Wolfowitz says Iraq needs advice rather than money

STRASBOURG, France, Nov 15 (Reuters) Iraq needs advice rather than money from international donors to rebuild its institutions, Paul Wolfowitz, president of the World Bank.

Wolfowitz, who plans to open a permanent office in Iraq to coordinate donor assistance, said the country was not making the best use of the money it already had.

''I am not saying they don't need money, but they have a lot of money on their own and it's not managed right, and they know that,'' Wolfowitz said yesterday.

''What they need is help in constructing better institutions, public financial management, and advice how to better manage the petroleum sector. Help, I believe, in how to manage social safety nets. This is policy advice and not money,'' Wolfowitz told the European Parliament's development committee.

He did not know what steps the United States would take in Iraq after the Republicans lost Congress in last week's elections, partly due to voter unease over Iraq policy.

''I don't know how U.S. policy in the Middle East will change. I know that they are not going to come and ask me for my opinion,'' Wolfowitz said.

''I am not sufficiently well informed on political and security issues to give sensible advice,'' Wolfowitz said.

Wolfowitz is a former deputy U.S. defence chief to Donald Rumsfeld, and a key advocate of the Iraq war. Rumsfeld resigned as Defense Secretary after the Republicans' electoral defeat.

Democrats, who will control Congress starting in January, have promised to conduct vigorous reviews of U.S. policy on Iraq, including post-war reconstruction and stabilization.

Wolfowitz, who was appointed president of the World Bank last year, could be called to testify.

Reuters PDS VP0435