Foreign Policy in Focus: Fixing Iraq

Excerpt:
" Between revenue from oil exports and foreign aid, over $100 billion has been pledged to Iraq’s “relief and reconstruction” in the last four years. Yet there is precious little to show for it. About half of this amount is Iraq’s own money. The United States has allocated a total of $38.28 billion in aid as of the end of 2006, but only $12 billion has been spent on civilian reconstruction with most it going to the Iraqi army and police. Other donors have pledged just over $15 billion, but most of this has not been delivered because of the chaos and violence in the country.

The amount of money spent on reconstruction is not at all trifling. It is equal or greater than the money in inflation-adjusted dollars spent by the United States on restoring post-Nazi Europe under the Marshall plan. There are, of course, clear differences between the Iraqi and German experience, as there was less violence and the Europeans were allowed to plan their own reconstruction. The grant money was spent on local companies, not U.S. companies. Most of the money went to fertilizer, food, fuel, raw materials, and semi-manufactured products, not for gigantic building projects.

These different priorities may well be a key explanation for why the Marshall plan was successful and Iraq is a failure. Much of the failure may also be easily explained by the deteriorating security conditions and the political mess. But there is definitely a third factor--the corruption, incompetence, and waste."

http://www.fpif.org/fpiftxt/4106

Alex

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