May 28 (Bloomberg) -- Representatives from about 100 countries will meet tomorrow in Stockholm to discuss Iraq's economic and political stability as provincial elections threaten to undermine security gains.
In talks with U.S. Secretary of State Condoleezza Rice and others, Iraqi Prime Minister Nuri al-Maliki will emphasize economic achievements, steps toward national reconciliation and improved security, his government said in an e-mailed statement. Since the United Nations and Iraq agreed to a five-year stability plan a year ago, violence has dropped and oil exports have increased.
Provincial elections planned in the fall may reverse some of the security gains, said Gareth Stansfield, an analyst at Chatham House, a London-based foreign policy consultant to European governments. The government has cracked down on fighters loyal to radical Shiite cleric Moqtada al-Sadr, who likely will make gains in the vote and who opposes the U.S. presence in Iraq.
``We've seen some very worrying signs coming out of Iraq about what the future will hold,'' Stansfield said.
Sunni tribal groups have been armed and financed by the U.S. to combat Islamic terrorists in Iraq and may pose a future threat to the Shiite-dominated central government, Stansfield said. And the government has little influence in the oil-rich northern Kurdish region, which is semi-autonomous.
The one-day meeting of as many as 600 delegates and UN Secretary General Ban Ki-Moon follows a meeting of the ``International Compact with Iraq'' in May 2007 in Sharm el- Sheikh, Egypt, which paved the way for debt relief for Iraq.
Political Gains
The top U.S. commander in Iraq, General David Petraeus, told Congress May 22 that he is likely to recommend further withdrawals of troops from the current 155,000, after violence dropped to a four-month low. Petraeus, 55, said progress was due to the government's improved ability to carry out security operations.
The Iraqi army now stands at 320,000, according to the Iraqi Defense Ministry. Petraeus also praised al-Maliki for his military offensive against fighters loyal to al-Sadr in Basra and Baghdad.
``You cannot expect to have a major breakthrough from one day to another, but the conference will start a process toward stability and progress and pave the way towards normalization,'' Frank Belfrage, Swedish state secretary for foreign affairs, told journalists in Stockholm on May 26.
Budget Agreed
The Iraqi parliament in February approved a budget, enacted a law allowing former Baath Party members back into politics and set Oct. 1 as the provincial election date. The vote, which may be important for increasing political participation by the Sunni Muslim minority, will probably be delayed a month, Petraeus said.
``It's very hard to be bullish,'' said Joost Hiltermann, deputy program director for the Middle East and North Africa at International Crisis Group in Istanbul, Turkey. ``The recent period has shown that progress with the current political setup is impossible.''
Oil production has increased to its highest level since 2004, with revenue of up to $70 billion expected this year, the government said in a report published before the meeting. A law mapping out an oil revenue-sharing system and improving the environment for foreign investment has yet to be completed.
`Not a Poor Country'
``The high-level meeting in Stockholm is not a pledging conference -- Iraq is not a poor country,'' the Iraqi government said in the report. The country wants ``partnership, technical assistance, and economic exchange,'' to unlock the country's resources.
At last year's meeting in Egypt, officials from around 50 countries promised to cancel $32 billion of Iraq's foreign debt.
The U.S., commercial creditors and countries in the Paris Club of creditor nations including Japan and the U.K. have canceled $66.5 billion of Iraq's debt in the past three years.
The Iraqi government has agreed on debt-relief arrangements with all 18 Paris Club members and with 37 other countries, according to its report. Most private sector debt has been settled, according to the report.
Iraq is still in talks with the Gulf states to reach an agreement on outstanding payments, the government said. The U.S. has been pushing the Arab states to cancel outstanding debt.
The number of Iraqis seeking asylum in industrialized countries almost doubled to about 45,200 last year, with the majority seeking refuge in one of the 37 European countries. Sweden received 41 percent of the claims, United Nations figures show. The U.S. had 734 applications last year.
To contact the reporter on this story: Camilla Hall in London at .
Last Updated: May 27, 2008 19:04 EDT