How Much was Really Pledged in Madrid?
Powell has done some serious arm-twisting, and numerous Iraqis have been running around like hucksters in Madrid over the past two days to wring some pledges of money out of the rest of the world to go toward Iraq’s reconstruction. Typical headlines are now reading “Iraq donations reach $19 billion,” and that impressive sounding figure is what the Bush administration will certainly push. Added to the US’s $20 billion, it sounds like they made it a good portion of the way to their goal of $55 billion.
But there’s something funny about that number, because it largely consists of loans, not grants. The Bush administration is fighting tooth and nail with the US Congress to get the US’s $20bn to consist entirely of grants, with no loans (an issue discussed in this earlier post). They argue that loans don’t do Iraq any good – what they need is outright grants. In fact, they feel so strongly about it that they’re threatening to veto.
But most of the $19bn figure pledged in Madrid is also in loans. Of the $19bn, the IMF has pledged $4.3bn in loans, the World Bank $5bn in loans, Japan $3.5bn in loans, and Saudi Arabia $500 million in loans. Several other pledges were not specified as to whether they are grants or loans, which suggests that they may well also be loans. But according to the Bush administration, loans are of no use to Iraq. Furthermore, the $19bn total includes $400 million ‘pledged’ by Canada and Korea that has already been spent.
So the real pledges may not even reach $5bn. The Bush administration worked hard to lower expectations as far as possible in the days before the conference – a figure as low as $6bn was quitely voiced before the meeting. So not even meeting this very low goal makes the Madrid fund-raiser look like a pretty miserable failure.
Update: News reports are now saying that only $13 billion were raised from sources other than from the US, not $19 billion. I’m not sure which of the loan committments mentioned above they’ve started excluding, but I would guess that some or all of the IMF and World Bank’s offers are no longer being counted in the total.