World Bank to discuss rebuilding Iraq

DUBAI, United Arab Emirates -- Choking off the flow of funds to terrorists, rebuilding Afghanistan and Iraq and bailing Argentina out of its worst economic crisis are among the issues facing world economic leaders as they gather this month.

World Bank president James Wolfensohn kicks off the annual meeting of the boards of the bank and its sister organization, the International Monetary Fund. In two days of talks next week, officials will focus on the state of the global economy and the gap between the world's richest and poorest countries.

Aid to the poor has received new urgency since the Sept. 11, 2001, terrorist attacks, as the United States and other wealthy countries believe the gulf between haves and have-nots has created a breeding ground for terrorism.

When the finance officials meet in Dubai -- their first time in an Arab country -- they will discuss the results of a program against money laundering and terrorist funding launched at an April 2002 meeting of the Group of Seven industrial countries in Ottawa, Canada.

"I don't anticipate it to declare complete victory over terrorist funding, or flag great weaknesses," IMF spokesman William Murray said.

At a summit last June of the G8 -- the United States, Britain, France, Germany, Japan, Canada, Italy and Russia -- leaders concluded that one of the best ways to combat terrorism "is to choke off the flow of financing that supports it." Cutting off funding for terrorists is a key component of President Bush's anti-terrorism strategy.

A U.S. Treasury Department report released last week said that since the terrorist attacks, 1,439 accounts worldwide containing more than $136.7 million in assets belonging to al-Qaida and other terrorists have been frozen. Of that, $36.6 million has been blocked in the United States, it said.

World Bank and IMF officials also said Arab and Islamic funding of the Palestinian Authority of Yasser Arafat is expected to be discussed by the G7 -- the G8 minus Russia -- on the sidelines of the Dubai board meetings.

Officials would not elaborate on whether the G7 members would discuss limiting Arafat's funds. Israel accuses Arafat of supporting a cycle of suicide bombings, and Bush has sidelined the Palestinian leader, calling him an unreliable peace partner.

Like other Arab countries, the United Arab Emirates is a supporter of the Palestinians. It does not recognize the state of Israel or normally allow Israeli passport holders to enter the country -- but had to bend those rules to host the talks.

World Bank and IMF regulations require host countries to accept delegations from all member countries. The blue-and-white Israeli flag -- a rare sight in an Arab city -- is among the 184 displayed in Dubai for the meetings.

Officials from the World Bank and IMF said Afghanistan and Iraq were not on the formal meeting agenda, but were important issues that would be discussed on the sidelines.

An interim economic report on war-ravaged Afghanistan, the first in many years, is to be released in Dubai. The World Bank and United Nations have estimated that between $13 billion and $19 billion would be needed for the reconstruction of the country.

Experts also will meet to assess how much international aid is needed to rebuild Iraq in order to present their findings at a donors meeting in Spain next month.

Bush has asked Congress for an additional $87 billion for military and reconstruction efforts in Iraq.

The United States is looking primarily to Europe for help on Iraq, but in an interview on the Al-Jazeera satellite network, Secretary of State Colin Powell said he hoped oil-rich Gulf states would be "as generous as they can."

Argentina, still trying to recover from an economic crisis that began in 2001, recently clinched a three-year, $21 billion aid package from the IMF that is expected to be formally approved by the lending agency's board of directors this weekend in Dubai.

The accord calls for refinancing about $21.6 billion in Argentine debt coming due through August 2006 with the IMF, the World Bank and other multilateral lenders, including about $12.5 billion to the IMF alone. The United States, the biggest shareholder in the IMF, has said it supports the package.