Friday, May 28, 2004

IMF loans to rebuild Iraq likely this year

By Martin Crutsinger
The Associated Press

WASHINGTON - International Monetary Fund loans to support rebuilding in Iraq will likely come in the second half of this year, an official said Thursday, now that a report on its debt has been completed.

Thomas Dawson, an IMF spokesman, said the institution made no specific recommendation on how much in Iraq's debt should be forgiven in order put its economy on a sustainable basis.

He said instead that the IMF looked at the types of debt payments Iraq would be able to make under various economic scenarios.

The United States is looking to both the 184-nation IMF and its sister lending agency, the World Bank, to provide loans covering a significant portion of the cost of rebuilding Iraq's war-torn economy.

Dawson said the agency was still on a timetable that would allow it to start providing loans to the country in the second half, once a "broadly recognized government" was running the country. The United States will hand over political control to the Iraqis on June 30.

The IMF's report on Iraq debt was prepared for the Paris Club, which includes the United States and 18 other wealthy nations that coordinate issues of debt relief.

That group has estimated that Iraq owes its member countries $42 billion, with the largest portions of that debt held by Russia, Japan, France and Germany. Estimates put Iraq's total foreign debt at around $120 billion.

Dawson said the IMF was not making the Iraq debt report public because it contains confidential information supplied by creditor nations.

Earlier this week, German Chancellor Gerhard Schroeder said that his country's offer of a substantial amount of debt forgiveness was conditional on an interim Iraqi government being given full sovereignty over the country on June 30.

Last year, President Bush appointed former Secretary of State James A. Baker III as his special envoy on Iraqi debt. Baker was able to obtain pledges of debt relief from countries including Germany, France and Russia, which staunchly opposed the U.S.-led war.

The IMF pulled its team out of Iraq after the terrorist bombing of the U.N. headquarters building in Baghdad last summer but has continued to provide technical assistance to Iraqi officials from outside the country.

Federated to give away cosmetics to end lawsuit
Graeter's rolls out fresh look
Main Street hits downturn
Need for war supplies has factories humming
Downtown building bucks vacancy trend
Home Depot shareholders voice fears on service, stock
Fed slaps firms with $70M fine over loans
Stocks rise on strong GDP data
Seattle begins using hybrid transit buses
Simon Group to build $43M headquarters in Indianapolis
IMF loans to rebuild Iraq likely this year
More Americans setting off again to explore world
Forum to focus on workplace race relations
Tristate business summary
Business digest