Order Code RL31833
CRS Report for Congress
Received through the CRS Web
Iraq: Recent Developments
in Reconstruction Assistance
Updated October 2, 2003
Curt Tarnoff
Specialist in Foreign Affairs
Foreign Affairs, Defense, and Trade Division
Congressional Research Service ˜ The Library of Congress

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Iraq: Recent Developments in Reconstruction
Assistance
Summary
Large-scale reconstruction assistance programs are being undertaken by the
United States following the war with Iraq. To fund such programs, Congress
approved on April 12, 2003, a $2.48 billion Iraq Relief and Reconstruction Fund in
the FY2003 Supplemental Appropriation. On September 7, President Bush proposed
a $20.3 billion reconstruction aid package, as part of an $87 billion FY2004
supplemental request. Other donors are expected to provide aid as well; their
contributions to date are estimated at $1.5 billion, and a donor conference on October
24 is expected to raise more. Security Council Resolution 1483, approved May 22,
allows the United States to draw on Iraqi oil sale profits for relief and reconstruction
purposes.
Former diplomat L. Paul Bremer III is the head of civilian administration in
post-war Iraq. Under him, the Coalition Provisional Authority (CPA), staffed by
officials from the U.S. government and other nations, is implementing assistance
programs.
After an initial period of coalition-led aid activities, existing Iraqi
ministries, nongovernmental organizations (NGOs), and international organizations
(IOs) are expected to assume some of the burden.
U.S. policymakers are negotiating with European allies the terms of a new U.N.
Security Council Resolution that may provide a larger role for the United Nations in
Iraq. One U.S. objective is to gain greater international military and financial
cooperation in the Iraq stability and reconstruction effort.
Criticisms of
Administration reconstruction efforts include accusations of inadequate security, a
failure to rapidly establish an Iraqi-led government, prevention of a larger multilateral
role, excessive reliance on the U.S. military, and a lack of openness regarding plans
for the reconstruction process.
The report will be updated as events warrant. For discussion of the Iraq political
situation, see CRS Report RL31339, Iraq: U.S. Regime Change Efforts and Post-War
Governance. See also CRS Report RL32090, FY2004 Supplemental Appropriations
for Iraq, Afghanistan, and the Global War on Terrorism: Military Operations,
Reconstruction Assistance, and Other Activities.

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Contents
FY2004 Emergency Supplemental . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Funding for Assistance: Recent Developments . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
U.S. Assistance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Oil Resources and Oil-for-Food Program (OFFP) . . . . . . . . . . . . . . . . . . . . . 3
Debts and Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Other Donors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
U.S. Aid Policy Structure in Iraq . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Security Concerns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
U.S. Response . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Reconstruction Assistance: Recent Developments . . . . . . . . . . . . . . . . . . . . . . . . 8
The Role of the United Nations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Background on Debate on U.N. Role . . . . . . . . . . . . . . . . . . . . . . . . . 11
Governance of Post-War Iraq . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Reconstruction Implementation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Reconstruction Contract Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Criticism of Reconstruction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Inadequate Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Slow Establishment of Iraqi-Led Governance . . . . . . . . . . . . . . . . . . . 17
Too Fast Establishment of Iraqi-Led Governance . . . . . . . . . . . . . . . . 18
Preventing the U.N. and International Community from Playing a Major
Role . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Inadequate Civilian Administration . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Excessive Reliance on the Military . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Lack of Clarity and Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

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Iraq: Recent Developments in
Reconstruction Assistance
Large-scale reconstruction assistance programs are being undertaken by the
United States in Iraq. This report describes recent developments in this assistance
effort. Given the rapidly-evolving situation concerning these aid programs, some of
these reported developments are based on press accounts. The report will be updated
as events warrant.1
FY2004 Emergency Supplemental
On September 7, the President announced he would submit to Congress a new
request for emergency spending for Iraq. The formal request was submitted on
September 17. The $87 billion request includes $20.3 billion for reconstruction
programs, a significant increase over previously appropriated sums.
Earlier funds have been used to support a broad range of humanitarian and
reconstruction efforts. The new request is intended to fund the most pressing,
immediate needs in Iraq, with the aim of having a noticeable impact on the two
greatest reconstruction concerns that have been raised since the occupation of Iraq
began — security and infrastructure. More than $5 billion would be targeted at
improving the security capabilities of the Iraqi people and government — including
training and equipment for border, customs, police, and fire personnel, and to
develop a new Iraqi army and a Civil Defense Corps. Enhanced efforts to reform the
judicial system would also be made.
Most of the remaining supplemental reconstruction request would go toward
rapid improvements in infrastructure, including electricity, oil infrastructure, water
and sewerage, transportation, telecommunications, housing, roads, bridges, and
hospitals and health clinics. The initiative is intended only to address the most
important needs; more long-term concerns in such areas of government reform,
agriculture, economic development, and education are not included in the
Administration request. A relatively small amount of funds — $353 million — have
been requested for programs designed to encourage the growth of the private sector
and jobs training, including establishment of an American-Iraqi Enterprise Fund.
Another $300 million is targeted on grassroots democracy concerns, including local
governance, civil society, human rights, and refugees.
Congress began holding hearings on the measure on September 18 and
continued to conduct hearings during the week of September 22. T h e S e n a t e
1 For detailed discussion of the Iraq political situation, see CRS Report RL31339, Iraq: U.S.
Regime Change Efforts and Post-War Governance.

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CRS-2
Appropriations Committee reported the measure, S. 1689, on September 30. It
provides the same level of funding as the request. Floor debate began in the Senate
on October 1. For more details on the legislation and the debate, including the issue
of providing loans in place of grants, see CRS Report RL32090, FY2004
Supplemental Appropriations for Iraq, Afghanistan, and the Global War on
Terrorism: Military Operations, Reconstruction Assistance, and Other Activities.
Funding for Assistance: Recent Developments
Until now, the eventual cost of meeting Iraq reconstruction needs has been
uncertain. Although in July, Ambassador Paul Bremer, the U.S. civil administrator
in Iraq, had said that total reconstruction costs could fall between $50 and $100
billion, a thorough accounting of possible costs was not expected to emerge until
World Bank/U.N. Development Program assessment teams had finished examining
the needs of 14 sectors of the Iraqi government and economy prior to an international
donors conference to be held in Madrid on October 23-24. Bank/UNDP estimates
are likely to establish the targets by which the adequacy of available resources will
be judged. Early press reports, although somewhat conflicting, suggest that the
Bank/UNDP assessments put the cost of reconstruction at $55 billion over four years.
However, it is not yet clear whether this figure includes oil and security needs, both
of which compose a significant portion of the Administration’s $20.3 billion
supplemental request for FY2004.2
A national budget for Iraq, formulated by Peter McPherson, the designated U.S.
advisor to the Iraqi Ministry of Finance, and covering the rest of 2003, was
announced on July 7. It called for expenditures of roughly $6.1 billion in addition
to providing for a Central bank currency reserve of $2.1 billion for a total
requirement of $8.2 billion. New oil revenue, taxes, and profits from state owned
enterprises would make up $3.9 billion of these costs. The remaining $4.3 billion
deficit would be covered by recently frozen and seized assets ($2.5 billion), the
Development Fund for Iraq ($1.2 billion), and already appropriated U.S. assistance
($3.0 billion). Taking into account previous expenditures ($1.2 billion), Iraq was
projected to have roughly $1.1 billion remaining at the end of December 2003.3
The new Administration FY2004 request suggests that available funds for Iraq
reconstruction are likely to run out by the end of 2003.4
In addition to new
appropriations, reconstruction costs may be supplemented by other sources of
funding, such as contributions from other donors, benefits of debt reduction or
rescheduling, and profits from oil resources. These sources of funding are discussed
below.
2 Interview with Paul Bremer, CNBC News, July 31, 2003. “Reconstruction Will Cost $55
Billion Over Four Years, Draft Shows,” Financial Times, October 2, 2003. “Assessments
Say Iraq Needs $55 Billion For Rebuilding,” New York Times, October 2, 2003.
3 See [http://www.cpa-iraq.org/Budget2003.pdf] for text of the budget.
4
“Urgent U.S. Aid for Coalition As Cost of Rebuilding Iraq Rises,” Financial Times,
August 30, 2003.

