US occupiers face Iraq cash crunch

US occupying authorities in Baghdad have almost completely exhausted $1.7 billion in seized assets used to pay Iraqi civil servants, as a Congressional aide said the situation was in turmoil.

Washington will need a lot more in the coming months
Washington will need a lot more in the coming months

A US Treasury Department spokesman said on Tuesday a cash shipment of $419 million would be made in the next week from a New York Federal Reserve account that once held $1.7 billion. The expected cash transfer would “nearly exhaust the available vested funds”.

A senior Congressional aide described the cash crunch as a “mess”.

“Seized assets are down to almost nothing. Oil money is a mirage in the near term,” said the aide who asked not to be identified.

And according to a recent report to lawmakers, gold-coloured bars which were seized with much fanfare by occupation troops in Iraq, appear to be melted-down shell casings made mainly of copper. US officials had believed they would be worth at least $600 million.

US President George Bush, has promised to give occupation authorities the resources needed to stabilise the country. Critics say he has not yet delivered these promises and accuse him of underestimating post-war costs.

Iraqis are frustrated with their occupiers, who have sacked hundreds of thousands of people, failed to deliver regular water and electricity supplies and provide security in the war-torn country.

Political risk 

Iraqis tightened their belts afterthe US-British invasion

Iraqis tightened their belts after
the US-British invasion

Congressional sources say the White House is considering seeking at least $2 billion in extra funds for Iraq, in the near term.

Sources have said that money could be freed up before an October donors conference, though administration officials insisted no decisions have been made.

By quickly freeing up extra funding, the administration can tide over occupation authorities until Congress approves a much large White House budget request, expected later in the year.

But it could be a political risk. For months the Bush administration has played down the cost of the occupation, saying it should be covered by increased oil production and contributions from Washington’s allies … neither has materialised.

Meanwhile, occupation administrator for Iraq, Paul Bremer, said that Baghdad will need tens of billions of dollars in contributions from overseas in the next year to fund the occupation and rehabilitation of the country.

It will cost $2 billion to meet current electrical demand and an estimated $16 billion over four years to deliver clean water to all Iraqis, said Bremer in an interview with a US-based newspaper.

Source : Reuters

More from News
Most Read