was also imported from different countries of the world, with Australia, India and Pakistan among them.  At the same time, there was some local procurement, which had been acknowledged by Security Council resolution 1483 (2003).

In a follow-up, the correspondent asked whether Mr. Rashan intended to go through with the contracts in place and whether those were fair prices or had involved “kickbacks” to Saddam Hussein. 

Mr. Rashan replied that he was in the process of verifying all contracts, together with the Authority, under the oil-for-food programme, and of prioritizing them, whether for food or for other sectors.  He added that the programme was not just for food and medicine, but also for oil, transportation, communication, irrigation, and so forth.

More than $10.5 billion in contracts had already concluded with letters of credits open, he said.  Those contracts included contacts for wheat.  Once those were prioritized, they would be renegotiated, taking into account the prices and delivery schedules.

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