Prometheus 6

But Michael O'Hanlon , an Iraq specialist at the Brookings Institution, a Washington think tank, said the money could be interpreted as a positive sign: it wasn't squandered or stolen.

Yeah, but you have to actively interpret it that way. Otherwise it really sucks that the best you can say ius, "At least they didn't steal it this time." No, this strikes me as closer to the truth.

Yahia Said , who recently led a UN team to Iraq to draft an aid agreement between Iraq and the international community, said Iraq's failure to spend its budget last year is an ominous sign. "This is the strongest indicator of the dwindling capacity of the Iraqi government," he said. 

Iraqi agencies can't perform basic functions, report says
$13b of budget has gone unspent
By Farah Stockman, Globe Staff | February 1, 2007

WASHINGTON -- The effort to resurrect vital government services in Iraq has been hampered by ethnic and sectarian purges among the ranks of civil servants, a high turnover rate for senior administrative officials, and a lack of comprehensive planning on the part of both Iraqis and the United States, according to an audit by the special inspector general for Iraq reconstruction released yesterday.

As a result, Iraq's ministries -- the backbone of the fledgling government, responsible for hospitals, utilities, and the provision of food rations and gasoline -- are struggling to perform basic functions, such as drafting budgets and hiring contractors, and too often depend on their American advisers. That in turn has led to the Iraqi government's failure to spend $13 billion -- more than a third of its annual budget -- in 2006, a situation that could further destabilize the country, the audit said.

"US mission officials view the Iraqi government's inability to spend its own budget resources...as a significant problem that, if not corrected, may lead to the failure of the government," the audit warned.

Nevertheless, the Bush administration plans to more than double the amount it has been spending to train Iraq's ministries to function without embedded advisers. The United States plans to allocate $260 million this year for training Iraq's civil servants, up from $125 million in 2006, the audit said.

The audit, which focused on Iraq's ministries, was one of a series of reports released this week detailing ongoing problems in the $18.6 billion-plus effort to rebuild Iraq. Other audits examined waste and abuse, including a $43 million purchase of trailer homes that went unused.

The ministries examined in the report have struggled amidst the spiraling violence in Iraq, including near-daily bombings, kidnappings, and militia battles. But another key problem, according to the audit, is that Iraq has essentially had four governments in as many years.

The Iraqi government's transitions -- from the US-led occupation in 2003 that dismissed much of Iraq's civil service, to the interim government in 2004, to the transitional government in 2005, to the elected government that came to power last year -- have led to the continuous removal of experienced civil servants and officials who have been trained with US funds, the audit said. With each temporary government, "senior officials not only purged the remaining skilled ministerial staff but replaced them with persons hired more for their ethnic loyalty and/or familial relationship than their qualifications," it stated.