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Iraqis hope funds speed rebuilding

Government officials want donor nations to step up aid to the still-limping country.

By wire services
Published July 19, 2005

As fresh violence engulfs Iraq, the officials in charge of its government pressed a major meeting of donor nations in Amman, Jordan, on Monday for billions of dollars in new financing to repair a country that remains in a state of physical and economic collapse.

But in a finely balanced argument, the Iraqi officials also said their country and its fledgling financial institutions are stable and secure enough to manage the influx of that much money.

In fact, those officials said, now is the time for local Iraqi governments to take the lead in setting priorities for rebuilding out of the hands of foreign nations, and for Iraqi contractors to carry out virtually all of the work with local labor.

However, the United States has yet to spend almost 60 percent of its pledged $21-billion in reconstruction money for Iraq, even as the country struggles through a third summer of sporadic electricity and limited clean water.

Iraqi and international officials at the conference said the U.S.-led rebuilding program has failed to provide Iraqis with adequate power, water and sanitation more than two years after the invasion.

Iraq'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.

Iraqi unemployment is estimated at between 25 percent and 50 percent; 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.

Nevertheless, some of the Iraqi officials' pleas were answered when Japan reached what the Iraqi planning minister, Barham Salih, said were the outlines of an agreement to provide $3.5-billion in low-interest loans for water, sewage, road and other projects. The World Bank also announced that it had offered Iraq up to $500-million in similar loans over the next two years.

Salih, whose ministry functions as a kind of switchyard for rebuilding funds, made it clear that he was disappointed in major portions of the American rebuilding program, which he said had failed to produce quick results despite the expenditure of about $9-billion, according to Pentagon figures.

After formulaic declarations by officials at the United Nations and the World Bank that the first day of the conference had been a success, Salih gave a blunter assessment.

"I want to hold judgment and claim success once we see these pledges turned into realities on the ground," Salih said, adding that the rebuilding effort had roughly six months to show results before Iraqis began giving up hope that it would ever improve their lives.

"This is the time to make the difference," he said. "It is now or it will be too late. Iraq's people have grown numb to many statements of support."

Staffan de Mistura, a U.N. representative at the gathering, held at a conference center next to the Dead Sea, agreed that "we are facing six crucial months" but argued that some programs had quietly been successful. For example, he said, water chlorination programs carried out by Iraqis have prevented major outbreaks of cholera amid the chaos of the insurgency.

Much of the conference focused on $1.1-billion already placed in trust funds for Iraqi reconstruction by a number of countries, led by Japan, the European Union and Canada. Japan's contribution to those funds is the largest, about $350-million, said Michael Bell, chairman of the International Reconstruction Fund Facility for Iraq, which oversees the money.

Most of the fund's money has already been committed to specific projects, and Iraqi officials have been saying for weeks that they hoped to reel in more pledges in Amman. But while 59 countries registered for the meeting by an official count, actual attendance seemed sparse, and a number of the countries did not send representatives.

Many schools have been built, water plants started and power stations finished - especially in the relatively peaceful south. But frustration is high.

Iraqis in the south look with envy at the Green Zone in Baghdad, with its air conditioning and hundreds of soldiers and police for security, while they don't have water, engineer Haider Albalhary told U.S. officials visiting his project site last week.

"Six months ago with no electricity, we said okay," Albalhary said. "One year, two years, now three years - enough.... My friend, three years is a long time."

Iraq's ongoing violence has been one factor, both delaying projects by keeping U.S. engineers huddled on bases far from project sites and eating into the pledged American money, taking up 20 to 23 percent of project costs, according to the Project Construction Office.

In addition, billions of dollars worth of projects await approval by the U.S. bureaucracy, and hundreds of millions are tied up in stalled contract negotiations with U.S. companies.

Overall, about 58 percent of U.S. reconstruction money has not been spent, according to a federal inspector general's office.

Some critics say the window for the U.S. government to make a positive impression on Iraqis has long closed.

But even the most skeptical acknowledge tangible progress, particularly in the Shiite south and the Kurdish-controlled north, which elected leaders from their dominant groups to top posts in the new government.

More than 3,000 schools have been renovated nationwide, according to the Iraqi Reconstruction Management Office, and 40 new buildings have gone up in the south to replace mud huts that served as schools.

At least three water treatment plants, including an enormous project near Nasiriyah, are scheduled to open in the south in the next year. They will supply clean water to more than a half-million people.

More than 70 electricity projects have been completed, officials say. But a surge in demand has made power less available to many than before the 2003 invasion, and officials are eager to start work on at least three southern power plants in the next year to serve over 400,000 households.

The reconstruction program has accelerated recently, and is now spending an average of $178-million a week for completed work, according to Iraq's reconstruction office. But progress is uneven, and key infrastructure sites are several months or even years from completion.

--Information from the New York Times, Associated Press and Los Angeles Times was used in this report.

[Last modified July 19, 2005, 01:09:13]