Iraq rebuilding fund largely unspent

A White House report shows that just $366m has been spent of the $18.4bn President George Bush and Congress provided last year.

The figure, in the latest quarterly report released on Friday by the White House budget office, marks the first time the administration has said how much of the money has been spent.

Despite the administration’s initial emphasis on speedy reconstruction in Iraq, the amount is less than two per cent of the funds lawmakers provided. The data cover expenditures through to 22 June.

The funds are meant to finance everything from training Iraqi police to starting small businesses and rebuilding the country’s electric, water, health and oil production facilities.

Behind schedule

The money was part of an $87bn package Bush signed on 6 November, mostly for wars in Iraq and Afghanistan.

The measure was approved after weeks in which administration officials and congressional Republican leaders said the money was needed quickly to hasten work, stabilise Iraq and improve the security of US troops there.

Bush’s war in Iraq is likely to cost the US taxpayer $50bn in 2005

Until now, the administration has provided data only on the amount of money obligated, which means spent or owed for specific contracts.

But Friday’s report said nearly $5.3bn is now owed or has been spent – compared with $2.2bn as of the last report, for the period through to 24 March.

When the White House filed its first report in January, it estimated $10.3bn would have been spent through 30 June.

Patrick Clawson, a former World Bank official and now deputy director of the bipartisan Washington Institute for Near East Policy, said while understandable, the spending rate was too slow for the battle to win support from Iraqi citizens.

Promises

“The amount of money actually spent is what Iraqis have seen,” Clawson said. He added that the US money committed to contracts is simply “a promise to Iraqis that we plan to do something”.

Iraqi police and security forces have received nearly $200m

The report said reconstruction in Iraq is moving forward, citing money that also has been spent from other accounts. It cited the immunisation of 85% of Iraqi children, the rebuilding of 2500 schools and the provision of telephone services to 1.2 million Iraqis, 50% above the pre-war total.

The $366m in expenditures includes $194m for Iraq’s police and armed forces and $109m for the country’s electrical system.

Of the $5.3bn committed to contracts, the largest amounts are owed for work on electricity, oil equipment, police and armed forces, the civil government and water.

Congress provided $2.48bn for rebuilding in April 2003. Of that, $2.4bn has been committed to specific contracts and $1.44bn has been actually spent, the report said.

Cash sources

In addition, $1.1bn has been spent out of $13bn in multi-year pledges in aid and loans from other countries, according to the report.

And other money is coming from seized Iraqi assets and the country’s oil revenue, though much of the money from oil sales is being used to run Iraq’s fledgling government.

The report also said it will cost about $1.5bn over the next 15 months to operate a US embassy in Iraq. That excludes the costs of building a huge, secure new embassy in Baghdad, which by some estimates could cost another $1bn.

The figures exclude US war-fighting costs in Iraq, which the administration said in May were $97bn to date.

The White House has said it expects 2005 military costs in Iraq to exceed $50bn, though lawmakers of both parties have said they expect a total closer to $75bn.