The Report
of the Iraq Inquiry
1097.
Mr Richmond
reported that CPA advisers had made progress in
re-establishing
the
machinery of government, reforming ministries, drawing up
strategies and putting
proper
financial controls in place. There was still some way to go, but
there was now
a functioning
system to hand on to the IIG.
1098.
A Treasury
official who had been seconded to the CPA told a July 2004
Treasury
seminar on
Iraq that the CPA’s scorecard on economic reform was “pretty
evenly
balanced”.643
Early, good
progress (including establishing a single, stable currency)
had
been
undermined by the CPA’s loss of control over the fiscal situation
over the last six
months.
Some CPA reforms, including “unfettered” foreign direct investment
and full
interest
rate liberalisation, had been too ambitious and had irritated Iraqi
counterparts.
1099.
The same
official provided advice to Mr Brown on 28 July on UK
economic
strategy in
Iraq to the end of 2004.644
In that
context, the official advised that the CPA
had made
substantial progress in establishing a new macroeconomic policy
framework
and in
liberalising the economy. In particular, the introduction of a new
currency and
creation of
an independent central bank had proved “more successful than
expected”.
There had
also been some substantial failures, including the unfinanced
deficit in the
2005 budget
and “ducking the subsidy issue”.
1100.
The official
also reported that the CPA had missed its target for
electricity
generation
of 6,000MW (generation was currently peaking at 5,000MW) and for
oil
production
of 2.5m barrels per day (production was “several hundred
thousand
barrels”
less).
1101.
In June 2004,
the CPA published a review of their accomplishments in
helping
the Iraqi
authorities assume responsibility for security, establish effective
representative
governance,
improve essential services, and build a market-based
economy.645
1102.
Hard
Lessons described the
review as “a glowing report card” which “missed the
mark”.646
Hard
Lessons assessed
that the Coalition’s record was “very mixed”. The most
serious
threat to continuing reconstruction was insecurity.
1103.
In his
statement to the Inquiry, Ambassador Bremer highlighted the
difficulties
created for
the CPA by the Coalition military’s inability to provide security,
and continued:
“Despite
these handicaps, and chronic understaffing [of the CPA], the
historic record
of the
CPA’s accomplishments is clear. When the CPA left, Iraq’s economy
was
rebounding
smartly, not just from post war levels, but well beyond the pre-war
levels.
643
Paper,
[undated], ‘Transcript of Treasury Seminar held in London on Monday
19 July 2004’.
644
Minute
Treasury [junior official] to Chancellor, 28 July 2004,
‘Iraq’.
645
Coalition
Provisional Authority, June 2004, An Historic
Review of CPA Accomplishments.
646
Bowen SW
Jr. Hard
Lessons: The Iraq Reconstruction Experience. U.S.
Government Printing
Office,
2009.
190