This report provides data through September 30, 2006 (the end of FY2006), at which point U.S. aid to Iraq had surpassed U.S. aid to Germany and Japan during the post-World War II occupations. Aid allocations for Iraq appropriated from FY2003 through FY2006, all of which is grant assistance, totaled $35.7 billion. Of this, about $11.8 billion (33%) was for the repair and improvement of critical economic infrastructure. Initial funding, primarily under the Government and Relief in Occupied Areas (GARIOA) program was directed primarily at humanitarian relief. Some military aid grants, related to the new security environment, was provided in the last Marshall Plan years. The Marshall Plan provided the first funding for Germany with the specific objective of promoting economic recovery. Post-World War II Assistance to Japan

Total U.S. assistance to Japan for the years of the occupation, from 1945-1952 was roughly $2.2 billion ($15.2 billion in 2005 dollars), of which almost $1.7 billion was grants and $504 million was loans. Over three-quarters (77%) of these funds were provided through GARIOA grants. Most of the remainder (i.e., 23%) was $490 million in related funds that Japan repaid and is classified as a loan. Of the negotiated $2.0 billion in current year dollars ($13.4 in constant 2005 dollars), $655 million ($4.3 billion in constant dollars) or 32%, went to categories that would mostly contribute directly to economic reconstruction, that is, industrial materials, including machinery and raw goods ($310 million or 15%); petroleum, oils, and lubricants ($95 million or 5%); and transportation, vehicles, and equipment ($249 million or 12%). Current U.S. Assistance to Iraq

U.S. assistance to Iraq appropriated from FY2003 through FY2006 totaled some $35.7 billion. Another $8.3 billion, representing about 23% of total aid, has been allocated to assist democratization (including civil society), education and health and the expansion of the private sector. The remaining $15.5 billion in aid, nearly 44% of the total, is targeted at bolstering Iraqi security. Comparative Overview

While the total amount of aid to Iraq—roughly $36 billion—now appears to be almost a fifth higher than that spent during the occupation of Germany and somewhat more than double that during the occupation of Japan, the total amounts and percentages of U.S. assistance targeted specifically at economic infrastructure reconstruction for Germany and Japan over the FY1949-FY1952 period appear to be lower than the amounts and percentages currently directed at such reconstruction in Iraq. In constant 2005 dollars, U.S. aid targeted at economic infrastructure reconstruction was some $9.3 billion in Germany, or about one-third of total U.S. assistance to that country, and some $5.2 billion in Japan, or a little under 40% of total U.S. assistance there. Food and housing shortages were critical in both Germany and Japan for several years after World War II, and early U.S. assistance focused on providing a subsistence level of nutrition. In Iraq, humanitarian aid has been a minor part of the assistance program because there was little need for food or other immediate relief assistance for most of the population. Observers may note that the Iraqi people and the international community most likely have much higher expectations of what the United States should contribute to economic reconstruction in Iraq than what the United States was expected to contribute to Germany and Japan, as the disparities are much greater between the United States and Iraq than between the United States and its World War II adversaries. The existence of an insurgency in Iraq which deliberately sabotages the economy and reconstruction efforts is an important consideration in comparing Iraq's economic reconstruction requirements with those of post-war Germany and Japan, which had no resistance movements.
As of the end of FY2006, U.S. aid to Iraq had surpassed U.S. aid to Germany and Japan during the post-World War II occupations of those countries. This report compares aggregate data on U.S. assistance to Iraq through FY2006 with U.S. assistance to Germany and Japan during the seven years following World War II. U.S. aid allocations (all grant assistance) for Iraq appropriated from 2003 through 2006 total $35.7 billion. About $11.8 billion (33%) went for economic infrastructure assistance. The remaining $23.8 billion was targeted at bolstering Iraqi security ($15.5 billion) and traditional political, social, and economic reform assistance ($8.3 billion). A higher proportion of Iraqi aid has been provided for economic reconstruction of critical infrastructure than was the case for Germany and Japan. Total U.S. assistance to Iraq as September 30, 2006 (the last day of FY2006), was about a fifth more than total assistance (adjusted for inflation) provided to Germany—and somewhat more than double that provided to Japan—from 1946-1952.
For Germany, in constant 2005 dollars the United States provided a total of $29.3 billion in assistance from 1946-1952 with 60% in economic grants and nearly 30% in economic loans, and the remainder in military aid. Beginning in 1949, the Marshall Plan provided $1.4 billion with the specific objective of promoting economic recovery. Prior to that, U.S. aid was categorized as Government and Relief in Occupied Areas (GARIOA). Adjusting for inflation, the constant 2005 dollar total for Marshall Plan aid was $9.3 billion, of which 84% billion was grants and 16% was loans. (West Germany eventually repaid one-third of all U.S. assistance it received.)
Total U.S. assistance to Japan for 1946-1952 was roughly $15.2 billion in 2005 dollars, of which 77% was grants and 23% was loans. Most of these funds were provided through GARIOA grants. Japan repaid $490 million of the total postwar assistance. Of the $2.2 billion in total aid, an estimated $655 million, or almost a third, went to categories that would mostly contribute directly to economic recovery (industrial materials, including machinery and raw goods; petroleum and products; and transportation, vehicles, and equipment). Most of the rest went for agricultural equipment, foodstuffs, and food supplies with smaller amounts spent on medical and sanitary supplies, education, and clothing.
U.S. assistance to Germany and Japan largely consisted of food-related aid because of severe war-induced shortages and the need to provide minimum subsistence levels of nutrition. In Iraq, humanitarian aid has been a minor part of the assistance. Expectations also have changed. Countries today have much higher expectations of what the United States should contribute to reconstruction in Iraq relative to what was expected following World War II. Germany and Japan also are larger than Iraq—both population and size of their respective economies—and the extent of war damage to each country's industrial capacity was different. Iraq also faces an insurgency that deliberately sabotages the economy and reconstruction efforts, whereas there were no resistance movements in either Germany or Japan.
This report will not be updated.