By Nick Cater
AlertnetMarch 7, 2003
The cost of a military operation, occupation and reconstruction in Iraq is calculated at tens of billions of dollars, but budgets for relief and rehabilitation afterwards are likely to be far more modest, in spite of the needs of 24 million civilians already impoverished by 12 years of sanctions.
The U. S. government has given funds to a small group of American NGOs, joined other countries in making donations to the U.N. appeal for preparedness and started stockpiling its own supplies, including an estimated $17 million worth of food, water, health kits and shelter materials, in four countries surrounding Iraq.
It has already spent $26.6 million on preparedness, says another $56 million is in the procurement pipeline and more funding decisions are expected within days.
Besides the U.S. contributions to the consortium of five U.S. agencies, the kind of NGOs usually on the front line of conflict or disaster have so far been given little or no money to prepare, hire staff, carry out training and acquire equipment and supplies for a man-made disaster that has been months in planning.
Most governments -- from hawkish Britain to dove-like Germany -- have been unwilling to fund NGOs on the grounds that this might pre-empt efforts to bring a peaceful conclusion but major donors are expected to support post-war recovery, including Japan, which is likely to see its continued backing for Afghanistan as a template for assisting Iraq, and Australia, which has committed $6 million but says it is considering contributing more. Norway has already committed about $4.2 million to the United Nations and $3.3 million to Norwegian NGOs and plans to step up its contribution to the U.N. within days.
At least one network of NGOs, Oxfam International, has decided that it will not accept funding from any government taking a military role in the Iraq conflict while hostilities are in progress.
Based on long-standing policies, the 12 Oxfam International members agreed a statement on the Iraq crisis, stating in part: "Oxfam will not accept funds from any source if doing so would increase poverty and suffering, undermine our humanitarian impartiality or public credibility to advocate" or "allows governments to effectively use the humanitarian operation as an instrument of foreign policy and thus increases the chances of war".
Most NGOs say they will wait for war to start before they can launch full appeals to obtain private funds for independent action, whether individually or through coalitions such as Britain's Disasters Emergency Committee or InterAction in the United States.
One major donor, the European Commission Humanitarian Office (ECHO), cannot act over the expected Iraq conflict because its rules prevent funds being spent before civilian casualties are reported. It has indicated, however, that it could release more than $3 million within 72 hours of hostilities and a similar sum for refugee operations.
The initial U.N. call for preparedness funds asked donors for $37 million, which was raised to $123 million in mid-February to cover the needs of a range of agencies, including the children's fund UNICEF, the Office of the U.N. High Commissioner for Refugees (UNHCR), World Food Programme (WFP), World Health Organisation (WHO), the U.N. Development Programme (UNDP), International Organisation for Migration (IOM) and the Office for the Coordination of Humanitarian Affairs (OCHA).
40 PERCENT PLEDGED
Figures from the end of February show that at least $48 million -- $2 per Iraqi -- has been pledged by the United States, Britain Australia and other countries, some of which are remaining anonymous because they wish to avoid being accused of planning for war.
At the same time, just $18 million has actually reached U.N. agencies. However, with almost 40 percent of the funding request pledged and almost 15 percent delivered, the Iraq preparedness fund is doing much better than almost all the consolidated U.N. appeals for other crises around the world launched in 2003, from Afghanistan to Uganda via North Korea and the Palestinians.
Three U.N. agencies have received the bulk of U.S. funding: the State Department's Refugee Bureau gave $15 million to the UNHCR, while the U.S. Agency for International Development (USAID) provided $5 million to the WFP and $2 million to UNICEF. The IOM has received $300,000. Just over $1 million went to OCHA, which some believe will be too little for an effective coordinating role, especially when the U.S. government has created its own Office for Reconstruction and Humanitarian Assistance as a coordinating body.
ECHO director Constanza Adinolfi was quoted on the organisation's website as saying that the rules blocking funds for pre-positioning food, water, medicine and equipment means the European Union must be prepared to move quickly if war leads to a humanitarian crisis.
