Big Iraqi Surplus, Big American Problem

It is an election year, and one-third of the senators and the all the members of the House of Representatives are scrambling to keep their jobs. With battle lines clearly drawn, the natural inclination is to castigate the other party, and in that regard this campaign is no different from previous ones. But in a rare election year display of bipartisan agreement, Senators Carl Levin, a Democrat, and John Warner, a Republican, are both heaping equal amounts of invective on the Iraqi government's hoarding billions of dollars of oil revenue.

The U.S. Government Accounting Office reported this week that high crude oil prices will give Iraq a huge surplus this year, perhaps as much as $79 billion cumulatively. Even with the price of oil now easing, next year's revenues will be substantially more than they were before the war, and Iraq's surplus will grow still further.

Now, the complaint isn't that Iraq is making money from selling oil. Indeed, one of the assumptions six years ago was that deposing Saddam would not only emplace a democratic government but would also liberate oil revenues so that they could be used for the good of all Iraqis---rather than just for the Sunni elite---and for the reconstruction that would redress the inevitable destruction of war. At the time, nobody anticipated the manifold increase in the price of crude oil, and so the projections of how much money would be available to the new Iraqi government were stupendously conservative.

But Levin and Warner complain that the Iraqis are just not spending the money. Last year, Iraq budgeted about $12 billion for major infrastructure projects and to deliver utilities like water and electricity to the people, but it spent only about a third of that. Meanwhile, the United States is pouring an enormous amount of capital into Iraq, and progress is being impeded by the slow pace of redevelopment.

Success in any war requires the employment of adequate military resources, but success in a conflict like that in Iraq calls for more than mere physical security. Among many other things it requires the training of an indigenous armed force, the delivery of essential services, and the establishment and maintenance of a viable economic sector. The slow pace of redevelopment causes a number of unattractive outcomes, including overburdening the American operation and forcing us to remain in Iraq longer than we otherwise would.

For its part, the Iraqi government says that it is trying hard to shoulder more of the burden of reconstruction, but that it is hampered by restrictive policies designed to eliminate corruption and by an immature bureaucracy that has little experience in administering vital reconstruction programs.

All this is demonstrably true, but it does little to mollify critics or rectify the problem. So, even as things are improving dramatically in Iraq, it is not surprising that many people have become frustrated with the pace of progress and even supporters are now vocal about it. When this is accompanied by a weakening American economy and energy-driven inflation, the observation that Iraq has a gigantic surplus of money from oil revenues converts frustration into impatience.

There is a lesson here of wide applicability. The health of every relationship---an alliance, a partnership, a marriage---depends on the notion of fairness. Burdens and sacrifice must appear to be shared, and relationships collapse when it seems that one party can do more but doesn't. We need to pay as much attention to getting the Iraqi government and economy in shape as we do to training its military establishment, and failing to do so will result in increasing impatience, irritation, anger and ultimately abandonment of the mission.