10.2  |  Reconstruction: July 2004 to July 2009

671.  The letter asked for detailed reports and weekly updates on key areas, including:

• a detailed report on reconstruction; and

• a weekly report on political development, security and economic activity

in Basra.

672.  Mr Blair and President Bush spoke again on 9 January.381 Mr Blair said that he had

asked for changes in the way that the UK system monitored and chased up progress

in Iraq. Information, for example on reconstruction, was incomplete. The US and UK

needed to be sure that everything that could be done on reconstruction was being done.

Mr Blair said that he wanted someone on the UK side “such as a senior military figure” to

travel around Iraq and report on what was actually happening, for example in Najaf. The

US and UK needed to improve delivery of assistance in calmer areas, to demonstrate

that peace brought dividends.

673.  An 11 January JIC Assessment judged that:

• There continued to be real economic growth in Iraq, but the Iraqi Government

had shown little commitment to economic reform and large-scale job creation

was highly unlikely in the next two years.

• The Iraqi Government was not short of funds (the JIC estimated that the

Government had accumulated some US$12bn since 2003 as a result of unspent

budget allocations), but public investment was hampered by weak central

Government ministries and a lack of competent staff at all levels of Government.

• The security situation remained the main obstacle to private sector development

and foreign investment.382

674.  President Bush announced the new US strategy in an address to the nation on

10 January:

“The situation in Iraq is unacceptable to the American people – and it is

unacceptable to me …

“It is clear that we need to change our strategy in Iraq.” 383

675.  President Bush said that a successful strategy needed to combine robust military

operations with visible improvements in Iraqi neighbourhoods and communities.

As well as providing 20,000 additional US troops and increasing efforts to build the

capacity of the ISF, the US would also increase its efforts to build the capacity of the

Iraqi Government, including by doubling the number of PRTs and giving US military

commanders and PRT leaders greater flexibility in how they used resources for

economic assistance.

381  Letter Banner to Hayes, 9 January 2007, ‘Prime Minister’s Phonecall with President Bush, 9 January:

Middle East Issues’.

382  JIC Assessment, 11 January 2007, ‘Iraq: Economic Prospects’.

383  The White House Archive, 10 January 2007, President’s Address to the Nation.

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