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(Provisional Translation)

Japan's Assistance for the Reconstruction of Iraq
(Assistance to meet the medium-term reconstruction needs of Iraq)

October 24, 2003
Government of Japan

The reconstruction of Iraq is extremely important for the people of Iraq, as well as for the peace and stability of the region and the international community as a whole. This is of direct concern to the national interest of Japan, which depends on the Middle East for almost 90% of its oil import.
To successfully reconstruct Iraq, it is necessary to provide the Iraqi people with a concrete vision as well as hope for their future. In doing so, it is important for the members of the international community to join efforts to assist the reconstruction of Iraq. @Japan has consistently stressed to the international community the importance of doing so, and played a leading role in the discussions leading up to the International Conference on Reconstruction in Iraq in Madrid.
On October 16, the United Nations Security Council (UNSC) unanimously adopted a new resolution (resolution 1511) concerning Iraq. This resolution recognized that the international community is united in undertaking the task of reconstructing Iraq and ensuring security in that country.
Furthermore, the President of the Iraqi Governing Council and the Interim Minister of Trade who visited Japan recently as well as other members of the Iraqi interim administration have welcomed Japan's assistance, and requested the continuation of cooperation in all areas.
The Government of Japan (GOJ) recently announced that it would provide grant assistance totaling US $1.5 billion to meet the immediate reconstruction needs of Iraq. At that time, the GOJ also announced that it was considering providing assistance to meet the medium-term reconstruction needs of that country, to be announced for the International Conference on Reconstruction in Iraq in Madrid. Bearing in mind the adoption of the UNSC resolution on October 16, the GOJ has decided to provide the following assistance.
|Having examined the outcome of the needs assessment conducted by the UN, the World Bank and other organizations covering the period extending approximately through the year 2007, the GOJ will provide assistance of up to $3.5 billion mainly through concessional loans (Yen loans) to meet the medium-term reconstruction needs. Together with the grant assistance of US$1.5 billion to meet the immediate reconstruction needs of Iraq that the GOJ has already announced, the total amount of Japanese assistance will become up to US$5 billion.
|With regard to specific areas of assistance, in addition to such areas as power generation, education, water and sanitation that was previously announced, the GOJ will also focus on infrastructure development, including telecommunications and transportation.
|The GOJ will provide the assistance for the medium-term reconstruction, taking into account the progress of the reconstruction projects, the advancement of the political process, and developments toward the solution of debt issues. In this connection, the GOJ will ensure close coordination with the financial assistance by the World Bank, the IMF and other international financial institutions.@@In addition, as one of the major creditor countries, Japan will actively participate in the discussions in the Paris Club and other fora, with a view to achieving an early and appropriate resolution of Iraq's debt issues.
Regarding Japan's assistance, including those for meeting the immediate reconstruction needs, the GOJ will endeavor to ensure its ownership in the provision of the assistance while taking into account the situation on the ground as well as developments in the international community.
The GOJ also believes that rehabilitation and reconstruction of Iraq's key industries is an urgent task on which both public and private sectors should cooperate.
Many countries are expected to announce positive and concrete measures of assistance for Iraq at the Ministerial Meeting of the International Conference on Reconstruction in Iraq today in Madrid. This will include the contribution that Japan has just decided to provide. These pledges will be the materialization of assistance to Iraq, provided through the concerted effort of the international community as affirmed in the new UNSC resolution. The GOJ strongly hopes that this will provied hope for the future for the people of Iraq.