Saturday, July 03, 2004


Things Could Be Better III

It's Little Wonder Why The Iraqi's Aren't Happy

U.S. Has Spent $366M of $18.4B on Iraq

WASHINGTON - Its own figures show just 2 percent of the $18.4 billion Congress provided last fall for Iraqi reconstruction has been spent, but the Bush administration says significant work there is under way.

The checks total $366 million of the amount spent through June 22, according to a report the White House budget office released Friday. It was the first time the administration has said how much it spent from reconstruction accounts — funds that lawmakers provided last November amid cries of urgency by President Bush and Republican congressional leaders.

White House budget office spokesman Chad Kolton said the figure is misleading because funds for many long-term contracts aren't released until substantial work has been done. He said the more important figure shows that $5.3 billion of the total was spent or is owed for specific contracts — up from $2.2 billion as of the last report, for the period through March 24.

"There can be substantial work ongoing without significant money going out the door yet," Kolton said.

The expenditures are far behind the White House's original schedule. When it filed its first report in January, it estimated $10.3 billion would have been spent through June 30.

Patrick Clawson, a former World Bank official and now deputy director of the bipartisan Washington Institute for Near East Policy, said the slow spending rate was not surprising. Besides ungainly federal spending procedures, the sluggishness was typical for undeveloped countries that have limited abilities to absorb cash, he said.

"It's understandable," he said. But it will be "totally, utterly incomprehensible to the average Iraqi on the street."

The reconstruction money was part of an $87 billion package provided last Nov. 6, mostly for wars in Iraq (news - web sites) and Afghanistan (news - web sites). The measure was approved after weeks in which administration officials and congressional Republican leaders said the money was needed quickly to hasten work, stabilize Iraq and improve the security of U.S. troops there.

The funds are meant to finance everything from training Iraqi police to starting small businesses to rebuilding the country's electric, water, health and oil production facilities.

The report said reconstruction in Iraq is "moving forward," in party with money that has also been spent from other accounts. It cited the immunization of 85 percent of Iraqi children, the rebuilding of 2,500 schools, and the delivery of telephone service to 1.2 million Iraqis — 50 percent above the prewar total.

The report also acknowledged the harm caused by the ongoing insurgency, which has forced a reduction in crude oil exports and caused electricity production goals to be missed.

"These challenges continue to impede the actual work from being executed and completed on schedule," the report said.

The $366 million in actual expenditures includes $194 million for Iraq's police and armed forces and $109 million for the country's electrical supply.

Of the $5.3 billion committed to contracts, the largest amounts are for work on electricity, oil equipment, police and armed forces, the civil government and water.

Some progress is being made because of other sources of reconstruction money.

Congress provided $2.48 billion for rebuilding in April 2003. Of that, $2.4 billion has been committed to specific contracts and $1.44 billion has actually been spent, the report said.

In addition, $1.1 billion has been spent out of $13 billion in multiyear pledges in aid and loans from other countries, according to the report. Other money is coming from seized Iraqi assets and the country's oil revenue, though much money from oil sales is being used to run Iraq's fledgling government.

The report also said it will cost about $1.5 billion over the next 15 months to operate a U.S. embassy in Iraq. That excludes the costs of building a new, huge, secure embassy building in Baghdad, which by some estimates could run to $1 billion.

The figures exclude U.S. war costs in Iraq, which the administration said in May were $97 billion to date. The White House has said it expects 2005 military costs to exceed $50 billion in Iraq, though lawmakers of both parties say they expect a total closer to $75 billion.

Alan Fram, Associated Press

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