About $15 million had already been earmarked for Iraq this year and another $200 million could be released, although that would take at least six weeks. She added that member states had done "practically nothing". A British Labour Member of the European Parliament, Richard Howitt, has urged the assembly to unblock the funds, saying the international community was "woefully unprepared" for the Iraq crisis.
There may be other issues before ECHO funds or wider EU development finance can be committed. Poul Nielson, the EU commissioner for development and humanitarian aid who manages more than $7.5 billion in aid, has said the U.N. should maintain its traditional role of co-ordinating the aid effort. He said U.S. attempts to lead post-war operations risks tainting normally impartial aid agencies and highlighted problems with armed but out-of-uniform U.S. and British soldiers in Afghanistan delivering aid while also collecting intelligence. EU officials have said they will not operate under U.S. military control once they start distributing aid funds.
In Britain, Save the Children's Director-General, Mike Aaronson, attacked the lack of British funding. "Despite the government's insistence that a war would be on humanitarian grounds, no funding has been forthcoming to support efforts to prepare for the potentially catastrophic humanitarian consequences of military action," he wrote in the Guardian newspaper.
"While the Ministry of Defence has been given a multi-billion pound war chest, the Department for International Development (DFID) has not received a penny of extra cash, either for its own work or to pass on to humanitarian agencies trying to make contingency plans."
At DFID, a spokesperson said that existing commitments to agencies already active in Iraq or the region were being fulfilled but new money had not been made available while it was planning for all contingencies.
Meanwhile, British Chancellor of the Exchequer (Finance Minister) Gordon Brown earmarked $2.8 billion for the conflict and said he would "spend what it takes" to disarm Iraq.
CONTINGENCY RESERVE
His cabinet colleague, International Development Secretary Clare Short, told a parliamentary committee: "The government does not pre-allocate resources for specific humanitarian crises. DFID's budget includes a contingency reserve of £100 million ($160 million) per year which would be drawn upon to provide additional assistance as necessary."
She said: "It would clearly be wrong to consider withdrawing DFID funding from other humanitarian emergencies or development efforts in other parts of the world. There are currently serious humanitarian crises in southern Africa, Ethiopia, Afghanistan and the West Bank/Gaza, and both the international humanitarian system and DFID resources are highly stretched."
U.S. funding for NGOs of about $900,000 has so far only gone to the Joint NGO Emergency Preparedness Initiative (JNEPI), an American consortium consisting of the International Medical Corps, International Rescue Committee, Mercy Corps, Save the Children U.S. and World Vision U.S., which aims to serve as a clearing house for information gathered by its members and other agencies. JNEPI is located in the Jordanian capital Amman at present but likely to move to Baghdad once fighting stops.
Some U.S. and British NGOs have started fundraising with approaches to foundations or direct mail to regular private donors, such as the Mines Advisory Group, or U.S.-based Church World Service which has joined other religious groups in the "All Our Children" $1 million appeal.
The International Rescue Committee mailed 125,000 supporters in January. Mercy Corps and its British affiliate Aid International have started fundraising for Peace Winds Japan, which offers medical aid in northern Iraq, while CARE UK has been searching for free advertising space or a sponsor so it can launch a public appeal.
Besides concerns about independence and impartiality, many agencies fear that the Iraq crisis could divert attention and funds from other disasters. Mercy Corps' Laura Guimond said: "One major concern we have is that it not drain attention and resources away from Afghanistan. We've seen signs that may already be happening."
In a call to donor nations, Anders Ladekarl, then-chair of the 80-member International Council of Voluntary Agencies (ICVA) told AlertNet: "The costs of war will not only be felt in Iraq. The massive financial cost of operations in Iraq and any subsequent humanitarian assistance programme threatens to divert attention of donors and NGOs from other crises where there are equal human needs and equivalent obligations to protect human rights."
