The Report
of the Iraq Inquiry
182.
On 14 March,
in response to Mr Blair’s 6 March request, Mr Mark
Bowman,
Mr Brown’s
Principal Private Secretary, sent No.10 a Treasury paper on
financing Iraq’s
183.
The Treasury
estimated that the total cost of Iraq’s reconstruction could be
up
to US$45bn
for the first three years (US$15bn a year) and warned that, without
UN
authorisation
of arrangements for a transitional administration, Iraqi oil might
pay for
only a
fraction of that.
184.
The Treasury
advised that the best way to pay for reconstruction would be
to
spread the
burden as widely as possible, drawing in contributions from
non-combatants,
IFIs and
Iraq itself, and ensuring Iraqi revenues were not diverted into
debt or
compensation
payments. By far the most significant factor in making that happen
would
be
political legitimacy conferred by the UN.
185.
The Treasury
stated that the OFF programme provided “an obvious way to pay
for
immediate
humanitarian needs”, using the approximately US$4bn unspent in the
OFF
account and
by restarting oil exports. That depended on oil production
facilities surviving
the
conflict relatively intact. In the most benign circumstances, with
rapidly increasing
production
and high oil prices, oil revenues “could make a very significant
contribution”
to ongoing
relief and reconstruction. The securitisation of future oil
revenues was
another
possible source of funds, but Iraq had already accumulated “massive
and
probably
unsustainable debts” that way.
186.
President
Bush, Mr José María Aznar, the Prime Minister of Spain, and
Mr Blair
discussed
Iraq at the Azores Summit on 16 March.96
187.
The FCO
background papers sent to No.10 in advance of the Summit included
a
revised
version of the UK’s ‘A Vision for Iraq and the Iraqi People’ (see
Section 6.5).97
The UK
intended that the document, which would be launched at the Summit,
would
reassure
Iraqis and wider audiences of the Coalition’s intentions for Iraq
after Saddam
Hussein’s
departure.
188.
The revised
version included a number of changes from the version
produced
the
previous month, including the addition of a reference to Iraq’s oil
industry being
managed
“fairly and transparently”.
189.
The statement
issued by President Bush, Prime Minister Aznar and Mr Blair at
the
Summit on
16 March shared much of the substance of the revised version of the
UK’s
95
Letter
Bowman to Cannon, 14 March 2003, [untitled] attaching Paper
Treasury, March 2003, ‘Financing
Iraqi
Reconstruction’.
96
Letter
Manning to McDonald, 16 March 2003, ‘Iraq: Summit Meeting in the
Azores: 16 March’.
97
Minute
Bristow to Private Secretary [FCO], 14 March 2003, ‘A Vision for
Iraq and the Iraqi People’.
402