Iraq reconstruction money to go on security and oil production

1.00pm - By RUPERT CORNWELL in Washigton



The Bush administration has asked Congress to shift US$3.5 billion of funds earmarked for Iraqi reconstruction into short-term spending.

The aim is to bolster security and help oil production, ahead of the elections which, despite the continuing violence, the White House insists will take place next January.

The move came on the day that at least 59 people were killed in separate attacks by insurgents in Baghdad and the nearby town of Baquba. It is being seen by critics as a major change in US strategy in Iraq, and a tacit admission of how efforts to rebuild the county have been a resounding failure.

Under the scheme US$1.8 billion allocated for longer term infrastructure projects will be redirected into an emergency effort to train and equip Iraqi police and security forces. US$450 million will go to help the oil industry and US$360 million to meet the budgetary costs of forgiving virtually all of Iraq's outstanding US$4 billion pre-war debt to the US.

The shift reflects the belief in Washington that the insurgents who have already turned some cities, especially in the 'Sunni triangle' north and west of Baghdad, into no-go areas are likely to keep up the attacks at least until the November 2 US elections - and maybe longer, in a bid to disrupt the Iraqi elections due in January.

"This reprogramming exercise is a recognition that Bremer, the CPA and the US military got the first year of the Coalition occupation in Iraq fundamentally wrong," Anthony Cordesman of the Centre for Strategic and International Studies *(CSIS) here said.

It was also "a de facto recognition that the neo-conservatives' goals...for restructuring Iraq can never be achieved."

US officials claimed they were merely making "an adjustment in response to challenging circumstances."

But Mr Cordesman said it amounted to the "Vietnamisation" of US military strategy.

As Washington rushed in funds to create an Iraqi force capable of replacing US and British troops and taking on the insurgents, American commanders have shifted to holding actions and surgical strikes.

The changed approach in effect defers major military action until after the US elections.

"Everything will consist of limited operations and strikes, until the new Iraqi forces are 'ready,' Mr Cordesman added.

The problem was that this may not be until mid-2005, well after the scheduled Iraqi elections. Even then, some US commanders fear local forces will never be strong enough to do the job without US air and ground support.

If the security situation has deteriorated, the aid effort to Iraq has fared little better.

Congress has allocated over US$18 billion for Iraqi reconstruction in 2004, but only US$1 billion had been spent.

"And much of that has been wasted due to sabotage, attacks and bad planning, or had been spent outside the country and on foreign security forces," Mr Cordesman claimed.

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Herald Feature: Iraq