Insurgency Becomes Self-Sustaining.

The Iraq insurgency has become financially self-sustaining, raising tens of millions of dollars a year from oil smuggling, kidnapping, counterfeiting, corrupt charities and other crimes, The New York Times reported in Nov. 26 editions. According to a classified US government report, a copy of which was obtained by the newspaper, groups responsible for many of the insurgent and terrorist attacks are raising $70m to $200m a year from illegal activities. Some $25m to $100m of the total comes from oil smuggling and other criminal activity involving the state-owned oil industry aided by "corrupt and complicit" Iraqi officials, the Times said, citing the report.

As much as $36m a year comes from ransoms paid over hundreds of kidnappings. Unnamed foreign governments - identified in the past by senior US officials as including France and Italy - paid kidnappers $30m in ransom last year alone, the report said. The Times also quoted the report as saying: "If recent revenue and expense estimates are correct terrorist and insurgent groups in Iraq may have surplus funds with which to support other terrorist organizations outside of Iraq".

The report, completed in June, was provided to the newspaper by US officials in Iraq who told the Times they had done so in hopes that the findings could improve US understanding of the challenges faced in Iraq. According to the Times, the report holds out little hope that much can be done any time soon to stem the flow of funds to insurgents, acknowledging how little US authorities in Iraq know about crucial aspects of insurgent operations. And it paints a bleak picture of the Iraqi government's ability, or willingness, to take the necessary measures to contain the insurgency's financing, the Times said. Some terrorism experts outside the government who were given an outline of the report by the Times criticised it for a lack of precision and a reliance on speculation.

What The US Army Has Learned: While US politicians from both political parties spin out their versions of Iraq that should have been, could have been and just maybe still might be, the US Army has taken on a far more useful project: figuring out why US military plans worked out so badly and drawing lessons for future conflicts.

That effort is a welcome sign that despite six years of ideologically driven dictates from Donald Rumsfeld's Pentagon, army leaders remain usefully focused on the real world, where actual soldiers daily put their lives on the line for their country and where the quality of military planning goes a long way towards determining whether their sacrifices help achieve America's national purposes.

Two hopeful examples are the latest draft of a new army field manual that will be taught to officers at all levels beginning in 2007 and a series of oral history interviews conducted with Iraqi and American officers involved in the disappointing efforts to establish and train Iraqi security forces.

The Los Angeles Times recently published details of some of the major changes being incorporated into the new field manual, while The Washington Post reported on some of the lessons learned in the Iraqi training programmes.

The field manual, the US Army's basic guidebook for war, peacekeeping and counter-insurgency, quietly jettisons the single most disastrous innovation of the Rumsfeld era. That is the misconceived notion that the size and composition of an American intervention force should be based only on what is needed to defeat the organised armed forces of an enemy government, instead of also taking into account the needs of providing security and stability for the civilian population for which the US will then be responsible.

Almost every post-invasion problem in Iraq can be directly traced to this one catastrophic planning failure, which left too few troops in Iraq to prevent rampant looting, restore basic services and move decisively against the insurgency before it took root and spread.

Modern innovations in warfare make it possible for America's technologically proficient forces to vanquish an opposing army quickly and with relatively few troops. But re-establishing order in a defeated, decapitated society demands a much larger force for a much longer time.

The new field manual will call for stabilisation to start as soon as American troops arrive. And it will legally require American field commanders to request sufficient forces to successfully carry out stability operations. That should short-circuit future debates about whether Pentagon policymakers are providing all the troops that the generals on the spot honestly feel they need.

Correcting deficiencies in American military training is also essential, since the biggest reason the US has not been able to withdraw significant numbers of its own troops over the past three years has been lack of adequately prepared and reliable Iraqi security forces. Iraqi officers interviewed for the oral history complained that their American trainers were often junior officers without combat experience.

American officers expressed unhappiness about how their own training teams had been selected and prepared. One major tellingly remarked that "I went there with the wrong attitude and I thought I understood Iraq and the history because I had seen PowerPoint slides, but I really didn't".

These are useful insights. But they can only go so far when a host government lacks the will to rid its security forces of sectarian militia fighters more intent on waging civil war than achieving national stability. That so far has been the biggest obstacle in Iraq.

Transforming American forces to fight 21st-century conflicts was the ubiquitous but largely empty slogan of the Rumsfeld era. Incorporating the hard lessons learned in Iraq into future military planning and training operations would constitute a far more practical variety of transformation.