Iraq reconstruction: U.S. takes step back, revisits rebuilding plans.

To recover from serious setbacks in its reconstruction plans for Iraq--caused by growing violence and slow infusion of assistance money--the United States will need a more flexible strategy, officials in Washington acknowledged.

Widespread violence and instability in Iraq, fueled by a lack of jobs and of a trained police force, as well as by a declining quality of life, have derailed reconstruction efforts. Part of the problem, some argue, is that the United States has been slow in dispersing its $18.4 billion aid package.

Now, the United States is trying to backtrack. The State Department has decided to defer infrastructure projects that were not going to start until 2006 or later and free up $3.4 billion of the reconstruction funds to pay for "more quick disbursing, employment, [and] security projects," said Robin Raphel, the director of Iraq reconstruction at the State Department.

The original philosophy behind the Iraqi reconstruction was that the United States would restore the infrastructure to a reasonable prewar level, and then the Iraqis would be able "to take off," said Raphel. "Their economy will be stimulated, opened up, and the capacity to support economic development and job creation will be there."

But that thinking failed to take into account other, more pressing, needs, she admitted. "We needed to spend money on security; we needed to spend money on helping the Iraqis understand and modernize their governance structure," Raphel told the Defense Writers Group in Washington, D.C.

To do that, the State Department undertook what Raphel calls a "strategic shift" in the allocation of the $18.4 billion in assistance money.

Even though this reallocation plan came later than expected, Congress approved shifting $3.4 billion into six key areas. The brunt of it, $1.8 billion, will go to security and law enforcement; $450 million is slated for oil infrastructure enhancements and improved export capacity; $380 million will go towards comprehensive economic development; $260 million will help with accelerating Iraqi employment; $180 million will support democracy and governance, while $360 million will go towards forgiving bilateral debt.

The large infrastructure projects that already are in progress are not going to be stopped, Raphel said. "There was a trail of planned projects, some of which would not come on stream until 2006 or later," she said. "And remember that $18.4 billion is a heck of a lot of money to spend, and big infrastructure projects have a start-up time."

In community level projects, she said, "a small amount of money can go a long way."

In the long term, "I think we are moving in the right direction," she added. Adjusting to changing circumstances, "in an enterprise of this nature, I think everyone would agree is inevitable."

Despite these recent changes in the reconstruction planning, the United States has to make up a lot of ground, experts said.

Iraqis are judging U.S. actions and achievements by several standards: in contrast to those of Saddam Hussein, in light of Iraq's many desperate, unmet needs, and by what they assume U.S. wealth and power should be able to achieve, according to a study published in September by the Center for Strategic and International Studies. The study is entitled "Progress or Peril? Measuring Iraq's Reconstruction."

Iraqis generally dislike the continued presence of the U.S.-led military forces in their country, said the report, which is based on research conducted between June 2003 and July 2004.

Many Iraqis consider the occupation to be ongoing despite the June handover of sovereignty. "The sentiment is caused by the mere fact of occupation, rather than by the particular qualities and experiences of this occupation, such as atrocities at Abu Ghraib prison, civilian deaths or cultural insensitivities, although those factors certainly exacerbate it," said the report.

To narrow the gap between what the United States describes as its successes and the Iraqi perception, the United States must do more than revamp its communications efforts to "more persuasively describe its actions," said CSIS. "It must calibrate those actions in light of Iraqi priorities and with a view to shoring up the fledgling Iraqi institutions in which the population has placed much hope."

The United States is faced with some tough trade-offs, said Raphel. It has to weigh the results, for example, of short-term employment for Iraqis versus pushing free-market reforms designed to attract private investment, either local or foreign, and which in turn would stimulate the economy, argued Raphel.

"We need for the Iraqis to believe that this assistance is really doing something for them, so to a degree, they have to be able to physically see it," she said. "But we all know that the long term is also important, getting the policy context right."

Regardless of the undertaking, every step taken in Iraq these days falls trader the shroud of violence. Therefore, security continues to be the predominant issue, hampering reconstruction on all other fronts. While many Iraqis are well disposed toward their own security forces and clearly want them to play a lead role in bringing stability, those forces are not up to the task, officials said.

With additional funds flowing towards security and law enforcement, the United States should be able to train more Iraqi forces. Some of the elite units that already have been trained could serve as a model, recommended CSIS.

"Basically, the object of the exercise is to get a credible Iraqi security presence, whether it's army, police, border and facilities protection in place, and they will have increasingly more responsibility, as fast as possible," said Raphel. With limited time, it is difficult to build a new police academy from the ground up, school and train people for three years, and turn out a very good, but small police force, she noted.

