6.4 |
Planning and preparation for a post-Saddam Hussein Iraq, mid-2001
to January 2003
“The two
big constraints will be finance and implementation capacity. On
the
former the
key will be a workable agreement between external stakeholders
which
guarantees
a reasonable flow of resources to Iraq … On the latter there will
be a
need for
detailed analysis and planning of the substance, some of which
should be
set in hand
now … and also for the establishment of a competent central body
within
Iraq able
to act as the focal point for reconstruction.”
776.
The FCO warned
that Iraq’s actual or potential financial obligations, including
debt
servicing
and compensation payments, threatened to “swamp” the income
available
from oil.
There would need to be co-ordination between external players on a
package
including
new bilateral grants or loans and multilateral
assistance.
777.
The FCO
advised that advance planning for the period immediately after
regime
change
“falls to the US”, but there was also a need for “good information
and sound
policy
analysis” from the World Bank and IMF:
“...
neither institution has done any substantive work for many years;
if we leave it
until
regime change has happened to ask them to address the issues there
is likely
to be a
considerable delay before they can produce anything useful. On
economic
grounds
there is a good case for asking senior management in both
institutions to
put work in
hand well in advance of military action … [S]ome useful
preparatory
assessments
… would at least mean that an incoming regime, and its
friends
abroad,
would not be flying completely blind on economic matters
…”
778.
The only
comments on the draft seen by the Inquiry were from a junior
official
in DFID,
who observed a need “to dovetail humanitarian relief efforts with a
transition
phase,
reconstruction and longer-term reform”.383
The
official recommended that
“a revised
version of OFF should incorporate development
planning (sector
development,
economic planning and strategy), provide a clear structure of
roles
and
responsibilities … and provide channels for supporting [Iraqi]
government
administrative
and planning structures …”
779.
A Treasury
paper on the impact of conflict on the global economy and the UK
was
circulated
to the AHGI on 7 November.384
The
Treasury’s assessment of the impact on
the global
economy remained unchanged from 6 September. The Treasury
assessed
that, in
the UK, the conflict might lead to lower growth, higher
unemployment and higher
inflation,
especially if it was protracted.
383
Minute DFID
[junior official] to Dodd, 31 October 2002, ‘Economic issues in
Iraq after post-Saddam
regime
change: internal policy and external engagement’.
384
Letter Dodd
to Ad Hoc Group on Iraq, 7 November 2002, ‘Ad Hoc Group on Iraq’
attaching Paper HMT,
October
2002, ‘Economic Impact of a War in Iraq’.
243