The Madrid Donors’ Conference on Iraq 23-24.10.03

Statement by State Secretary Vidar Helgesen, Norway

Mr. Chairman, Your Excellencies, colleagues and friends,

Iraq is a country rich in both resources and history, and a country that was destroyed and ruined by a repressive regime. We are all gathered here today to support the building of a democratic Iraq.

The recent Security Council resolution on Iraq is a sign that the international community has decided to support the Iraqi people in their efforts to create a better future. We hope that resolution 1511 will enable the international community, guided by its foremost representative body, the UN, to contribute substantially to the reconstruction of Iraq.

We await with great interest the report from the Special Representative of the Secretary General on the progress in the constitutional process. A timetable for a new constitution and democratic elections will provide the political road-map that both the international community and the Iraqi people have requested.

I would like to express my appreciation to the Government of Spain for arranging this important donor’s conference. I would also like to thank the UN and the World Bank for the Joint Needs Assessment, which gives a clear and realistic assessment of the needs, and the capacities to meet them, in the years to come.

The Needs Assessment calls for structural reforms and policy changes in virtually all of the sectors covered by the study. Such reforms are not just technicalities. They are crucial elements of national policies. Thus they need to be determined by a truly participatory process. Iraqi institutions must therefore be a central part of the decision making and the implementation of the reconstruction activities proposed in the Needs Assessment, and there must be close co-ordination between donors and the relevant authorities in Iraq.

Norway supports the establishment of new and independent multi-donor funds which are able to work directly with the Iraqi authorities. In this regard, we attach great importance to transparency and openness, and look forward to discussing features of the fund in more detail. It is very important that such funds are used to strengthen national and local ownership.

It is also very encouraging that many non-traditional donor countries have contributed humanitarian assistance to the Iraqi people in the present crisis. Norway welcomes the opportunity provided by this conference for dialogue between all the humanitarian partners.

There is a wide range of issues that are going to be decisive for whether or not one succeeds in Iraq. I would like to highlight a few of them.

Security is an issue of paramount importance. We are concerned about the safety of civilians and humanitarian personnell. Without an adequate security environment, the implementation capacity of multilateral organisations and of other humanitarian actors is far below what is needed. We hope that the increased role of the UN and of Iraqi political institutions will help to create a more safe and secure environment. Iraq’s neighbours also have a special responsibility here.

The limited absorptive capacity of Iraqi institutions may also impact on the timing of disbursements. Implementing agencies must take this into account to ensure the effective use of resources.

Iraq’s burden of debt is of such a magnitude that no Iraqi government will ever be able to rebuild the country while at the same time servicing its debt under the present terms. Foreign investors are also likely to be hesitant as long as this problem has not been solved. This issue must be dealt with as soon as possible.

Post-conflict reconstruction and economic reform is always a challenge. Such processes should be nationally and locally owned. Experience of other reform economies tells us that reforming the Iraqi system could have a high social cost. Due concern must be paid to the social consequences of the reform process, and measures must be taken to avoid the heavy burdens for those least able to bear it. A successful reform process also depends upon the establishment of administrative and legal institutions that can provide a solid foundation for the reform programme.

At the same time, there are popular expectations to be managed. Hence, it is important that reconstruction efforts focus on sectors that will make concrete and visible improvements in people’s lives. It is important to communicate to the Iraqi people that the effects of decades of tyranny, mismanagement and wars cannot be undone in months or even years.

Despite the present security problems, the elimination of the former regime has led to an immediate improvement in the human rights situation in Iraq. It is of paramount importance that international standards for human rights have a central place in the rebuilding of the country. It is particularly important to safeguard the rights of women, children and all ethnic and religious groups.

Iraq is a country with an abundance of resources, which will in the long term have the economic resources needed for sustaining its own development. Multilateral and bilateral assistance must be designed in such a way that Iraq is not made donor-dependent in the long term. The donor community must already at this stage design aid programmes with an exit strategy that can be implemented once the Iraqi economy is functioning adequately. The engagement has to be on an intermediary basis.

Norway has done its share in the reconstruction of Iraq and we will continue to do so. The Norwegian Government has this year disbursed significant funds to humanitarian and transitional assistance to Iraq. Our contributions include providing clean drinking water and health care, rehabilitation of water plants and the electricity system, humanitarian demining, a contribution to a living conditions survey, and repair of infrastructure and clearing of unexploded ordnance in Southern Iraq, which is being carried out by a unit of the the Norwegian army.

For the period 2003-06 Norway is contributing approximately EUR 63 million in humanitarian and transitional assistance. The exact level of Norwegian total assistance will depend on the development of the humanitarian situation inside Iraq, and the extent to which our business community will be able to take advantage of the measures made available. With a multi-donor fund established with broad international support, and provided that there is agreement on the modalities of the fund, Norway will consider channelling the greater part of its transitional assistance (of approximately EUR 11,5 million) through this fund.

The focus on Iraq should not divert resources from other countries and regions in need. One such country is Afghanistan, where we expect to allocate EUR 138 million, excluding military resources, for 2003-06. This makes a total contribution to these two countries in the amount of EUR 201 million.

The challenge in Iraq is immense. But the international community cannot afford to fail in supporting the Iraqi people, who have suffered so much. Our actions are also motivated by the recognition that if Iraq fails, regional and even global security will be jeopardized. The last thing the world needs is another failed state, where terrorists are allowed to operate in the shadow of a government unable or unwilling to exercise sufficient control.

There is great potential in Iraq and in the Iraqi people. There are encouraging precedents in history of cruel and war-torn dictatorships ending and giving people a new start once their human resources are allowed to develop constructively. I hope and believe that Iraq will be another such example.