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CRS-3
U.S. Assistance
In the FY2003 emergency supplemental (P.L. 108-11), $2.48 billion was
appropriated for a special Iraq Relief and Reconstruction Fund for the purpose of aid
efforts in a wide range of sectors, including water and sanitation, food, electricity,
education, and rule of law. Of this amount, $743 million was allocated for relief and
$1.7 billion for reconstruction. The conference report gives the President control
over the Fund, and amounts may be transferred only to the Department of State, the
Agency for International Development (USAID), the Department of the Treasury, the
Department of Defense, and the Department of Health and Human Services, subject
to the usual notification procedures. The FY2003 supplemental also provides $489.3
million through the Department of Defense budget for repair of oil facilities.
U.S. Funds Committed to Iraq Relief and Reconstruction as of
6/30/03
($ millions)
Iraq Relief and Reconstruction Fund
2,475.0
DOD - Oil Repair*
502.5
DOD - Cost of CPA
599.0
Other Agency Funds**
529.2
Total
4,105.7
Source: 90-Day Update Report to Congress Pursuant to Sec.1506 of Emergency Wartime
Supplemental. July 14, 2003.
*Includes $13.2 million from Defense Cooperation Account.
**Includes USAID ($460.5million), Department of Treasury ($2.3 million), and Department of State
($66.4 million).
Up to October 1, $1.7 billion in FY2003 funds provided to USAID and the
Department of State has been obligated for relief and reconstruction, of which $1.1
billion is for reconstruction activities. Operational expenses for the Coalition
Provisional Authority (CPA), under the Department of Defense budget, were
projected to reach $599 million through September 2003.5
Oil Resources and Oil-for-Food Program (OFFP)
Until the start of the war, an estimated sixty percent of Iraqis received their food
supplies through the U.N.-supervised Oil-for-Food Program. Since the end of March,
the U.N. has taken direct control of the program, setting priorities for and directing
delivery of already contracted supplies. U.N. authority over the program was
extended for six months beyond the original expiration date of June 3, 2003, by the
U.N. Security Council resolution approved May 22. During this period the program
will be phased out, and surplus funds will be transferred to the new Development
5 Iraq Reconstruction and Humanitarian Relief, Weekly Update Number 1,USAID, October
1, 2003. 90 Day Update Report to Congress Pursuant to Sec. 1506 of Emergency Wartime
Supplemental, July 14, 2003.

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CRS-4
Fund for Iraq (DFI), under the control of the occupying powers. In mid-July, the
U.N. announced approval, in consultation with the United States, of $2 billion in
projects using remaining funds from the OFFP, including $1 billion in oil industry
spare parts, $794 million for electric power, $54 million for water and sanitation, and
$30 million for youth and sports. Some contracts will reportedly go to France and
Russia.6
It has been expected that Iraq’s oil reserves will help it “shoulder much of the
burden for [its] own reconstruction.”7 Efforts are being made to quickly restore
Iraq’s oil production capacity; some oil exporting resumed in mid-June. The ability
of the United States to use oil reserves for more long-term reconstruction purposes
was assured by the May 22 Security Council resolution which ended sanctions. The
resolution shifts responsibility for oil profits from the U.N. to the United States by
establishing a Development Fund for Iraq held by the Central Bank of Iraq. The
resolution gives authority for disbursal of the funds to the United States and its allies,
in consultation with the Iraqi Governing Council. A Program Review Board is
intended to prioritize and recommend how DFI resources are used. Although
composed of coalition, multilateral bank, and U.N. officials, the multilateral bank
members have no vote and the U.N. official serves only as an observer. Following
the direction of the Security Council, the U.N. transferred $1 billion in OFFP funds
to the Development Fund for Iraq. Further, concerns that questions about the
legitimacy of the Iraq authority would prevent companies from purchasing Iraqi oil
were alleviated by a clause in the U.N. resolution providing immunity for Iraqi sales
of oil under most circumstances.8
Oil production has been slowed by looting and sabotage. Iraq was expected to
sell $5 billion worth this year, $3.5 billion of which it was estimated could be
deposited in the Development Fund.
But these estimates, reportedly, may be
downgraded. Current rates of production are nearing 2 million barrels/day, but Iraqis
do not expect to reach the prewar level of 2.8 million barrels until spring. A 2.8
million barrels/day level might generate between $19 and $25 billion annually.9 At
the June 24, 2003 U.N./World Bank donor meeting, it was agreed that oil revenue
would be insufficient to cover Iraqi needs over the next few years. Prior to the war,
some had suggested that it would take as long as five years and cost billions of
dollars in investment before Iraqi oil production could meet its reconstruction
needs.10 However, Ambassador Bremer indicated at a Senate hearing on September
6 “Patten Urges U.S. to Back Donors’ Trust Fund for Iraq,” Financial Times, July 16, 2003.
7
Ari Fleisher, February 18, 2003. 90 Day Update Report to Congress Pursuant to Sec.
1506 of Emergency Wartime Supplemental, page. 4, July 14, 2003.
8 Although the resolution provided for an international advisory board to monitor the sale
and use of oil, resistance from the Iraqi oil community reportedly prevented the United
States from putting together a board. “Oil to Come Under Iraqi Control as U.S. Fails to
Form Advisory Board,” Financial Times, August 19, 2003.
9 See Petroleum section by Larry Kumins in CRS Report RL31944, Iraq’s Economy: Past,
Present, Future, pp. 17-23.
10 “Bremer Broaches Plans for Iraq’s Oil Revenue,” Washington Post, June 23, 2003. “Iraqi
(continued...)

