YOU ARE HERE: LAT HomeCollections


'Marshall Plan' for Iraq Fades

Once the $18.6 billion for reconstruction is spent, the nation might have to rely on private investment. 'No pain, no gain,' a U.S. official says.

January 15, 2006|Doug Smith and Borzou Daragahi | Times Staff Writers

BAGHDAD — After more than 2 1/2 years of sputtering reconstruction work, the United States' "Marshall Plan" to rebuild this war-torn country is drawing to a close this year with much of its promise unmet and no plans to extend its funding.

The $18.6 billion approved by Congress in 2003 will be spent by the end of this year, officials here say. Foreign governments have given only a fraction of the billions they pledged two years ago.

With the country still a shambles, U.S. officials are promoting a tough-love vision of reconstruction that puts the burden on the Iraqi people.

"The world is a competitive place," Tom Delare, economics counselor at the U.S. Embassy, said this month during a news briefing. "You have to convince the investor that it is worth his while to put his money in your community."

An embassy spokeswoman later said that the Bush administration was not abandoning the Iraqi reconstruction effort. It "remains committed to helping build Iraq and continues to assess needs on the ground," she said. No decisions on future funding requests have been made, she said.

But embassy and reconstruction officials outlined a program of private investment and fiscal belt-tightening by the new Iraqi government as the long-term solution to the country's woes, even if that causes short-term suffering for Iraq's people.

"No pain, no gain," Andy Wylegala, whose job at the embassy is to help Americans do business in Iraq, said at the same briefing. "It's a very difficult procedure to pass through. But when I look from my side, I see it as a long-term, very favorable development."

After touring Baghdad early this month, Sen. Jack Reed (D-R.I.) questioned the new direction.

"I think we're fooling ourselves if we think we can simply just pass this on to the Iraqi people immediately or to the international community," Reed said. "We've got to continue our efforts.... That requires money."

Iraq's new government will embrace market policies, but it still needs more help with reconstruction, said Movad Ubaidi, deputy chief of the newly elected National Assembly's economics committee.

"If these donations were spent, the American government is asked to give more so that Iraq can recover from the damage it suffered," Ubaidi said.

But the commander of the U.S. Army Corps of Engineers in Iraq, Gen. William H. McCoy, said at a recent briefing that the last of 3,100 reconstruction projects would soon be awarded, and almost all would be completed before the year ends.

"We were never intending to rebuild Iraq," McCoy said. "We were providing enough funds to jump-start the reconstruction effort in this country."

Although U.S. officials say the projects have given a needed jolt to the economy, most Iraqis have seen little effect in their lives.

"If they say they have spent money, where is it?" asked Salah Qaragholi, 30, a barber in the poor neighborhood called Zafraniya. "Where are the projects? The electricity is only four hours a day."

Baghdad's roads are an obstacle course of barriers, potholes and debris. Many government and office buildings are either still gutted or strung with webs of electrical wire connecting to generators that run 12 hours on good days. A brown haze fouls the air and pools of sewage overflow dot the streets.

The U.S. Embassy credits the reconstruction effort with restoring sewage treatment to more than 7.7 million Iraqis, opening 21 berths at the Umm al Qasr port, building nearly 600 miles of freeways and primary roads, and developing three new international airports: at Basra in the south, and Irbil and Sulaymaniya in the north.

It says 124,000 Iraqis are employed under reconstruction and military contracts.

But from its inception, the program has been troubled by contracting scandals and rising security costs that have drained as much as a quarter of the funding.

Some completed projects were destroyed by insurgents or damaged by poor operation.

McCoy conceded that the Army Corps had overreached in Baghdad's Sadr City neighborhood.

"The initial strategy was, 'Let's put some big capital investment here so that we can improve their water, their electricity, their sewage treatment quickly.' " McCoy said. "Over the course of time, we saw that those, while important, weren't helping us quickly."

Instead, he said, the Army Corps is now placing 27 compact water units around the community that will dispense drinking water.

State Department officials say the program's overall success is evident in increases in employment, imports and gross domestic product, which has climbed above $1,000 per capita for the first time since the 2003 invasion.

"In spite of difficulties and shortfalls, it is an undeniable reality that huge progress has been made in the last 2 1/2 years, both on the physical infrastructure and the mercantile infrastructure," Wylegala, the embassy official, said at the briefing.

Los Angeles Times Articles