"You start to think about where you can compromise on the length of training, the content of the training and so on," she said. "And that, like everything else here, is a work in progress."

Those who have had some kind of previous training and experience with security, including former Saddam army forces, are allowed to rejoin the armed services, said Raphel. "The large body of people in the military and police have an opportunity to rejoin, and rejoin a profession that takes advantage of some of their experience," she said. For that to happen, the United States has to develop and fund a more robust demobilization, disarmament and reintegration program for Iraq's former army members and the militia groups. For this program to work, it has to start and prove effective in all regions of the country at once, CSIS recommended.

To strengthen security, the United States also should help in the creation of community public-safety groups that have a link to local governing institutions, the CSIS report suggested. The U.S. and Iraq governments should consider giving Iraq's local and provincial governing institutions resources to hire local "crime-watch" officers and develop localized training programs. In addition, the United States should develop and promote model joint security units made up of Iraqi forces with international backup.

Training Iraqi forces is not enough, according to CSIS. The United States overlooked a n essential entity that not only impacts security, but also the governance and economic issues: the justice system.

"Rebuilding Iraq's justice system has been given short shrift by the United States thus far, with too few resources and technical expertise devoted to the sector," said the report. "Crime and violent acts should be handled through the justice system. Courts, lawyers and judges are needed to process criminals arrested by Iraqi police."

Another Factor connected to the exacerbation of violence is the lack of economic opportunity and high levels of unemployment, which are leading to "entrenched frustration and anger at the occupying forces." Iraqis can make tip to $100 by agreeing to plant a roadside bomb or shoot at U.S. forces, according to CSIS.

Even though Iraq has a perceived oil wealth, security problems undermine oil production and exports. Iraq's turnaround is heavily dependent on the oil sector, which remains hostage to the security situation, and on diversifying the economy away from oil, something that has not been a "heavy focus," said the report.

Meanwhile, Iraqis don't see acceptable employment opportunities, said the report, and those who choose to work for foreign companies or in Iraq's security forces face serious dangers.

Before the transition of power in June, the provisional authority focused on large capital-intensive reconstruction, such as rebuilding the power grid and the oil industry, which have not created nearly the number of jobs needed, said the report.

But Raphel insists that initiatives, such as the U.S. military commander's emergency response program, and the office of transitional initiatives at the United States Agency for International Development "were geared towards precisely soaking up the obvious unemployment, man-on-the-street problem that you would have expected to see in this kind of economy at this particular point," Raphel explained. "They're out and about early on. They have the key authority to write small grants on the spot, disburse money."

The $286 million diverted from the reconstruction funds, she said, are going to help with generating short-term employment. "What it amounts to is getting more people out with the authority to pay people to clean the irrigation district canals, to pick up the garbage, to paint the school, to do simple things, which the community needs, and which puts people back to work," she said. These types of projects also ensure that the citizens see concrete results, she added.

Iraqis, meanwhile, "remain unhappy with the level of services that they are receiving," said the CSIS report. The lack of sufficient electricity in major cities undermines public confidence, while sewage systems are worse than under Saddam Hussein's regime, causing spillover health and environmental problems. "There is a wide gap between the level of services actually being provided and Iraqis perception that services ate inadequate," the report said.

The United States should provide resources to local and provincial governing councils to allow the Iraqis to own the rebuilding process and set the spending priorities. Otherwise, CSIS said, "outsiders will continue to be blamed for delays and problems." Currently, these local and regional governments exist in name and on paper, but lack the resources, capacity or technical expertise to address the population's concerns, said the report. Giving them the money would help communities define their own rebuilding goals, said the report.

Iraqis also should have a stake in the country's oil wealth, said CSIS. "Neither U.S. nor Iraqi officials have handled the question of oil ownership transparently and with a sense of urgency," said the report. "A balance must be struck between recognizing the oil as a national asset and devising some means of individual Iraqi ownership."

While the Bush administration has tried to address some of these burning issues, it still is under heavy criticism for not spending hardly any of the $18.4 billion reserved for the reconstruction. Before the $3.4 billion was approved at the end of September for quick dispersal, only $1.1 billion had been paid out to contractors. Another $7 billion had been committed to contracts, but not yet spent, according to Raphel. Also, out of the $13 billion pledged by other countries to aid Iraq's reconstruction, only roughly $1.2 billion was spent. Even top Republicans on the Senate Foreign Relations Committee called the slow movement "beyond pitiful and embarrassing."

The $18.4 billion will stretch for a couple of years, said Raphel. "We have to spend what we got," she said.