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CRS-5
22 that he expected Iraq to produce sufficient oil in 2005 to take care of its basic
needs and provide additional funds for capital investment.11
Debts and Assets
The United States has sought to obtain support from creditors for Iraq debt
relief. Debt estimates vary widely; recently some in the Administration have put it
at as much as $200 billion.12 The Paris Club organization of creditor nations has
estimated Iraqi debt to its members at $21 billion and as much as $21 billion more
in interest. Of this amount, the United States is owed $2.2 billion. The London Club
of commercial creditors, multilateral banks, and the Gulf States are owed substantial
additional sums.13
Creditors have agreed to suspend repayment of debt until the end of 2004. But
the United States argues that any new Iraqi government should not be burdened with
debts associated with the policies of its previous ruler.14 Some large holders of Iraqi
debt, such as Russia, are more inclined to reschedule debt than to forgive it.
On March 20, President Bush issued an executive order confiscating non-
diplomatic Iraqi assets held in the United States. Of the total assets seized, an
estimated $1.74 billion worth were available for reconstruction purposes, including
salaries for civil servants. Another $795 million in assets located by the United
States in Iraq were also used for these purposes. These funds have, reportedly, been
exhausted.15 In addition, foreign governments are reported to hold an estimated $2.9
billion in seized or frozen assets.16 On August 29, Japan transferred $98 million in
frozen assets to the Development Fund for Iraq.
10 (...continued)
Oil Cash May Secure Rebuilding,” Financial Times, May 30, 2003. “Iraq Is Ill-Equipped
to Exploit Huge Oil Reserves,” Washington Post, June 4, 2003. “Expectations Weigh Heavy
on Man Who Must Get Oil Flowing Again,” Financial Times, July 18, 2003.
11 Testimony to Senate Appropriations Committee. September 22, 2003.
12 Paul Bremer, Testimony, House Foreign Operations Subcommittee, September 24, 2003.
13 “Baghdad’s Debt to Paris Club Set at $21 billion — Plus Interest,” Financial Times, July
12, 2003.
14 “G-7 Agrees that Iraq Needs Help with Debt,” Washington Post, April 13, 2003. “U.S.
Plans for Iraqi Economy Hit Friction,” Washington Post, April 11, 2003. “Restructuring,
not Forgiveness,” Financial Times, April 15, 2003.
15 Undersecretary for Defense Dov Zaheim. Testimony to Senate Foreign Relations
Committee, June 4, 2003. “Urgent U.S. Aid for Coalition As Cost of Rebuilding Iraq
Rises,” Financial Times, August 30, 2003.
16
90 Day Update Report to Congress Pursuant to Sec. 1506 of Emergency Wartime
Supplemental.

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CRS-6
Other Donors
Since March, U.N. appeals for postwar humanitarian relief to Iraq totaling $2.2
billion have been met with nearly $2 billion in pledges and contributions as of the
end of September.17
U.S. officials have sought to encourage international donor contributions, and
some form of support has been offered by about 61 countries. International
contributions pledged or received by September have amounted to $1.5 billion,
according to Ambassador Bremer.18 Among others, the U.K. has pledged roughly
$382 million in assistance; Japan $212 million. Early on, the European Union (EU)
agreed to provide 100 million euros for humanitarian relief agencies, but did not
announce plans with respect to reconstruction and long-term aid until recently. The
EU is now expected to pledge $232 million at the Madrid donor conference. Japan
is expected to pledge $1 billion. However, donors are said to be reluctant to
contribute to reconstruction because they have no say in where the funds are to be
allocated.19 The EU Commissioner for External Affairs Chris Patten has supported
establishment of a trust fund for Iraq to be administered by the World Bank that
would encourage contributions by other donors by keeping them outside the control
of the United States. Language establishing such a fund was reportedly being
discussed in conjunction with a broader Security Council resolution seeking to obtain
greater international cooperation.
U.S. Aid Policy Structure in Iraq
To prepare for the use of aid, a post-war planning office — the Office of
Reconstruction and Humanitarian Assistance (ORHA) — was established on January
20, 2003, by a presidential directive. On June 1, it was subsumed into the Coalition
Provisional Authority (CPA).20 While immediate overall responsibility for the war
and management of U.S. military activity in post-war Iraq belongs to the Commander
of U.S. Central Command, the CPA is responsible for administration of Iraq and
17 U.N. Office for the Coordination of Humanitarian Affairs. Summary of Requirements and
Contributions by Appealing Organization. September 30, 2003.
18 Down from $2.5 billion reported in the July 14, 2003, 90 Day Update Report to Congress
Pursuant to Sec. 1506 of Emergency Wartime Supplemental. This figure may also include
part of the U.N. appeal donations. Testimony of Paul Bremer to House Foreign Operations
Subcommittee, September 24, 2003.
19 “Patten Urges U.S. to Back Donors’ Trust Fund for Iraq,” Financial Times, July 16, 2003.
“U.S. Seeks Help With Iraq Costs, But Donors Want a Larger Say,” New York Times, July
14, 2003. “Europe Weighs Helping Out in Iraq, But Under Its Own Terms,” New York
Times, July 16, 2003. “Bush’s Plea for Iraq Aid Falls on Deaf Ears,” Financial Times,
September 25, 2003.
20 The former head of ORHA, Retired Army Lt. General Jay M. Garner left Iraq on June 1,
2003.

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CRS-7
implementing assistance efforts there.21 The Authority is headed by L. Paul Bremer
III, appointed by the President on May 6. He reports to Defense Secretary Rumsfeld.
The CPA is staffed by officials from agencies throughout the U.S. government as
well as personnel from other coalition member nations.22 It has eleven directorates
— oil policy, governance, operations and infrastructure, management and budget,
economic development, private sector development, civil affairs, interior affairs,
USAID, security affairs, and press and public affairs. A Council for International
Cooperation provides liaison with NGOs, donor countries, and U.N. agencies and
directs humanitarian affairs.
In July, the CPA opened a support office in
Washington, the Office of the CPA Representative, headed by Reuben Jeffrey III.
Security Concerns
The successful conduct of much relief and reconstruction work is contingent on
an environment of order and stability. As the battle phase of the war ended, however,
Iraq was besieged by looting and lawlessness. Six months into the U.S. occupation
violence persists against both U.S. forces and Iraqis cooperating with the occupation.
The August 19 bombing of the U.N. headquarters in Baghdad and the August 29
bombing of the Najaf mosque and assassination of the moderate Shiite cleric Al-
Hakim drew media and international attention to the failure of U.S. forces and the
CPA to cope with the problem. One likely impact of the continued instability has
been an increase in reconstruction costs and delay in implementation.23 For example,
sabotaged oil pipelines must be repaired, and many aid implementors have been
temporarily withdrawn from the country.24 Further, as institutions of commerce and
security have yet to be fully reestablished, the trust of the Iraqi people in U.S.
leadership to bring about a democratic transformation in Iraq has been undermined,
opening the door to political discontent and opposition.25
U.S. Response
As security concerns have continued to dominate the attention of policymakers,
greater efforts have been made to encourage other countries to provide peacekeeping
forces. However, participation of other countries has been hindered by previous
opposition to the war and lack of a U.N. mandate. U.S. diplomats are currently
seeking to encourage international help through a U.N. Security Council resolution.
But many analysts think it unlikely that the United States will get the military support
21 For more information about the CPA, see [http://www.cpa-iraq.org].
22
As of early June 2003, there were 617 U.S. citizens and 471 coalition members in the
CPA.
23 “Iraq Reconstruction Costs Said to Have Doubled,” Washington Times, July 2, 2003.
24 “Facing ‘Different Kind of War’, Aid Groups in Iraq Adopt Lower Profile,” Washington
Post, September 29, 2003. “Crossed Wires Deprived Iraqis of Electric Power,” Washington
Post, September 25, 2003.
25 “Iraqis’ Bitterness is Called Bigger Threat Than Terror,” New York Times, September 17,
2003.