Interviewed by the BBC, UNICEF head Carol Bellamy said governments had been slow to offer funding. "There's been virtually no money... to any of the humanitarian agencies so far," she said. "As things stand right now, it is almost entirely self-financed, which means taking money away from places like Sierra Leone or Afghanistan or Somalia or Colombia, and those are crises as well."
For the Médecins Sans Frontií¨res agencies, Kevin Phelan highlighted the issue of independence when working in Iraq: "MSF is always concerned to have independent financing because it ensures independent capabilities, not just for work in Iraq but in all situations. So we balance a pool of private donors with government funding but the government funding must come without strings. We have done no fundraising for Iraq so far, but with a team in Jordan and assessments under way in Iraq and Iran, we are ready as we can ever be for a disaster."
Ken Bacon, president of Refugees International advocacy group, said limited funding of U.N. agencies had slowed down their preparedness and so far there had been little funding of NGOs to hire staff and establish them in the region. It was a pity more funding had not been committed well in advance, he said, adding: "Money spent early is far better than money spent late".
Among U.N. agencies, the WFP has spent $7.7 million to build up a stockpile of food sufficient to feed 900,000 people for three months and has agreements to buy more than 140,000 tonnes of food from Syria, Iran and Turkey if required, and options on more food in Kuwait and regional markets. The WFP says it needs more than $35 million for all its preparations, as it may need to help up to 10 million Iraqis.
STOCKPILES IN KUWAIT, JORDAN, IRAN, TURKEY
The UNHCR has received $15 million, used $16 million from its reserves and now has stockpiles in Kuwait, Jordan, Iran and Turkey for the needs of well over 100,000 refugees with more tents, blankets and cooking materials being purchased, but it estimates more than $55 million is required to help, perhaps 600,000.
"We have to be prepared for a worst case scenario. We cannot wait for the pictures (of suffering) to appear on people's television screens. By then it is too late," the UNHCR's Peter Kessler was quoted as saying in Geneva.
The International Committee of the Red Cross is spending $20 million on supplies in Iran, Jordan and Kuwait and national Red Crescent Societies across the region may be able to assist 300,000 refugees.
Save the Children UK, which works in the Kurdish-controlled north of Iraq, has been stockpiling shelter and feeding materials for thousands of families. The Catholic Fund for Overseas Development is supporting 14 mother and baby clinics in Iraq, which the all-Iraqi staff are transforming into first-aid centres, and stockpiling supplies in Jordan. Christian Aid's Kurdish partner agencies in the north are training local people in first aid and chemical warfare precautions.
If war starts, the humanitarian preparedness and response, long delayed by lack of advance funding and planning, may turn out to be reasonably well financed, since the United States, Britain and other belligerents believe it is essential to quickly improve the lives of individual Iraqis to serve their longer-term political objectives of establishing a Western-friendly government.
U.S. media reports put the projected total war budget at about $90 billion, which President George W. Bush will review in the next week or two before it is presented for approval to Congress, perhaps after a war has already started.
Of that, about $1 billion could be earmarked for post-war humanitarian response and reconstruction. In addition, there will be funds available from other donor nations and public appeals, which some expect could be worth tens of millions of dollars.
For agencies on the ground, funding could be available fast, providing they do not mind limited independence of action and tight financial controls. Once military forces have declared an area safe, decision-making on humanitarian action and funding is likely to centre on a US-led Disaster Assistance Response Team (DART) of more than 60 people from various government agencies, as well as invited representatives from the UK and Australia.
The DART will have immediate spending powers, or as Joseph Collins, U.S. Deputy Assistant Secretary of Defence for Stability Operations, put it in a Washington briefing to journalists: "These are 60 people with cheque books. They are also experts at using contracts to get whatever resources they need."
That approach could well mean the DART moving into areas at a pace decided by military objectives not humanitarian need, and then a small number of DART members assessing the problems, prescribing the solutions, choosing which agencies they want to do the work and putting a take-it-or-leave-it price on the operation before moving on.
