Kuwait's Emir Sheikh Sabah Al Ahmad Al Sabah meets with Iraqi Prime Minister Haider al-Abadi in Kuwait City
By Maher Chmaytelli and Ahmed Hagagy
KUWAIT (Reuters) - Iraq received pledges of $30 billion, mostly in credit facilities and investment, on Wednesday from allies but this fell short of the $88 billion Baghdad says it needs to recover from three years of war.
Donors and investors gathered in Kuwait to mull ways to rebuild Iraq's economy and infrastructure as it emerges from a ruinous conflict with Islamic State militants who seized almost a third of the country before being beaten back.
"If we compare what we got today to what we need, it is no secret, it is of course much lower than what Iraq needs," Iraqi Foreign Minister Ibrahim al-Jaafari told a news conference.
"But we know that we will not get everything we want."
The United States and United Nations say that failure to help Iraq rebuild could unravel its gains against Islamic State since economic and social problems that bred sectarian conflict, creating political space for jihadists, would persist.
For his part, U.N. Secretary-General Antonio Guterres called the conference "an enormous success".
Although the United States said on Tuesday it was extending a $3 billion credit line to Iraq, it has not provided any direct government assistance. It instead hoped it could count largely on Gulf allies to shoulder the burden of rebuilding Iraq.
Washington is also counting on a Saudi-Iraqi rapprochement to weaken Iran's influence there.
Saudi Arabia will provide $1 billion through its Saudi Fund for Development and $500 million in export credit, Foreign Minister Adel Jubeir told the conference, which ended Wednesday.
"Kuwait will earmark $1 billion in loans to Iraq and will commit to another $1 billion as investments," Emir Sheikh Sabah al-Ahmad al-Jaber al-Sabah said at the gathering.
Qatar pledged $1 billion in loans and investments and the United Arab Emirates pledged $500 million but added that there were $5.5 billion in private sector investments in Iraq.
Turkey will give Iraq $5 billion in credit lines, Foreign Minister Mevlut Cavusoglu said, and other allies made smaller pledges.
Those sums are dwarfed by the more than $88.2 billion that Iraqi officials have said would be necessary for reconstruction after years of war, with housing a particular priority.
Officials say almost $23 billion is needed for short-term reconstruction and over $65 billion in the medium term.
Iraq might have been unable to attract more pledges because due to its association with corruption, UNDP Administrator Achim Steiner told Reuters. Investors see Iraq as the 10th most corrupt country, according to Transparency International.
Still, Steiner said, the amount pledged was significant.
"Would you be better without the pledges made today? The answer is clearly no. Would you be better off if all of it was in the form of grants funding? Absolutely."
Iraq, which still owes Kuwait reparations from the 1991 Gulf War, declared victory over Islamic State in December, having taken back all territory the militants captured in 2014 and 2015. The group has been largely defeated in Syria too.
But the fighting has been devastating - leaving thousands dead, millions displaced and almost 150,000 houses destroyed.
Rebuilding homes, hospitals, schools, roads, businesses and telecommunications will be crucial to providing jobs for the young, reversing displacement, and putting an end to decades of political and sectarian violence.
On Wednesday, the United Nations launched a two-year Recovery and Resilience programme designed to help Iraq's government fast-track the social dimensions of reconstruction.
"The programme will ... help families when they return home to get back on their feet, provide specialised support to survivors ... of sexual and gender-based violence, people who survived injuries," Lise Grande, the U.N. Humanitarian Coordinator for Iraq, told Reuters.
She also cited a special programme to promote community reconciliation in areas with strong sectarian tensions.
(editing by Mark Heinrich)