Iraq's Budget Surplus Raises Questions About Reconstruction Funding

On August 5, the Washington Times ran an article on Iraq's potential total budget surplus at the end of 2008. The article, "GAO: Iraq could have $79 billion budget surplus," went on to report:

"The Iraqi government could end the year with as much as a $79 billion budget surplus as ever-increasing oil revenues pile on top of leftover income the Iraqis still haven't spent on their national rebuilding effort, congressional auditors say.

A report by the Government Accountability Office (GAO) made public Tuesday prompted renewed calls from senators that Baghdad pay more of the bill for its own reconstruction, which has been heavily supported with U.S. funds.

The projected Iraq surplus, including unspent money from 2005 through 2008, has been building because of rising world oil prices, increasing Iraqi oil production, the government's inability to execute budgets for spending its money and persistent violence in the country, the GAO said."

The good news is that levels of violence have decreased, and Iraq's oil production is on the rise. So why is the resulting budget surplus not being spent on any number of needed rebuilding projects? Why is the money just sitting there? As the GAO report detailed, this surplus has been building since 2005. The estimated surplus from 2005-2007 was $29 billion. With crude oil prices rising rapidly since 2007, another $50 billion will be added. The GAO report suggested the following reasons for why the money has not been spent:

"First ... (the) relative shortage of trained budgetary, procurement and other staff with the necessary technical skills as a factor limiting the Iraqi government's ability to plan and execute its capital spending," the GAO said, adding that a second problem is the government's weak accounting systems. Third ... violence and sectarian strife remain major obstacles to developing Iraqi government capacity."

Iraqi lawmaker Haider al-Abadi stated that Iraq is pulling its weight in funding reconstruction. However, the GAO also reported that from 2005 through April 2008, Iraq spent just $3.9 billion on reconstruction. How does al-Abadi define "...pulling its weight...?"

The governor of Iraq's Central Bank, Sinan al-Shabibi, said he thought the problem with not spending money on reconstruction was due not to the bulk of funds being spent elsewhere, but because of security problems, and especially the lack of experts in Iraq's ministries.

The Washington Times article also reported that, "Since 2005, the United States has funded a number of efforts to teach civilian and security ministries how to effectively execute their budgets. The efforts included programs to advise and help Iraqi government employees develop the skills to plan programs and to effectively deliver government services such as electricity, water and security."

Have the students in these classes been doing their homework? Has their progress been tracked? Have they been assigned experienced mentors to aid their efforts? I thought the post-Rumsfeld era was going to be more efficient, productive, and professional in all aspects of this war. They got the Surge right. What about the rest? Does anybody care ... or will it just be more expedient to dump it all on President Obama or President McCain?