Tue, Jul 06, 2004 - Page 7 News List

US reconstruction budget unspent ? except on admin

THE GUARDIAN , WASHINGTON

The US government spent just 2 percent of the $18.4 billion it had obtained from Congress for the urgent reconstruction of Iraq before formally ending its occupation last week.

The White House budget office report, the first detailed audit of the reconstruction, showed that the US occupation authorities had spent nothing on healthcare or water and sanitation, two of the most urgent needs for Iraqis. In contrast, a total of US$9 million was spent on administrative expenses.

By June 22 the US' reconstruction campaign had spent US$366 million of the sum allotted to the Iraq Relief and Reconstruction Fund.

The US$18 billion was supposed to help train Iraq's police force and to rebuild the country's national infrastructure, including its electricity grid bombed during the war, sewage treatment plants, schools, hospitals, telecom facilities and roads neglected since the 1991 Gulf war.

Instead, the burden of paying for the reconstruction has fallen largely on Iraqis, absorbing nearly all of a US$20 billion fund raised by the country's oil sales.

An additional US$1.1 billion came from grant and loan pledges from other countries.

In its accounting of the funds, the White House budget office said the largest disbursement so far was for rebuilding Iraq's police and military, with US$194m spent.

But that figure was less than the planned spending of US$3.2 billion to provide security.

Despite the complaints from Iraqis about blackouts and an erratic power supply, just US$109 million was spent on repairing Iraq's electricity grid, compared with the US$5.4 billion allocated in the reconstruction fund.

Other urgent needs were also unmet. Although Iraq has an unemployment rate of 30 percent, the fund created only 15,000 jobs, compared with the 250,000 that had been mandated.

A spokesman for the budget office said the figures were misleading and projects costing US$5.3 billion were in the pipeline.

"The reconstruction effort is moving forward," the report said.

"The coalition has helped Iraqis rebuild schools and refurbish hospitals and health clinics, repair bridges, upgrade the electrical grid and ports and modernize the communications system," the report said.

As evidence of progress, the report said 1.2 million telephones had been connected as of June 18 and 2,500 schools had been repaired.

But even by the standards of the budget office, those achievements lagged behind projections.

In a report published in the spring, the administration said it expected to spend more than US$10 billion on reconstruction projects by June 30.

The reality, which was made apparent in the report released on Friday in advance of the July 4 holiday weekend, is bound to raise questions from Iraq's new rulers -- and during the US election campaign -- about the use of the US$87 billion package approved by Congress last November.

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