Iyad Allawi: Economic and security problems must be solved, not just for us but for the world

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News reports on Iraq paint a picture of a country trapped in a cycle of violence and destruction. The sceptics and nay-sayers don't believe Iraqis are ready for democracy. They couldn't be more wrong. The vast majority of Iraqis are still hopeful, and yearn for the opportunity of building a prosperous and democratic nation. The process will take time, but the potential outcome of a peaceful and successful Iraq at the heart of the Middle East is of vital importance to all the nations of the world.

News reports on Iraq paint a picture of a country trapped in a cycle of violence and destruction. The sceptics and nay-sayers don't believe Iraqis are ready for democracy. They couldn't be more wrong. The vast majority of Iraqis are still hopeful, and yearn for the opportunity of building a prosperous and democratic nation. The process will take time, but the potential outcome of a peaceful and successful Iraq at the heart of the Middle East is of vital importance to all the nations of the world.

The economic and security situations are intertwined: without peace and security there can be no sustainable reconstruction and no improvement in the lot of the ordinary Iraqi. Yet what is feeding the instability and chaos is the lack of jobs and economic opportunity.

Our approach as the interim government is to address both aspects simultaneously. On the security front our policy is to re-establish control over all areas of the country. The Iraqis who joined or aided the insurgency out of desperation and frustration, but have no blood on their hands, are invited to take advantage of the amnesty. The small minority of hardcore Saddam loyalists and foreign jihadist terrorists whose aim has been to instil terror will not succeed. They will be isolated and brought to justice, no matter how long it takes.

Since the transfer of sovereignty just over two months ago, we have been actively engaged in capacity-building for the institutions required to establish security - boosting the police force, establishing responsible intelligence services and strengthening the National Guard. Iraq is, however, in need of help in expertise, training, and equipment, and we call upon Nato and the European Union to do their utmost to assist.

On the economic front, our priorities are to tackle joblessness, rebuild the national infrastructure and restore basic services, and rapidly boost oil production. Key to these initiatives is the swift and efficient disbursement of pledged reconstruction funds. Despite more than $18bn pledged by the US and $13bn from other countries almost a year ago, only a small fraction (less than 5 per cent) has been received and disbursed. This process needs to be accelerated for Iraqis to see progress.

In addition, Iraq's inherited national debt level is the highest in the world as a percentage of GDP and of exports, and to service it would be unsustain- able for its fragile, fledgling market economy. The vast majority is "odious" debt, used to build up the war machine of the ousted regime, largely through arms purchases supported by the lending countries.

The innocent people of Iraq cannot be expected to bear this crushing burden; the vast majority of the debt must be forgiven if Iraq is to have a chance. Despite vague statements of good intentions, however, concrete pledges of debt forgiveness have not yet been forthcoming.

The oil sector is a vital economic resource and the country's main source income for the time being. It will require responsible management and investment. To this end, we have established the Supreme Oil Policy Council to co-ordinate policy, and are in the process of establishing the Iraqi National Oil Company to manage professionally and apolitically the existing fields and operations, with a view to inviting invest- ment for exploration and development.

Lastly, and of utmost importance, we are preparing the country for elections. An independent Iraqi Electoral Commission has been active with UN training and support, and campaigning is under way to invite all the elements of Iraqi society to participate in a peaceful and inclusive political process. The next step is for free elections to be held in early next year - an ambitious but achievable target that we intend to meet.

The forces of global terrorism are taking advantage of the situation in Iraq and using it as a theatre of operations to destabilise the region. This must not be allowed to happen, and it is in the interests of all nations to assist Iraq in its hour of need.

The writer is interim Prime Minister of Iraq

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