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(AFX-Focus) 2003-03-28 11:00 GMT: IRAQ WAR Israel first country to receive war compensation; receives 10 bln usd

CAIRO (AFX) - Israel has emerged as the first country in the region to benefit from the war on Iraq and is lined up to receive 10 bln usd in assistance under a US emergency bill to cover costs tied to the conflict.

Iraq itself will have to wait until security improves to receive goods contracted under the UN "oil-for-food" programme, the lifeline for 60 pct of the 25 mln Iraqis before its suspension on March 17.

US president George Bush on Tuesday unveiled a spending request of 74.7 bln usd to cover the war's costs, including rewards to 19 key US allies in the Middle East and other partners in the global war on "terrorism."

If approved by Congress, Israel will receive the lion's share, with one bln usd in military financing and additional loan guarantees of nine bln usd.

Among the rewarded Arab states, Jordan stands to gain more than 1.1 bln usd -- 700 mln to offset the economic effects of the war with neighbouring Iraq and 406 mln in military aid.

Jordan's economy is expected to suffer the most in the region for the duration of the war because overland shipments of cut-price Iraqi oil stopped after war broke out on March 20, forcing the country to draw on its reserves.

Saudi foreign minister Prince Saud al-Faisal has said the kingdom will provide Jordan with oil, but "not at preferential prices."

Egypt is set to receive 300 mln usd under the US war package to assist its economy, of which a portion could be used to secure up to two bln usd in loan guarantees.

War is taking a heavy toll on Egypt's tourism, the country's top hard currency earner, with industry executives reporting average hotel occupancy at 30 pct, down from the normal 80 pct for the spring season.

Bush has also asked lawmakers to approve some 3.5 bln usd in aid to put Iraq back on its feet, including nearly half a billion for oil field repairs.


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