Sunday, July 04, 2004

Only 2% of $18B Reconstruction Fund Spent - So what?

To read the news articles, you'd get the impression the US was raping the Iraqi treasury. Ironically, the same folks who castigated the Bush administration for asking for the money in the first place are now castigating the Bush administration for not spending it.

Had the $18B been spent, John Kerry would be standing before a camera somewhere stating, "I voted for the 18 billion before I voted against it - when I was voting for it, I was only voting to give the President the threat of spending the 18 billion....When I was in Vietnam..."

The U.S.-led occupation authorities were much quicker to channel Iraq's own money, expending or earmarking nearly all of $20 billion in a special development fund fed by the country's oil sales, a congressional investigator said.

Only $366 million of the $18.4 billion U.S. aid package had been spent as of June 22, the White House budget office told Congress in a report that offers the first detailed accounting of the huge reconstruction package.

I don't see anything wrong or sinister here. Using Iraqi money to fund Iraq reconstruction, instead of using US taxpayer dollars, makes sense to me. The United States has done a great deal more for Iraq, using Iraqi money, than was ever accomplished under the United Nations' Oil-For-Palaces program. The United States has acted as an advocate to other nations to eliminate a great deal of Iraqi debt. The United States is working hard to get the ISX reopened and trading globally. In terms of how it affects the average Iraqi citizen, Iraq is financially stronger today than ever before.

Today, pipelines are being destroyed almost as fast as they can be repaired. Water stations, power stations, telephone exchanges are all experiencing the same kind of attacks. Massive enhancements to these infrastructure systems are not prudent, if the result is simply their destruction. The administration is correct to focus on stabilizing Iraq with regards to government and security first. Only when these are accomplished can any meaningful enhancements to critical infrastructure take place.

I approve of measured, prudent spending of US dollars in Iraq. I would even go so far as to hope President Bush would be in a position to say, "You know, we used Iraqi money for that and didn't need the whole 18 billion. Here's 10 billion back."

What a coup that would be for the American people.


At 12:04 AM, Blogger Brian said...

Thats a good point Joel. As Iraq recovers and generates more oil revenue they won't need American dollars. It wasn't a poor country before the war and it won't be one in the future.

At 8:17 AM, Blogger Charles Wilhelm said...

What did you expect? That article is from a San Francisco newspaper. That place is a liberal hotbed if I've ever seen one. :)

At 2:15 PM, Blogger Joel Gaines said...

Here is something interesting from a poster on Winds of Change:

Posted by klaatu on July 6, 2004 08:48 PM
I'm recently back from working for the CPA in Iraq. Don't ask how or where; I won't tell you. It was a wild ride. Some very good and very bad times. The security got worse the whole time I was there. My son is still there, unfortunately.

Development Fund for Iraq (DFI) money was spent on relatively small (say, less than $1 mil) projects and purchases. A lot went for the budget of the Iraqi ministries. Some went to direct grants to Iraqi civil society organizations, NGOs and educational institutions.

The paperwork and procedures were abbreviated. The single guideline was that the money had to be spent "for the benefit of the Iraqi people." Other than that, you could find any need, plan a project and obligate the funds. The amount of money we had was really not the constraining factor: we were really limited in our ability to travel, plan, meet and survey projects as security deteriorated. We tried to have competitive bidding: the contracting officers that I knew did a great job soliciting these bids and building relationships with the local builders and other contractors. Sometimes things were sole-sourced out of necessity.

It was all cash, lots of it. So much that the smell of those fresh Franklins would fill a large room.


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