The Economic Plan

Reconstruction Effort to Emphasize Iraqi Jobs

By Karen DeYoung
Washington Post Staff Writer
Thursday, January 11, 2007

While the core of President Bush's "new strategy" for Iraq calls for the military to think big, the economic component is centered on making smaller, more incremental progress.

In a speech last night, Bush said that "America will hold the Iraqi government to the benchmarks it has announced" and noted that Prime Minister Nouri al-Maliki has pledged to devote $10 billion of his government's substantial unspent surplus to rebuilding and economic development. U.S. officials said the administration will seek an additional $1.2 billion on top of the $21 billion already sent to Iraq for reconstruction.

Details of a revamped reconstruction effort will be outlined today by Secretary of State Condoleezza Rice in congressional testimony. The new money is to be nearly evenly divided among an increased number of the State Department's Provisional Reconstruction Teams spread around Iraq; the Commander's Emergency Response Program, which provides the U.S. military with funds for local, quick-fix reconstruction projects; and a separate quick-response fund.

All of those preexisting efforts will be expanded, along with a Pentagon-led jobs program to revitalize dormant state-owned industries and new "microfinancing" for Iraqi entrepreneurs. Having largely abandoned the huge, unsuccessful construction projects that marked its early years in Iraq, the United States will now emphasize putting Iraqis back to work to dissuade them from joining Shiite militias and the Sunni insurgency.

"It's not a bad choice under the circumstances," said one veteran of the administration's initial reconstruction effort. "Everybody who had half a brain cell knew this is what we should have done four years ago" instead of paying private U.S. contractors to rebuild and modernize infrastructure and trying to turn Iraq's highly centralized, government-owned economy into free-market capitalism overnight.

To ensure that all U.S. reconstruction elements are cooperating with one another and with the Iraqi government, Rice has asked retired Foreign Service officer Timothy M. Carney to serve in a new coordinator post in Baghdad, according to sources who spoke on the condition of anonymity in advance of the president's speech.

Carney -- who was first approached about the job Tuesday, in a reflection of the last-minute nature of some of the new plan's details -- was part of the original U.S. civil team led by retired Army Lt. Gen. Jay M. Garner after the 2003 invasion. He also served under the Coalition Provisional Authority chief, L. Paul Bremer.

After nearly four years in Iraq, the Bush administration has little to show for the more than $16.5 billion it has spent on reconstruction assistance, out of the $21 billion appropriated. That does not include reconstruction money spent by the military. Oil production, Iraq's principal revenue source, remains below prewar levels and government goals, as does electricity production. Nationwide unemployment is 25 to 40 percent, and as high as 60 percent in many areas, according to some estimates.

Many outside experts said the new program will have little impact in the current climate of violence and political stalemate in Iraq.

"Unless they deal with the basic peace issue, unless there's some kind of political agreement, all of this is at the margins and irrelevant," said Carlos Pascual, vice president and director of foreign policy studies at the Brookings Institution and until late 2005 the director of the State Department's Office of Reconstruction and Stabilization. "The reality is that one of the reasons why people can't work is because there's a war. Foreign investments are sabotaged, and others in the private sector are unwilling to invest."

He added: "The question is whether or not the military strategy can actually create an environment where you're going to have sufficient security to create jobs. I don't think a surge of 20,000," the approximate number of U.S. troops Bush has said he will add to the current 130,000 in Iraq, "is enough to create the kind of security environment that's going to create prospects for economic development."

Administration officials insisted yesterday that long-standing difficulties between the U.S. military and civilian officials, particularly regarding the Provisional Reconstruction Teams, have been resolved. Even as the State Department had difficulty staffing the teams, the Pentagon was reluctant to provide security for them.

The teams, a Rice initiative begun in 2005, are designed to move into areas where violence has been quelled to provide immediate economic and civil affairs assistance so that residents can see tangible improvements in their lives after military action. In many cases, protection for the teams had to be purchased from private security contractors. In a highly critical October audit, the special inspector general for Iraq reconstruction said the teams had fallen far short of their goals and that as much as 30 percent of their funding had been spent on security costs.

According to a list of "key tactical shifts" previewed by the White House yesterday, the State Department teams and the military's battalion combat teams will now be integrated "in most areas." The number of personnel will increase from 250 to 400, and the number of teams will nearly double from the current 10, with six added in Baghdad and three in Anbar province.

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