THE IRAQ RECONSTRUCTION
STRATEGY By
David Isenberg and William Fisher NEW YORK
- With the billions of dollars appropriated by the
United States for Iraqi reconstruction mostly
spent, Japan, Australia and other nations in US
President George W Bush's "coalition of the
willing" are likely to be asked to shoulder much
of the burden for funding the large number of
unfinished projects.
Getting others to take up the
slack is reportedly high on
Secretary of State
Condoleezza Rice's agenda when she visits the Far
East in March. Her trip, originally scheduled for
this week, was postponed because of the current
crisis in Israeli politics
caused
by Prime Minister Ariel Sharon's recent stroke.
White House spokesman Scott McClellan
has also called on the international community to
"reach out to Iraq as well" to help with its
reconstruction.
And according to the US
Agency for International Development, Iraq must
also look to private investment, international
lending and its own economy to finance future
reconstruction.
Japan is due to pull out
its 600 troops from Samawah in southern Iraq in
May, and, according to a Kyodo News report, the US
will ask Japan to become more involved in
reconstruction efforts.
The
United States' desire
to stop the bleeding of funds for
reconstruction comes along with a new report that suggests the eventual
overall cost of the war in Iraq will not be $70
billion, as the administration first advertised, but
at least US$1 trillion.
The new
initiative comes barely a month after Bush
appointed Rice to take over the lead role in
supervising and coordinating the US reconstruction
program in Iraq from the Pentagon. The
administration has signaled that it will not seek
further funding for these efforts and the Iraq
Reconstruction Management Office (IRMO) will go
out of business.
"The US never intended
to completely rebuild Iraq," Brigadier-General
William McCoy, the Army Corps of Engineers
commander overseeing the work, said at a recent
news conference. "This was just supposed to be a
jump-start."
However, McCoy's assertion
seems to be at odds with previous administration
statements. For example, in a speech on August 8,
2003, 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."
Relatively little ($3.3 billion) of the
$21 billion allocated for reconstruction since the
invasion remains to be spent, and IRMO is
scheduled to disband in June 2007. Thus the
decision not to renew the reconstruction program
leaves Iraq with tens of billions of dollars in
unfinished projects and an oil industry and
electrical grid that have yet to return to prewar
production levels.
The US State Department
has been given a mandate to provide a "focal
point" for reconstruction efforts and to supervise
and coordinate reconstruction programs not only in
Iraq, but also in other countries emerging from
civil strife. These include Afghanistan, but Bush
administration officials have announced they will
henceforth rely more on the Afghan government, the
North Atlantic Treaty Organization and contractors
from other countries.
Steven Aftergood,
head of the government secrecy program of the
Federation of American Scientists, told Inter
Press Service that the switch from the Pentagon to
the State Department was "a belated recognition
that existing policy on reconstruction and
stabilization has been woefully inadequate".
According to a study published last month
by the US Army War College's Strategic Studies
Institute:
Only $1
[billion] to $2 billion of the [initial] $18 billion authorized
for reconstruction by Congress in late
2003 had been expended a year later, and Iraqis
had yet to see much tangible improvement in employment
or quality of life after a year
and a half of occupation. A study
by the Center for Strategic and International
Studies in Washington, DC, argued that, in every
area necessary for a successful reconstruction
of Iraq, there had been not only lack of
progress but an actual deterioration of
conditions on the ground.
That
switch of reconstruction responsibility to the
State Department from the Pentagon came in
a little-noticed December 7 presidential
national-security directive that said, "The secretary of
state shall coordinate and lead integrated United
States government efforts, coordinating these
efforts with the secretary of defense to ensure
harmonization with any planned or ongoing US
military operations across the spectrum of
conflict."
The State Department will lead
US government efforts to prevent countries at risk
"from being used as a base of operations or safe
haven for extremists, terrorists, organized crime
groups or others who pose a threat to US foreign
policy, security or economic interests", the Bush
directive said.
Some administration observers say the switch was
a product of increasing frustration with
the pace of reconstruction work in Iraq. They
also believe the cutoff in reconstruction funding is part
of a new White House narrative that
includes reduction in the number of US troops in Iraq
before US mid-term elections next November, when the entire
House of Representatives and a third of senators
will stand for re-election.
