10.1 |
Reconstruction: March 2003 to June 2004
1032.
Mr Richmond
reported that Mr Drummond and Mr Lowcock had pressed CPA
and
US
officials on US transition plans, but key decisions had not yet
been made. That lack
of clarity
was making it difficult for the UK and others to plan their
reconstruction efforts
beyond the
transition, which was delaying implementation.
1033.
Mr Richmond
offered his view on 2 May, as part of a DFID/Treasury exercise,
on
whether
unblocking funding streams would improve the security
situation.605
He
advised
that his
answer was:
“For now …
probably no – given absorptive capacity and the security
conditions.”
1034.
Mr Richmond
continued:
“A
disaffected, unemployed Tikriti can be bought for a few dollars to
launch an attack
on a member
of the Coalition. It has passed no one by that project planning,
fund
disbursement
and employment generation might help direct the Tikriti’s efforts
to
more
productive ends. There was a physical cash flow problem in the
first quarter of
2004 which
meant that even monthly salaries were being delayed. Those have
been
largely
unblocked.”
1035.
Mr Richmond
highlighted the recent approval by the CPA of a “seven
cities”
initiative,
which would rapidly inject up to US$30m into each of seven areas
which posed
significant
security problems in order to increase employment. A “new but
refreshing”
condition
of approval had been the existence of a robust monitoring and
evaluation
programme,
on which DFID and USAID had provided advice.
1036.
Mr Richmond
concluded:
“In the
immediate term, therefore, disbursing significant extra funds into
projects
is not the
key issue. Indeed, to do so risks exacerbating a growing concern
abut
inadequate
quality control of proposals which can lead to wastage of resources
and
corruption.
More thought must also be given to how to meet the additional
running
costs …
created by capital/project expenditure …”
1037.
Mr Richmond
also reported that:
“CPA
statistical analysis does not show a correlation between areas of
highest
unemployment
and violence. Promoting employment in and directing projects
to
specific
trouble spots will not produce immediate results. Longer-term,
effective
distribution
of funding is therefore required.”
1038.
Mr Richmond
reported by telegram on 4 May that US intentions
regarding
international
advisers had been misunderstood.606
Some 200,
mainly US, advisers would
remain
after the transition. They would not be “running the Government”
but providing
605
Telegram
207 IraqRep to FCO London, 2 May 2004, ‘Iraqi Economy: Does
Expenditure Need
Unblocking?’.
606
Telegram
211 IraqRep to FCO London, 4 May 2004, ‘Iraq: What Should be
Different After 30 June?’.
179