Iraq's 2005 oil revenues exceeded budgetary expectations of $18 Billion, the State Dept reports total exports of $23.5 Billion for the year.

In addition, of the $18 Billion allocated to reconstruction, only $10 Billion has been disbursed. So their is $8 billion left still in the pipeline.

The fuel subsidy program in Iraq was also costing $250 million per month. Now that that has ended, and with the increased value of oil exports, the Iraqi government should have $10 billion in their 2006 budget, that they didn't have in their 2005 budget.

At some point, additional monies pumped into an economy spur inflation, Iraqi inflation is running at 30% now.

Soldier's Dad...but how much of the assistance actually takes the form of money being pumped into the economy, and hence raises concerns about inflation? Equipment shipped to Iraq after being bought in the U.S. and paid for in U.S. dollars should have no impact on Iraqi inflation; indeed, if there's enough of it, it should be counter-inflationary.

And with reconstruction cash cut off it makes the job of the insurgency that much easier. Destroying the oil network in Iraq before hurt. Now it has the potential to derail the entire war. Without external resources and, in the future, internal resources there is very little hope of winning the conflict.

Not meant to be a plug but you can read my full take on it here

I'll be sending my post to that email addresses you provided as well.

I don't see what's unreasonable about expecting an oil-rich nation like Iraq to start taking responsibility for rebuilding their own country. At some point, isn't "we're in till we win" just another way of saying to the Iraqis "don't worry about getting your house in order, we'll keep pumping troops and money in no matter how little progress you make"? Seems to me that's the way you create client states, not representative governments.

Hearing things like this back in July makes me suspicious that's what may be happening from the Iraqi side:
"...some of Petraeus' aides, if not the general himself, have recently learned of rumors that Iraqi Prime Minister Ibrahim Jaafari doesn't want his army to be well-trained. A leading Shiite, Jaafari reportedly fears that if the U.S. troops leave Iraq, the insurgents will crush all resistance and hoist the Sunnis back to power. Since the Americans have said they will leave once the Iraqi security forces are self-sufficient, Jaafari figures it's best to keep that day at bay. This could explain why many Iraqi units lack such basic materials as reliable weapons, ammunition, and sufficient food and bedding gear. One of Petraeus' aides hit the roof when he heard this rumor of Jaafari's recalcitrance a few weeks ago. This may be why Rumsfeld seemed more perturbed than usual after his meeting with Jaafari in Baghdad this week. It may be why, for the first time, he brought up the subject of eventually pulling out. "

Saddam is gone. A new elected government is slated to come into power soon. We've poured $18 billion into the country with apparently little effect ("still a shambles"), and the rest of the world isn't interested in helping out either, if the contribution numbers are correct. This seems as good a time as any to re-evaluate exactly what our mission in Iraq is, if there is anything meaningful left which can realistically be achieved. The answer may well be "not much," in which case turning off the aid tap seems like a reasonable first step.

"I don't see what's unreasonable about expecting an oil-rich nation like Iraq to start taking responsibility for rebuilding their own country."

The amount so far spent on non-military reconstruction is considerably less than the damage done during the invasion phase alone.

If you think you have the right to invade countries in order to improve their government, you ought also to admit the obligation to pay the costs you impose on them.

Nothing wrong with this.

It should be (but apparently is not) axiomatic that democracacy cannot work if the people do not want it very VERY badly.

Bush is basically saying to Iraq, "If you really want democracy, the time to put your money where your mouth is has come. We have shed as much blood as we are willing to to give democracy to those whose interest in it seems at best sketchy and opportunistic. Good luck. We've tried harder than any one else would have to give you what you really must give yourselves.

Whatever failures you endure from here on out cannot be blamed on an indifferent and autocratic government. You own them, and you cannot blame us, or Baathists, or anyone else."

If the Iraqi's can pay for it they will. Problem is that funding is in constant danger and not enough.

Cutting of our funding worsens the situation.

"If you think you have the right to invade countries in order to improve their government, you ought also to admit the obligation to pay the costs you impose on them."

I guess it depends on whether or not you see removing Saddam as delivering a benefit to the Iraq people. How much does removal of a brutal dictatorship go for these days, on average? Or of an American life given to defend the right to self-government of the Iraqis?

Our debt to Iraq has been paid, with blood in many cases. I agree with Randal: the Iraqis must come to realize that their destiny is in their hands now, not ours. We will be there to assist and help, but that help cannot be a panacea for their country's problems.

Re: comment #5, John Quiggin:

What sources are you referencing regarding the monetary value of the damages sustained during the initial invasion? Without sustantiation, I cannot agree with your supposition that the invasion caused more damage than the construction projects have replaced.

From reading prior posts at this site, especially the fine posts "Good News from Iraq" by Arthur Crenkoff, it seems that most of the repair and replacement projects involve long-neglected infrastructure that was in disrepair well before the invasion. Many of the projects are actually first-time construction projects, building infrastructure that didn't previously exist, like new water and sewer systems, power grids and generating capacity where none existed before.

