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World Bank Says World Bank Says Constitution Must Precede Loans to Iraq By RICHARD A. OPPEL Jr. and ROBERT F. WORTH NYTimes http://tinyurl.com/ipgo BAGHDAD, Iraq, July 30 — The president of the World Bank, James D. Wolfensohn, suggested today that the bank would lend money for the reconstruction of Iraq only after the country writes a constitution and conducts national elections. He also said that an indeterminate number of the country's state-owned industries would have to be shut down or restructured. Mr. Wolfensohn's comments may put more pressure on Iraq's new Governing Council to accelerate deliberations about its own leadership and other decisions. Today, the 25-member council appointed Ibrahim Jafari, the official spokesman of the Islamic Dawa Party, a Shiite political group that had been banned by Saddam Hussein, as the first of nine presidents who will serve rotating one-month terms. But the council still has not selected any cabinet officials and has taken little substantive action on other matters. It is expected to take at least a year to draft a new constitution. In an interview broadcast this evening on Al Jazeera, the Arab television network, Mr. Jafari said he hoped that the Council would begin appointing cabinet ministers next week. In a news conference here after meeting with the governing council, Mr. Wolfensohn refused to provide a World Bank estimate on Iraq reconstruction costs. But many experts have said that the long-term costs could exceed $100 billion — many times more than the resources currently available. At the end of June, the American-led Coalition Provisional Authority, which oversees nonmilitary matters in Iraq, had $5.4 billion available. But that is expected to dwindle to about $1 billion by year-end, according to official projections, mostly because of a $2.2 billion budget deficit. The deficit stems largely from the gap between Iraq's projected $3.5 billion in oil revenue and the $6.1 billion in expenditures planned for the rest of the year, a sum that will provide only a fraction of what is needed to rebuild Iraq's electricity grid, sewer systems and other services. Occupation officials have not said how much outside financing will be required for the 2004 budget, but they hope a donor conference in October will provide billions of dollars for infrastructure and other projects. "I think the global community is going to want to make the up the gap between oil and such other revenues as the country has, and a basic budget," Mr. Wolfensohn said today. World Bank financing is likely to follow, assuming that a proper government is organized, he said. "Clearly what would put it beyond doubt would be a constitution and an elected government," Mr. Wolfensohn said. "The question is what we could do in the meantime." Aside from oil, much of Iraq's potential wealth, and its employment base, lies in its state-owned enterprises, including cement, fertilizer, phosphate and chemical companies. But Mr. Wolfensohn, speaking about the state-owned businesses, said, "It does look as though there are a number that are not efficient and need to either be closed or resurrected or significantly changed." _______________________________________________ Sent via the discussion list of the Campaign Against Sanctions on Iraq. To unsubscribe, visit http://lists.casi.org.uk/mailman/listinfo/casi-discuss To contact the list manager, email firstname.lastname@example.org All postings are archived on CASI's website: http://www.casi.org.uk