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CRS-8
it seeks. Reversing its previous position, India, for example, has announced it would
not send troops regardless of the outcome of a resolution.26 There are no official
figures; however, credible estimates at this time put the number of U.S. troops at
between 129,000 and 145,000, British troops at roughly 12,000, and troops from 29
other countries at between 11,000 and 22,000.27
About 37,000 Iraqi police, half the goal, have returned to work. About 28,000
police trainees are expected to be sent to Hungary for accelerated training.28 Within
one year, a reconstituted Iraqi army of 40,000 — half soldiers and half supply and
administrative personnel — is expected to be ready.29 The first 3,000 troops will
have completed a nine-week training course by January. The CPA also proposes that
more than 4,500 more border/customs police be recruited and trained; that 20,000
facility protection guards be deployed; and a roughly 10,000 strong Civil Defense
Corps to support the coalition forces be established.30
In early September, the Interior Ministry proposed a new 5,000 man Civil
Defense Battalion aimed at combating the security threat from militants.31 This move
has not yet been approved by CPA Administrator Bremer. Some Iraqi leaders have
recently proposed the withdrawal of U.S. forces to their bases and the turnover of
military duties to existing Kurdish and Shiite militias that, up to now, the U.S.
military has tried to disarm or restrict.32
Reconstruction Assistance: Recent Developments
Among the key policy objectives laid out by the Bush Administration in
conjunction with the war in Iraq was the economic and political reconstruction of the
country. Discussion and debate within the United States government and the
26
“Some May Not Want to Send Troops,” USA Today, September 15, 2003. “India Has
Ruled Out Sending Troops to Iraq, UN Mandate or Not,” Agence France Presse, September
12, 2003.
27 One report even put the number of U.S. troops at 116,000. “U.S. Reduces Number of
Troops in Iraq to 116,000,” USA Today, September 11, 2003. “U.S. Cuts its Hopes for Help
in Iraq,” USA Today, September 15, 2003. “GIs Doubt Foreign Troops’ Readiness,” Chicago
Tribune, September 7, 2003. “Bush Looks To U.N. to Share Burden on Troops in Iraq,” New
York Times, September 3, 2003.
28 “Iraqi Police to Train in Hungary,” International Herald Tribune, August 26, 2003.
29
“Iraq’s New Military Taking Shape,” Washington Post, September 16, 2003. “Iraqis’
New Army Gets Slow Start,” New York Times, September 21, 2003.
30 Coalition Provisional Authority Request to Rehabilitate and Reconstruct Iraq, September
2003.
31
“New Ministry to Recruit Paramilitary Force in Iraq,” Washington Post, September 2,
2003. “Loyalties in New Iraqi Police Forces Scrutinized,” Washington Post, September 4,
2003.
32
“Iraqi Factions Seek to Take Over Security Duties,” New York Times, September 19,
2003.

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CRS-9
diplomatic community have been ongoing regarding responsibilities for
reconstruction programs and the effectiveness of aid implementation. Serious
criticisms have mounted over the past six months regarding all aspects of the
reconstruction effort.
The Role of the United Nations
The August 19 bombing of the U.N. mission in Baghdad highlighted the failure
of U.S. forces and the CPA to establish security in Iraq and appears to have forced
a reassessment of U.S. policy with regard to the post-war role of the U.N.. Following
the bombing, two previously announced U.S. objectives — obtaining greater
international military support for peacekeeping and donor financial contributions for
reconstruction purposes — became significantly more important to U.S.
policymakers. In this view, security could best be established if there were a greater
military presence and a more visible, high-impact reconstruction effort. To avoid
having to bear the financial and military burdens alone, the United States would have
to seek greater international support.33 As a stronger U.N. role might facilitate U.S.
goals in each case, U.S. Administration officials and legislators have debated a shift
in policy from a continuing post-war position opposing a U.N. role to a moderation
or outright reversal of this position.34 (See Background section below for events and
views prior to August 19.)
Many countries, especially those that opposed the war, appear to believe it may
legitimize the U.S. occupation if they provide substantial military or reconstruction
assistance. A number of countries have indicated that they would not be able to
participate in a peacekeeping force unless the U.N. provided some “political cover”
through a resolution creating a multilateral force.
Security concerns as well as
absence of a strong U.N. role in governing Iraq have also been suggested as a
possible obstacle to large donor contributions toward the reconstruction of Iraq.35
On September 2, the President agreed to seek a U.N. Security Council resolution
that might encourage international financial and military support by providing the
U.N. with a larger role.36 Since then, negotiations with other countries on the
Council regarding Iraq’s reconstruction have focused on two key questions — the
extent of a U.N. role and the timing of full Iraqi sovereignty. When the leaders of
France, Germany, and Britain met on September 20 to discuss Iraq, among other
issues, they all agreed that the U.N. should play a major role and that sovereignty
should be transferred to an Iraqi civilian government as soon as possible. However,
they did not agree, in Chirac’s words, on “the practicalities and the timetable” for this
33 “U.S. Presses U.N. Members to Bear More of Iraq Burden,” New York Times, August 22,
2003.
34 “U.S. Abandons Idea of Bigger U.N. Role in Iraq Occupation,” New York Times, August
14, 2003.
35 “Countries Resist Aid to Iraq,” Washington Post, September 2, 2003.
36
With regard to military assistance, the United States is seeking a resolution that backs
creation of a U.N. force with the United States in command. “U.S. Wants Larger U.N. Role
in Iraq,” Washington Post, September 3, 2003.

