The oil boom will give Iraq a surplus of nearly $80 billion (42 billion) by the end of this year, a US agency has concluded, raising the political pressure for a cut in American spending to help the country to recover.
High oil prices will soon give the Iraqi Government a pot of $79 billion in unspent funds, the US’s Government Accountability Office (GAO) projects in a new report to Congress. It adds that nearly $10 billion has been sitting in a US bank in New York because the Iraqi Government has been so slow in spending funds on reconstruction.
The report, commissioned by two senators, Democrat Carl Levin and Republican John Warner, for the non-partisan oversight agency, will add to concern in Washington about the justification for the $48 billion the US has spent on rebuilding Iraq since the 2003 invasion. From the time of the invasion, there have been grumblings on Capitol Hill, on both sides of the political aisle, about the need to pour US taxpayers money into rebuilding the country with the third-greatest oil reserves in the world, after Saudi Arabia and Iran. This report will only strengthen them.
It suggests that Iraq has been relying on US funds rather than its own and has had difficulty spending either source of money fast or efficiently. In a statement, the senators point out that in 2007, Iraq spent only 28 per cent of the $12 billion it earmarked for reconstruction and $2 billion of that was in the northern Kurdish region, which has been spared the worst of the violence.
The GAO found that for the three years from 2005 to the end of 2007, Iraq brought in about $96 billion in revenues, of which the export of crude oil accounted for about 94 per cent. For this year, it estimates that Iraq could make between $73.5 billion and $86.2 billion, and that oil revenues would be more than double the annual average from 2005 to 2007.
It also notes that 90 per cent of Iraqi government spending went on salaries, goods and services, but only 1 per cent on maintaining Iraqi and US funded investments such as buildings, water and electricity and weapons.
Between 2003 and 2008, it notes, US agencies spent about $23.2 billion on security, oil, electricity and water services, crucial to Iraq’s future stability, where Iraq had spent only about $3.9 billion.
The GAO sounds a note of caution on one potential drain on Iraqi funds: the still-unresolved question of its debts to other countries, including reparations to Kuwait for invasion. It suggests that in July this year, it owed between $50 billion to $80 billion in bilateral foreign debt, and $29 billion in war reparations to Kuwait. Although Iraq’s oil revenues are at the moment immune from legal claim, this will expire in December without an extension of UN Security Council protection.
Freedom isn’t free, so when will Iraq pay up?
Why should Iraq pay up? It wasn’t the one that decided, hey let’s get invaded! I’m nude btw.
Wait… I thought this war was going to pay for itself with all that oil they are going to sell. WTF!
Saddam didn’t want to be invaded, the people he suppressed did.
OMGSTFU!
US Companies are gonna get their cut, it would appear.
Then we tax the shit out of the monopolistic predators.
See how beautifully the cycle works?
just another in the the series of lies and half-truths we have been fed by this administration
better that they spend it slow and inefficiently than fast and inefficiently at least
Humungus solution: legalize drugs, and then grow them all in iraq.
prosperity for all.
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