BAGHDAD (Reuters)–Iraq’s US administrator said on Monday he would "listen very carefully” to a new Iraqi Governing Council on foreign investment–but would keep broad control over the course of the country’s economy.
The US-led administration has said that Iraq–burdened with debts that could reach $120 billion and facing massive rebuilding costs–should consider privatizing its state-owned sectors and allowing foreign investment in its oil industry before a permanent sovereign government takes over.
But asked who had the power to ink contracts and bring in foreign investment–Paul Bremer said the Coalition Provisional Authority (CPA) retained the ultimate say.
"The coalition made it very clear in its discussions yesterday with the Governing Council that we consider that the coalition has very broad authorities to determine the direction of the Iraqi economy,” Bremer told reporters.
"Concerning foreign investment…it is an issue on which the Governing Council will obviously want to give its advice–and we intend to listen very carefully to whatever the Governing Council has to say.” Difficult Transition
Bremer spoke after a visiting World Bank delegation addressed Iraqi business leaders–saying the country of 26 million faced a difficult transition.
"We did come hoping to share with Iraqis the information we have about other countries which have gone through very difficult periods of transition. That is what Iraq faces–a very difficult period of transition,” said Joseph Saba–a World Bank regional director whose mandate includes Iraq.
"Nevertheless–as we discussed–Iraq has many advantages that I think are very well known–its human resource base–its natural resource base–its position in the Middle East. So there are many hopeful opportunities.”
Bremer has said that Iraqis needed to give clear backing to the entry of foreign capital to reassure private investors.
The US-backed Governing Council–made up of 25 Iraqi politicians–will have to consider foreign investment in the telecommunications sector and the tendering of licenses to operate a wireless telephone system.
Iraq will have to consider foreign investment–a tricky issue in a country that has been largely closed to investment by Western firms–because it will not be able to generate enough revenue to balance its budget for the next 18 months.