By BUSHRA JUHI – 1 day ago

BAGHDAD (AP) — An Iraqi lawmaker close to Prime Minister Nouri al-Maliki defended the government's record on reconstruction spending, saying Thursday that U.S. critics of its multibillion dollar surplus were overlooking Baghdad's progress over the past three years.

But a senior Iraqi official and a private Iraqi economic analyst both acknowledged that inefficiency and a cumbersome, inexperienced bureaucracy were still delaying many projects aimed at improving the lives of Iraq's 27 million people.

A report Tuesday by the U.S. General Accounting Office predicted Iraq could finish the year with as much as a $79 billion cumulative budget surplus due to the influx of oil revenues.

U.S. critics — including senators — complain American taxpayers were shouldering an unfair share of the reconstruction load at a time when Americans are suffering from high gasoline prices and Iraq is getting rich from oil.

Hassan al-Sineid, a Shiite lawmaker from al-Maliki's Dawa party, said the GAO report was "unrealistic" because it was based on incomplete information.

"In 2004, there was no investment budget. In 2005, the investment budget was $3 billion. In 2006 it was $11 billion and in 2007 was $12 billion," he said. "In the years before 2008, less than half the investment budget was spent because of the security issue."

He said parliamentary committees were now reviewing government spending programs to make sure that funds were used properly.

His comments echoed some U.S. officials in Baghdad, who acknowledged that the Iraqis had not spent funds fast enough in the past but that the situation was improving. The officials spoke on condition of anonymity because the issue is politically sensitive.

They cited problems of inexperienced bureaucrats, shortages of Iraqi contractors and a cumbersome approval progress — aimed at curbing corruption — for the delays.

A senior official of the Iraqi Planning Ministry described other problems, including delays in parliament approving the budget, which meant the ministries did not get their money until several months had passed, and

"Security and stability are also reasons for the delay," the official, Qassim Inaya, told The Associated Press. "Some ministries have projects in unsecured areas or disputed areas or not-yet-ready areas."

Bassem Jamil Anton, an economist and deputy leader of the Iraqi Businessmen's Association, blamed delays on a shortage of experienced Iraqi contractors because so many businessmen, engineers, architects and other skilled people have fled the country.

"Moreover, the local governments and the provincial councils lack experience needed to implement many projects," he told AP Television News. "These factors have created the cumulative budget surplus."

The Iraqi government is drafting plans for Iraqi-funded projects to include 1,000 new primary health care centers over the next 10 years, new airports and a major renovation project for downtown Baghdad, the American officials said.

Nonetheless, public pressure is strong from the Iraqi people, who want to see progress in boosting the nation's economy after five years of war.

Many Iraqis — who lack adequate electricity, clean water and jobs — find it unfathomable their country is awash in oil dollars. Last year, the government spent less than a third of the $12 billion budgeted for major projects such as electricity, housing and water.

"I wonder where the oil revenue went," said Abu Saif, who runs a money exchange office in downtown Baghdad. "I think the main reason is the lack of big projects and the absence of big companies. Another issue which keeps Iraq backward is administrational corruption. Iraq must overcome corruption to progress."

The report also angered many in Congress. Senators renewed calls for Baghdad to pay more for its own reconstruction, which has been heavily supported by hard-pressed American taxpayers.

"I think it's absurd that we're paying for the reconstruction in a country when right at the beginning of the war the Bush administration assured the American people that Iraq's reconstruction would be paid for by Iraq and through its oil revenues," Democratic Sen. Carl Levin said Wednesday on MSNBC.

Levin, who requested the GAO report along with Republican Sen. John Warner, said in a statement Tuesday that it was "inexcusable for U.S. taxpayers to continue to foot the bill for projects the Iraqis are fully capable of funding themselves."

In the report, the GAO said Iraq had an estimated budget surplus of about $29 billion from 2005 to 2007 and could have an additional surplus of up to $50 billion this year.

The expected surplus is likely to be lower than $79 billion because parliament Wednesday approved legislation for a $21 billion supplemental budget for 2008.

Iraqi official defends spending, surplus -  Source