Iraq says petrodollars hold key to peace

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BAGHDAD (AFP) — Finance Minister Bayan Jabr Solagh said on Monday that Iraq's booming oil wealth holds the key to peace and urged foreign investors to take part in huge projects planned by his war-ravaged country.

With state revenues quadrupled since the US-led invasion of 2003 and amid soaring world oil prices, "from my point of view, money is key to peace, it is the main key," Solagh said in an interview with AFP.

Iraq's oil revenues for 2008 are set to jump to more than 75 billion dollars, earmarked for running expenditure and development projects.

"It is the first year since 2003 that we have access to that kind of money," said the upbeat finance minister who boasted a vision for Iraq with a more prosperous and secure future.

The army of jobless needing money to feed their families has created a pool of recruits for Al-Qaeda insurgents or the ex-Baathists of toppled dictator Saddam Hussein, he cautioned.

But the government's aim was to "bring peace to Iraq" by creating jobs and rebuilding the country, said the minister in the Shiite-led government.

No official figures have been issued for unemployment in Iraq, a country of 26 million people, but it is estimated to affect half or more of the potential working population.

Solagh, who spoke in English, said the government has decided to set up a strategic fund, apart from the state's general budget and an additional finance law, to fund priority projects.

He invited "the French, the Europeans, the Americans to share in this project directly or indirectly through joint ventures" to build refineries, roads, railways, 15 ultra-modern hospitals and ports, and to purchase aircraft.

The 2008 state budget of 48.3 billion dollars has already been achieved in the first six months of the year, the minister said.

A supplementary budget of 21 billion dollars was set aside at the start of July to finance operations in the oil, electricity, security, public services and housing sectors.

Baghdad also plans to set aside five to 10 billion dollars for strategic projects.

Oil accounts for 93 percent of Iraq's revenues, with the 2008 budget calculated on the basis of a conservative estimate of 57 dollars a barrel for crude, in sharp contrast to last week's peak of more than 140 dollars.

"We have a lot of money outside the budget ... We have more money, but it is a secret," said Solagh, adding that the 2009 budget was expected to range between 80 and 90 billion dollars.

"We have a strategic plan for the next three years. Iraq has a vision" for its future, he stressed. "The ministry of planning has focused on investments and we are focusing on executing the budget."

The minister said Baghdad was committed to fighting corruption and to transparency. But "it is not easy and it will take time. I am not telling you that we will do it tomorrow," Solagh acknowledged.

"We have to go around the world and choose the most efficient process for public tenders," he said. "We are studying all the processes in the world and we will choose the best one."

The government has used its new wealth to shower its 18 provinces with allocations of between 100 and 150 million dollars for emergency programmes.

The funds are being poured in to meet urgent needs of local populations after security operations against insurgents, and aim "to show that after the security, there is something new," said the finance minister.