Talking points:

Talking points:
The Madrid Donors Conference: A Fig Leaf for Maintaining US Control
Phyllis Bennis
IPS 22 October 2003

The international donors meeting beginning in Madrid on Thursday, 23 October,
will not come close to meeting Washington's original goals. Initially called
to pressure other countries to contribute significant amounts of money to
sustain the US-UK occupation of Iraq, public and governmental opposition in
virtually all countries forced a radical downsizing of US aims.

Washington has scaled down its anticipated income from the conference. US
officials in the last several weeks had talked about wanting to raise a total
of $55 billion for the period through 2007; now that goal is reduced to $36
billion. Claiming that the Iraqi economy cannot absorb more, only $6 billion is
being sought for 2004.

Pledges of $27.5 billion have been made so far, and it is likely Washington
will declare the donors conference a success. However, $20 billion of that
initial amount will come directly from the US, so the amounts promised from
other nations are still tiny. Only Japan ($1.5 billion) has pledged a significant
amount. The EU offered an almost insultingly small $230 million, and even
war-backers Britain ($840 million) and Spain ($300 million) offered small amounts,
as did new recruit South Korea ($200 million).
The remainder, $3.4- $4 billion, is expected to come from the World Bank
(which of course includes a major component from the US)

The new fund to be run by the UN and World Bank was hastily announced in the
last several days only when it became clear that even these small donations
might be withheld if they were destined for the US-controlled Iraq Development
Fund. The new fund will only oversee the non-US donations, meaning that
most of the money will remain under complete US control. Even the UN
Secretary-General was cautious in describing the arrangements, stating (22 Oct. in
Madrid) only that "there will be a mechanism where the UN and the World Bank will
be involved in the disbursements of some of the funds which are going to be
raised".

The new fund will likely be seen as providing political cover for eager donor
governments constrained by public opposition - but the only countries
currently in that position would probably be the oil-rich Gulf states. They may be
willing to make substantial contributions if, by bypassing the US-controlled
fund, it could be done without inflaming public passions. However, the
continuing escalation of Israeli violence in Palestine, and the recent US veto of
the Security Council resolution condemning Israel's "apartheid wall", may make
any kind of significant donation to occupied Iraq impossible for any Arab
country.

The likely failure of the Madrid conference to raise a significant portion of
the vast sums needed for rebuilding Iraq will increase the domestic political
pressure in the US regarding the spending of the $87 billion "for Iraq".
We should continue to focus on the fact that the bill does NOT provide $87
billion for Iraq, but rather designates $65 billion directly to the Pentagon and
corporations out-sourcing defense contracts to maintain the US occupation.
Only $15 billion is actually earmarked for reconstruction in Iraq (plus another
$5 billion to rebuild Iraq's military), and that $15 billion is the only part
of the bill facing any serious scrutiny or threat of reduction in Congress.
Aside from the problems of how it will be spent, the $15 billion is not
sufficient to meet the US obligations under international law and the Geneva
Conventions, as the occupying power, to provide for the needs of the Iraqi people.

All of the problems of the contracts being offered by the US occupation
authority remain and must be challenged:

• US AID regulations requiring that only US contractors to be hired;
• US contractors and sub-contractors charging far greater rates than local
  Iraqi counterparts;
• corporations with close ties to the Bush administration winning huge no-bid
  contracts;
• the failure to rebuild Iraq's economy by refusing to open all bids to Iraqis;
  reconstruction priorities being set by the US occupation instead of by
  Iraqis;
• ruthless privatization setting the stage for long-term economic disaster for
  Iraqi civilians.

We should continue to demand that the US, as the aggressor power and
currently the occupying power, abide by the requirements of international law and
pay for the reconstruction of Iraq. It should not try to pass that
responsibility to other countries. US reconstruction funds should not be the
responsibility of ordinary taxpayers, but should be raised from a combination of excess
profits tax on corporations benefitting from the war; a renewed tax on the
wealthiest 1% of the population; the Pentagon funds currently designated to
maintain the occupation.