Thursday, June 28, 2012

Special Inspector General For Iraq Reconstruction’s “Hard Lessons” Chapter 9 “Bremer’s Grand Visions”

In April 2003, the Coalition Provisional Authority (CPA) was created to take charge of post-war Iraq from the Office of Reconstruction and Humanitarian Affairs (ORHA). The organization was placed under the charge of Paul Bremer who was immediately overwhelmed by the situation within the country. In the next few months, four sets of surveys were done of the reconstruction needs of Iraq with suggestions for the CPA. In turn, the Authority came up with its first detailed plan for how it was going to rebuild the nation. The problem was that the CPA ignored most of the main ideas made by the outside experts. That would go on to undermine much of the American effort to improve Iraq after it emerged from over a decade of international sanctions and a recent invasion.

Almost as soon as the Coalition Provisional Authority was created a series of experts came through Iraq to assess the situation, come up with lists of the major needs, and cost estimates for how much it would take to reconstruct the country. Altogether, four separate reports were generated that estimated that the nation needed around $60 billion to repair everything. That was far above all the previous projections made by the American government. There were some early claims, such as by the Office of Management and Budget within the White House that believed Iraqi reconstruction would cost as little as $50-$60 million. Not only that, but other agencies like the Pentagon claimed that Iraqi oil and frozen assets would pay for almost the entire endeavor. As a result, Congress had only approved $2.4 billion for the Iraq Relief and Reconstruction Fund in April 2003. Those early claims were part of the best-case scenario thinking that had marked the Bush administration’s post-war planning for Iraq. It believed that the U.S. could invade, have a short period of humanitarian relief, and then leave within months of the fall of Saddam Hussein. The reality was quickly setting in that Iraq was not only going to be an immensely costly project, but a long-term one as well.

The first two groups to come through Iraq to look into the country’s reconstruction needs were the United States Agency for International Development (USAID) and Bechtel in April. USAID had already given Bechtel a $680 million contract to work in Iraq, so their survey was more a preview for what they were going to end up doing. Together, the two looked at transportation, aviation, buildings, water, electricity, and the Um Qasr port in Basra. They found that Iraq’s infrastructure was in poor shape. The country had been under international sanctions since 1990 after it invaded Kuwait, and those proceeding thirteen years had taken its toll. Many things were falling apart by the time of the U.S. invasion. Together, the USAID-Bechtel report estimated that Iraq needed $16 billion. It warned of five major problems ahead for the U.S. including the lack of security, poor coordination amongst government agencies, limited information about Iraq, complicated contract regulations, and unexploded ordinance that littered the place. The two predicted that the budding insurgency and looting would dramatically increase costs, and that unless the Americans did a lot better job at getting their different organizations to work together, the entire rebuilding project could be undermined. Those warnings were the first of many that would predict how the U.S. reconstruction effort would go astray.

In May, the U.S. Army Corps of Engineers, working with Kellogg, Brown & Root and the Iraqi Oil Ministry looked at the petroleum industry. They found $457 million in war damages, and $943 million in harm done by looting. They estimated those predictions could vary by as much as 40%. They called for an integrated plan by the CPA, because the oil industry was dependent upon electricity and water. If one part of that rebuilding effort failed, it would affect the rest. They also said that the Iraqis needed to be intimately involved in the process from the beginning so that they could handle the equipment that would be installed, and that security was a priority. The locals were not included however, and the Iraqi Oil and Electricity Ministries when they were put back together never coordinated, a problem that lasts until this day.

In the summer, the United Nations and World Bank looked at Iraq’s overall development needs. Like USAID and Bechtel, they found the nation in a sorry state of neglect and deterioration. They estimated that health, education, agriculture, government, rule of law, oil, and security would cost a total of $56 billion. Like others, they also warned that unless security was established the entire effort could be threatened, and that Iraq’s technocrats and bureaucracy had to be re-instated so that the nation could run itself. That latter issue would prove to be a major one, because as the fighting took off, there was a giant brain drain out of the country.

Finally, in June, Defense Secretary Donald Rumsfeld asked the Center for Strategic and International Studies (CSIS) to do a report on Iraq. It sent a set of experts to half of the country’s eighteen provinces, and thought that it would take years to rebuild the contry. Like others, it said that security was preeminent, that Iraqis should be included in the process, that jobs should be a top priority, and that power should be decentralized to the provinces, to break the centralized system used by Saddam Hussein. In the end, the Center’s report suggested that the CPA get a dramatic increase in funding, and be given the freedom to spend it as it saw fit. The CSIS therefore came to many of the same conclusions as the previous three findings.

