6. U.S. Economic and Reconstruction Assistance

Building the capacity of the Iraqi government should be at the heart of U.S. reconstruction efforts, and capacity building demands additional U.S. resources.

Progress in providing essential government services is necessary to sustain any progress on the political or security front. The period of large U.S.-funded reconstruction projects is over, yet the Iraqi government is still in great need of technical assistance and advice to build the capacity of its institutions. The Iraqi government needs help with all aspects of its operations, including improved procedures, greater delegation of authority, and better internal controls. The strong emphasis on building capable central ministries must be accompanied by efforts to develop functioning, effective provincial government institutions with local citizen participation.

Job creation is also essential. There is no substitute for private-sector job generation, but the Commander’s Emergency Response Program is a necessary transitional mechanism until security and the economic climate improve. It provides immediate economic assistance for trash pickup, water, sewers, and electricity in conjunction with clear, hold, and build operations, and it should be funded generously. A total of $753 million was appropriated for this program in FY 2006.

RECOMMENDATION 64: U.S. economic assistance should be increased to a level of $5 billion per year rather than being permitted to decline. The President needs to ask for the necessary resources and must work hard to win the support of Congress. Capacity building and job creation, including reliance on the Commander’s Emergency Response Program, should be U.S. priorities. Economic assistance should be provided on a nonsectarian basis.

The New Diplomatic Offensive can help draw in more international partners to assist with the reconstruction mission. The United Nations, the World Bank, the European Union, the Organization for Economic Cooperation and Development, and some Arab League members need to become hands-on participants in Iraq’s reconstruction.

RECOMMENDATION 65: An essential part of reconstruction efforts in Iraq should be greater involvement by and with international partners, who should do more than just contribute money. They should also actively participate in the design and construction of projects.

The number of refugees and internally displaced persons within Iraq is increasing dramatically. If this situation is not addressed, Iraq and the region could be further destabilized, and the humanitarian suffering could be severe. Funding for international relief efforts is insufficient, and should be increased.

RECOMMENDATION 66: The United States should take the lead in funding assistance requests from the United Nations High Commissioner for Refugees, and other humanitarian agencies.

Coordination of Economic and Reconstruction Assistance

A lack of coordination by senior management in Washington still hampers U.S. contributions to Iraq’s reconstruction.

Focus, priority setting, and skillful implementation are in short supply. No single official is assigned responsibility or held accountable for the overall reconstruction effort. Representatives of key foreign partners involved in reconstruction have also spoken to us directly and specifically about the need for a point of contact that can coordinate their efforts with the U.S. government.

A failure to improve coordination will result in agencies continuing to follow conflicting strategies, wasting taxpayer dollars on duplicative and uncoordinated efforts. This waste will further undermine public confidence in U.S. policy in Iraq. A Senior Advisor for Economic Reconstruction in Iraq is required. He or she should report to the President, be given a staff and funding, and chair a National Security Council interagency group consisting of senior principals at the undersecretary level from all relevant U.S. government departments and agencies. The Senior Advisor’s responsibility must be to bring unity of effort to the policy, budget, and implementation of economic reconstruction programs in Iraq. The Senior Advisor must act as the principal point of contact with U.S. partners in the overall reconstruction effort.

He or she must have close and constant interaction with senior U.S. officials and military commanders in Iraq, especially the Director of the Iraq Reconstruction and Management Office, so that the realities on the ground are brought directly and fully into the policy-making process. In order to maximize the effectiveness of assistance, all involved must be on the same page at all times.

RECOMMENDATION 67: The President should create a Senior Advisor for Economic Reconstruction in Iraq.

Improving the Effectiveness of Assistance Programs

Congress should work with the administration to improve its ability to implement assistance programs in Iraq quickly, flexibly, and effectively.

As opportunities arise, the Chief of Mission in Iraq should have the authority to fund quick-disbursing projects to promote national reconciliation, as well as to rescind funding from programs and projects in which the government of Iraq is not demonstrating effective partnership. These are important tools to improve performance and accountability—as is the work of the Special Inspector General for Iraq Reconstruction.

RECOMMENDATION 68: The Chief of Mission in Iraq should have the authority to spend significant funds through a program structured along the lines of the Commander’s Emergency Response Program, and should have the authority to rescind funding from programs and projects in which the government of Iraq is not demonstrating effective partnership.

RECOMMENDATION 69: The authority of the Special Inspector General for Iraq Reconstruction should be renewed for the duration of assistance programs in Iraq.

U.S. security assistance programs in Iraq are slowed considerably by the differing requirements of State and Defense Department programs and of their respective congressional oversight committees. Since Iraqi forces must be trained and equipped, streamlining the provision of training and equipment to Iraq is critical. Security assistance should be delivered promptly, within weeks of a decision to provide it.

RECOMMENDATION 70: A more flexible security assistance program for Iraq, breaking down the barriers to effective interagency cooperation, should be authorized and implemented.

The United States also needs to break down barriers that discourage U.S. partnerships with international donors and Iraqi participants to promote reconstruction. The ability of the United States to form such partnerships will encourage greater international participation in Iraq.

RECOMMENDATION 71: Authority to merge U.S. funds with those from international donors and Iraqi participants on behalf of assistance projects should be provided.