U.S. Set to Cede Part of Control Over Aid to Iraq

http://www.nytimes.com/2003/10/20/international/middleeast/20DIPL.html?hp

U.S. Set to Cede Part of Control Over Aid to Iraq
By STEVEN R. WEISMAN


ANGKOK, Oct. 19 — Under pressure from potential donors, the Bush administration will allow a new agency to determine how to spend billions of dollars in reconstruction assistance for Iraq, administration and international aid officials say.

The new agency, to be independent of the American occupation, will be run by the World Bank and the United Nations. They are to announce the change at a donor conference in Madrid later this week.
The change effectively establishes some of the international control over Iraq that the United States opposed in the drafting of the United Nations Security Council resolution that passed on Thursday. That resolution referred to two previously established agencies devised to ensure that all aid would be monitored and audited.
But diplomats say other countries were unwilling to make donations because they saw the United States as an occupying power controlling Iraq's reconstruction and self-rule.<snip>

European countries are concerned that the Coalition Provisional Authority "is the decision-making authority in Iraq," a World Bank official said. "For political reasons, they don't want their funds to be perceived as being commingled with funds controlled by the C.P.A. They want their own say over how the money is spent." American reconstruction aid, like the proposed $20 billion that President Bush is struggling to get through Congress, would go to the previously set up entity, the Development Fund for Iraq, which is run by the occupation administrators and the Iraqis. Other resources are to come from Iraqi oil revenues. This fund has given big contracts to American companies like Halliburton and Bechtel.
But the new agency could open up that process and award contracts through bidding practices open to global companies. Donors could also give directly to Iraq, specifying that their own companies do the work. <snip>

As it is now envisioned, the agency would oversee two new funds, one managed by the World Bank and the other by various United Nations development agencies. Those funds would oversee spending from international funds in 14 sectors that the World Bank and the United Nations assessed earlier this month as needing $36 billion in assistance over several years. Those sectors included electricity, sewage, water and health programs, from hospitals to smaller community health centers.<snip>