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Archive for Saturday, October 25, 2008

Iraqis have money, but lack know-how in spending it

October 25, 2008

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— Iraq's government has an unusual money problem as much of the world grapples with a credit crunch - it can't spend its oil riches fast enough.

The U.S. is trying to change that by training Iraqi bureaucrats struggling to emerge from a centralized system in which nearly all decisions - from where to build a water treatment plant to which workers would do the job - came from the top.

Money also was scarce for more than a decade after the U.N. Security Council imposed sanctions to punish Saddam Hussein's regime for the 1990 invasion of Kuwait.

"Our efforts are devoted to helping the Iraqis spend their own money," said Marc Wall, the U.S. Embassy's coordinator for economic transition in Iraq. "We've zeroed in on it in the last year or two."

The issue came to the fore this summer when the U.S. General Accounting Office said Iraq could finish the year with as much as a $79 billion cumulative surplus because of oil revenues and unspent funds from previous budgets.

The August report drew outrage in Congress, where lawmakers asked why the Iraqis haven't spent more of their own money on reconstruction efforts while U.S. taxpayers shell out some $12 billion a month for Iraq - most for military operations.

U.S. and Iraqi officials dispute the GAO figures, arguing they are inflated and do not reflect Iraqi accounting procedures. They also say Iraqi spending on reconstruction is expected to increase by 50 percent from 2007 to 2008.

But most agree that major obstacles still include inexperienced bureaucrats, too few Iraqi contractors and a cumbersome approval procedure aimed at curbing corruption.

The U.S. Agency for International Development's Tatweer project is designed to train Iraqi civil servants in basic decision-making skills to help them allocate funds and effectively deliver government services such as electricity, water and security.

One recent class of bureaucrats from various Iraqi ministries - six men and six women sitting around an oval table - listened attentively as the instructor told them how to diagram a decision tree.

The analysis and problem-solving tool is aimed at determining possible sequences of events and their consequences to choose the best investment.

But one student raised her hand to ask how, exactly, that would work in Iraq.

"We have instability and insecurity. You have to consider the black market," said Shetha Nasser, a 46-year-old engineer at the Water Resources Ministry.

Nasser's concerns reflect the myriad problems facing Iraqis as they try to overcome decades of isolation from war, sanctions and centralization.

The postwar Iraqi government inherited an old-fashioned, paper-based system. Violence also has taken its toll, with insurgents frequently targeting government employees.

Wearing a black skirt and sequined headscarf, Nasser said she has worked with feasibility studies for nine years but never really knew how to do them.

"We didn't have clear guidelines or methods ... because of the gap between Iraq and the international community," she said.

Instead, the orders generally came from above and needed only to be implemented. Prices also were fixed under Saddam, aiding cost estimates.

Sattar Hussein, a 42-year-old instructor for Tatweer - which means development in Arabic - said the key is training Iraqis in how to choose the best projects.

"They have the money, but they don't understand how to invest the money to help the people," the Fallujah native said during a class break for coffee and cookies. "The idea is to prepare these people for the future because they will be the decision-makers."

Comments

just_another_bozo_on_this_bus 6 years, 2 months ago

Iraq is in total shambles as a result of the US invasion. $79 billion won't even begin to touch reconstruction costs, and the ethnic cleansing that has created a tense, but still very violent standoff, means that it won't find any easy agreement on how to implement the relatively meager funds it has available.

Confrontation 6 years, 2 months ago

The U.S. is teaching another nation how to spend its money?! What a joke!

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