Highly promising figures that the Bush administration cited to demonstrate economic progress in Iraq last fall, when Congress was considering whether to continue financing the war, cannot be substantiated by official Iraqi budget records, the Government Accountability Office (GAO) reported on Tuesday.
The Iraqi government had been severely criticized for failing to spend billions of dollars of its oil revenues in 2006 to finance its own reconstruction, but last September the administration said Iraq had greatly accelerated such spending. By July last year, the administration said, Iraq had spent some 24 percent of US$10 billion set aside for reconstruction that year.
As General David Petraeus, the top US commander in Iraq, and Ryan Crocker, the US ambassador to Iraq, prepared in September to report to Congress on the state of the war, the economic figures were a rare sign of progress within Iraq's often dysfunctional government.
But in its report on Tuesday, the GAO said official Iraqi Finance Ministry records showed that Iraq had spent only 4.4 percent of the reconstruction budget by August last year. It also said that the rate of spending had substantially slowed from the previous year.
The reason for the difference, said Joseph Christoff, the GAO's director of international affairs and trade, was that few official Iraqi figures for last year were available when Petraeus and Crocker went to Congress.
So the administration, with the help of the Finance Ministry in Baghdad, appears to have relied on a combination of indicators, including real expenditures, ministries' suggestions of projects they intended to carry out, and contracts that were still under negotiation, Christoff said. But actual spending does not seem to have lived up to those estimates for spending on reconstruction, a budget item sometimes called capital or investment expenditures, he added.
"So it looked like an improvement, but it wasn't an improvement," he said.
The US Treasury Department and State Department criticized the conclusions in comments included in the report, saying that the GAO had not accounted for all places in the Iraqi budget where investment or capital expenditures had been made. But the report said those departments had not been able to identify specific places where those other expenditures had taken place.
A spokeswoman for the US embassy in Baghdad said on Tuesday that she could not comment.
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