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transfer of power.37 The position of France and Germany is that full authority over
Iraq should be transferred from the occupation coalition to the United Nations. In
addition, France has been promoting the view that the transition to full Iraqi
sovereignty should occur more rapidly than envisioned by U.S. leaders. The French
have been arguing recently that steps toward handing over power to the Governing
Council should begin within a few months. On September 21, President Chirac
presented a plan in which symbolic sovereignty would be transferred immediately to
the Governing Council, followed by a gradual six- to nine-month process of
transferring real power from the CPA to the Iraqis.38
The United States position, as suggested in the President’s September 23 speech
to the U.N. General Assembly, has been that the present timetable of U.S. control
during a process of drafting a constitution and eventual elections should continue,
and that the U.N. could play a major, but unspecified, role in supervising the
constitution and election efforts.39 This position has been viewed by many as
unlikely to satisfy critics and unlikely to lead to increased donor contributions.40 The
European Commission is reportedly expected to pledge only $232 million at the
forthcoming donor conference. German Chancellor Schroder, however, has agreed
with President Bush to put aside differences on the war and work cooperatively in the
future. Germany has offered to assist with police training.41 Russia’s President Putin
has indicated a willingness to assist as well, although he has indicated strong support
for an active U.N. role.42
The existing U.N. role was further diminished on September 25 as Secretary
Annan ordered another reduction in international U.N. staff in Baghdad in response
to a second bomb attack on September 22.43 Annan has since suggested that the U.N.
might resume its political role if security is improved and if a provisional Iraqi
government is soon established.
The United States introduced its draft U.N. resolution on October 2.
It
reportedly offers to strengthen the U.N. role, asking it to continue humanitarian relief
efforts, help draft a constitution, organize elections, train civil servants and police,
37
“3 Leaders’ Views on Iraq, Not Quite Unified,” New York Times, September 21, 2003.
38 “French Leader Outlines Two-Stage Proposal,” New York Times, September 22, 2003.
39 “Bush Open to U.N. Oversight of Iraq Election,” Washington Post, September 22, 2003.
40 “Donors in Madrid Expected to Pledge ‘far less’ Than $20 billion Earmarked by U.S.,”
Financial Times, October 1, 2003. “Bush is Criticized at U.N. Over Iraq,” Washington Post,
September 24, 2003. “A Vague Pitch Leaves Mostly Puzzlement,” Washington Post,
September 24, 2003. “U.N. vote on Iraq ‘Unlikely’ to Produce Many Troops,” Financial
Times, September 17, 2003. “Bush’s Plea for Iraq Aid Falls on Deaf Ears,” Financial Times,
September 25, 2003.
41 Gerhard Shroder, “Germany Will Share the Burden in Iraq,” New York Times, September
19, 2003.
42 “Putin Ready to Help U.S. on Iraq,” Financial Times, September 26, 2003.
43 “U.N. Shifts More Relief Staff Out of Baghdad; Annan Move Seen as Blow to U.S. Bid
for Support,” Washington Post, September 26, 2003.

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CRS-11
and help with judicial and penal reform. It reportedly supports the “progressive”
transfer of administrative power to Iraqi leadership, while maintaining authority with
the U.S. Administrator. The proposal has reportedly received a “tepid” response
from diplomats.44
Background on Debate on U.N. Role. The current debate on the role of
the United Nations in post-war Iraq is a continuation of a discussion begun in March
2003 both within the U.S. Government and internationally. As the war ended, the
U.S. position was that the U.N. may play a major role in humanitarian and other
assistance, but should have no political authority. Secretary Powell suggested that
the United States and its allies must play the “leading role” in post-war
administration because it was they who took on the mission to establish democracy
in Iraq.
Some observers also argued that unilateral U.S. rule might make
reconstruction “quicker and more efficient.” Administration officials, however,
disagreed over the role of the U.N. Many in the State Department reportedly argued
that a U.N.-run post-war Iraq would attract more financial support from the
international community while being more acceptable to the Iraqis.45
A number of European leaders, including those of France and Germany, argued
that administration of Iraq should be turned over as soon as possible to the United
Nations.46 They argued that prolonged U.S. military control will be opposed by Iraqis
and antagonize the Arab world. They supported a role for the U.N. such as it has had
in Kosovo. They appeared reluctant to offer reconstruction assistance unless the
U.N. was provided a lead role, and there was speculation that they would use the U.S.
desire for a U.N. resolution ending sanctions as leverage to win support for a greater
U.N. role in reconstruction.47
The European position on the U.N. role was significantly strengthened by the
persistent advocacy of British Prime Minister Blair. The issue, raised at the Belfast
Summit on April 7-8 as it had been in previous talks between the Prime Minister and
President Bush, resulted in a pledge that the U.N. would play a “vital role” in
reconstruction. The President described the U.N. role as providing aid, channeling
44 “U.S. Pushes Iraq Resolution at Security Council,” Washington Post, October 2, 2003.
“New U.S. Text Wins Tepid Response,” Financial Times, October 2, 2003. “Annan
Outlines Plan for U.N. Role in Iraq,” Washington Post, October 1, 2003. “Bush Officials
See Long Road to Resolution,” New York Times, September 25, 2003.
45 “At United Nations, Yet Another Clash Looms Over Iraq,” Washington Post, March 26,
2003. “A Partnership for Iraq,” Washington Post, April 8, 2003. “Blair to Press Bush over
U.N. Role,” Financial Times, March 26, 2003.
46
“Europeans Urge Key Role for U.N.,” Washington Post, April 5, 2003. “Antiwar Trio
Says Iraq’s Future Is What Counts,” Washington Post, April 12, 2003.
47 “US Should Bear Cost of Rebuilding, Says Berlin,” Financial Times, March 26, 2003.
“Paris Plans to Regain Place on World Stage,” Financial Times, March 27, 2003. “Against
France and Russia, Washington Tries to Curb U.N. Role in a Postwar Iraq,” New York
Times, March 27, 2003. “Lifting of Sanctions Linked to U.N. Role,” Washington Post,
April 18, 2003.