I can think of two good reasons for the Bush administration to say there will be no additional funding. The first is because the Iraqi’s are tough negotiators. Everything always goes down to the wire before someone blinks and an agreement is reached in Iraq. If we tell them we are willing to provide extra money, they will certainly be willing to take it.

The second is that unless the money is urgently needed before next November there is no reason to give Democrats additional ammunition for the 2006 congressional elections.

Iraq was busted when we got there. Saddam hadn't done anything for the infrastructure for years while he was busy building palaces and going to war with Iran and Kuwait. Baghdad had electricity but the rest of the country had neither electricity nor running water.

Now, the country has been given a functioning democracy and a constitution to do with what they want. They have been given courts and police and soldiers who are trained and not obviously in the hire of anyone. They have been given an infrastructure throughout the country to provide electricity (although Iraqi's themselves keep stealing the cables to sell on the black market), and in a lot of places that never had it before they have running water.

And they have all that lovely oil that they can use to build and rebuild anything their little hearts' desire if they can just figure out how to pump it without the Americans being around to supervise.

I don't think the deal was that we would stay until we could make Iraq synonymous with pastoral rural Maryland. It took us 250 years of getting up and going to work in the morning to achieve what we've got, and if that's what the Iraqi's expect us to deliver to them then they're expecting just a little bit too much. Especially since they seem to want it for free.

I expect the Iraqi's to start getting up and going to work in the morning and building their own country into what they want it to be. If they want it so that no one has indoor toilets, that will be their decision, but I don't see that it's incumbent upon America to deliver them to the whole country. If they think they must have electricity to run their air conditioners, then that seems a perfectly logical goal to me, but the Iraqi's themselves need to start figuring out how to make it happen. It's really not America's problem to provide air conditioning to Iraq -- it's not part of that whole "war on terror" thing that's supposed to be protecting us from another 9/11.

And if there are still terrorists and insurgents and assorted other bad-guys lurking around in Iraq, we have bad guys here too, and we face them and fight them, and lock them up or kill them. I expect the Iraqi's to start fighting their own war against terrorism and would really love to see a little bit more of a "give me liberty or give me death" attitude than lots of tears of remorse and grief and not much else.

It seems to me that when we've started negotiating with the same "insurgents" who were shooting at American soldiers yesterday, and urging them today to be a part of the government tomorrow, the time has come to say "adios" and mosey on down the road to the next place where we can sit a spell and get to know the neighbors: either Syria or Iran.

How else will we pay for the "bridge to nowhere" and Bush 41's failure to veto any bills whatever during his two terms so far?

No other President has gone through even one term without vetoing any bills whatever.

The "W" is for "Where do I sign?"

A.L., I agree the defunding is a bad idea. I'd also agree (pace Quiggin) that we should (more or less) fix what we broke, and I'm not sure how well that's happened. I think your "troop moral" issue is the strongest talking point and I would encourage people to use it if they are writing to the White House.

But I'm not sure I'd accept the characterization of "leaving the troops in" - the troops will be home in substantial numbers by the end of this year, and it sounds like the spending levels won't decrease in this time.

You seem to imply that it is possible in effect to "buy off" the insurgents - I think there is a respectable case to be made that the only thing which will "buy off" the (native) insurgents is a sufficient stake in the political establishment in Iraq (and what will "buy off" the foreign AQ element is precisely... nothing).

I will reiterate my previous remarks on this subject. The problem is that there is a substantial, bipartisan consensus that the funding should stop - or rather, the "butter for Iraq but no butter for my constituents" is a non-starter for congress critters on both sides of the aisle. There is not sufficient political capital anywhere in Washington to change this.

So while I agree it's dumb, and arguably morally vacant, I'm having a hard time working up actual outrage, partially because given the political landscape I can't muster any surprise.

Welfare to work.

It did a good job in America.

It can work in Iraq.

Great post. It goes directly to my thoughts and disgust w/ this administration on the issue of competency.
Much of the infrastructure of Iraq was under severe strain due to the embargo which effected parts and maintainance in a harsh climate(ask a tanker or helicopter pilot whose served there to understand)for a civilian economy and society. When we told the Europeans we would not let them help because of their opposition to the invasion we did a good job of cutting off our nose to spite our face as much of the infrastructure had come from Europe even when Saddam was our friend(?)- the time he invaded Iran. With the subsequent lack of troops to secure order and arms depots, you know that messy thing Rumsfield calls democracy, and the strategy the flypaper trap of having an open border so as to kill Jihadists we openly allowed the jihadists to attack the economic infrastructure. they had no choice strategically or tactically because they cannot match our firepower in an traditional battle. so now we are just going to let the country rot by not rebuilding....
Welcome to Bush world
Everyone calling for us to leave is IMO wrong, but if we do not right the ship we may be forced to cut and run to keep the Army and Marines from becoming a class 4 fighting force(the point I think Murhta is making).

I guess it depends on whether or not you see removing Saddam as delivering a benefit to the Iraq people. How much does removal of a brutal dictatorship go for these days, on average? Or of an American life given to defend the right to self-government of the Iraqis?

