US politicians have begun questioning the virtue of the US spending over USD20 billion on Iraq whereas the Iraqi government has merely spent less than USD4 billion on the construction exercise despite having USD70 billion of budget surplus.[1] By comparison, the planned expenditure for the 2008 Malaysian budget was approximately USD55 billion and we are running on deficit.
As reported by the New York Times, security problem in Iraq is discouraging the Iraqi government from spending. Turbulent environment is not conducive for developmental effort, forcing Iraqi institutions to hesitate before even beginning to spend money for new projects. As a result, large Iraqi surplus sits safely idle in banks, earning enormous interest amounting to half a billion to date.[2]
Despite the large surplus and low expenditure, I do not think that would rationalize the call for the US politicians to cut back the US reconstruction expenditure in Iraq, especially when the reason for reconstruction originates from destruction brought upon during the US-led invasion back in 2003.
I am in the opinion that the US has every obligation to finance the reconstruction exercise with its own resources, regardless of the resources available to the Iraqi government. To put it simply, if a person breaks it, the person should pay for it.
This however does not mean that the Iraqi government should not spend anything. It is far more helpful if both governments could simultaneously spend to improve Iraqi public infrastructures like roads and communication lines for example. Restoring old infrastructures and building new ones should take place simultaneously to hasten development of Iraq. In other words, both reconstruction exercise, which is the responsibility of the US, and further developmental exercise, which is the task of the Iraqi side, should happen concurrently.
It would be far more acceptable for US politicians to call for the Iraqi government to match the US developmental expenditure instead. Nevertheless, the inability of the Iraqi government to spend has to be addressed first before the call could be earnestly made and that means securing peace in the war torn country. After all, the low figure for expenditure is about inability to spend rather than refusal to spend.
With greater security, those projects could bring economic returns to the Iraqi society. With insufficient security in place, those projects would just be another targets for the insurgents.
[1] “The Iraqi government now has tens of billions of dollars at its disposal to fund large-scale reconstruction projects,” Mr. Levin, who is chairman of the Senate Armed Services Committee, said in a joint statement with Mr. Warner. “It is inexcusable for U.S. taxpayers to continue to foot the bill for projects the Iraqis are fully capable of funding themselves. We should not be paying for Iraqi projects, while Iraqi oil revenues continue to pile up in the bank.” [As Iraq Surplus Rises, Little Goes Into Rebuilding. James Glanz, Campbell Robertson. New York Times. August 5 2008]
[2] The deposit at the Federal Reserve Bank is so large that the United States has been obliged to make $435.6 million in interest payments to Iraq through the end of last year, according to the new report. [As Iraq Surplus Rises, Little Goes Into Rebuilding . James Glanz, Campbell Robertson. New York Times. August 5 2008].
