(US) Appointed Finance Minister in Iraq - Privatization of All State Industries By 2005

INTERVIEW-Iraq finmin says privatisation plan ready in 2 yrs
Reuters, 09.11.03, 9:12 AM ET
By Rosalind Russell

BAGHDAD, Sept 11 (Reuters) -Iraq's new finance minister said on Thursday a clear framework for the privatisation of the country's state industries would be in place in two years.

Kamel al-Keylani, appointed last week by the U.S.-backed Governing Council, said the idea of selling off Iraq's state industries, particularly its prized oil sector, would first have to be sold to the Iraqi people.

"The period is very clear, not less than two years," Keylani told Reuters in an interview. "We will first identify which sectors can be privatised, lay the foundations and make sure the issue is acceptable to the Iraqi people."

After decades of highly centralised economic management under Saddam Hussein, privatisation is a sensitive issue for Iraqis.

Many believe the U.S.-led war which toppled Saddam in April was aimed at seizing control of Iraq's oil reserves, second only to those of Saudi Arabia.

Keylani, a former businessman, said it would take time for Iraq's fledging cabinet to reach a consensus on the details of a privatisation programme.

"The new government is only one week old so we need to sit with each other and discuss these issues," he said. "Every ministry has its own opinion. It is too soon to set a deadline or give a start date."

DAY-TO-DAY BUSINESS

Iraq's 25 new ministers are responsible for the day-to-day running of their departments. But ultimate power in Iraq still lies with Paul Bremer, head of the U.S.-led administration which will stay in charge until elections are held.

Keylani was vague about how Baghdad would contribute to funding the country's postwar reconstruction, a multi-billion dollar effort international donors will be asked to support at a conference in Madrid next month.

Oil revenues, he admitted, may be lower than expected due to the sabotage of Iraq's pipeline to Turkey which halted exports to the Mediterranean just as large shipments from the northern Kirkuk fields were to resume in mid-August.

The U.S. military has said exports will not resume through the line for at least another month.

Keylani said Iraqi officials were in negotiations with "big banks" for loans and financing but declined to give details. He said it would take time for a new economic policy for Iraq to emerge.

"We need to do a lot of studies with a lot of countries and experts," he said. "We don't want to repeat the same mistakes of the old regime."

He said more concrete policies would emerge after this month's IMF conference on Iraq and the Madrid conference in October.

On Wednesday, Ahmed Chalabi, chairman of the Governing Council, said he expected Iraq to have a 2004 budget of $13 billion focused on services and mainly financed by U.S. aid.

Washington has earmarked $20 billion for the reconstruction of Iraq and Keylani said Iraq was now trying to secure aid pledges from other countries. Such pledges would likely be firmed up in Madrid but may take a year to translate into cash, he said.

Copyright 2003, Reuters News Service