Iraq’s Prime Minister Haider al-Abadi. Picture: REUTERS
Iraq’s Prime Minister Haider al-Abadi. Picture: REUTERS

Kuwait City — On Wednesday, governments from around the world pledged billions of dollars in loans and investment for the reconstruction of Iraq, a nation reeling from a three-year war against Islamic State (IS).

Iraq secured nearly $25bn in the first few hours of the final day of an international donors’ conference in Kuwait City. Baghdad says it needs nearly $90bn to rebuild after a grisly war with IS extremists that devastated homes, schools, hospitals and economic infrastructure, displacing millions of people.

The top contributors so far are Britain and Turkey, though each with its own stipulations. Britain said it would grant Iraq export credit of up to $1bn a year for a decade. Turkish foreign minister Mevlüt Çavusoglu said his country would provide $5bn in loans and investment, without specifying the breakdown.

The Gulf states, led by host nation Kuwait, pledged $5bn in investment, loans and financing for exports. Iran’s deputy foreign minister said that Tehran would contribute to stabilisation efforts through the private sector, without announcing a financial pledge.

Iraq said its 10-year reconstruction plan will cost $88.2bn, of which $22bn was required immediately.

Prime Minister Haider al-Abadi’s government is hoping the international community will follow up the end of major combat against IS with concrete financial support for reconstruction. However, the call for investment came just days after an Iraqi court sentenced an Iraqi-American anti-corruption activist to six years in jail for defamation of state institutions.

On Wednesday, in Kuwait City, Al-Abadi sought to allay fears that funds would be lost to corruption, for which the country is notorious.

"We will not stop fighting corruption, which is not less than terrorism. In fact, it was one of the reasons for the rise of terrorism," he told the potential donors. "Last week, we launched a string of measures to simplify procedures for investments," Al-Abadi said, adding that Iraq’s council of ministers had ratified international covenants aimed at protecting investments.

Throughout the three-day reconstruction conference, Baghdad has been on a drive to attract international investors to rebuild the country, offering hundreds of projects from oil refineries to massive housing and transport ventures.

On Tuesday, Iraqi and World Bank officials talked up legal guarantees available in post-IS Iraq, pointing to an investment law that offers ownership, unlimited cash transfers and tax breaks, among other benefits.

The chair of Iraq’s national investment commission, Sami al-Araji, said investors in Iraq will find "high risks, but high returns".

On Wednesday, UN chief António Guterres sought to motivate donors, saying it was incumbent on the international community to back Iraq after its sacrifices against the extremists of IS. "The whole world owes you a debt for your struggle against the deadly global threat posed by Daesh [IS]," Guterres said, in comments directed at the Iraqi delegation. "It is time to demonstrate our lasting gratitude and solidarity with the Iraqi people."

Guterres highlighted two key, UN-backed initiatives, for which he was seeking support. "The UN development programme’s funding facility for stabilisation is working in 25 cities and districts, supporting the return of displaced people to their homes," the UN chief said, adding that 2.5-million remained displaced.

He also announced a new, two-year recovery and resilience programme. "It aims to make immediate and tangible improvements to people’s daily lives, rather than the long timelines associated with major infrastructure projects and economic reforms."

Kuwait, which was invaded by Iraq in 1990, was the first country to make a pledge to the reconstruction fund. Kuwaiti Emir Sheikh Sabah al-Ahmad Al-Sabah said his country was acutely aware of the extent of the destruction caused to its neighbour when IS occupied parts of its territory: "Reconstruction is not something Iraq will be able to undertake on its own, and that is why we are appealing to the international community."