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CRS-12
international donor contributions, and suggesting people to serve on the IIA.48 The
U.N. resolution submitted by the United States to the Security Council on May 9
appeared to match the President’s description, giving the U.N. a purely advisory role
on assistance. The United States and Britain in the draft resolution supported the
appointment of a U.N. Special Commissioner who would act as liaison between the
U.N. and ORHA.
In part because Germany and France were much less inclined to appear as
obstacles to U.S. intentions, the U.S. position was not strongly challenged.49
Subsequent negotiations only slightly strengthened the U.N. role.50
The final
resolution gave the United States the nearly complete control it sought over the
administration of Iraq’s reconstruction.
On May 22, 2003, the U.N. Security Council approved (14-0) resolution 1483
ending sanctions on Iraq.51 It recognized the United States and United Kingdom as
the occupying powers until an internationally recognized government is in place. It
extended the Oil-for-Food program for six months, and transferred $1 billion to
establish a new Development Fund for Iraq. The Fund, the depository of future
profits from the sale of oil, would finance reconstruction programs. It would be
controlled by the coalition, but be monitored by an international advisory board and
audited by independent accountants.
On May 23, Sergio Vieira de Mello, a Brazilian diplomat, was named U.N.
Special Representative, and assumed a central role in coordinating U.N. humanitarian
and reconstruction activities. He was credited with making the U.N. a more active
player in the unfolding Iraqi political process than his formal role would suggest. On
July 14, the U.N. announced it would soon send a team of experts to help prepare for
elections expected to be held next year. Further, on July 18, in an assessment of the
Iraqi situation, U.N. Secretary General Kofi Annan called for the coalition partners
to quickly restore power to the Iraqis and produce a clear timetable leading to self-
rule.52
On August 14, the Security Council approved Resolution 1500 which
established the United Nations Assistance Mission for Iraq (UNAMI). It also
approved the U.S.-appointed Governing Council as a step in the direction of an
internationally recognized sovereign government for Iraq.53 On August 19, a bomb
destroyed U.N. headquarters, killing Vieira de Mello and leading to the withdrawal
from Iraq of more than two-thirds of the 300-member international U.N. staff.
48 “Blair to Press for New UN Resolution over Postwar Rule,” Financial Times, April 7,
2003. Transcript of Bush, Blair Press Conference, Belfast, April 8, 2003.
49
“Berlin Backs End to Iraq Sanctions in Drive to Improve U.S. Relations,” Financial
Times, May 17, 2003.
50 “New Revision is Offered for Draft of U.N. Plan,” New York Times, May 20, 2003.
51 For the full text, see [http://www.un.org/News/dh/iraq/iraq-blue-res-052103en.pdf].
52 “Annan Wants Plan for Iraqi Self-Rule,” Washington Post, July 19, 2003.
53
For the full text, see [http://ods-dds-ny.un.org/doc/UNDOC/GEN/N03/467/78
/PDF/N0346778.pdf?OpenElement].

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CRS-13
Governance of Post-War Iraq
How Iraq is administered in the post-war period will strongly affect the outcome
of U.S. assistance objectives and programs. Under the May 22 Security Council
resolution, the United States and United Kingdom are recognized as “occupying
powers,” responsible for administration until a permanent, internationally recognized
government is in place. Although U.S. officials have repeatedly stressed the desire
to return the governance of Iraq to its people as soon as possible, there have been
predictions, but no official deadlines, for completion of all U.S. objectives. On May
9, Secretary Rumsfeld said that U.S. administration might take longer than a year.54
Some, including a delegation of Senators returning from Iraq in July, had suggested
that the nation-building effort may take years.55
As noted above, the United States had appeared to resist recent calls from
France and Germany for a rapid transfer of sovereignty to an Iraqi government. CPA
Administrator Bremer currently envisions a seven-step process leading to transfer of
sovereignty to the Iraqi people. The first three steps have already taken place:
creation of the 25-member Governing Council which took place on July 13; naming
by the Council of a committee to propose a plan for writing a constitution (August
12); and appointment of 25 ministers to run the government (September 3). The
final four steps are drafting a constitution; ratifying the constitution by the Iraqi
people; electing a government; and transferring power from the coalition authority
to the new government.56 On September 25, Secretary Powell set a deadline of six
months for Iraqis to write a new constitution. Some Governing Council members,
however, believe this is too short a time, because the committee to determine how
the constitution is written has been unable to agree on a recommendation and has
missed a September 30 deadline for reaching a decision.57
Throughout the summer, the CPA-handpicked Council, fractured along ethnic
and religious lines, had been encouraged by the CPA to move forward with its
appointments of the cabinet and preparatory committee for the constitution.
Although decisions of the Council and the cabinet must ultimately be approved by
Bremer, the Council has increasingly taken steps independent of the CPA, including
approving a law on de-Baathification and announcing it publicly before the CPA
could respond.58 Several individual members of the Council have pressed the CPA
to turn over sovereign power to the Council, thereby making more difficult the U.S.
54 “Occupation of Iraq Has No Time Limit,” Washington Post, May 10, 2003.
55 “After Tour, Senators Warn U.S. Is Spread Thin in Iraq,” New York Times, July 4, 2003.
56 L. Paul Bremer. “Iraq’s Path to Sovereignty,” Washington Post, September 8, 2003.
57 “Powell Gives Iraq 6 Months to Write New Constitution,” New York Times, September
26, 2003. “Iraqis Call U.S. Goal on Constitution Impossible,” Washington Post, September
30, 2003.
58 “Iraqi Council’s Path Diverges From U.S. Path,” Los Angeles Times, September 20, 2003.
“Iraq Leaders Seek Greater Role Now in Running Nation,” New York Times, September 27,
2003.

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CRS-14
position in the ongoing discussion regarding a new U.N. resolution.59 For discussion
of the internal politics of Iraq, see CRS Report RL31339, Iraq: U.S. Regime Change
Efforts and Post-War Governance.
Reconstruction Implementation
Since his appointment in early May, civilian administrator Bremer has taken
steps to demonstrate U.S. control and its intention to “remake” Iraq. Among these
were the appointment of the Governing Council noted above. Although an Iraqi
cabinet is now in place to run the government, one or more U.S. advisers are attached
to each of the 25 Iraqi ministries to provide technical expertise.60
On July 7, 2003, Bremer announced a $6.1 billion budget for Iraq through the
rest of 2003. This amount is derived from future Iraqi oil sales, frozen and seized
assets, and U.S. assistance.
The budget includes funds for what Mr. Bremer
described as “key priorities”: the improvement of security and justice ($233 million,
4% of the total), electricity ($294 million, 5%), construction ($257 million, 4%),
health ($211 million, 3.5%), water and sewerage treatment ($73 million, 1%), and
telecommunications ($150 million, 2.5%).61
Actual reconstruction project work on the ground is well underway, but there
is no report card measuring the degree to which U.S. reconstruction objectives are
being met nationwide. Anecdotal accounts, from the media and USAID, provide a
mixed picture. The dredging operation at the port of Umm Qasr, necessary to allow
import of relief and reconstruction materiel and to enable oil exports to flow, has
been completed.
Neighborhood councils, intended to determine priorities and
implement small projects, have been established in 88 Baghdad locations and are
being set up in 14 other places throughout the country. USAID grants are being
provided to meet identified community needs. Sixteen of the 25 ministries have been
rehabilitated and reequipped.
School materials are being provided, schools
inventoried, and some schools beginning to be renovated. All schools will open in
October. A broad range of economic policy reform efforts are being launched.
These and many other reconstruction activities are countered by reports in the press
of slow and ineffective implementation.62
59 At least one member has publicly supported the U.S. position, however. “Warning on
Swift Self-Rule Timetable,” Financial Times, September 22, 2003.
60
For example, Walter Slocombe (former DOD official) advises the Defense Ministry;
Peter McPherson (former USAID Administrator) and David Nummy (Treasury), the Finance
Ministry; Robert Reilly (formerly with VOA), the Information Ministry, and Robert
McKee, the Oil Ministry.
61
“Bremer Announces Iraq’s 2003 National Budget,” Washington File, July 7, 2003.
Republic of Iraq: Budget Revenues and Expenses 2003 July-December, CPA.
62
USAID Iraq Management Team Sectoral Factsheets, September 16, 2003.
Iraq
Reconstruction and Humanitarian Relief, Weekly Update Number 1, USAID, October 1,
2003. “Crossed Wires Deprived Iraqis of Electric Power,” Washington Post, September 25,
2003.

