Iraq dire conditions require lots of improvement
Iraq-USA, Politics, 6/13/2006

A report to the US congress on the status of Iraq on governance, security, reconstruction, and financing challenges by Comptroller General of the United States David M. Walker to Congress indicate that US spending on security related spending far dwarfs the spending on foundation elements needed for good governance and civil and economic infrastructure for different public.

Though the report was in April of this year, it is very relevant. Here is some of what Walker said: The war in Iraq will not be won by the military alone. Iraq's future requires strong Iraqi leadership, sustained US commitment, and a reengaged international community.

The United States, Iraq, and its partners have made some progress in stabilizing and rebuilding Iraq. Iraqis have voted in increasing numbers, with over 12 million casting votes in the December 2005 election. Over the past year, the number of security forces that the coalition has trained and equipped has increased from about 142,000 to about 242,000. Finally, the United States has completed or has underway about 500 water, oil, and electricity reconstruction projects.

However, this progress is tempered by the overwhelming challenges the coalition faces. First, sectarian divisions delayed the formation of a permanent government and created a political vacuum. Recent events provide some hope that a new government will be formed in the near future. Once formed, the new government will confront the enormous tasks of strengthening government institutions, disbanding the militias, resolving disputes over internal boundaries and oil revenues, addressing corruption, and delivering results to the Iraqi people. Of particular importance is providing the Iraqis with the training and technical assistance needed to run their national and provincial governments. A transparent and accountable government can reduce corruption and deliver results to the Iraqi people.

Second, the security environment continues to be a concern as insurgents demonstrate the ability to recruit, supply, and attack coalition and Iraqi security forces. From 2004 to 2005, attacks against the coalition, Iraqis, and infrastructure increased 23 percent. Since the bombing of a Samarra mosque in February 2006, Iraqis have become increasingly concerned that civil war may break out. The poor security situation in much of Iraq has impeded the development of an inclusive Iraqi government and effective Iraqi security forces.

Third, higher than expected security costs, funding reallocations, and inadequate maintenance have impeded US reconstruction efforts. As of March 2006, oil and electricity production were below pre-war levels and reconstruction goals for oil, electricity, and water had not been met. Iraq produced 2.6 million barrels of oil per day before the war; in 2005, production averaged 2.1 million barrels per day. Production levels alone do not measure the impact of reconstruction efforts. While US efforts have helped Iraq produce more clean water, 60 percent is lost due to leakage and contamination. Continued focus on developing outcome measures is critical to ensure that reconstruction efforts are making a difference in the lives of the Iraqi people.

Between fiscal years 2001 and 2005, the US direct financial commitment to securing and stabilizing Iraq grew to $278 billion.

Approximately $248 billion has been provided to support US military operations and forces, which currently number about 130,000 troops, and about $30 billion to develop capable Iraqi security forces, restore essential services, and rebuild Iraqi institutions.

US reconstruction efforts have focused on restoring Iraq's basic services, including refurbishing oil facilities, increasing electrical generating capacity, and rebuilding water treatment plants. As of March 2006, oil and electricity production were below pre-war levels and reconstruction goals for oil, electricity, and water had not been met.

Iraq produced 2.6 million barrels of oil per day before the war; in 2005, production averaged 2.1 million barrels per day. Higher than expected security costs, funding reallocations, and inadequate maintenance have slowed the pace of reconstruction efforts and limited the impact of the services provided. For example, in the water sector, $1.9 billion was reallocated to the security and justice sectors, which delayed or terminated many large water projects. In addition, production levels alone do not measure the impact of reconstruction efforts. While US efforts have helped Iraq produce more clean water, 60 percent is lost due to leakage and contamination. Continued focus on developing outcome measures is critical to ensure that US efforts are making a difference in the lives of the Iraqi people.

Iraq will likely need more than the $56 billion originally estimated for reconstruction and stabilization efforts, but it is unclear how Iraq will finance its reconstruction needs. US commitments are largely obligated, and future commitments focus on sustaining existing infrastructure, strengthening ministerial capacity, and training and equipping Iraqi security forces. International donors are reluctant to commit additional funds until security improves and Iraq accounts for the donors' previous contributions. Iraq can only contribute to its future reconstruction needs if it increases oil revenues, reduces energy and food subsidies, controls government operating expenses, and minimizes corruption.

The Ministry of Interior was seriously compromised by sectarian influences of militias, corruption, and a culture of impunity, according to State's 2006 human rights report.

