UNDP chief says Iraq could 'quickly' become a land of market opportunity

The head of the United Nations Development Programme (UNDP) said today that Iraq could convert quickly from a land of subsidies and state control to one of "rising incomes and market opportunity."

Mark Malloch Brown, the UNDP Administrator, and chair of the United Nations Development Group, told the Iraq donors conference in Madrid that if the political track of Iraqi sovereign government is aggressively pursued in 2004, "we can indeed look to a more creative financing package for 2005-2007" to include loans as well as grants.

Mr. Malloch Brown said the political track would include a liberalization of the economy, a new foreign investment framework, an easing of internal tension, and an Iraqi government that "would take full leadership and ownership of the development and reconstruction effort."

"Together these steps by an Iraqi government enjoying full domestic and international legitimacy can convert Iraq quickly from a land of subsidies and state control to one of rising incomes and market opportunity," he said,

This approach, he noted, recalled the kind of mix of financing that transformed the countries that emerged in 1989 from behind the Berlin Wall.

"Yes, grant finance counted, but even more, technical assistance and capacity building to adjust to a modern market economy and a global economy beyond; and a growing flow of initially concessional finance increasingly supplemented by foreign direct investment portfolio, and bond flows as well as domestic savings," Mr. Malloch Brown said.