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CRS-15
While most reconstruction activities provide needed infrastructure and services,
some far-reaching economic and political policy reforms are likely to stir controversy
in Iraq, especially as they are viewed as imposed by an occupying administration. In
a move to establish an open and free market economy, on September 21, the new
Iraqi finance minister announced new laws signed by Ambassador Bremer abolishing
all curbs on foreign direct investment except in natural resources. Like donor
assistance and oil income, foreign investment would be a way to obtain revenue to
meet development needs and stimulate the economy. However, security concerns are
likely to prevent significant investment at this stage, no matter how appealing the
terms offered. Further, nationalist sentiment in Iraq as in other Arab countries has
in the past severely restricted foreign ownership, and investors would have to wonder
whether a future Iraqi government might restore restrictions.
Already several
members of the Governing Council have criticized the reforms as announced by the
Finance Minister, while being careful not to attack the CPA itself. According to the
Financial Times, the reforms are “near universally unpopular,” Iraqi businessmen and
unions fearing they would be unable to compete.63
Reconstruction Contract Issues. Reconstruction of Iraq is expected to
cost billions of dollars and utilize the services of dozens of U.S. and international
companies and NGOs.
As a result, government agencies implementing these
programs have been besieged by expressions of interest from potential contractors.64
Continuing security and other concerns in the unpredictable Iraqi environment may
pose problems for firms interested in reconstruction work.
The main contracting agencies for relief and reconstruction activities are the
Army Corps of Engineers, which is responsible for oil well repair and maintenance;
the Department of State, which is handling police training; and the Agency for
International Development (USAID), which is managing the widest range of
economic, social, and political development programs. To date, USAID has awarded
contracts in seaport and airport administration, capital construction, theater logistical
support, public health, primary and secondary education, personnel support, and local
governance.65 It has also requested submission of proposals for an agriculture
63
“Governing Council Hits at Minister Over Business Reform,” Financial Times,
September 25, 2003. “Iraq Offering Laws to Spur Investment From Abroad,” New York
Times, September 21, 2003. “Economic Overhaul for Iraq,” Washington Post, September
22, 2003.
64 For information on contract solicitations and business opportunities in Iraq, see the
following websites: [http://www.export.gov/iraq/], the Department of Commerce (DOC)
Iraq Reconstruction Task Force; [http://www.usaid.gov/iraq/activities.html], USAID’s Iraq
Reconstruction effort; and [http://www.hq.usace.army.mil/cepa/iraq/iraq.htm], website of
the U.S. Army Corps of Engineers, the Army branch most directly involved in
reconstruction activities on the ground in Iraq to date; and [http://www.policemission.com],
the site for recruiting of police trainers under the State Department-managed, DynCorp-
implemented project. Companies interested in sub-contracting under any of the USAID
projects should contact the winner of the award.
For example, construction-related
companies can register at [http://www.bechtel.com].
65 Stevedoring Services of America was selected for seaport administration; International
(continued...)

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CRS-16
development project, a higher education program, and a second phase of
infrastructure reconstruction.
An Administration decision applied to the early reconstruction contracts to
waive the normal competitive bidding requirements and request bids from specific
companies which were seen to have preexisting qualifications received considerable
attention by the business community. The closed bidding and lack of transparency
disturbed a number of legislators, and some Members of Congress asked the GAO
to determine whether contracting agencies are following appropriate procedures.66
U.S. officials explained that only a few select firms possess the particular skills that
would qualify them for the job specifications for Iraq reconstruction, and that time
and security clearances were also critical factors.
Foreign entities, potentially
excluded by “buy America” provisions of law, and other U.S. firms, they noted,
could participate as sub-contractors to the selected American firms. Sub-contractors
are likely to compose half or more of the total cost of each contract. Ambassador
Bremer has said that all future contracts will be competitively solicited.67 The Senate
Appropriations Committee-reported version of S. 1689 requires that all
reconstruction contracts employ open competition. The President can waive this
provision in case of unforeseen or emergency circumstances.
In particular, it was the sole source contract for oil well repair provided to
Kellogg Brown and Root, a subsidiary of Halliburton, whose former chief executive
is Vice-President Cheney, that was and continues to be the focus of some media
attention, raising concerns of favoritism and reinforcing suspicions that the war was
fought for oil. The repair work, conducted by KBR for the Army Corps of Engineers,
was valued at $948 million as of early September. With the war over, the Corps
announced that remaining oil repair work would be competitively bid. However,
KBR continues to carry out work orders pending a delayed decision on two new
contracts worth up to $500 million each.68 Favoritism concerns have persisted as
press reports appear regarding well-connected lobbyists seeking to profit from the
reconstruction effort.69
65 (...continued)
Resources Group for personnel support; Creative Associates for primary and secondary
education; Research Triangle for local governance; Bechtel for capital construction; the
Air Force Contract Augmentation Program for theater logistical support; ABT Associates
for public health; and SkyLink Air for airport administration. Grants were also provided to
UNICEF for water and sanitation services, and to WHO for health system strengthening.
66 “‘Open’ Contest Pledged for Iraq Subcontracts,” Washington Post, April 18, 2003.
67 “Insiders’ New Firm Consults on Iraq,” New York Times, September 30, 2003.
68 “Bush Seeks $2.1 Billion More for Iraqi Oil Industry,” New York Times, September 13,
2003. “Halliburton’s Deals Greater Than Thought,” Washington Post, August 28, 2003.
“Halliburton’s Iraq Role is Expanded to Oil Products Distribution,” Financial Times, May
8, 2003, “Halliburton Contracts Total $50 million,” Financial Times, April 12, 2003, “U.S.
to Request Bids for Work on Oil Fields,” Washington Post, April 15, 2003.”Halliburton’s
Links Sharpen Bids Dispute,” Financial Times, March 27, 2003
69
“Lobbyists Set Sights on Money-Making Opportunities in Iraq,” Washington Post,
(continued...)

