Iraq Hoarding Oil Revenue While U.S. Pays For Reconstruction
Ambassador Ryan Crocker, the top U.S. diplomat in Iraq, in testimony (.pdf) this morning before the Senate Armed Services...
Ambassador Ryan Crocker, the top U.S. diplomat in Iraq, in testimony (.pdf) this morning before the Senate Armed Services committee, heralded increased Iraqi investment in its own reconstruction, noting $18 billion in pending budget allocations by the government in Baghdad and assuring lawmakers that "the era of U.S. funded major infrastructure projects is over." This would surely be welcome news to committee chairman Carl Levin, Democrat of Michigan, if only he could bring himself to believe it.
Levin, along with Senator John Warner (R-Va.), has for months been expressing concern that the U.S. continues to shoulder the majority of Iraq's reconstruction costs at a time when Iraqi oil exports are finally producing sufficient revenue for the Baghdad government to begin shouldering a greater part of the financial burden. Last month, the senators asked the GAO to conduct a study of Iraq's oil business to determine just how much reconstruction spending should be transferred to the Iraqi side. Indeed, basic details such as total Iraqi oil revenues since 2003, how much of it has been spent on reconstruction and security, and how much the Iraqi government has deposited in banks around the world remain unclear, as do projections for expected revenues from oil exports for the coming year.
In their letter to the GAO's David Walker, Levin and Warner cite pre-Iraq invasion assurances from the Bush administration that Iraq would be able to pay for its own reconstruction. "The oil revenues of that country could bring in between 50 and 100 billion dollars over the course of the next two or three years," Paul Wolfowitz told Congress in March 2003. "We are dealing with a country that can really finance its own reconstruction and relatively soon." This, of course, like almost every other Bush administration contention, turned out to be untrue. But today, five years after the invasion, Iraqi oil revenues may finally be reaching the levels required to finance major projects. According to Levin and Warner, Iraq is estimated to have netted $41 billion from oil exports in 2007 and is on track to make $56 billion for the current year, for a total exceeding $100 billion over two years—not exactly chump change.