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[casi] Rebuilding Iraq: What will it cost?

By CNN's Liz George
Wednesday, December 10, 2003 Posted: 1015 GMT ( 6:15 PM HKT)

LONDON, England (CNN) -- Analysts have said it could cost anything
from $84 billion to nearly $500 billion to rebuild Iraq, a country
battered by two wars in two decades and 12 years of United Nations

One economist from America's Yale University predicted rebuilding
Iraq could cost up to $1.6 trillion over 10 years.

But the final cost of rebuilding a battered Iraq will depend on how
quickly the country manages to get back on its feet -- it does after
all have the second largest oil reserves in the world, and a fertile
agricultural economy.

If you want to make comparisons, so far the cost of rebuilding
Afghanistan has topped $900 million.

After World War II -- the Marshall Plan -- a model for economic re-
build -- cost more than $13 billion over four years, and that was
back in 1948.

The bill for reconstruction and redevelopment will include:

 The cost of aid to friends and allies in the region -- Turkey,
Jordan, and Israel -- expect to cost $6 billion to $10 billion.

 Humanitarian assistance -- food and medical supplies -- expected to
cost $1 billion to $10 billion.

 Governance assistance -- paying Iraqi civil service and police
salaries -- $5 billion to $10 billion.

 Reconstruction and recovery is expected to cost between $10 to $105
billion dollars, depending upon the amount of destruction and the
detail of rebuilding.

 Debt relief is expected to cost between $62 and $361 billion
dollars. (More on debt)

Jan Randolph, Head of Economics and Forecasting at the World Markets
Research Center, said: "We are talking about an economy that could be
reflated relatively quickly with the right circumstances of course.

"That does require new investment, mainly in the oil sector, but it
will also require a certain amount of humanitarian assistance, repair
of the social infrastructure, that is the schools & hospitals and
such like."

Mark Parkinson

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