The Army War
College study, "Revisions in Need of Revising:
What Went Wrong in the Iraq War", does note that
while many of the criticisms of the Bush
administration for the haphazard way it planned
and prepared for the invasion of Iraq are valid,
the result would have been much the same even if
things had been done differently.
The
authors write, "Nevertheless, strong reasons exist
for believing that the most serious problems
facing Iraq and its American occupiers - 'endemic
violence, a shattered state, a non-functioning
economy and a decimated society' - were virtually
inevitable consequences that flowed from the
breakage of the Iraqi state."
Unfinished business According to the
regularly updated Iraq Index run by the Brookings Institution
in Washington, at the end of 2005 crude-oil
production was 1.92 million barrels per day, lower
than the prewar peak of 2.5 million. Crude oil
exports were 1.071 million, down from an
estimated 1.7 million to 2.5 million.
The shortfall in oil production, which,
according to the Pentagon's prewar planning, was
supposed to provide the funds for Iraqi
reconstruction, has been attributed mainly to
sabotage by insurgents.
The average amount
of electricity generated nationwide in 2003 was
3,958 megawatts. Last month it was 3,800MW,
with the average Iraqi receiving less than
12 hours of power a day. This is despite the $4
billion spent on restoring electricity supplies.
Foul-ups such as new generators not being linked
to the national grid have not helped matters.
The US Embassy said the
reconstruction effort had restored sewage treatment to more
than 7.7 million Iraqis, opened 21 berths at the
Umm Qasr port, built nearly 1,000 kilometers of
roads and developed three new international airports.
It said 124,000 Iraqis were employed under
reconstruction and military contracts.
But 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 US 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 were 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 alleged victims.
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.
While 3,600 projects will be completed by
the end of the year, the cost of security has
eaten up as much as 25% of each project, according
to the Office of the Special Inspector General for
Iraq Reconstruction (IG).
A US
congressional report in October forecast that many
reconstruction projects were unlikely to get off
the ground because of security costs. Iraqi
authorities estimate that $10 billion would be
needed for the health sector alone, to build or
rehabilitate and provide equipment for hospitals
and clinics.
Another problem hindering
reconstruction is a familiar one - scandal. More
than 18 months after the Pentagon disbanded the
Coalition Provisional Authority that ran Iraq,
neither the Justice Department nor a special
inspector general has moved to recover large sums
(in the region of $8 billion) suspected of
disappearing through fraud and price gouging in
reconstruction. Earlier audits by the IG found
that oversight of contractors by the authority was
so lax that widespread abuse was likely.
Running costs The US is
preparing to hand over billions of dollars' worth
of infrastructure projects to the Iraqi government
over the coming year, but US officials are
increasingly concerned that the Iraqis lack
sufficient funds to run the high-technology water
and electric plants, among other projects, that
have been built since 2003.
US officials
say the costs of running the new facilities and
training Iraqis to operate them will be borne by
US taxpayers for years, barring significant
improvement in the Iraqi economy.
An audit
released in October by the IG estimated that
annual costs could reach $550 million and that the
additional expense of protecting those projects
from insurgent attacks could push the total price
tag to almost $1 billion per year.
Although details are still being hammered
out, State Department officials said they were
prepared to shoulder about $350 million out of the
$550 million in the estimated operating costs in
Iraq for 2006. The Iraqi government would be
responsible for the remaining $200 million, and
would be expected to pay a greater share of the
operating costs in 2007.
The end of
reconstruction funding appears to mark a change
from a promise the president made in 2003 to
provide Iraq with the best infrastructure in the
region.
But just how far the US intended
to go in that process has always been murky. While
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, in a sense
[reconstruction] funds can come from those various
sources I mentioned: frozen assets, oil revenues
and a variety of other things, including the
[UN-administered] oil-for-food [program], 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 funding
decision suggests it is not likely to happen any
time soon - unless with the help of some generous
friends.
David Isenberg, a
senior analyst with the Washington-based British
American Security Information Council (BASIC), has
a wide background in arms control and national
security issues. The views expressed are his
own.
William Fisher writes
for Inter Press Service.
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2006 Asia Times Online Ltd. All rights reserved.
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