Tuesday, June 2, 2009

U.S. Reconstruction In Iraq Coming To An End

U.S. reconstruction in Iraq is coming to an end. The effort to rebuild the country following the 2003 invasion was the largest in American history, with the U.S. budgeting $51 billion for the project. That amount has almost all been spent, and no new large outlays are expected in the future, especially with the U.S. planning on withdrawing. The Special Inspector General for Iraq Reconstruction (SIGIR) believes that most of this money failed to achieve its goals. While the Iraqi security forces were successfully reconstituted, the larger goal of boosting services and the economy of Iraq failed.

Since March 2003 the U.S. has promised $51.0 billion for reconstruction in Iraq. $24.43 billion was for security, and $26.57 for the economy, government, and services. $42.16 billion of the total amount has been obligated for projects, while $37.89 billion was actually spent. Of the remaining $3.01 billion in unspent funds, $2.82 billion is for the Iraqi armed forces and police. The new Obama administration has asked for an additional $700 million, $449 million of which is supposed to go to reconstruction. The White House did not ask for any new money for the Iraqi security forces. Instead, the President wants to extend $1 billion in bridge funds left over from 2008 for that purpose.

The American program was originally aimed at rebuilding Iraq’s infrastructure and building a democracy, but as violence rose in the country, more and more money was appropriated for security. By April 2009 the Iraqi security forces took almost half of the funding at $24.43 billion compared to $11.82 billion for infrastructure like electricity, oil, gas, water, sanitation, transportation, and communications. The SIGIR reported that the rise in attacks in Iraq derailed much of the reconstruction program, delaying projects and adding additional costs.

The U.S. program has not been without success. The one area that the SIGIR believes has seen the best effort is the rebuilding of the Iraqi security forces. They now stand at over 700,000 strong. The Americans have also added 1.2 million cubic meters of sewage treatment capacity, brought up water production to 2.4 million cubic meters of potable water per day, and for three straight quarters electricity production has gone up. Power output is now higher than pre-invasion levels. The problem is since the overthrow of Saddam, demand for services has skyrocketed amongst Iraqis, and the U.S.-funded increases have not kept up. Only around 25% of Iraqis polled say they were satisfied with the sewage system for example.

Today, U.S.-reconstruction is coming to an end, leaving Iraq increasingly in charge. There are no current oil projects on-line for example. There is still $224.39 million going to be spent on electricity however. Now the Iraqi government is the largest source of funding for rebuilding. Its capital budget used for investment has recently gone down from $13.1 billion in 2008 to $12.7 billion this year. Iraq has also never been able to spend all of its money, like the Electricity Ministry that only spent 12% of its budget last year.

Now that Iraqis are taking control, transferring projects is becoming an issue. An April 26, 2009 SIGIR audit found that the U.S. had been turning over projects to Iraqis with no unified plan or process. Many are given to the Iraqi government whether they can handle them or not. Most transfers are also done at the local level, and the information is not passed up to Baghdad or Washington. Of $13.5 billion in projects studied by SIGIR, 72% were handed over to local authorities, and only 13% to the central government. That means neither government has a real idea on what has been done so far. Some of these projects were not even wanted by the Iraqis, and were left unused or were not maintained. The Iraqis in general also don’t have the experience or training in much of the equipment installed by the Americans. For instance, examinations of Iraqi health care facilities found that gear wasn’t always installed and Iraqis didn’t always know how to operate them. The SIGIR is worried that this will mean much of the U.S. investment will be wasted. The U.S. is trying to address this by spending $313.7 million on training and spare parts. That still doesn’t address the larger issue of how the Iraqis will take control of the thousands of projects built by the Americans.

In its review of the U.S. reconstruction effort, the SIGIR believes that much of the U.S. reconstruction project has failed. Iraqis are largely unhappy with the state of the economy, services, and government. Production of many services such as electricity is higher than under Saddam, but it’s only meeting a fraction of demand. The main problem was the lack of security, which was not planned for. That derailed and delayed much of the work. Violence also shifted the focus of the Americans to the point that the security forces received just as much money as building up the economy and government combined. The U.S. also tended to impose their views of what Iraq should have, rather than asking Iraqis what they wanted. Many of the large infrastructure projects therefore were not used properly, left to break down, or were never wanted. Some of the $51 billion budgeted for Iraq has gone to good work, especially the money appropriated by U.S. commanders to local Iraqis. The larger projects however are more of a mixed bag.

Total Outlays By U.S.

Security - $24.43 billion
$21.18 billion obligated
$18.58 billion expended
$3.24 billion unspent
$6.84 billion for equipment and transportation
$5.79 billion for infrastructure
$5.67 billion for training and operations
$2.42 billion for sustainment
$1.72 billion for rule of law
$1.0 billion for other

Infrastructure - $11.82 billion
$11.41 billion obligated
$10.86 billion expended
$553 million unspent

Infrastructure – Electricity - $5.09 billion
$4.98 billion obligated
$4.75 billion spent

Infrastructure – Water and Sanitation - $2.25 billion
$2.17 billion obligated
$2.01 billion spent

Infrastructure – Oil and Gas - $2.05 billion
$1.93 billion obligated
$1.88 billion spent

Infrastructure – Other - $1.31 billion

Infrastructure – Transportation and Communication - $1.12 billion
$1.09 billion obligated
$965 million spent

Governance - $7.02 billion
$5.64 billion spent
$2.38 billion obligated for capacity development
$1.92 billion obligated for democracy and civil society
$1.88 billion obligated for public services
$0.81 billion obligated for humanitarian relief

Economy - $1.47 billion
$1.25 billion spent

SOURCES

Special Inspector General for Iraq Reconstruction, “Asset-Transfer Process for Iraq Reconstruction Projects Lacks Unity and Accountability,” 4/26/09
- “Hard Lessons,” 1/22/09
- “Quarterly Report to the United States Congress,” 4/30/09

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