Tuesday, Jul 06, 2004
U.S. fails to spend Iraq fund
By Suzanne Goldenberg
With the U.S. spending just two per cent of the $18.4 billion it had obtained from Congress for the reconstruction of Iraq, the burden of paying for the reconstruction has fallen largely on Iraqis.
THE UNITED States Government spent just two per cent of the $18.4 billion it had obtained from Congress for the urgent reconstruction of Iraq before formally ending its occupation last week.
The White House budget office report, the first detailed audit of the reconstruction, showed that the U.S. occupation authorities had spent nothing on healthcare or water and sanitation, two of the most urgent needs for Iraqis. In contrast, a total of $ 9 million was spent on administrative expenses.
By June 22, America's reconstruction campaign had spent $ 366 million of the sum allotted to the Iraq Relief and Reconstruction Fund.
The $18 billion were supposed to help train Iraq's police force and to rebuild the country's national infrastructure, including its electricity grid bombed during the war, sewage treatment plants, schools, hospitals, telecom facilities and roads neglected since the 1991 Gulf war.
Instead, the burden of paying for the reconstruction has fallen largely on Iraqis, absorbing nearly all of a $20 billion fund raised by the country's oil sales. An additional $1.1billion came from grant and loan pledges from other countries.
In its accounting of the funds, the White House budget office said the largest disbursement so far was for rebuilding Iraq's police and military, with $194 million spent. But that figure was less than the planned spending of $3.2 billion to provide security.
Despite the complaints from Iraqis about blackouts and an erratic power supply, just $109 million was spent on repairing Iraq's electricity grid, compared with the $5.4 billion allocated in the reconstruction fund.
Other urgent needs were also unmet. Although Iraq has an unemployment rate of 30 per cent, the fund created only 15,000 jobs, compared with the 250,000 that had been mandated.
A spokesman for the budget office said the figures were misleading and projects costing $5.3 billion were in the pipeline.
"The reconstruction effort is moving forward," the report said. "The coalition has helped Iraqis rebuild schools and refurbish hospitals and health clinics, repair bridges, upgrade the electrical grid and ports and modernise the communications system."
As evidence of progress, the report said 1.2 million telephones had been connected as of June 18 and 2,500 schools had been repaired. But even by the standards of the budget office, those achievements lagged behind projections.
In a report published in the spring, the administration said it expected to spend more than $10 billion on reconstruction projects by June 30.
The reality, made apparent in the report released on Friday in advance of the July 4 holiday weekend, is bound to raise questions from Iraq's new rulers - and during the U.S. election campaign - about the use of the $ 87 billion package approved by Congress in November.
The Bush administration said the funds were needed urgently to stabilise Iraq and enhance the security of the U.S. forces. But the budget office report said the mounting violence in Iraq made it impossible to meet the goals set for reconstruction.
"These challenges continue to impede the actual work from being executed and completed on schedule," the report said.
However, the kidnappings and roadside bombs that have plagued Iraqis did not hamper spending of Iraqi revenues. During the Coalition Provisional Authority's tenure in Iraq, some $19 billion of the $20 billion oil fund was spent on development programmes.
According to July 4 Washington Post, more than $ 6 billion of the oil fund has been spent in the past two months alone. -
© Guardian Newspapers Limited 2004
Copyright © 2004, The Hindu.