March 13, 2006
Monday

WASHINGTON - As the third anniversary of the war approaches, the $21 billion the United States has allocated for reconstruction of Iraq has yet to lift the war-torn nation from ruin.

Power outages are the norm; in fact, there's less electricity available than before the war began. Fewer people have clean water and sanitation systems. And fuel production isn't at pre-war levels, either.

The slow progress is largely a result of continued insurgent attacks on infrastructure and the need to divert building dollars to protection. There also has been evidence of mismanagement, fraud and incompetence in the reconstruction efforts.

The well-documented setbacks have some asking what the U.S. responsibility should be in the future.

"This winter is the first time I am generally discouraged about economic trends in Iraq," said Michael O'Hanlon, a senior fellow in foreign policy studies at the Brookings Institution who has been tracking the progress of reconstruction in Iraq.

O'Hanlon said the signs of positive developments in the last couple of years - better phone service and more cars on Iraqi streets, as examples - have stalled.

"While there is some good news, for the first time there is no more good news than bad news," he said.

The view from inside the country isn't much better.

"The majority of Iraqi people say the reconstructions in Iraq don't start until now," said Haitham Hadi, a mass media professor at Baghdad University and a consultant with the Iraqi American Chamber of Commerce who has conducted public opinion polls.

When the United States invaded Iraq on March 20, 2003, it intentionally targeted bridges, telecommunications systems and power plants to immobilize Iraqi forces.

By May, the Iraqi government had toppled and President Bush declared the end of major combat operations.

The United States pledged to help rebuild Iraq, and Congress allocated about $20.9 billion in non-military funds to do so.

One of the earliest and loudest criticisms of the war, aside from the failure to find weapons of mass destruction, was that the United States had no strategy for reconstruction.

Retired Rear Adm. David J. Nash said there may have been a plan to rebuild Iraq, but if so, it never made it to him. Soon after the war ended, Nash headed the office that managed reconstruction contracts for the transitional government known as the Coalition Provisional Authority.

"We started basically with a blank sheet of paper," said Nash.

When Nash became director of the Iraq Project and Contracting Office in Baghdad, he made a list of 5,000 infrastructure projects that needed to be tackled, everything from refurbishing schools that were neglected under Saddam Hussein's rule to rebuilding power plants that had been destroyed in the war. That list was winnowed to about 3,000 Nash thought could be covered by U.S. appropriations and other donor contributions.

Of those, 2,750 have been started and more than 2,000 have been completed, said Nash, now president of the government group of a major construction company, BE&K Inc.

"Rather than this constant din you hear that nothing has happened, that's not true," he said, pointing to the weekly reconstruction update that shows completion of 825 schools, 302 police facilities and 13 hospitals among other successes.

Still, he acknowledged, "I'm sure not as much has been done as originally contemplated."

The failures have been in crucial areas.

Politically, despite having held democratic elections, the Iraqis aren't yet governing themselves.

The shortfalls in infrastructure were detailed in a recent report by Stuart Bowen Jr., special inspector general for Iraq reconstruction.

Of 136 water sector projects, only 49 will be completed, and most of those involving sewerage, irrigation, drainage and dams have been canceled. Of 425 electricity projects, only 300 will be completed and only 2,200 megawatts of additional power will be delivered instead of the 3,400 megawatts that had been planned, Bowen told senators last month.

Building dollars had to be diverted to protecting the people trying to do the work and securing the infrastructure that already exists.

"It is difficult to overstate the impact of violence on the reconstruction program," Bowen said.

While electrical capacity surpassed pre-war levels in mid-2004 and peaked in July 2005, insurgents have sabotaged high-voltage lines that carry power from generating facilities into Baghdad, he said.

"Increasing demand for electricity, provided to consumers at no cost, the influx of new appliances and new customers, and the creation of new industries, businesses, factories and jobs also contribute to nationwide shortages," he said.

"The lethal environment in Iraq continues to pose extraordinary challenges to reconstruction contractors," Bowen added.

According to Department of Labor statistics, 467 contractors from various countries have been reported killed in Iraq.

"It's easier to build when you're not worried about your life," Nash said. "Plus, you don't have to go to the same degrees we have to to go back and forth. I guess the delays are due to that and basic construction problems like shortage of materials."

Perhaps the greatest impediment to getting Iraq back on a course to economic independence has been the failure to increase its oil production.

"We were told, 'Don't worry about reconstruction; they've got all this oil; they'll sell the oil, and the oil will pay for it,'" said Sen. George Voinovich, R-Ohio.

Instead, he pointed out to some of the government officials in charge of the reconstruction, Iraq has had to import $5 billion worth of oil.

Secretary of State Condoleezza Rice attributed part of the problem to significant underinvestment by Saddam in "a very creaky infrastructure."

"They are producing currently at below the pre-war range of 2 to 2.5 (million barrels) a day, largely because of problems in inefficiency in the management of the oil industry, and we've worked very hard with the Iraqis on that piece of it, but also the interdiction by insurgents of the oil pipeline in the north, which is 400,000 barrels a day that has essentially been shut in," Rice said.

The petroleum situation is a disaster because it hampers progress in other areas, said John Pike, director of Globalsecurity.org, a nonprofit think tank that specializes in defense issues.

"How can it be that everyone else in OPEC is getting rich quick with current oil prices, and Iraq is not positioned to cash in on it?" Pike said. "It defies understanding. It just makes no sense whatsoever."

While poor security conditions have slowed reconstruction and increased costs, "a variety of management challenges" also impeded progress, according to a recent report by the Government Accountability Office, the investigative arm of Congress.

"Difficulties include lack of agreement among U.S. agencies, contractors, and Iraqi authorities, high staff turnover, and an inflationary environment that makes it difficult to submit accurate pricing," the GAO said.

While corruption isn't pervasive, Bowen said, there have been cases of contract fraud, particularly early in the war.

On Thursday, a jury found a defense contractor liable for fraudulently billing U.S. funds in the first Iraq contracting case brought under the False Claims Act.

The inspector general also found that haphazard hiring practices and a lack of skilled workers contributed to delays.

Even the measurements for judging progress seem unreliable or don't tell the whole story, some critics say.

"Water is consistently reported as how many households we can serve with the additional capacity that we generate at the water treatment plant," Joseph A. Christoff, director of international affairs and trade at the GAO, cautioned lawmakers.

"The problem in Iraq is that 65 percent of the water leaks as it's going through the distribution system. And the water pipes are right next to the sanitation pipes, so in addition to that, they're contaminated. So we really don't know how many households get potable drinkable water. We know how much water we generate, but as a result of leakage and contamination, we really don't know how many people are drinking clean water."

The problems have some people asking what the long-term commitment of the United States should be.

"You do have to wonder, over time, what the congressional appetite is going to be for that line item," Pike said.

Three years later, there still isn't enough of a strategic plan for getting over the hump, he said.

"Part of winning the hearts and minds of the Iraqi people is some tangible improvement in their quality of life," Pike said. "An essential way of doing that is increasing petroleum production and using some of that money to get the electricity on. In both cases, they seem to be doing just enough to keep things from getting worse. They do not seem to have a plan for victory on this front. They seem to have a plan for stalemate."

O'Hanlon said the United States needs to be committed to doing more to rebuild Iraq, but not because it hasn't been generous enough already.

"I don't think we owe anything more to the Iraqi people, to be blunt," O'Hanlon said. "We owe it to our own troops and our own strategic interests."

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