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Iraq fails to spend '$79bn surplus'
US watchdog says bureaucracy, a lack of experience and violence are responsible.
Last Modified: 06 Aug 2008 21:40 GMT

Iraq is expected to reap billions of dollars
in oil profits [GALLO/GETTY]

Iraq is struggling to spend money on reconstruction despite an expected $79bn surplus generated by oil revenues, a US government report says.

The Government Accountability Office (GAO) report, released on Wednesday, blamed the surplus on bureaucracy, a lack of experienced officials and ongoing violence.

The GAO said Iraq had an estimated cumulative budget surplus of about $29bn from 2005 to 2007 and could have another surplus of up to $50bn this year.

However, the expected surplus could be lower if the Iraqi government executes a $22bn supplemental budget for 2008.

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.

"Violence and sectarian strife remain major obstacles to developing Iraqi government capacity," it said.

Senators angry

Carl Levin called for Iraq to fund
its own reconstruction [AP]
The GAO also estimated that this year Iraq could generate $67bn to $79bn in oil sales.

The report prompted US senators to renew their calls for Baghdad to pay more for Iraqi reconstruction, which has been heavily supported by US taxpayers.

Carl Levin, a Democratic senator, said in a statement: "The Iraqi government now has tens of billions of dollars at its disposal to fund large-scale reconstruction projects.

"It is inexcusable for US taxpayers to continue to foot the bill for projects the Iraqis are fully capable of funding themselves."

'Part of the picture'

But a senior US embassy official in Baghdad said Iraq was making progress in using oil revenues to rebuild its shattered infrastructure.

The official told the Reuters news agency the report captured only part of the picture when it said Baghdad was failing to spend on reconstruction, leaving much of the task to Washington.

"The impression that somehow the Iraqis are sitting back on these huge growing balances does not really fit what is happening," the official, who did not want to be identified, said.

The US official said he hoped bureaucratic changes to facilitate contracts and to authorise spending would help Iraqi officials spend the money.

"They are looking for ways to de-bottleneck their own expenditures," he said.

Source:
Agencies
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