The Report of the Iraq Inquiry

305.  Summarising the outcome of the discussion, Mr Blair asked for more advice on

several issues, including a “short strategy” from DFID on engaging key donors.

306.  DFID sent its donor engagement strategy to the Cabinet Office on 3 June.177 The

DFID strategy advised that a significant portion of the US$32bn pledged at the Madrid

Conference in October 2003 remained unspent. Some donors had spread their money

over several years, some had offered soft loans that could only be activated after an

agreement on debt relief, some had been waiting for an elected Iraqi Government, and

many had experienced difficulties in implementing reconstruction projects in Iraq. One

or two donors were “simply back-sliding”. The paper identified 16 countries that the UK

should lobby to secure outstanding pledges.

307.  DFID advised that the US was committed to disbursing its funds as quickly as

possible. The UK had limited influence over US policy and did not question its “current

thrust”, but should seek to:

• join up US and UK work in southern Iraq;

• encourage the US to participate in donor co-ordination processes in Baghdad;

and

• work with the US to encourage other donors and the multilateral agencies to

contribute more effectively.

308.  The UK was lobbying Japan to allocate the bulk of its soft loans (up to US$3.5bn)

to the power sector and exploring with Australia, Denmark and Canada the possibility of

co-funding DFID projects in southern Iraq.

309.  France and Germany remained the “two missing donors”, although France had

taken a constructive approach on donor co-ordination and the Brussels International

Conference, and Germany was contributing to police training outside Iraq.

310.  Implementation of reconstruction projects by UN agencies had improved and the

UN was playing a valuable role supporting Iraqi-led donor co-ordination. DFID continued

to press for further improvements to UN Trust Fund operations.

311.  DFID also continued to press:

• the World Bank urgently to establish a presence on the ground in Iraq, and to

find ways of implementing its projects; and

• the EC to open a permanent office in Baghdad. The EC was already making

use of UK life support178 and security facilities for its increasingly frequent visits

to Iraq.

177  Email DFID [junior official] to DFID [junior official], 3 June 2005, ‘Iraq donor coordination paper’

attaching Paper DFID, 2 June 2005, ‘Iraq Reconstruction: Engaging USA and Other Key Donors’.

178  Life support includes accommodation, medical services, catering, laundry and cleaning.

246