US outlines plans to rebuild Iraq
Iraq-USA, Economics, 1/27/2007

The United States plans to improve the distribution of economic reconstruction funds in Iraq as part of a strategy to support military operations aimed at securing neighborhoods from insurgents and sectarian violence, officials tell a Senate Committee.

Ambassador David Satterfield, the State Department's senior coordinator for Iraq policy, told the Senate Foreign Relations Committee January 25 that the Bush administration is working to create a situation where "if, on a given day, a neighborhood has been cleared and secured, we... are able to move monies, to begin employing people, taking them out of their houses, putting them onto the streets in a positive sense, working, and then to build longer-term sustainable projects to give a stake in the economy of those areas, those neighborhoods."

General Michael Jones, deputy director of Middle East affairs for the Joint Chiefs of Staff, told the senators that the ability to coordinate economic reconstruction with military operations serves as a "combat multiplier," creating goodwill with the local population and ensuring that cleared areas remain secure.

Satterfield said the key principles of the US reconstruction strategy are decentralizing the effort and supporting Iraqi government and local officials in their priority projects. He said the United States also would renew its diplomatic efforts to obtain political and financial support for Iraq's reconstruction from Jordan, Egypt and the Gulf countries.

He said the administration plans to double its number of provincial reconstruction teams (PRTs) from 10 to 20 and staff them with specialized technical personnel, such as agricultural and veterinary experts, to ensure that they are effective.

The PRTs are designed to move civilian personnel out of the Green Zone and into the provinces where they can provide local officials with assistance in governance and economic development. (See related article.)

Satterfield told the senators that the United States has fundamentally transformed its reconstruction efforts over the past 18 months from large projects to small local undertakings.

He said the United States has sought to "reallocate funds to achievable projects, to Iraqi-contracted projects, rather than multinational or design-build contracts, to place greater responsibility and accountability into Iraqi hands" and to improve oversight. He said future projects would likely be focused on microfinance, business development and job creation in coordination with local officials.

Satterfield said the reconstruction of Iraq is ultimately an Iraqi responsibility and that Iraqis would have to take the lead in all future efforts, but he added that they need international assistance to move the process forward. In particular, he noted that the Iraqi government has difficulty in budget execution.

"Iraq does have fiscal resources. It has money in the bank, some 12 1/2 billion dollars from unspent prior budget years, and also a certain amount from windfall profits from unexpected oil prices. They lack the resources, the mechanisms, to move that money within their own budget on an urgent basis," he said.

Satterfield said the primary focus of US efforts to build administrative capacity is improving the Iraqi government's ability to move its funds into effective programs. He added that Secretary of State Condoleezza Rice plans to appoint a new coordinator for economic transition to facilitate these efforts.

Previous Stories:
  Massive number of Iraqis leaving each month   (1/20/2007)
  Gates in Iraq: results to secure Baghdad to be clear by summer   (1/20/2007)
  US capture of diplomats aimed at Iran - Iraq relations: Iranians   (1/20/2007)
  US $4 billion for Iraq reconstruction   (3/1/2006)
  US should 'seek resolution' with Iraq over $1.4 billion Kellogg, Brown and Root contract   (12/31/2005)
  Private security is consuming large part of Iraq rebuilding efforts   (8/6/2005)

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