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Iraq: What Reconstruction?
Based off unofficial Iraqi data, the Bush Administration reported in September that the central government of Iraq had spent 24 percent of their 2007 capital projects budget as of July 15. "However, this report is not consistent with Iraq’s official expenditure reports, which show that the central ministries had spent only 4.4 percent of their investment budget as of August 2007," said a frustrated Government Accountability Office (GAO). The GAO released a report this month on the expenditures in Iraq for capital projects, that is, rebuilding. With a $10 billion budget for such projects, Iraq had only spent 4.4 percent of it by August. Rather than being spent on much needed construction projects, greater revenues from high oil prices and improved security are landing in the Federal Reserve. At the same time an estimated $6 to $7 billion from last year’s budget is being invested in U.S. treasuries instead of reconstruction. Many are blaming the problem on the new Iraqi government. Yahia Said, director of Iraq Revenue Watch said "The government is broken. The country's midlevel bureaucracy has either fled the country or been purged in de-Ba'athification, [and] a lot of ministers are politically appointed and not professional." With no structure or staff at the middle level, orders are sent out from Baghdad ministers, but never carried out. "It's like they lost the manual for driving the government. They lost the landing instructions for landing the airplane," added Mr. Said. While oil production has once more reached prewar levels and oil prices rising, the GAO is struggling to know how revenues are being spent. "We cannot determine the extent to which Iraq has spent funds due to conflicting expenditure data," the report said. The GAO was told by U.S and foreign officials that weakness in budgeting, accounting procedures and procurement had resulted in the incompletion of many projects. “According to the State Department, Iraq’s Contracting Committee requires about a dozen signatures to approve projects exceeding $10 million, which slows the process," wrote the GAO. In 2007 expenditures were around $10 billion, expected expenditures this year are a mere $4.3 billion, less than half of that. Joseph Saloom, senior advisor to Condoleezza Rica and coordinator of Iraq said of the new government, "Most of the people had never been ministers before, they had never managed large budgets." Elected in January of 2006, the current government was not formed until May of the same year. While violence levels have dropped over the past year, the government is unsure of itself and inexperienced, indicating an even longer stay on the part of the United States. With money allocated for reconstruction being invested in U.S. treasuries and oil revenue paths shrouded from view, something seems not quite right here, wouldn’t you say? |
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This intel was contributed by The Rift
The Rift
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May, 2012
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