Less than 140 of Iraq’s projects are underway

Only US $366 million of the $18.4 billion US aid package for the redevelopment of Iraq has been spent by the US government as officials blame security issues

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By  Rhys Jones Published  July 10, 2004

The US government has spent 2% of an US $18.4 billion aid package that Congress approved last year after the Bush administration called for a quick infusion of cash into Iraq to finance reconstruction, according to figures released last week by the White House. The US-led occupation authorities were much quicker to channel Iraq’s own money, earmarking around $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 US aid package had been spent as of 22nd June, the White House budget office told Congress in a report that offers the first detailed accounting of the reconstruction package. However, according to the report, nothing from the package has been spent on construction, health care, sanitation and water projects. More money has been spent on administration than all projects related to education, human rights, democracy and governance. US officials involved in the reconstruction blame security concerns and bureaucratic infighting between the Pentagon, the State Department and the White House for delays in the allocation of funds. By the time the Pentagon’s contracting office in Baghdad began awarding contracts, the risk of kidnappings and other attacks aimed at foreign workers was so severe that many projects never began. As a result, several Western firms that won contacts have withdrawn their employees from Iraq. Fewer than 140 of the 2300 reconstruction projects that were to be funded with the US aid package are underway. Officials with the contracting office say the amount of money actually spent does not reflect the full scope of work being performed. A more accurate figure, they said, is the amount of money allocated for reconstruction work. Just over $5.2 billion had been allocated as of the 22nd June, according to the White House budget report. “The money that is disbursed is typically not disbursed until the work is completed, so it doesn’t give the best picture of what’s going on,” said John Proctor, a spokesman for the contracting office. “Some of our projects take months, or even years, to complete.” Proctor said actual spending had increased to $400 million since the figures were provided to the White House on 22nd June. Furthermore, spending patterns have been different with the Iraqi money. The Coalition Provisional Authority, the now-dissolved US-led occupation administration, spent or locked in for future programmes more than $19 billion from the $20 billion Development Fund for Iraq, which was established by the UN Security Council to manage Iraq’s oil revenue, said Joseph A Christoff, director of international affairs and trade at the General Accounting Office, the watchdog arm of the American Congress. Christoff added that all but $900 million of the fund had been spent or allocated by the time the USA transferred political authority to an interim Iraqi government last week. Meanwhile, some Iraqi officials have criticised the contrasting spending practices. The occupation authorities “came here and spent a lot of our money but very little of theirs,” said a senior Iraqi official, who spoke on condition of anonymity on the grounds that criticism could affect his relationship with the new US Embassy in Iraq. The official did not contest the CPA’s decision to use the development fund money to pay the expenses of running Iraq’s government during the occupation, but he condemned spending on what he called “less essential projects that should have been left up to the Iraqis to decide.”

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