Limited Progress Has Been Made in National Reconciliation

Since GAO last reported on the status of the 18 Iraqi benchmarks in  September 2007, the number of enemy attacks in Iraq has declined. While  political reconciliation will take time, Iraq has not yet advanced key  legislation on equitably sharing oil revenues and holding provincial  elections. In addition, sectarian influences within the Iraqi ministries  continue while militia influences divide the loyalties of Iraqi security  forces. United States and Iraq Lack Clear Strategies for Key Efforts

Three GAO reports illustrate a recurring problem with U.S. efforts in  Iraq—the lack of strategies with clear purpose, scope, roles and  responsibilities, and performance measures. Our reports assessing (1) the  National Strategy for Victory in Iraq (NSVI), (2) U.S. efforts to develop  planning and budget capacity in Iraq’s ministries, and (3) U.S. and Iraqi  efforts to rebuild Iraq’s energy sector show that clear strategies are needed  to guide U.S. efforts, manage risk, and identify needed resources. First, it only partially identified the agencies responsible for  implementing key aspects of the strategy. Second, it did not fully address  how the United States would integrate its goals with those of the Iraqis  and the international community, and it did not detail Iraq’s anticipated  contribution to its future needs. However, U.S.  efforts lack an overall strategy, no lead agency provides overall direction,  and U.S. priorities have been subject to numerous changes. Reconstructing Iraq’s Energy Sectors

The weaknesses in U.S. strategic planning are compounded by the Iraqis’  lack of strategic planning in its critical energy sector. Iraqi and International Contributions Have Played a Limited Role in Rebuilding Iraq

From the onset of the reconstruction and stabilization effort, the U.S.  strategy assumed that the Iraqis and the international community would  help finance Iraq’s development needs. Iraqi Government Has Spent a Small Portion of Its Funds on Reconstruction

The government of Iraq allocated $10 billion of its 2007 revenues for  capital projects and reconstruction, including capital funds for the  provinces based on their populations. Iraq’s ministries, for  example, spent only 24 percent of their 2007 capital budgets through mid- July 2007. Of this amount, about $11  billion is in the form of loans. This is a work of the U.S. government and is not subject to copyright protection in the  United States.
Why GAO Did This Study

Since 2003, the Congress has obligated nearly $400 billion for U.S. efforts in Iraq, of which about $40 billion has supported reconstruction and stabilization efforts. Congressional oversight of this substantial investment is crucial as the Administration requests additional military and economic funds for Iraq. This testimony summarizes the results of recent GAO audit work and proposes three areas for which continued oversight is needed: (1) progress in improving security and national reconciliation, (2) efforts to develop clear U.S. strategies, and (3) Iraqi and international contributions to economic development. We reviewed U.S. agency documents and interviewed agency officials, including the departments of State, Defense, and Treasury; and the U.S. Agency for International Development; the UN; and the Iraqi government. We also made multiple trips to Iraq as part of this work.

What GAO Found

Since GAO last reported in September 2007, on the status of the 18 Iraqi benchmarks, the number of enemy attacks in Iraq has declined. While political reconciliation will take time, Iraq has not yet advanced key legislation on equitably sharing oil revenues and holding provincial elections. In addition, sectarian influences within Iraqi ministries continue while militia influences divide the loyalties of Iraqi security forces. U.S. efforts lack strategies with clear purpose, scope, roles, and performance measures. The U.S. strategy for victory in Iraq partially identifies the agencies responsible for implementing key aspects of the strategy and does not fully address how the United States would integrate its goals with those of the Iraqis and the international community. U.S. efforts to develop Iraqi ministry capability lack an overall strategy, no lead agency provides overall direction, and U.S. priorities have been subject to numerous changes. The weaknesses in U.S. strategic planning are compounded by the Iraqi government's lack of integrated strategic planning in its critical energy sector. The U.S. strategy assumed that the Iraqis and international community would help finance Iraq's reconstruction. However, the Iraqi government has limited capacity to spend reconstruction funds. For example, Iraq allocated $10 billion of its revenues for capital projects and reconstruction in 2007. However, a large portion of this amount is unlikely to be spent, as ministries had spent only 24 percent of their capital budgets through mid-July 2007. Iraq has proposed spending only $4 billion for capital projects in 2008, a significant reduction from 2007. The international community has pledged $15.6 billion for reconstruction efforts in Iraq, but about $11 billion of this is in the form of loans.