PRESS CONFERENCE BY UNDP ADMINISTRATOR ON IRAQ RECONSTRUCTION NEEDS

The achievements of today’s “Technical Consultation on Reconstruction Needs for Iraq” could not be underestimated, Mark Malloch Brown, Administrator of the United Nations Development Programme (UNDP), and Chair of the United Nations Development Group, told correspondents this afternoon during a press conference at Headquarters.

Other participants were:  Nasreen Sideek, Minister of Reconstruction and Development of the Coalition Provisional Administration in Iraq; Akila al-Hashimi, Deputy Director-General, Ministry for Foreign Affairs of the Coalition Administration; Faris A. Al-Asam, Acting Deputy Mayor of Baghdad; Alan Larson, Under Secretary of State of the United States for Economic, Business, and Agricultural Affairs; and Dov S. Zakheim, Under Secretary of Defense of the United States.

[After yesterday’s launch of the revised appeal for Iraq (see Press Release IHA/784 of 23 June), today’s “Technical Consultation on Reconstruction Needs for Iraq” was held on ways “to assist the people of Iraq in the reconstruction and development of their economy and to facilitate assistance by the broader donor community” (Security Council resolution 1483).  Opening remarks were made this morning by Mr. Malloch Brown, Ramiro Lopes da Silva, United Nations Humanitarian Coordinator for Iraq, as well as Ms. Al-Hashimi.]

After a war that had divided the United Nations, Mr. Malloch Brown continued, today’s meeting was a meeting of the minds, a new moment of unity within the Organization.  Its membership had united around rebuilding an independent Iraq with its economic potential unleashed.

It was agreed, among other things, that a donor conference would be held in October under intergovernmental sponsorship of the European Union, Japan, United States, United Arab Emirates, World Bank, International Monetary Fund (IMF) and the UNDP.  There was consensus that by then the Coalition Provisional Administration would need to present a budget for 2004 including revenue estimates, and that there was a crucial need to make progress on the political side, as donors would need an Iraqi “interface”.  A liaison group to coordinate preparations for the conference would include donor countries that had not necessarily been on the side of the Coalition during the conflict, he said.

Jean-Louis Sarbib, Vice-President, Middle East and North Africa, of the World Bank, said a non-tangible result of today’s meeting was the atmosphere in which the international community was rallying behind the people of Iraq.  The October donor conference would present Iraqi priority needs for 2004 and how those needs could be met both by local resources and by the international community.  A number of teams would be organized to assess those needs.

He said the challenges faced were enormous, including reconstructing an economy that not only had been damaged by the war, but also by 30 years of mismanagement, combined with a transition from a State-controlled economy to an open economy.

The three representatives of the Coalition Provisional Administration stressed that today showed that the Iraqi people were not longer isolated and had rejoined the international community.  The last two days, however, were only the beginning, albeit a promising beginning.

Responding to a correspondent’s question about privatization plans, Alan Larson, United States Under Secretary of State, said the basic point heard today from the Iraqi representatives was that large parts of their economy had been run by State-owned enterprises that were often quite inefficient.  They had stressed that it was not an immediate large-scale privatization but that those institutions should operate on a more corporate basis, rather than as branches of a ministry.

Asked how much it would cost United States taxpayers, as Congress had appropriated $2.4 billion for reconstruction, he said the meeting’s basic message was that the Coalition Provisional Administration should be preparing a preliminary budget for the rest of 2003 and one for 2004, including estimated oil-revenues, income from other vested assets and contributions from other governments, including the appropriated $2.4 billion.  Donors had expressed the wish to have a sense of what those revenues were and what the priority needs were, as well as the results of the need assessments.

Asked whether three months was sufficient time to organized the conference and prepare a budget, Faris A. Al-Asam, Acting Deputy Mayor of Baghdad, said that during the transition period -- which was a combination of emergency situations and strategic planning -- he would rather “go fast and good, rather than slow and perfect”.

Nasreen Sideek, Minister of Reconstruction and Development of the Coalition Provisional Administration, added that planning for the future was a message that gave the Iraqi people hope and helped them to tolerate the current inefficiencies.  There was a system in place that was running and needed a budget.  Three months was, therefore, timely.

Addressing a question about the security situation, Mr. Malloch Brown said that insecurity made the job for humanitarian assistance hard, but without economic and political change, it would be difficult to tackle the roots of insecurity.  Nobody, the United Nations included, took pleasure in the insecure situation.  In that regard, he pointed to the fact that in recent years more aid workers had been lost than “Blue Helmets”.

One correspondent suggested that because of the security situation, the aid process might come to a standstill, as had happened in Afghanistan.  Dov Zakheim, United States Under Secretary for Defense, stressed that there was no standstill in Afghanistan or Iraq.  In Afghanistan the Provincial Reconstruction Teams, as well as the nascent national army were functioning.  The same applied to Iraq.  There were incidents of terrorism in Iraq, which were not concentrated in any place.  The only way to secure Iraq was to engage the international community.  Between now and the conference, there was an urgent need to “get the police going”.

Asked whether today’s meeting signalled the United Nations’ blessing of the Iraqi delegation as a legitimate Iraqi representation, Mr. Malloch Brown said the Security Council resolution had called for an Iraqi interim administration.  The current delegation was not that administration nor did the Coalition Provisional Administration claim it was.  However, today’s Iraqi delegation was the right one for the meeting on reconstruction, as it represented both the Coalition and their technocrat Iraqi counterparts.

Replying to a question on who would control the donor money, he said the oil revenues would go into the Development Fund for Iraq which would be controlled by the Coalition Provisional Administration, but monitored by an international advisory and monitoring board, including representatives of the United Nations, World Bank, IMF and the Arab Fund for Social and Economic Development.  The board’s purpose was to ensure that contracts awarded by the Fund would meet the highest standards of international procurement.  Another purpose would be to ensure that no country would get an “inside track”.  Today’s meeting had agreed that donor resources could be committed to a parallel, multilaterally controlled fund to address development needs not met by the Development Fund.  The World Bank had been asked to prepare that option for the October conference.

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