IRAQ
Strike Two

This morning, President Bush will make the second of three planned
speeches on Iraq prior to the December 15 elections -- part of what the
Associated Press deems a "public relations campaign" meant to "shore up
slumping public support for the war." His address today will focus on
reconstruction and Iraq's economy. But rather than reassuring Americans
that he recognizes the reality of the challenges we face in Iraq, he
plans to tout purported economic progress and "to highlight rebuilding
of electrical plants, schools, hospitals and businesses." President
Bush is ignoring the big picture. Iraq's reconstruction -- a behemoth
effort on par with the post-World War II Marshall Plan -- is simply not
achieving its goals. Iraq's economy remains weak and beset by
unemployment; basic necessities like potable water and sewage treatment
are scarce; and there remains little evidence that the Bush
administration is prepared to shift course to reverse these trends.

ECONOMIC WOES: President Bush is expected to point today to Iraq's per
capita gross domestic product, which "rose to $942 in 2004 and is
expected to rise to more than $1,000 this year," as a sign of the
country's economic progress. But as Brookings Institution scholar
Michael O'Hanlon argues, "Growing GDP is good for those with access to
the twin golden rivers flowing through Iraq - not the Tigris and
Euphrates, but oil revenue and foreign aid. The rest of the economy is,
on the whole, weak." Unemployment rates hover near 40 percent, meaning
"the insurgency will always find fresh recruits," in Sen. Joseph
Biden's (D-DE) words. And as "the money runs out on the $30 billion
American-financed reconstruction of Iraq, the officials in charge
cannot say how many planned projects they will complete, and there is
no clear source for the hundreds of millions of dollars a year needed
to operate the projects that have been finished." Moreover, serious
challenges remain: "In its September World Economic Outlook, the IMF
also notes that Iraq's new government 'faces daunting medium-term
challenges, including advancing the reconstruction of the country's
infrastructure, reducing macroeconomic instability and developing the
institutions that can support a market-based economy.'"

INFRASTRUCTURE WOES: U.S. goals for electricity and oil infrastructure
reconstruction have not been met. State Department figures show that
power generation, "currently at 4,600 megawatts, has only recently
exceeded the prewar level of 4,400 megawatts. That's still shy of the
6,000 megawatt objective stated by the Coalition Provisional Authority
in September 2003." Most Iraqis continue to have only intermittent
access to electricity, and typically "for just half the day." Daily oil
production in Iraq is currently around 2.14 million barrels -- not only
"less than the average 2.5 million barrels before the 2003 Iraq War,"
but down to the lowest levels in a decade, according to the
London-based Center for Global Energy. "The sluggish production is due
to pipeline attacks by insurgents, poor infrastructure, and lack of
refineries."

WHITE HOUSE WILL NOT KEEP PROMISES TO IRAQIS: Last month, Stuart Bowen,
the special inspector general for Iraq reconstruction, reported that
the "administration promises to use $18 billion Congress allocated to
rebuild water, electricity, health and oil networks to prewar levels or
better are running into cold reality. 'We are going to provide
something less than that,' he said." This position is reflected in last
week's "National Strategy for Victory in Iraq." In what the Washington
Post called "a striking rollback from an earlier, more optimistic
position, the [strategy] says Iraq has the 'potential' to become
prosperous and self-sustaining -- without specifying a time frame."
(This contradicts statements by Deputy Defense Secretary Paul D.
Wolfowitz is 2003 that Iraq's oil revenues "could bring between $50 and
$100 billion over the course of the next two or three years. ... We're
dealing with a country that can really finance its own reconstruction,
and relatively soon.") These are the harsh facts faced by millions of
ordinary Iraqis "who are trying to live a more normal life with the
curse of Saddam Hussein taken away, but with a terrible disappointment
of the expectations that the removal of Saddam Hussein generated have
not been lived up to."

IGNORING LINK BETWEEN SECURITY AND RECONSTRUCTION: The "National
Strategy for Victory in Iraq" released last week ignores the direct
link between security and reconstruction. Loathe to acknowledge the
heavy impact of widespread insurgent violence, the White House document
states that "Iraq is struggling to reach its economic potential due
largely to decades of dictatorship and neglect." This is misleading.
After three years and billions of dollars worth of reconstruction
efforts, it is no longer appropriate to lay the blame for Iraq's
economic woes on the imprisoned tyrant. The prime cause of current
reconstruction woes is the Iraq insurgency, which is not being
countered effectively by the president's current military strategy.
Stuart Bowen's report noted that "more than a quarter of all
reconstruction funds had been spent on security costs to protect
contractors, hundreds of whom have died in Iraq." And as long as Bush
administration refuses to shift our military strategy, both Iraq's
economy and security will suffer. As the International Crisis Group has
pointed out, "Economic hardship and violence (political and criminal)
feed on each other: heightened popular dissatisfaction and unemployment
swell insurgent ranks and the growing insurgency further hampers
development. Without genuine reconstruction and a sustained recovery
plan, any political success will be short-lived."