Negotiations such as these are generally held prior to delivery of product or service.

Perhaps next time you can work these petty details out in advance.

Bush 41 served one term 1989-1993.

Perhaps next time you can work these petty details out in advance.

Petty details to be worked out with Iran: give up your nukes, or die.

OK, how about a middle position (sure to get brickbats from both sides):

The move is in the right strategic direction, but tactically incorrect.

Part of fixing Iraq is to unwind the socialist part of Saddam's one party state. Things like energy subsidies distort the local economy, are a source of corruption and an incentive to coopt the political apparatus.

External subsidies are also a source of distortion and corruption. They replace what should be done by local initiative (see, for instance, in another domain the effect of food relief on local agriculture). They are also a source of corruption, potentially even worse since there are no visible local losers when cheating occurs.

This all argues for removing our development aid. HOWEVER, free markets also thrive on predicatability. Driving the aid budget down to zero with little notice is the wrong way to do it. (Caveat that there might have been some heads-up to the Iraqi political sector that I don't know about.)

It would be better to have an openly known schedule on which we will draw down the rebuilding support, and the Iraqi government and people need to take it over. Particularly, we need to make certain that we aren't subsidizing the capital costs of projects that won't be able to support themselves in the 'natural' economy of the country, or getting drawn into subsidizing those operating expenses.

So the economic situation is a different game from the military, Marc. In the latter, we should give Al Qaeda in Iraq, and the insurgents, the certainty that we are there until they are dead or accept defeat. In the former, we should give the certainty that our external influence over the economy will be disappearing in a known fashion over time, requiring and enabling local alternatives to stand up in a free market.

"Negotiations such as these are generally held prior to delivery of product or service. "

With whom did you have in mind? Saddam, perhaps?

I find the underlying idea that dictators may not be removed without receiving clear approval from the populace being oppressed to be both astounding and morally bankrupt.

If the Iraqis were presumably so upset about his removal, they've had more than one opportunity to freely elect him back into office.

Tim Oren makes sense. If our goal is a democratic state, the top-down economic model of most oil rich countries is going to be one of the chief obstacles. Government to government aid is most likely to strengthen the economic power of the state.

Tim: (see, for instance, in another domain the effect of food relief on local agriculture)

I think this is what Tim is referring to:

Another problem is the gradual withdrawal of food aid. More than half of the families in Iraq still receive a monthly food parcel of basic supplies. Oliver Burch says this legacy of the oil-for-food programme in the long years of sanctions is expensive, and distorts the market. 'Farmers aren't growing wheat, because there's no market for it,' he says.

The food supply issue is particularly troubling because (a) nobody wants to cut off food to Iraqis and (b) the cost of food is fueling inflation.

But I would disagree with Tim as to whether Bush is telegraphing US intentions well in advance. In the Summer of 2003, Congress appropriated 18 billion for reconstruction, of which there is still 8 to 9 billion, which will be gone in 12 to 18 months. Bush is saying don't expect anymore when that's gone.

The linchpin still appears to be security, Iraq's economy will probably take off once security improves.

I find the underlying idea that dictators may not be removed without receiving clear approval from the populace being oppressed to be both astounding and morally bankrupt.

And I find comments misusing the phrase "morally bankrupt" to be very tiring.
But regardless, you asked.

How much does removal of a brutal dictatorship go for these days, on average?

And I responded. How much indeed?

Davebo - And I find commenters who use throwaway one-liners equally tiresome, so I guess that makes us even.

I liked PD's points. I wonder if the NGOs have learned anything after Bosnia and Afghanistan on how to moderate the effect of aid on local economies? It appears not.

As far as funding, there's nothing to say that a supplemental budget bill can't be used to continue funding if there's sufficent will to do so when the current aid runs out, but as lewy14 put it well, I can't see where the political capital for that would come from, especially in an election year. A wildcard would be if the incoming Iraqi government made a direct appeal for aid to be continued, though I expect the odds of that happening to be remote: the new government will likely want to show themselves as being as independent of the U.S. as possible for political as well as national pride reasons. Coming hat in hand to the U.S. Congress for more money is something they'd want to avoid if at all possible.

.
It is the role of the loyal opposition in Canada .>+

AL, reading (the majority of) the comments above, and noting the lack of any echo of your concerns in the pro-war blogosphere, I think you should recognise the nature of the policy you've supported thus far. The comments are pretty typical of the thinking that has driven the war throughout, and including the latest decision, which you correctly describe as "delusional".

A minor illustration (one of many) is this report indicating that US forces are consuming more Iraqi oil than the entire city of Baghdad, a per person ratio of 40 to 1.

http://www.salon.com/news/feature/2006/01/17/iraq_oil/

Et, George Packer in Assassins Gate estimated the cost of immediate postwar looting alone at $12 billion. As noted here looting was encouraged by US and British forces, condoned by the Administration ('freedom is messy') and cheered on by pro-war bloggers. Even if this had not been the case, the Geneva conventionsput responsibility for such things clearly on occupying forces.

The damage from "shock and awe" was almost certainly as much again, though i've never seen an accounting.