The four reports and the pressing situation in Iraq led the CPA to write its own program for rebuilding the country. That became known as Vision for Iraq, which set out the goals of creating a democracy, providing security, services, economic development, governance, and communication. It noted that security was the main priority otherwise the rest of the plan could not come to fruition. It said that this was going to be achieved through creating a new Iraqi security force. The Coalition also wanted free market reforms, and to impose the rule of law. In July, the report was sent to the Pentagon, which approved it on July 18. Bremer then asked his staff to come up with detailed plans on how it was going to achieve its aims. That became another paper, Achieving the Vision to Restore Full Sovereignty to the Iraqi People. That too was presented to Washington at the end of July. While these were all necessary steps, the CPA almost immediately began ignoring the recommendations of the experts that had come through beforehand. For instance, Iraqis were never included in any of the Coalition’s deliberations. It had created the Iraqi Governing Council, but it was never asked about the two reports. The two officials who drew up the Achieving paper even worried about the consequences of not talking with Iraqis about what was going to happen to them, but they didn’t seem to act on their concerns. A second major issue was that the Coalition did not come up with realistic goals or costs for the work that they were about to embark on. This was the beginning of a long line of problems the CPA would run into. With four reports on what Iraq needed, it seemed like Bremer and his staff were going to come up with their own opinions. This was something that marked all of the post-war planning made by the Bush administration from the day that it started. There were always an array of groups talking about what needed to be done, but little to none of it was coordinated, undermining the whole process.

The first specific dilemma the CPA ran into with its new plan was finding the money that it required. In July, the Coalition put together a budget for Iraq’s ministries for the rest of the year. That was for $6.1 billion, and had a deficit of $2.2 billion. It believed that seized Iraqi funds, money from the Development Fund for Iraq that collected Iraq’s oil revenue, and money form Congress would cover the difference. Out of the budget however, only $609.5 million was for reconstruction and investment, a pittance after the estimates that the CPA was just given, which totaled around $60 billion. That led Bremer to come up with a far more robust 2004 budget for Iraq that was for $35 billion with a $23 billion deficit. This time, the CPA was going to ask Congress for a supplemental spending bill, and for international aid to cover the difference. In July, the Coalition started drafting a request for Congress, and also came up with the International Donors Conference to be held in October. In September, the White House included the CPA’s estimate in an $87 billion request to Congress for both the Iraq and Afghanistan wars. This came as a shock to the legislature after all of the rhetoric by the administration about how little Iraq was going to cost, and how they were going to pay for their own rebuilding. There was some initial questioning of the request, but the money was eventually requisitioned.

Another group that was critical of the CPA was USAID. They were not included in the CPA’s plans even though they were one of the first U.S. agencies in Iraq. It also said that the Coalition’s plan did not include capacity building, democracy programs, agriculture, and economic development. The CPA was focusing almost solely upon large project as well, which USAID warned would cost a lot of money, but would not create much employment for Iraqis, which it thought was a priority. USAID believed that agriculture would be a much better investment, because it was the largest pre-war employer in the country, but there was nothing for farming in the CPA request. The Agency also emphasized that institution building was the most important legacy the Americans could leave behind, because they would last long after the U.S. departed the country. As a result, USAID asked the White House to revise the CPA’s plans, and requested its own $5 billion to spend on Iraq. Both the administration and Congress ignored that. Within Iraq, it led to more infighting, another thing that the outside reports warned about should be avoided to maximize the U.S. effort.

It’s not like all of the CPA’s efforts were in vain. In October 2003, it carried off a rather successful donors conference in Madrid, Spain. There was a major setback when in August, the United Nations building in Baghdad was bombed, which led many foreign countries and groups to believe that Iraq was too dangerous to send any money to. In the end, countries committed $13.5 billion in loans and grants, with Japan being the largest with $4.9 billion. The United Nations created the International Reconstruction Fund Facility to manage the contributions. While fewer than half of the 76 countries and organizations that attended the meeting actually said that they would give money to Iraq, it still generated a hefty sum, which would help with rebuilding the country.

Together, the money generated from the donors conference and the requests to Congress would create the largest reconstruction program for a single country in U.S. history. The CPA noted the enormity of the task at hand, and started to plan for it immediately. The problem was that it ignored some of the most important recommendations from the four outside reports. It didn’t include Iraqis, it didn’t generate inter-agency cooperation, it didn’t create institutions, and it failed to provide jobs for locals. Finally, it didn’t come up with realistic timetables and goals, because it failed to survey the conditions within the country. The U.S. also failed to provide security. With that list of problems it was no surprise that the Special Inspector General for Iraq Reconstruction considered the American effort a failure. In 2012, after tens of billions had been spent on the country it still can’t provide basics like enough electricity to meet demand. More importantly, effective government institutions were not created that would provide good management of the nation and its resources. Instead, everything is politicized. The U.S. never lacked a set of plans for what to do in Iraq. What it always seemed to do was come up with too many of them, none of which were coordinated. Everything appeared ad hoc as a result with one group after another doing what it wanted with little organization behind it all.This chaos is what would come to characterize the Coalition Provisional Authority, and the entire American rebuilding process.

 Other Chapters From The Special Inspector General For Iraq Reconstruction's Hard Lessons


Crocker, Bathsheba, “Post-War Iraq: Are We Ready?” Center for Strategic and International Studies, 3/25/03

Elliott, Michael, “So, What Went Wrong?” Time, 10/6/03

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

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