10.2 |
Reconstruction: July 2004 to July 2009
support by
delivering a reconstruction ‘peace dividend’. As yet, it is too
early to judge
how
successful this approach is likely to be.”
711.
DFID also
reported that its aim in the run up to PIC in Basra was to help
the
Provincial
Council demonstrate that it was in charge and delivering services.
The first
step was to
secure Baghdad’s approval for Basra’s provincial strategy and
associated
budget. The
second was to get Baghdad to release the funds. The third
was to help the
Council to
communicate and deliver services. The US had adopted a similar
focus.
712.
DFID’s second
fortnightly update on 8 February expanded on the problems
that
the Iraqi
Government had in spending its money.407
With oil
prices topping US$60 per
barrel, the
Iraqi Government was “cash rich”, but in the nine months to October
2006, it
had spent
just 14 percent of the US$8.2bn allocated to public investment. The
Ministry
of Oil had
spent only one percent of the US$3.5bn allocated to it. DFID
attributed the
underspend
to:
•
poor
security;
•
poor
planning by line ministries (and failure at the centre to demand
plans); and
•
paralysis
resulting from distrust between the Ministry of Finance
(responsible for
disbursing
and accounting for funds) and the Ministry of Planning
(responsible
for
reviewing plans and agreeing allocations).
713.
The Iraqi
Government was considering setting up a National Council
for
Reconstruction
and Development, chaired by the Prime Minister, to
accelerate
disbursement.
The US was setting up a “Budget Execution Cell” in the Deputy
Prime
Minister’s
Office, which might increase disbursement in the short term but was
unlikely
to be
sustainable or to lead to significant improvements in services.
DFID commented:
“In
reality, there are few quick fixes to improving services in
Iraq.”
714.
DFID also
reported that the World Bank would open an office in Baghdad
the
following
week. It would have three full-time staff, “supported by DFID and
protected
under the
[UK] security umbrella”. As the coalition scaled back during 2007,
the Bank
was likely
to become the Iraqi Government’s “partner of choice”.
715.
On the Iraqi
Government’s failure to disburse, Mr Blair commented, “we must
get
this sorted
out”; on Iraqi and US action to increase disbursement, he asked,
“can’t we
provide the
competence?”.408
716.
Dr Marsden
reported on 9 February that the centre of a “revamped”
Better
Basra
Action Plan would be a political plan for getting Basra to PIC and
beyond. That
political
plan would be supported by the other lines of operation (“military,
police,
407
Paper DFID,
8 February 2007, ‘Iraq: Reconstruction Update’.
408
Manuscript
comment Blair on Paper DFID, 8 February 2007, ‘Iraq: Reconstruction
Update’.
409
Letter
Marsden to Aldred, 9 February 2007, ‘Basra: Weekly
Report’.
311