U.S. Criticized on Iraq Rebuilding

Iraqi and international officials contend that Washington's effort is not moving fast enough. More loans are pledged for reconstruction.

By T. Christian Miller

Los Angeles Times

July 19, 2005

AQABA, Jordan — In language both sharp and subtle, Iraqi and international officials on Monday criticized the U.S.-led rebuilding effort for moving too slowly to improve the lives of Iraqi citizens.

Meeting for a donors conference at this Jordanian resort town sandwiched between desert cliffs and the placid Red Sea, the officials announced the expected approval of $4 billion in loans from Japan and the World Bank to help speed reconstruction.

They said the United States' $18.4-billion effort had fallen short of restoring essential services such as power, water and sanitation. The criticism reflected a growing belief in Iraq and elsewhere that the Bush administration had bungled the reconstruction by giving billions to private corporations to tackle major infrastructure projects.

"It is now clear that these mega projects, though essential, have not succeeded in providing quickly enough for Iraqis' basic needs," said Barham Salih, Iraq's minister of planning and development cooperation. "Iraqis throughout the country remain dissatisfied."

The State Department, in a little-noticed report released this month, acknowledged the necessity of "adjusting [U.S.] support" to improve the reconstruction plan.

More than $6 billion in U.S. funds and billions more in Iraqi money have been spent so far, but the country's electricity supply is far from meeting demand; oil production is below prewar levels; and barely half of Iraqis report having access to safe, stable supplies of drinking water.

Unemployment is estimated at between 25% and 50%; fuel and food subsidies have resulted in a significant budget deficit; U.S. and Iraqi audits have been unable to account for billions in spending; and at least three U.S. officials and scores of Iraqis, including two former government ministers, are facing corruption charges.

In addition, more than 350 contractors working on reconstruction have been killed; scores have been kidnapped. Insurgents have also targeted Iraqi civilians working with U.S. firms.

Before speaking, Salih observed a minute of silence for the more than 90 Iraqis killed in a suicide bombing Saturday in the town of Musayyib, south of Baghdad. He then asked the assembled representatives from dozens of countries to step up their pledges to help in Iraq's reconstruction.

It was an unsettling juxtaposition that underscored the difficulty of trying to rebuild a country in the middle of a war.

Iraqi and U.S. officials said efforts to stabilize the nation's currency, train Iraqi security forces and rehabilitate hundreds of schools and health clinics had been successful.

"It has worked," Salih said, "but very, very, very slowly so far."

The international rebuilding effort is being funded through loans and grants from the World Bank, the United Nations and donor nations such as Japan.

At Monday's conference, the World Bank announced final approval of $500 million in loans. Iraq, meanwhile, said it had agreed in principle to another $3.5 billion in loans from Japan.

Although couching criticism in diplomatic language, officials from the World Bank and the U.N. made it clear that the international community's $13.5-billion rebuilding effort would differ from the U.S. approach.

The United States in early 2004 awarded contracts to a handful of U.S.-based multinational firms such as Halliburton Co., Bechtel Corp. and Perini Corp. for massive infrastructure projects such as building power plants, hospitals and clinics and refurbishing water treatment facilities.

But many of the firms have had difficulty completing projects in the face of insurgent attacks, logistical difficulties and complicated U.S. contracting guidelines. At least one contractor, Contrack International Inc., has pulled out. Perini and Pasadena-based Parsons Corp. have had jobs taken away from them over concerns about rising costs.

The international officials said they had learned from the U.S. experience and would rely on Iraqi contractors. Besides being cheaper, Iraqi contractors often face fewer security concerns, said Michael Bell, a Canadian official overseeing part of the international reconstruction effort.

Bell said about 2% of World Bank and U.N. project costs are for security. The U.S. estimate for security costs is 16% to 22%.

"We can't afford to sit and wait," Bell said. "There are rather urgent needs."

International officials also said they would concentrate on smaller projects that would have an immediate effect, such as chlorinating water to help prevent cholera, distributing schoolbooks and providing free vaccinations.

"Of course, these projects are not enough given the needs," said Christiaan Poortman, the World Bank's vice president for the Middle East and North Africa.

"There is not yet enough progress felt on the ground."

The international officials also said they were committed to working more closely with Iraqi officials, who have recently drawn up a 70-page list of projects. Especially in the early days of the reconstruction effort, Iraqis often complained that U.S. officials did not consult with them or with local communities.

"The U.S. programs were big, and they themselves are learning that they have to do much more through the Iraqis," said Staffan de Mistura, the U.N. secretary-general's deputy special representative for Iraq.

Though not acknowledging any mistakes, U.S. officials at the meeting in Jordan said they too were committed to using more local contractors with input from recently elected provincial councils.

In a report this month, the State Department acknowledged the need for further changes in the U.S. reconstruction program. It increased spending on a new security force to protect oil pipelines in northern Iraq and dedicated $16 million to improving oil flow.

The report also acknowledges publicly for the first time that many of the U.S.-built projects were at risk because Iraqis did not have the money or expertise to maintain them.

Tony Wayne, the U.S. assistant secretary of State for economic and business affairs, praised the day's discussions. "We think this was a very successful day," he said. "It was a good dialogue."