Larry Thompson of Refugees International wrote in a report from Kuwait in early March: "The assumption is that, when the war begins, the financial spigot will run wide open. But humanitarians -- like the military, which has been preparing for war this region for more than six months -- need time to prepare.
CALL TO ACTION
"A last minute call to action may find the aid agencies under-staffed and under-resourced to address a humanitarian crisis. The first victims of such a failure would be the people of Iraq, millions of whom are at risk if the infrastructure of the U.N. supervised oil for food program which feeds them is destroyed in a war or if U.N. estimates of two million displaced persons prove to be correct. Other victims would include the taxpayers of the U.S. and UK because a humanitarian program run by their military forces would be vastly more expensive than one run by NGOs."
He added that tens of millions more dollars and hundreds of additional relief workers were needed: "It is past time for the U.S. government to stop speaking in generalities and, if war is truly intended in Iraq, to providing the resources that will be needed to address the humanitarian consequences of a war. Those consequences are likely to be more complex than can be solved by simply handing out a food packet. The expertise of international aid agencies and non-governmental agencies is needed."
Compared with other conflicts, longer-term reconstruction for Iraq may be easier to fund. There have been various estimates of the overall cost of Iraq's reconstruction, from the UNDP's $30 billion in the first two years to a study by William Nordhaus of Yale University, which offered scenarios from $100 billion to a staggering $1.9 trillion over the next decade.
An important difference between Iraq and the recent example of Afghanistan in funding post-war recovery is that, while Kabul is dependent on international aid that has been slow to arrive, a U.S.-led military occupation could use Baghdad's oil revenues to cover its own costs and the rebuilding work.
Indeed, U.S. Secretary of State Colin Powell said recently: "I don't think one should assume the country is going to be devastated by a conflict," adding that Iraq "has $22 billion of oil revenues a year. So this is not like Afghanistan".
Joseph Collins added: "Iraq, first and foremost, is economically way above the level of where Afghanistan is. Iraq is also an oil-rich country, and that would certainly allow them to have some kind of reconstruction that would be self-financing.
"The pace in a very poor country like Afghanistan is set by sort of things like donor fatigue and how much money is available in the system at any one time. But if you're an oil-rich country, you have options, and you can begin to improve the health and welfare of your population at the speed of light, as long as the infrastructure is not damaged."
Once initial recovery work is over, the U.N. and NGOs may find themselves nudged aside by companies, as it appears the larger funding for post-war reconstruction is already being channelled towards the private sector of the United States and its allies, with reports of American commercial operators being approached to fulfil initial contracts in Iraq for $900 million. One aid analyst with access to an early draft of USAID planning for Iraq said it assumed a major role for contractors.
Outside Iraq, the war may have unexpected benefits or costs for some developing countries as the United States and Britain look for votes on the U.N. Security Council, and need assistance for the military campaign.
While multi-billion dollar deals in negotiation with Turkey, Israel, Jordan and Egypt, it is expected that packages of help - from loans and aid grants to trade concessions and military support -- will be offered to non-permanent Security Council members Angola, Bulgaria, Cameroon, Chile, Guinea, Mexico, Pakistan and Syria.
Resisting U.S. demands may bring the withdrawal of existing or promised support. The United States is also expected to guarantee that Iraq will repay its debts, which include $9 billion to the Russian Federation, a Security Council permanent member, and Russian companies with Iraqi oil contracts may find them honoured as well.
At $90 billion, it will certainly be a very costly war for the United States. The 1991 Gulf War cost about $85 billion at today's prices, but 90 percent was paid by other countries, from Japan to Germany and Saudi Arabia.
This time, no cash contributions are expected. The United States has made a commitment to increase its aid budget by 50 percent, to $15 billion a year, albeit by bypassing USAID to send additional funds to a small group of countries through the seemingly politicised separate mechanism of what will be called the Millennium Challenge Corporation. Yet some fear the war's overall impact on the U.S. economy might well affect its future enthusiasm to deal with international conflicts or willingness to put more money into overseas assistance.
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