Date: 10 Mar 2000
Time: 15:05:39
Remote Name: 156.29.145.175
By Harry Dunphy Associated Press Writer Friday, March 10, 2000; 4:02 p.m. EST
WASHINGTON –– Two loans to Iran, the first in seven years, are likely to be approved soon by the World Bank over U.S. opposition, bank officials and representatives of other countries say.
Bank and Iranian officials plan a final round of negotiations in Paris before the end of the month on the $231 million package, bank officials said. If the talks succeed, the two projects will go before the bank's 24 executive directors, including Jan Piercy, the U.S. representative, probably next month.
Federal law requires the United States to oppose loans by the World Bank and other international institutions to countries listed by the State Department as sponsors of terrorism. Iran is among seven countries on the list.
"We will not support any loan to Iran that comes to the World Bank's executive board," State Department spokesman James P. Rubin said last month.
But several prominent foreign policy analysts have urged the Clinton administration to reconsider. Richard Haass, vice president of the Brookings Institution in Washington, said U.S. support for the loan package "would send a positive message" to Iran, where moderates made large gains in elections last month.
Rubin would not comment this week on a report in the Los Angeles Times that the administration is close to a decision to lifting economic sanctions barring Iranian carpets, caviar and pistachios.
He said, however, "We are looking for ways to engage Iran in a dialogue and to recognize the important changes that are taking place there." Iran has been buying U.S. agricultural and medical products since April.
While the United States is cautiously exploring how to engage Iran, the European Union is taking a more aggressive approach. Two foreign ministers from European governments have visited Iran since the Feb. 18 elections, which the reformers won handily.
With Japan joining the Europeans, approval of World Bank loans over U.S. opposition would send another signal to the Iranian moderates.
Even though the United States is the bank's largest shareholder, Japan and European nations who favor the Iranian projects could override U.S. opposition to the Iranian loans. Bank officials said this has happened before, on loans to China, for example.
It is only when the United States actively tries to line up opposition that loans fail to reach the board. Representatives at the bank from European countries said there were no signs so far the United States was mounting a campaign against the Iranian loans. That likely reflects an easing of Washington's total opposition, even if it maintains a public position against the loans.
"My expectations are that the projects will be supported as long as they are developmentally sound and benefit the people," said Myles Wickstead, the alternative British executive director.
He said most other members of the board share this view.
Abdullah Bouhabib, a bank spokesman, said he expected the projects to be approved before the bank's new fiscal year begins July 1.
One World Bank loan of $145 million would go toward a $340 million sewage treatment project in south Tehran, a poor district in the Iranian capital.
The other loan, for $86.1 million, covers the bank's contribution to a $148.7 million project to help the Iranian government improve health care in urban and rural regions.
The health care loan augments the last loan the bank made to Iran, in 1993, for health care and family planning.
© Copyright 2000 The Associated Press