NEW YORK - Last week's announcement that
Iraq will now have to pay for its own
reconstruction has left some observers wondering
whether the country's yet-to-be-formed government
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 US$21 billion. "We should be very much
dependent on ourselves," al-Basri said in an
interview with 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% 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 US Iraq Reconstruction Management Office.
The deputy finance minister said Iraq
needs foreign investment to lift exports to 3
million barrels a day. That would equal the oil
exports achieved by Iraq in the 1980s. Oil
production today is far below pre-war levels.
According to the Pentagon's pre-war
planning, oil production was supposed to provide
the funds for Iraqi reconstruction. Vice President
Dick Cheney and other senior Bush administration
officials emphasized this point repeatedly in
their pre-war effort to justify the US invasion.
Also facing the country is a massive
rebuilding of infrastructure. Lack of security has
stymied efforts to rebuild electrical, sewer and
water systems. A report last month by the US
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 fewer 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 US has gone to
protect projects and contractors.
Speaking
on condition of anonymity because he is involved
in the current Iraqi political process, a leading
Middle East expert said, "Because the US did not
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 US reconstruction funding as vindicating
this position. Typical is Beau Grosscup, professor
of international relations at California State
University at Chico.
"Having destroyed
Iraq, the US now refuses to put it back together
again," he said. "This decision reflects the
disastrous reality of the US occupation for the
Iraqi people as it is obvious there won't be peace
until the US leaves. Meanwhile, the makeover of
the Iraqi economy has been completed."
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 US 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 US 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 US commitment to
reconstruction has always been somewhat murky.
"The US never intended to completely rebuild
Iraq," Brigadier General William McCoy, the Army
Corps of Engineers commander overseeing the work,
told reporters at a recent news conference. He
reportedly told The Washington Post, "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 August 8, 2003, President George W
Bush said, "In a lot of places, the infrastructure
is as good as it was at pre-war 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."
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 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
the country's government will have either the
resources or the expertise to manage the
large-scale reconstruction projects that remain
unfinished.
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 2007.
According to a recent report by the US
inspector general for Iraq reconstruction (IG),
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.
Some funds were diverted to other types of
projects, primarily security-related, and 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 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 is needed for the health sector alone, to
build or rehabilitate and provide equipment for
hospitals and clinics.
