Funds for Iraq run low

Earlier this year, Robert Stein, who was a regional Coalition Provisional Authority (CPA) comptroller, and contractor Philip Bloom pleaded guilty to participation in a scheme to defraud the CPA of more than $8.6 million, the report noted.

Then there's waste, brought about by haste, inattention, incompetence, or a combination of the three. In May, an audit by Mr. Bowen found that a $243 million program to build healthcare clinics would finish just 20 of the 150 that had been planned, unless extra cash is forthcoming.

Forty-one natural-gas turbines bought with US funds, and meant to generate needed electricity, are being run on fuel oil, due to limited natural-gas availability. This cuts their output by 50 percent, according to the US Government Accountability Office, increases maintenance needs three-fold, and reduces the life of the equipment.

US officials defend the rebuilding effort as the best that could be accomplished under the circumstances. The latest SIGIR quarterly report calls reconstruction "a picture of significant progress achieved through a substantial US investment of time, talent, and tax dollars...."

But critics point out that basic services have yet to be restored three years after the US invasion. Oil and electricity production have yet to return to prewar levels. Some 60 percent of clean water produced in Iraq is lost to leakage and contamination.

"The US aid process has failed. It has had some important individual successes, but it has wasted at least half of the some $22 billion in US funds ... it attempted to use to secure and develop Iraq's economy," wrote Anthony Cordesman, a senior expert on Iraq at the Center for Strategic and International Studies, in a recent study.

The question is, what next? As the IRRF phases out, most projects will turn to Iraqi control. Further US aid would be funneled through the normal foreign-affairs budget.

Yet many projects won't be completed by the handover date. As of April, 277 electricity projects remained incomplete, with 58 not yet even started. Forty-two oil and gas projects aren't finished – and only 13 are.

US budget plans don't call for big additions to the money already spent. For fiscal 2007, the US requested $770 million in reconstruction funds – and a House committee has trimmed that by $200 million pending final passage. US officials are pressing other nations to pay up pledges of aid they've already made. But a reasonable estimate of the money still needed is $18 billion to $28 billion, according to Mr. Kosiak, and total foreign aid pledges are only $13 billion.

"Even assuming ... that this gap could be covered by drawing equally upon US, international, and Iraqi resources, this suggests that an additional $5 billion to $10 billion in US reconstruction assistance might need to be provided," he wrote in an analysis of reconstruction earlier this year.

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