Vanishing BILLIONS

However, the donors’ conference to raise money for the reconstruction of Iraq appears to have concluded in disappointment. France, Germany, Russia and the Arab states are investing on their own terms amounts they themselves are determining, not out of pressure to produce the immediate contributions the US-led coalition wants but because everyone realizes it is the right thing to do. All countries need to get some kind of economic foothold in Iraq before it is too late. Prior to the conference, it was said that many of the participants had been convinced by the US administration to put up some money. Deals were said to have been done. Fences that lay in tatters after the unilateral US invasion were said to have been mended. UN Secretary-General Kofi Annan has thrown his weight behind the pleas for assistance, and the Iraqi Governing Council has cranked up demands by warning that those who do not help now will find themselves at the back of the queue when juicy investment opportunities come along later.

So why did the participants at the conference remain largely unforthcoming? The reason is that nobody can be sure where the money will go once the administration in Iraq gets its hands on it. The UK charity Christian Aid has said that $4 billion of oil revenues and other funds from Iraq have "disappeared" in bank accounts in the hands of the US-led occupation authority. The missing billions were earmarked for Iraq’s reconstruction, and were a combination of pre- and post-war oil revenues now controlled by the Coalition Provisional Authority. They also included seized Iraqi government assets and funds held overseas. "Conservative estimates put the total at $5 billion, of which less than one billion dollars can be accounted for," Christian Aid said.

There is also a danger, the charity said, that another $4 billion in postwar oil revenues may disappear into what it calls "opaque bank accounts." It worries, and rightly so, that the money will be creamed off for the benefit of US corporations rather than go to the Iraqi people to whom it belongs. Now Democrats in the US are asking for details of what they claim is another missing $1 billion. In other words, the equivalent of almost 10 percent of the amount of money the US is now asking for has vanished. Christian Aid’s international director said the situation was "little short of scandalous".

It is therefore little wonder that Germany says it has no intention to commit any funds until it is persuaded that everything is transparently accounted for.