from Follow the Money

Find a way to spend the $18 billion in Iraq!

October 8, 2004

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I have a certain interest in the topic, since in my first and so far only foray into oped writing, I supported the Bush Administration’s call for $20 billion in US grant aid for Iraq (in the end, congress authorized $18.4 billion). It made sense to me to mobilize the US’s financial power to try to win the peace in Iraq with dollars and dinar, not bullets. I say financial power consciously -- right now, the US is borrowing from Japan and China to provide grant aid to Iraq. Or it would be if the U.S. were actually spending any of the aid package in Iraq. Not only has the US spent a tiny fraction of the total, only $1.2 billion, but -- as Kevin Drum noted using this CSIS report --only a tiny fraction of that, $270 millon, actually has actually been spent in Iraq. $270 of $18.4 billion, after more than a year. That is pathetic. $18 billion is a lot of money for a country like Iraq; its annual GDP is probably somewhere between $20 and $30 billion. Given, Iraq’s population of roughly 25 million, $18 billion works out to be something like $750 per Iraqi. If we had simply used the existing food ration cards as the basis for a distribution system to provide a one off $100 payment for every Iraqi (marketed as an advance on their future oil revenues), it would have put $2.5 billion of purchasing power directly in Iraqi hands. Admittedly, that just supports consumption and does nothing to rebuild/ rehabilitate Iraq’s infrastructure. But it does suggest that it would not have been hard to put more than $270 million into Iraqi hands. I can see why Hagel and Lugar are not happy.

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