US aid spending unlikely to change, despite $8 billion wasted in Iraq

A US government report found widespread waste in the $60 billion reconstruction effort in Iraq. But development experts think waste in US aid spending is here to stay.

A US government report detailing widespread waste and missed opportunities in America’s $60 billion reconstruction effort in Iraq is unlikely to dramatically alter America’s aid policy, say international development experts. 

Yesterday the Special Inspector General for Iraq Reconstruction (SIGIR) released a report entitled Learning From Iraq that examined many of the challenges and mistakes that led to the wasting of at least $8 billion, or 13.3 percent of US reconstruction spending in Iraq.

Although the report offered suggestions for improvement, the US continues to fund a number of programs in Afghanistan that bear a strong resemblance to the failed Iraq projects outlined in the report.

Ashley Jackson, a research fellow at the Overseas Development Institute, says that most of the problems highlighted in SIGIR’s final report on Iraq were issues the agency repeatedly warned Congress and Presidents Bush and Obama about. 

“This is something they started reporting on years ago and nothing has changed,” she says. 

SIGIR’s sister institution, the Special Inspector General for Afghanistan Reconstruction, has issued regular reports on US spending in Afghanistan, uncovering many of the same wasteful spending patterns. Both organizations’ findings have resulted in numerous criminal investigations, but Ms. Jackson says the watchdogs lack the authority to implement aggressive changes that could prevent future waste.

“These agencies are really useful in exposing things, but unless they have the ability to correct them, it’s not going to happen. It’s just going to be another report,” says Jackson, who has worked extensively in Afghanistan. 

Providing adequate oversight remained a consistent problem in both Iraq and Afghanistan, where security concerns prevented American monitors from directly supervising the work they funded or making regular site visits. 

As the US looks to provide aid to areas such as Pakistan, Yemen, and other strategically important countries, the question of project oversight in dangerous areas remains a consistent problem that many development experts say remains unaddressed. Additionally, the political climate has made it more difficult for policymakers to enact measures that would support more front-line monitoring.

“The 9/11 attack in Benghazi proved that the political atmosphere in Washington DC won’t accept risk. Everything is hyper-politicized,” says James Miller, a Syria analyst and associate editor of EA Worldview. “Money being wasted is a political liability, but I think that money being wasted is less of a liability than lives being wasted.” 

Still, George Ingram, a senior fellow at Brookings Institution, says that it’s problematic to use reconstruction programs for Iraq and Afghanistan as examples for most US assistance programs.

The sheer size of the Iraq and Afghanistan programs, $60 billion and $89 billion respectively, make them anomalous. If anything, he says the two wars may have taught the US that it is often better served by more modest spending that allows for more careful planning and comprehensive oversight.

“You haven’t seen the US rush massive amounts of assistance into the Middle East. I think it’s been a combination of a difficult budget situation, but also a little more humility on the ability of the US to rush in with large amounts of money and create sustainable solutions to the problems there,” says Mr. Ingram.

“You’re already beginning to see the impact of some lessons learned from Iraq and Afghanistan, of the US being more cautious and moving a little slower until it gets a better fix of what’s going on in the country and how we can be helpful effectively.”