10.3 |
Reconstruction: oil, commercial interests, debt relief, asylum and
stabilisation policy
160.
The paper was
one of several passed to Mr Blair on 7 March, after his 6
March
ministerial
meeting on post-conflict issues.82
161.
A revised
version of the paper was passed to the US by 13
March.83
162.
Mr Blair
chaired a meeting on post-conflict issues on 6 March with
Mr Brown,
Mr Hoon,
Ms Clare Short (International Development Secretary), Baroness
Symons
(joint
FCO/DTI Minister of State for International Trade and Investment),
Sir Michael Jay
(FCO
Permanent Under Secretary) and other officials.84
The meeting
is described in
detail in
Section 6.5.
163.
Mr Brown
received a number of papers from Treasury officials before the
meeting,
including a
draft “DFID paper rewritten by the Treasury” on humanitarian relief
and
reconstruction
costs.85
The draft
paper stated that it was a “first attempt at charting
the
likely
costs of the first three years of the Iraqi
reconstruction”.
164.
The draft
paper stated that, while cost estimates would remain “very rough”
until
the
International Financial Institutions (IFIs) had completed a full
needs assessment:
•
In year 1,
humanitarian costs could be between US$2bn and
US$12bn,
depending
on the scale of the humanitarian crisis and the extent to which
oil
exports and
the OFF programme were disrupted.
•
In years 2
and 3, total reconstruction costs (before Iraq’s oil revenues
were
taken into
account) would be between US$2bn and US$15bn per year.
Oil revenues
might allow Iraq to pay for most of this – if production levels
and
prices were
favourable, Iraq did not have to repay its debts, and
rehabilitation
of Iraq’s
oil infrastructure was cheap.
165.
The draft
paper stated that sources of financing for relief and
reconstruction
remained
uncertain. The current US/UK approach was to maintain and expand
the OFF
programme
as the central source of financing.
166.
At the
meeting, Mr Brown said that the burden of reconstruction
should not
be borne by
the US and UK alone; other countries and Iraqi oil revenues should
be
tapped.86
In the
longer term, Iraqi oil should fund the country’s
reconstruction.
167.
Mr Blair
concluded that Mr Brown should draw up “a funding plan,
including
securing
funding from wider international sources, in particular the IFIs”.
The Treasury
sent that
plan to No.10 on 14 March.
82
Minute
Rycroft to Prime Minister, 7 March 2003, ‘Iraq: Weekend
Papers’.
83
Letter
Gooderham to Chilcott, 13 March 2003, Iraq: Day After: The Oil
Sector’.
84
Letter
Cannon to Owen, 7 March 2003, ‘Iraq: Post-Conflict
Issues’.
85
Email Dodds
to Private Office [Treasury], 4 March 2003, ‘Iraq: Ministerial
Meeting on Thursday Morning’
attaching
Paper DFID
[draft], March 2003, ‘Iraq Relief and Reconstruction Costs:
an Overview’.
86
Letter
Cannon to Owen, 7 March 2003, ‘Iraq: Post-Conflict
Issues’.
399