Special Inspector General For Iraq Reconstruction’s “Hard Lessons” – Chapter 2 The Agencies Engage

The second chapter of the Special Inspector General for Iraq Reconstruction’s “Hard Lessons” review of America’s rebuilding project in Iraq focuses upon the pre-war planning. Most of it centers upon the work of the United States Agency for International Development (USAID). That agency was given the largest responsibility of any in the U.S. government even though it didn’t have the capacity to do all that was asked of it. It was also one of the only that understood the task ahead of it. It thought of how much it would cost to rebuild Iraq, and came up with a plan to integrate that task with building a democracy in Iraq. The White House and the Pentagon wanted the latter, while largely rejecting the former, which highlighted the faulty strategy created before the war.

The USAID was included in the post-war planning in August 2002. The National Security Council (NSC) believed that the agency had experience with disasters beforehand that would allow it to handle any problems that might occur in Iraq. The USAID was made part of the NSC’s Humanitarian Working Group, and took over all of the humanitarian and much of the reconstruction planning. By October most of the agency’s personnel had been tasked with working on Iraq. They proved to have a much richer and realistic view of what lay ahead. They saw rebuilding as only a small part of a much longer process to transform the country into a democracy. In a policy paper released in October it said that the job could take years. The White House and Pentagon thought that the U.S. would only be involved for a few months.

The USAID’s main task was dealing with any humanitarian contingencies that might emerge after the invasion, and then rebuilding Iraq. Their major fear was that Saddam might destroy much of the country during the fighting. After those problems were dealt with the agency would then move to reconstruction. That task was thought of as mostly repairing war damage. The NSC’s Humanitarian Working Group broke up this job amongst different parts of the U.S. government. USAID was given health, water, sanitation, electricity, education, transportation, telecommunications, farming, and rural development. The State Department had governance, Treasury had finance and the economy, while the Pentagon had oil and overall control of the country.

The USAID was given the most responsibility. They came up with a series of benchmarks to meet within a year of the invasion. These included providing dependable water to all cities, basic health services to all Iraqis, reconstructing and improving transportation, raising electricity to 75% of pre-Gulf War levels, privatizing state run businesses, and open private banks. Those later two were part of a plan to promote business and capitalism, since Iraq was mostly a state-run socialist country. It’s telling that few of these have been met six years after the invasion.

The USAID was also supposed to help the State Department. It never came up with a detailed plan however, so the USAID was left to its own devices. It planned to decentralize power away from Baghdad down to the local governments to break the tradition of a centralized state that Saddam had imposed. The general idea was that each neighborhood would elect councils that would then be in charge of jobs and local reconstruction, while teachers and other civil servants would go back to work to keep institutions going. All of this was part of the USAID’s larger plan to build a democracy in Iraq.

When the NSC Humanitarian Group heard about the USAID’s plans they were opposed. The White House didn’t believe in large-scale reconstruction or nation building. Following this, the co-chair of the group only wanted the U.S. to focus upon repairing war damage. The task of rebuilding would be the responsibility of the new Iraqi government, which would pay for it using oil money. This led to statements like those by Vice President Dick Cheney when he said that Iraq was a rich country, with vast resources, that could pay for much of its own reconstruction when he was on NBC’s Meet The Press in March 2003 shortly before the war started.

The problem was that the U.S. knew very little about the state of Iraq’s oil industry. The 1991 Gulf War had damaged much of the country’s infrastructure. The United Nation’s sanctions that followed caused a shortage of spare parts, and a subsequent lack of maintenance. These problems could be seen in 1998 when the U.N. authorized Baghdad to double its crude sales under the oil for food program, but couldn’t.

Even if the Americans did know about these problems it didn’t have the personnel to repair them. This led the government to contract out the work. This job was given to Kellogg Brown and Root (KBR), which became the most well-known and controversial deal. The company already had an agreement to provide basic services to the U.S. Army. Giving such a deal to KBR was a problem because Vice President Cheney was the former CEO of its parent company Halliburton. The contract was looked at by a series of lawyers in the government, but the Pentagon went ahead anyway saying that necessity and the coming war overrode any public relations fallout that might occur later. As a result KBR was given a $7 billion contract to repair Iraq’s oil infrastructure. This was the largest amount given during the war. A subsequent review by the Government Accountability Office said that KBR should have never been given the task.

USAID also contracted out much of its own work. After the Cold War, 37% of the government’s staff was cut. That led the USAID to largely rely upon NGOs and private companies to do its work. Following this, the United Nations’ World Food Program was given a $200 million contract to provide aid to Iraqis after the invasion. USAID also gave out $41 million in deals to groups like Mercy Corps and Save The Children to meet the humanitarian disasters they were planning for. From February to May 2003 it gave another $1.3 billion in contracts. Bechtel International for example was added in April 2003 to do $680 million in work on Iraq’s infrastructure. This deal was eventually enlarged to $1.03 billion, the largest amount USAID had ever given.

Overall, USAID’s experience showed the contradictions in America’s pre-war stance. The administration was prepared for the worst-case humanitarian crisis, but the best-case reconstruction situation. The humanitarian planning went ahead smoothly because it had the full backing of President Bush. USAID could call upon any government agency to help with this task. Its work on rebuilding however was much more complicated. The White House did not want the U.S. to be responsible for Iraq beyond a few months. It did not believe in nation building. It also saw no connection between rebuilding Iraq and creating a democracy, something that USAID believed were integral. The USAID was also the only part of the government that believed that reconstruction would be a huge task. In 2002 it predicted that it would cost the U.S. up to $90 billion over three to five years. The rest of the administration argued that Iraq would be doing the work and paying for it. In fact, if the rest of Washington knew what the USAID was thinking it would’ve rejected it. Yet, it was the only agency that had a realistic view of what Iraq was going to be like.

SOURCES

Meet The Press, “Interview with Vice-President Dick Cheney,” NBC, 3/16/03

Special Inspector General For Iraq Reconstruction, “Hard Lessons,” 1/22/09