Lessons Learned from Iraq Reconstruction

Last week I attended a panel discussion at the U.S. Institute of Peace entitled “Lessons Learned from Iraq and How they Apply to North Africa.” The panel featured the Special Inspector General for Iraq Reconstruction (SIGIR), Stuart Bowen, who discussed his office’s final publication, Learning from Iraq,” along with three other experts on the subject.The report, along with the corresponding panel, provided some answers to questions surrounding the Iraqi reconstruction project and raised questions about the future of stabilization and reconstruction operations.

The report marks the culmination of SIGIR’s nine-year mission in Iraq, from 2004-2013, which resulted in $1.61B of found potential savings within the reconstruction program, $645M in actual savings and $191M of court-ordered punitive damages recovered through 104 indictments and 82 convictions. These numbers certainly represent a large amount of money but pale when compared to the overall amount of $60.6B provided by the U.S. for the reconstruction effort. However, the small percentage of money recovered cannot measure the effect SIGIR had as a fraud and waste deterrent and its oversight role in the reconstruction process.

Bowen and Maliki, Pg 11

SIGIR, Stuart Bowen, interviewing Iraqi Prime Minister Nouri al-Maliki. (SIGIR “Learning from Iraq,” pg 11)

Few surprises arise in SIGIR’s final report. The U.S. expended a lot of money, with no overarching plan or strategy and little coordination with Iraqi government officials, that resulted in mostly limited rates of success. According to Iraqi Prime Minister Nouri al-Maliki, the overall benefit to Iraq of reconstruction was small compared to the large cost. This sentiment was echoed by most of the 17 Iraqi leaders interviewed for the report. The reflections of the 15 U.S. officials interviewed were not markedly more positive but tended to shy away from labeling the reconstruction efforts a failure.

The most interesting chapters of “Learning from Iraq” cover the institutional organization of the U.S. reconstruction effort in Iraq and a detailed description of the money spent and projects undertaken.

The SIGIR, Stuart Bowen, describes the institutional framework of reconstruction as an ‘adhocracy.’ Bowen’s describes the situation below.

When Iraq’s reconstruction began, the U.S. government relied on- in the words of former Secretary of Defense Donald Runsfeld- “quickly assembled, ad hoc efforts” to coordinate the resources of departments long used to working independently. The lead agencies the Dept. of Defense, the Dept of State, and USAID- sometimes coordinated but rarely integrated their operations.

Iraq Reconstruction Flow Chart

U.S. Embassy Baghdad organizational flow chart. The bottom left corner reads, “it was not always clear who was in charge of the reconstruction effort.” (SIGIR “Learning from Iraq,” pg 45)

The problem that emerged was that these “quickly assembled ad hoc efforts” never matured into a smooth running institutional arrangement. Although their coordination improved somewhat, Bowen comments that the improvement did not lead to any significant institutional reform that would prevent the same problems from recurring again. The organization chart to the left symbolizes the confusion created by this ‘adhocracy’ which kept the U.S. from reaching significant success in Iraqi reconstruction.

Funding by source, Pg 56

Total funding from sources for reconstruction. (SIGIR “Learning from Iraq,” pg 56)

The reconstruction of Iraq following the 2003 U.S. led invasion was an extremely expensive undertaking. The SIGIR report totals the amount appropriated by all contributors at $220.21B. The U.S. accounted for $60.64B, or about 27%, of the total cost with Iraq contributing the largest portion of funding, $145.81B, or about 66%. Further, of the roughly $61B appropriated by the U.S. for Iraq, only $53.27B was expended.

Funding by Year, Pg 56

U.S. and Iraqi reconstruction funding by year. Iraq did not surpass U.S. in funding until 2008. (SIGIR “Learning from Iraq,” pg 56)

In the end, Iraq paid for a majority of its own reconstruction. However, this was a far cry from the promises made by Bush administration official, Paul Wolfowitz, in 2003. Mr. Wolfowitz testified to Congress that a reconstruction cost of $95B was “too high” and said such estimates ignored the wealth of Iraq’s annual oil exports. An assumption that the U.S. would foot the cost of reconstruction was “just wrong” according to Mr. Wolfowitz.

Oil, Pg 84

Iraqi crude oil exports by year. (SIGIR “Learning from Iraq,” pg 84)

The SIGIR report shows that it was not until 2008, five years after the U.S. invaded, that Iraq surpassed the U.S. in reconstruction funding. The small amount of money from Baghdad was rooted in the slow recovery of its oil industry after 2003. Oil production in Iraq peaked at just over 2.5 million barrels per day (MBPD) for the two month period before March 2003. Although it would surpass the 2.5 MBPD mark in early 2013, at the end of 2012, Iraq’s oil industry had yet to return to pre-war levels.

With over $26B spent, security commanded the largest share of U.S. reconstruction dollars in Iraq. Within the realm of security expenditures, the Iraqi Ministries of Defense and Interior received the largest amounts, driven mostly by extensive programs to rebuild the Iraqi army and police forces. From 2003 to 2011, not only did the U.S. provide the bulk of security forces in Iraq, it also paid for the bulk of security related expenditures. Because of this, the Iraqi government appropriated small amounts for security and defense in its annual budget.

