The Report
of the Iraq Inquiry
1070.
The resolution
also requested Member States, international financial
institutions
and other
organisations to strengthen their efforts to support reconstruction
and
development.
1071.
A Treasury
official advised Mr Brown and Mr Boateng that the
resolution
had
significant implications for Iraq’s development.630
To maintain
transparency in
the
management of oil revenues, the resolution provided for the
continuation of the
DFI under
the control of the Iraqi Government. At the UK’s request, the
resolution
explicitly
mentioned transparency and provided that DFI funds could only be
spent
through
Iraq’s budget.
1072.
The IAMB would
continue to monitor oil sales and provide an external
audit
function,
and would include an additional member designated by the Government
of Iraq.
1073.
Oil revenues
held in the DFI would continue to enjoy immunity from
attachment.
The UK had
pressed unsuccessfully to extend that immunity to foreign
exchange
reserves
held in the Central Bank of Iraq.
1074.
The resolution
recognised the IIG’s authority to conclude and implement
loan
agreements
and other financial assistance and arrangements. That should enable
the
IGI to
negotiate and agree an IMF programme and conclude a Paris Club debt
deal.
1075.
The resolution
called for IFIs to engage fully in assisting reconstruction
and
development.
Since the bombing of the UN Headquarters in Baghdad in
August
2003, they
had provided technical assistance through seminars outside Iraq and
by
commenting
on draft economic legislation and the management of donor funds.
That
was no
substitute for working in country; the UK would continue to press
them to return
as soon as
possible.
1076.
The official
also advised that the Financial Management Law signed
by
Ambassador
Bremer on 5 June was “a key piece of economic legislation” that
regulated
the
preparation and execution of Iraq’s budget. UK Treasury officials
had been
extensively
involved in its drafting.
1077.
The 17 June
meeting of the AHMGIR considered DFID’s second paper on
funding
reconstruction
in the South after transition.631
It was more
detailed and less reassuring
than the
paper considered by ISOG on 19 May.
1078.
In the paper,
DFID assessed that the first few months after transition would be
a
critical
period for establishing stability under new Iraqi structures,
building credibility in
the
political process, and maintaining consent for multinational
military forces after the
end of
Occupation.632
The quality
of the provision of basic services – particularly
water,
630
Minute
Treasury [junior official] to Chancellor, 10 June 2004, ‘Iraq –
UNSCR 1546 and Financial
Management
Law’.
631
Minutes, 17
June 2004, Ad Hoc Group on Iraq Rehabilitation
meeting.
632
Paper DFID,
June 2004, ‘Southern Iraq: Reconstruction and Employment After 30
June’.
186