Told To Rebuild Itself
By William Fisher
28 March, 2006
week’s announcement that Iraq will now have to pay for its own
reconstruction has left some observers wondering whether the yet-to-be-formed
government there will be up to the task.
Iraq's deputy finance minister,
Kamal Field al-Basri, said it was "reasonable" for the United
States to sharply cut back its reconstruction efforts after spending
about $21 billion. "We should be very much dependent on ourselves,"
al-Basri said in an interview the American newspaper, USA Today.
That will prove to be a very
tall order. In 2003, the World Bank estimated the total rebuilding cost
would be $60 billion. Current estimates put the bill at $70-100 billion.
The new estimate comes at
a time when little progress has been made in increasing Iraq’s
oil production – which represents more than 90 per cent of the
country’s income. Slowed to a near halt by insurgent attacks,
Iraq now spends about $6 billion annually to import oil.
Iraq must increase oil exports
from their current level of about 1.6 million barrels a day to 2 million
barrels a day, said Daniel Speckhard, director of the U.S. Iraq Reconstruction
Management Office. The deputy finance minister said Iraq needs foreign
investment to lift exports to three million barrels a day. That would
equal the oil exports achieved by Iraq in the 1980s. Oil production
today is far below prewar levels.
According to the Pentagon's
prewar planning, oil production was supposed to provide the funds for
Iraqi reconstruction. Vice President Richard Cheney and other senior
Bush Administration officials emphasized this point repeatedly in their
pre-war effort to justify the U.S. invasion.
Also facing the country is
a massive rebuilding of infrastructure. Lack of security has also stymied
efforts to rebuild electrical, sewer and water systems. A report last
month by the special U.S. inspector general overseeing reconstruction
said so much money was being spent on security that most sewer, irrigation,
and drainage projects had been canceled.
Production by Iraq's national
electrical grid remains at 4,000 megawatts, 400 megawatts below pre-war
levels, with the average Iraqi receiving less than 12 hours of power
a day. The shortfall has been attributed mainly to sabotage by insurgents.
Approximately 16%-22% of
each reconstruction dollar spent by the U.S. has gone to protect projects
Speaking on condition of
anonymity because he is involved in the current Iraqi political process,
a leading Middle East expert told us, “Because the U.S. did understand
Iraqi culture, it did not anticipate the insurgency. Because it did
not anticipate the insurgency, it could not have planned for the huge
sums that would have to be spent on security.”
Critics of the Bush Administration
see the end of American reconstruction funding as vindicating this position.
Typical is Prof. Beau Grosscup, professor of international relations
at California State University at Chico. He told us, “Having destroyed
Iraq, the U.S. can't and now refuses to put it back together again.
This decision reflects the disastrous reality of the U.S. occupation
for the Iraqi people as it is obvious there won't be peace until the
U.S. leaves. Meanwhile, the make-over of the Iraqi economy has been
But the Pentagon defends
the reconstruction project as the best that could be achieved under
very difficult and dangerous security conditions.
With the billions of dollars
appropriated by the U.S. for Iraqi reconstruction almost all spent,
other nations and multinational institutions will be asked to shoulder
the burden for funding the large number of unfinished projects.
Speckhard said the U.S. aid
program sought to "kick-start the economy" and "lay a
foundation" that Iraq could build on. He added, "That kick-starting
process has occurred.”
However, the extent of U.S.
commitment to reconstruction has always been somewhat murky. "The
U.S. never intended to completely rebuild Iraq," Brig. Gen. William
McCoy, the Army Corps of Engineers commander overseeing the work, told
reporters at a recent news conference. In an interview, McCoy reportedly
told The Washington Post newspaper, "This was just supposed to
be a jump-start."
But McCoy’s assertion
seems to be at odds with previous administration statements. For example,
in a speech on Aug. 8, 2003, President George W. Bush said, "In
a lot of places, the infrastructure is as good as it was at prewar levels,
which is satisfactory, but it's not the ultimate aim. The ultimate aim
is for the infrastructure to be the best in the region."
While President Bush gave
the impression that Iraq was slated for a complete makeover, Defense
Secretary Donald Rumsfeld appeared less certain. He told the Senate
Appropriations Committee in March 2003, “I don't believe that
the United States has the responsibility for reconstruction…(reconstruction)
funds can come from…frozen assets, oil revenues and a variety
of other things, including the Oil for Food, which has a very substantial
number of billions of dollars in it.”
On the other hand, that view
seems to contradict a report submitted the same year by the prime consulting
contractor hired by the Pentagon to lay out the future of Iraq’s
economy. The company, BearingPoint Inc. of McLean, Virginia, said, “The
reconstruction of Iraq has begun. Not the reconstruction of vital public
services such as water, electricity or public security, but rather the
radical reconstruction of its entire economy.”
Clearly, this has not happened.
And the Administration’s recent decision not to ask Congress for
additional funding for reconstruction suggests it is not likely to happen
any time soon.
With many of Iraq’s
key ministries in disarray and some dogged by persistent corruption,
and with no permanent government in place, observers say it is doubtful
that the country’s government will have either the resources or
the expertise to manage the large-scale reconstruction projects that
Relatively little of the
$30 billion allocated for reconstruction since the invasion remains
to be spent, and spending authority is scheduled to run out in June
According to a recent report
by the U.S. special inspector general for Iraq (IG), reconstruction
officials cannot say how many planned projects they will complete, and
there is no clear source for hundreds of millions of dollars a year
needed to operate the projects that have been finished.
The IG’s report described
some progress but also cited a number of projects that have failed.
For example, expensive electrical substations were built but not connected
to the country's electrical grid.
Much of the reconstruction
funding has been diverted to other projects. At least $2.5 billion earmarked
for infrastructure and schools was diverted to building up a security
force. Funds originally intended to repair the electricity grid and
sewage and sanitation system were used to train special bomb squad units
and a hostage rescue force. The U.S. has also shifted funds to build
10 new prisons to keep pace with the insurgency, and safe houses and
armored cars for Iraqi judges.
Hundreds of millions of dollars
from the reconstruction fund was also used to hold elections and for
four changes of government, and to establish a criminal justice system,
including $128 million to examine several mass graves of Saddam Hussein’s
In addition to the diversion
of funds to other types of projects, the reconstruction efforts have
been plagued by substantial corruption and overcharging by contractors.
The cost of security has
eaten up as much as 25% of each project, according to the IG. A U.S.
congressional report last October forecast that many reconstruction
projects were unlikely to get off the ground because of security costs.
Iraqi authorities estimate that 10 billion dollars are needed for the
health sector alone, to build or rehabilitate and provide equipment
for hospitals and clinics.
The bottom line here is that
while Iraqi politicians squabble over the composition of their future
government, Iraq’s infrastructure remains in shambles. If these
leaders – and wannabe leaders – really care about their
country more than they do about their party or their egos, real reconstruction
provides a huge incentive for them to get on with the job.