2013 Iraq Budget

2013 Iraqi budget, broken down by sector. (IAU, “Iraq Budget 2013, Background Paper,” pg 4)

The large U.S. expenditures on Iraqi security may have had an unpredicted impact following the U.S. withdrawal at the end of 2011. An analysis of the proposed 2013 Iraqi budget shows that funding for security and defense grew 3840%, from .5T Iraqi Dinar (IQD) to 19.7T IQD, between 2011 and 2013 while the total budget only grew by 43%. Presumably, this enormous increase is due to the Iraqis assuming not only operational but also financial control of a large security apparatus created by the U.S. Unfortunately, the increase in Iraqi security spending came at the expense of significant increases in social services such as health, housing, water and sanitation, and agriculture. In a country where 32% of the population do not have access to clean drinking water and 25% receive less than 12 hours of electricity a day, this certainly led to more unrest.

How can the U.S. do a better job of reconstruction in future operations? This is the subject of the final two chapters of the SIGIR report. Further, this question was at the core of the USIP panel mentioned above. In “Learning from Iraq,” Bowen suggests seven final lessons from the U.S. experience rebuilding Iraq. These lessons were expanded and added to by the panelists at USIP. I will focus on two specific lessons below, one from Bowen and one mentioned repeatedly by the expert panelists.

Bowen emphasized the need to create an integrated civilian-military office to “plan, execute, and be accountable for contingency rebuilding activities during stabilization and reconstruction operations.” During the panel discussion, Bowen described the current system as a “diffusion of responsibilities” and suggested that an organized and integrated office could provide a unity of command and unity of effort. In the report, Bowen suggests creating the U.S. Office for Contingency Operations and proposes a draft of legislation authorizing such an office.

Bowen Lobbying

SIGIR, Stuart Bowen, met with Congress to discuss his ideas for a U.S. Office of Contingency Operations. (SIGIR “Learning from Iraq,” pg 127)

In theory, Bowen’s idea makes sense and seems to address the major problems that plagued the U.S. effort to rebuild Iraq. However, while many in the U.S. question whether large-scale reconstruction operations are worth the money and risk and pledge never to undertake another ‘Iraq’, Bowen’s plan institutionalizes the operations and guarantees their place in American foreign policy. This sentiment was present in the panel as well. Ambassador William Taylor claimed that a stabilization and reconstruction operation (SRO) on the same scale of Iraq is unlikely to happen again while John Nagl rebutted that SROs are not going away and we must be prepared.

In addition to the need to better plan for and organize future SROs, all the panel members reiterated the need to better understand the cultures and operational environments in which future SROs will take place. Within in the SIGIR report, a misunderstanding of, and in some cases complete ignorance of, Iraqi culture were cited by many Iraqi interviewees as major problems of Iraq reconstruction. Further, the panelists agreed that a more thorough cultural knowledge could have led to better project selection, consultation and increased Iraqi support.

Intel Jobs

Results from a recent Mercyhurst survey of intelligence professionals shows a decline in many analytical positions. (“Entry Level Analyst Hiring Projections
for the U.S. Intelligence Community”, pg 3)

The importance of understanding the culture in which you will be operating is clear, but how can the U.S. government maintain the institutional knowledge of foreign cultures and places? Traditionally, it seems that this cultural knowledge would rest with the political, military, geographic, regional and leadership analysts of the U.S. intelligence community. However, this group of professionals is quickly shrinking. A recent report from the Institute of Intelligence Studies at Mercyhurst University found that hiring projections for entry-level analysts are falling for almost all specialties except cyber and IT analysis.

Cultural knowledge within government institutions is often supplemented by academia but it is easy to see the same problems affecting universities. Undergraduate and graduate regional studies programs are often influenced by the strategic focus of the U.S. government. Thus there was a sharp drop in Russian and Eastern European studies after the end of the Cold War and an increase in Middle Eastern Studies after 9/11. Today, the U.S. strategic focus is on Asia and the Pacific and it is easy to imagine that the regional studies disciplines will soon reflect this shift. Because it is impossible to predict where the next SRO will occur, it is necessary for the U.S. government to encourage, fund, and support various analysis positions and regional studies disciplines in order to maintain a vast amount of cultural knowledge.

I highly recommend the SIGIR report, “Learning from Iraq.” (Download the PDF here) The report is a great resource for understanding the processes and costs of the U.S. reconstruction project in Iraq. Further, it should serve as a sobering reminder of past experiences before the U.S. undertakes another expansive SRO. Although, after nearly a decade of experience, it does not appear that the U.S. has acted on any significant lessons learned. A frightening thought as talk about military and civilian action in Syria, Iran, Korea, and Africa continues to drown our newscasts.

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2 thoughts on “Lessons Learned from Iraq Reconstruction

  1. Personally I was amazed at the amout of NGO’s which appeared on the ground almost overnight in Iraq and seemed to be able to function financially. Have there been any surveys done on what became of the projects done on the ground by these organizations. Was there clinical supervision provided? Auditing?

    • Merri, thanks for reading the post and leaving a great comment! You are right, the speed and size of the NGO force that descended on Iraq was amazing. You also allude to a great point that I did not mention. The numbers quoted in the SIGIR report for the cost of Iraq’s reconstruction only cover official US, Iraqi, and international government funding. Certainly, when NGOs are added into the mix the cost soars even higher.

      I would venture to guess that projects undertaken by NGOs may have had a better success rate than those undertaken by the US government. This is because it is likely that NGOs were not saddled with the same problems plaguing the government such as a revolving door of personnel on relatively short deployments, confusing organizational flows, competing priorities, etc. The SIGIR report mentions NGO funding a few times but only in the context of programs funded entirely or partially by USAID. I have not come across any surveys or reports that account for a total of NGO projects and expenditures.

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