The new government will face four immediate challenges once formed.

Developing effective national and provincial governments. Strengthening national and provincial institutions is a key step in improving governance and supporting efforts to build Iraqi self- reliance and defeat the insurgency. However, according to US assessments, Iraqi ministries have limited capacity to provide government services to the Iraqi people. These assessments identified limitations in managers' skills and training; weak technical expertise; outdated work processes and procedures; and an inability to identify and articulate strategic priorities. In January 2006, State reported a new initiative to address Iraqi ministerial capacity development at 10 national ministries.

According to State, Embassy Baghdad plans to undertake plans to provide key ministries with training in civil service policies, requirements- based budget processes, information technology standards, and logistics management systems.

In addition to a weak national government, Iraqi provinces also have limited capacity to provide governmental services.

Stemming corruption. US and international officials reported increased concerns about corruption. In our discussions with IMF, World Bank, Japan, and the European Union, representatives reported that "donor fatigue" might limit their ability to provide future assistance to Iraq, especially if the current security environment did not improve and the Iraqi Ministries did not improve their procurement and financial management practices. Corruption in the oil sector was cited as a special problem. According to State officials and reporting, about 10 percent of refined fuels are diverted to the black market, and about 30 percent of imported fuels are smuggled out of Iraq and sold for a profit.

According to World Bank and UN specialized agency officials, public tendering is still an "alien concept" within Iraq Ministries. These officials reported several recent attempts by Ministry officials to subvert the public procurement process. For example, World Bank financing for two projects worth $40 million each was cancelled after Iraqi ministry officials awarded contracts to firms that were not included in the competitive bidding process.

US officials also reported instances of corruption related to the protection of essential infrastructure. According to IRMO officials, the Ministry of Electricity contracts with tribal chiefs, paying them about $60-$100 per kilometer to protect transmission lines running through their areas. However, IRMO officials reported that the protection system is flawed and encourages corruption. According to US and UN Development Program officials, some tribes that are paid to protect transmission lines are also selling materials from downed lines and extracting tariffs for access to repair the lines. IRMO officials stated that they want the Ministry of Electricity to change the system so that tribes are only paid when the lines remain operational for a reasonable period of time.

Disbanding militias. Disbanding the militias or integrating them into Iraq's armed forces is a critical challenge facing a new Iraqi government. Iraq's 2004 transitional law outlawed all militias not under the command structure of the Iraqi transitional government, except where provided by federal law. Iraq's constitution similarly states that formation of military militias outside the framework of the armed forces is prohibited. Despite these prohibitions, militias continue to operate throughout Iraq. The largest militias include the Kurdish Peshmerga organization in Kurdistan, the Shiite Badr organization in southern Iraq, and the Shiite Jayash al-Mahdi (Mahdi Army) in central and southern Iraq. In March 2006, the UN reported that militias challenge Iraq's rule of law and that the consolidation of local militia power in southern Iraq is resulting in systematic acts of violence against the Sunni community. Such developments, including recent efforts to form a Sunni Arab militia could undermine efforts to promote national accord. According to the Secretary of State, controlling the militias is one of the new government's top priorities.

Resolving disputes on boundaries and ownership of future oil fields.

Resolving disputes over territorial boundaries, especially in Kirkuk, poses another challenge.

A new Iraqi government will need to agree on how to share the proceeds from crude oil exports from both current and future Iraqi oil fields. The constitution states that oil and gas are owned by the people of Iraq in all regions and governorates. It also states that the federal government, with the producing governorates and regional governments, shall undertake the management of oil and gas extracted from the present fields, provided that it distributes its revenues fairly and in proportion to the population. However, the specific details of revenue sharing have yet to be worked out, and the status of revenues from future fields is unclear.

enemy-initiated attacks against the coalition, its Iraqi partners, and infrastructure increased in number over time.

Additionally, transparency and accountability mechanisms are essential given the legacy of corruption inherited from the previous regime. Efforts should also be taken to ensure that Iraqis are capable of maintaining power plants, water treatment facilities, and other US-funded infrastructure.

Collectively, Iraq's future requires strong Iraqi leadership, sustained US commitment, and a reengaged international community. All these will be essential in order for real success to be achieved.

Previous Stories:
  Zarqawi's death not going to stop the violence   (6/9/2006)
  Iraqi key ministers not part of spoil system   (6/9/2006)
  Grim picture of Iraq's condition   (5/6/2006)

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