Date: 11 Mar 2000
Time: 06:43:19
Remote Name: 24.30.137.96
By HARRY DUNPHY
03/11/2000 Associated Press Newswires Copyright 2000. The Associated Press. All Rights Reserved.
WASHINGTON (AP) - Despite U.S. opposition, Iran likely will soon receive its first loans from the World Bank in seven years.
If bank and Iranian officials agree on the details of the $231 million package in talks later this month in Paris, the plan could go to the bank's 24 executive directors in April, bank officials and representatives of European countries said Friday.
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 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 lift economic sanctions that now bar 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 to 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 expects 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.