The Madrid Donor’s Conference for Iraq (German View)

Yesterday marked the first day of the two-day Iraq donors’ conference in Madrid. I’ve chosen the German press as the prism through which to review events at and surrounding that conference; it usually gives good, comprehensive coverage, and what’s more, in this situation it represents a country which you suspect doesn’t want to be at that Madrid conference in the first place. (Germany’s delegation there is headed not by a political minister – the Minister for Developmental Aid, Heidemarie Wieczoreck-Zeul, might at least have been appropriate – but by her top civil servant, state-secretary Erich Stather.)

The Frankfurter Allgemeine Zeitung covers Madrid thoroughly, in two on-line articles, the lead one of which is entitled At the Construction-Site of an Iraqi Marshall Plan.

But, as the article itself quickly reveals, that headline might be more of a case of wishful thinking. Writer Leo Wieland cites the World Bank’s call for $36 billion to be contributed over the next four years, but that seems an ambitious target indeed in view of the monies already committed by the US and various other countries prior to the conference. The article devotes particular attention to the role of UN Secretary General Kofi Annan, whose welcoming address called attention to this “moment of hope” for Iraqis, and urged generosity among donor-nations. But the first day’s proceedings were largely devoted to breaking down into working-groups for a Bestandsaufnahme, or “assessment of the situation,” with the group on security led by American officials and that on humanitarian aid by Spanish.

Interestingly – and not widely reported elsewhere – a parallel conference was run in Madrid, sponsored by Spanish economy minister Rato, for private companies interested in doing business in Iraq. Over two hundred such attended, including even Iraqi companies, not to mention French. Organizers spoke of “excellent possibilities” for business in Iraq’s rebuilding, since that obviously has a long way further to go and there is much yet to be done. Still, an American Mr. Fisher, of the American-Iraqi economic council, speaking at this parallel conference, was refreshingly honest: “The way to Baghdad lies through Washington.” This was also reflected in the financial arrangements erected for money donated at the donors’ conference to actually make it to Iraq. Money gained from country donations will go to a “help fund” run by the UN and the World Bank, but not the $20 billion just appropriated by the US Congress – that will go directly to Iraq via American administrative mechanisms.

The FAZ’s parallel article, Powell: For Iraq More Money than for Afghanistan, is mainly about US Secretary of State Powell’s attitude towards the donors’ conference. He is optimistic, although he realizes that there is no chance that the conference will gather all the money that is needed. In any case, he’s sure that it will exceed the $5 billion that was pledged last year in Tokyo as aid for Afghanistan. (The FAZ article helpfully notes that various NGOs in Madrid are claiming that not even 20% of those Tokyo pledges have yet been fulfilled.) Powell: “Ten days ago it was still the case that there would be no UN resolution, that the Secretary General didn’t want to have anything to do with the thing [i.e. the Madrid conference], no one wanted to come and there would be chaos.” Things have turned out considerably better since then, which gives Powell cause for optimism.

Yet, if the Financial Times Deutschland is to be believed (Thrifty Flow of Money Disappoints USA), US officials aren’t really so happy after all. Particularly disappointing is the stance of the EU, which has allocated only €200 million for next year. Said EU external affairs Commissioner Chris Patten, “I can’t suddenly announce a higher amount here. You can’t expect that the European taxpayer is too happy to give money for Iraq.” Still, there might be grounds for hope, the FTD reports: Friday is the day when donations from potential heavy-hitters (Kuwait, the United Arab Emirates, Italy) are to be announced. The Gulf States in particular have been subject to heavy lobbying, such as from Spanish foreign minister Ana Palacio de Loyola, who urged them not to “leave Iraq in the lurch.”

Die Welt also has extensive coverage of the Madrid conference. The focus in its primary article (Participants at Iraq Donors’ Conference Hesitate) are the reasons why so many countries are reluctant to give, particularly those of the anti-war coalition (Germany, France, and Russia), who have already made clear that there will be no more money, and certainly no soldiers, out of them for Iraq. Security is obviously still a problem in the country, which places in danger any investment projects that may be undertaken there; Iraqi representatives, in their view, have yet to come forward with acceptable plans about how to use that money to proceed with rebuilding; and there is even doubt about the Americans’ willingness to contribute, considering that the US Congress put forth $21 billion of a recently-passed aid bill to Iraq not as a grant, but in the form of a loan. (What is more, because of that, President Bush is said to be considering vetoing it.)

Yet another concern is that any monies contributed will go overwhelmingly to American contractors working in-country. This aspect is addressed in Die Welt’s second article (Im Iraq kommen fast ausschließlich amerikanische Firmen zum Zug, which I translate as “In Iraq American Firms Get to the Gravy Train Almost Exclusively”). Halliburton, that construction firm so tightly-linked to vice-president Dick Cheney, already has a $1.9 million contract, and the similarly well-connected Bechtel is not so far behind. Actually, the main complaint is over the over-hasty, non-competitive, and non-transparent way that these contracts have been awarded. At least the contract to set up mobile telephone networks in Iraq are not going to American firms – not directly – but maybe that’s because the more broadly-used GSM standard is considered more appropriate for Iraq than the other technical standards used within the US. Instead, various Arab firms have already won contracts for these projects – firms which in every case have close ties with US firms (and with Motorola, for example, also indirectly involved).

Finally, a commentary out of Berlin’s Tagesspiegel, entitled Not Their Fault. This unsigned editorial reminds us of the $350 billion of debt incurred by Saddam Hussein’s regime that still hangs over the Iraqi economy. This must be forgiven. Yes, forgiving debts sets a bad example for others, but post-war Iraq definitely, in the eyes of the Tagesspiegel, definitely constitutes exceptional circumstances warranting such a move.

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