§ The Lord President of the Council (Baroness Amos)My right honourable friend the Secretary of State for International Development has made the following Written Ministerial Statement.
I visited Iraq from 22 to 23 March. In Baghdad I met the Iraqi Governing Council, Ministers and representatives of non-governmental organisations, as well as Ambassador Bremer and other staff from the Coalition Provisional Authority. In Basra I visited two development projects, met leaders of women's groups and held discussions with CPA South staff.
Significant progress is being made. Iraq's economy is recovering with oil output now over 2.5 million barrels per day, and reconstruction projects are bringing results. I visited Al Faw to see the installation of five 2MW diesel generators, funded by DfID, which should provide the 45,000 citizens of Al Faw with 24 hours of electricity every day.
In Basra I visited the Rzero water treatment plant. This is part of a major programme to renew the Basra water supply. The USA is providing most of the capital investment, alongside some money provided by the Development Fund for Iraq, to extend new water mains to the poorest areas of Basra, and in doing so create up to 2,000 jobs. The DfID-financed team in CPA South helps to co-ordinate the whole programme. It should provide a good model for future collaboration.
Successful reconstruction is bringing new challenges. Sustaining the improvements in infrastructure will require difficult political decisions by the new Iraqi Government about charging customers realistic rates for services such as electricity and water and strengthening the Iraqi institutions that run these utilities. The public distribution system for 46WS food and Iraq's state-owned enterprises will also need reform. The IMF and World Bank will have a significant role to play in this.
Security remains a major concern for the Iraqis and those who are helping them. But encouraging progress is being made in recruiting for the new Iraqi security forces, and training programmes are under way.
The transitional administrative law is a significant development in the political process. At the Iraqi Governing Council's invitation the UN has agreed to play a major role in facilitating the formation of the interim government and the preparation for elections. The handover on 30 June will be a big step. From 1 July Iraqis will have to address their concerns to their own government. However, donors will still have a significant role, and we are working to make the transition as smooth as possible and to ensure that donors co-ordinate their programmes effectively.
The Minister for Municipalities and Public Works, Mrs Nasreen Berwari, joined me in Baghdad to launch DfID's interim country assistance plan for Iraq, which I announced to the House in a Written Statement on 23 February (col. 7WS). Copies of the plan are in the Libraries of both Houses. At the same time I was able to confirm that DIID is making an initial contribution of £70 million to the International Reconstruction Fund Facility for Iraq: £40 million of this will be spent through the World Bank's trust fund and £30 million through the UN's. We are also providing £8.5 million to the International Finance Corporation for its programme for small and medium enterprises in Iraq, which will enable it to start promoting much needed business activity and employment.
Recent events remind us to take nothing for granted in Iraq, but overall reconstruction is going better than many predicted. However, it will require a sustained effort from the Iraqis, with support from the international community, to ensure that it succeeds.