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CRS-17
Criticism of Reconstruction
There has been a chorus of criticism — from American soldiers, coalition
partners, analysts, NGOs, U.S. policymakers, and the media — regarding the way in
which the reconstruction effort is being carried out. In early July, the Administration
itself requested that a team of specialists examine Iraq reconstruction with a critical
eye. The resulting report warned that the “window for cooperation may close
rapidly” if progress is not made on security, delivery of basic services, and providing
opportunity for political involvement. U.S. officials indicated they would take the
report’s recommendations seriously.70
Subsequent incidents demonstrating the
continued failure of security, such as the August U.N. headquarters bombing, and
slow pace of reconstruction appear to have led the Administration to request its $20.3
billion supplemental in order to address pressing security and infrastructure concerns
and accelerate the political process. However, some Administration officials, Vice-
President Cheney most notably, insist that there is no reason to “think that the
strategy is flawed or needs to be changed.”71
Disparate critical views can be categorized and summarized as follows:
Inadequate Security. Lack of security and order continues to threaten
reconstruction efforts, including supply of electrical power, oil resources, and
movement of assistance personnel. As a result, many Iraqis are angry and alienated
by the occupation. Critics point to a lack of readiness on the part of the U.S. military
to anticipate security needs and provide support to reconstruction implementors and
call for an increase in force deployment, including international help. Some also
criticize the early decision of the CPA administrator to disband the Iraqi military as
contributing to the initial disorder.72
Slow Establishment of Iraqi-Led Governance. Perhaps as important to
many critics as the lack of order has been the slow pace of forming an Iraqi authority
which could provide Iraqis with a sense of ownership in the reconstruction and
democratic processes. Until September, foreign aid workers had no counterpart in
the Iraqi ministries able to make decisions that might advance reconstruction.
Appointed, instead of elected or chosen by an Afghan-like national assembly, the
Governing Council will have to establish its legitimacy in the eyes of Iraqis and the
international community to be fully effective — members are already disputing CPA
decisions and some are seeking recognition by the U.N. Until the Council is
69 (...continued)
October 2, 2003. “Insiders’ New Firm Consults on Iraq,” New York Times, September 30,
2003. “The Iraq Reconstruction Bonanza,” New York Times, October 1, 2003.
70
John Hamre, and others. Iraq’s Post-Conflict Reconstruction: A Field Review and
Recommendations, July 17, 2003.
71 “Bush Team Stands Firm on Iraq Policy,” Washington Post, September 15, 2003.
72 “Iraqis’ Bitterness is Called Bigger Threat Than Terror,” New York Times, September 17,
2003. “Priorities for Rebuilding Iraq,” Financial Times, June 26, 2003. “Two-Way Street
on Iraq,” David Ignatius in Washington Post, July 4, 2003. “Wolfowitz Concedes Iraq
Errors,” Washington Post, July 24, 2003.

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CRS-18
embraced by Iraqis, however, serious policy decisions likely to be made by it and the
CPA, such as on liberalization of the economy and privatization of state-owned
enterprises, may have little long-term legitimacy and support.73
Too Fast Establishment of Iraqi-Led Governance. Conversely, some
analysts argue that the pace of self-governance may now be too hurried, driven by the
timetable of the U.S. presidential election or the need to appease Europeans to obtain
financial support rather than Iraqi needs. They argue that time must be allowed for
democratic institution building.74 U.N. officials have reportedly questioned the need
for a deadline on approving a constitution, noting that a legitimate process might take
longer.75
Preventing the U.N. and International Community from Playing a
Major Role. As noted earlier, the Administration has sought to keep control of
post-war reconstruction in U.S. hands, rather than internationalizing it as had been
done in Kosovo and Bosnia. Critics assert that were the U.N. in a position of greater
responsibility, it would deflect Iraqi criticism of the United States, legitimize
occupation policies, and encourage financial and peacekeeping participation by
bilateral donors. Some Members of Congress have criticized the current modus
operandi because of the financial cost and strain put on the U.S. military. Senator
Hagel has urged, “We need to internationalize this as quickly as we can.” Donors,
reportedly, are unresponsive to U.S. pleas for either military or financial assistance,
partly because they are not being offered a “seat at the table” in determining the
future of Iraq.76
Inadequate Civilian Administration. Though a part of the Department of
Defense, the civilian reconstruction effort led by ORHA, some assert, was never
given sufficiently high priority by the Department’s leaders to receive the security
and technical support it needed to be effective. Its successor, the CPA, has also been
described as understaffed, lacking experience and knowledge of the country, and too
isolated from the Iraqi people (with headquarters in a former palace and requiring a
military bodyguard when they venture outside).77 A British official has been quoted
73 “Unrest Grows Over Rebuilding Iraq,” Financial Times, June 25, 2003. “Give Iraqis a
Say in Running Their Country,” David Phillips in Financial Times, July 10, 2003.
74 Thomas Carothers in “It’s Too Soon for Democracy,” Washington Post, July 20, 2003.
“Rumsfeld’s Myopia,” Washington Post, September 30, 2003.
75 “U.N. Queries U.S. Call for Iraq Constitution,” Financial Times, September 27, 2003.
76
Senator Hagel quoted in “U.S. to Form New Iraqi Army,” Washington Post, June 24,
2003. “Reluctance to Share Control in Iraq Leaves U.S. On Its Own,” Washington Post,
September 28, 2003. “Trapped in Vicious Circles in Iraq,” Financial Times, July 2, 2003.
“Washington Struggles to Top Up Allied Force in Iraq,” Financial Times, July 3, 2003.
“Facing Reality in Iraq,” Washington Post, July 8, 2003. “Kerry Raps Bush Policy on
Postwar Iraq,” Washington Post, July 11, 2003. “Getting Help in Iraq,” Chicago Tribune,
July 17, 2003. “American Needs Europe to Win Peace in Iraq,” Robert Hunter in Financial
Times, July 21, 2003.
77 “Iraq Leaders Seek Greater Role Now in Running Nation,” New York Times, September
(continued...)

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CRS-19
as saying of the CPA, “this is the single most chaotic organization I have ever worked
for.”78
Some suggest that post-war planning, although begun as long ago as
November 2002, was inept. In its defense, Administration officials argue that they
were planning for a humanitarian crisis that never came, and had not expected the
problems with reconstruction that they did encounter.79
Excessive Reliance on the Military. Although reconstruction is inherently
a civilian effort, in its early stages, it has been implemented largely by military
personnel.
Prior to the war, it was anticipated that the military would fill
humanitarian needs as the war was winding down — a role the military has played
to some degree in other crises. In part because the reconstruction phase of assistance
arrived earlier than expected, military civil affairs teams are reportedly making
decisions at the grassroots level regarding election of local councils, selection of
community leaders, prioritization of needs, and other reconstruction activities. Some
assert that these are roles for which they have not been prepared and which
emphasize to the Iraqi people the “occupation” character of the U.S. presence. Some
critics suggest that a corps of civilian reconstruction specialists should have been
deployed around the country.80 Along these lines, the July 17 Assessment Mission
report recommended that 18 provincial CPA offices should be established in Iraq,
with 20-30 staff in each.81
Lack of Clarity and Strategy. The Administration has been criticized for
a lack of openness and clarity regarding its plans for the reconstruction process, with
a consequent negative affect on the stability and trust of the Iraqi people in the work
of the Coalition Provisional Authority and faltering support for its Iraq policy among
the American people. Some attribute problems in reconstruction to “secretive
77 (...continued)
27, 2003.
78 “America’s Rebuilding of Iraq Is in Chaos, Say British,” London Daily Telegraph, June
17, 2003. “Open War Over, Iraqis Focus on Crime and a Hunt for Jobs,” New York Times,
September 16, 2003.
79 “Bush Never Made Serious Postwar Plans,” Trudy Rubin in Philadelphia Inquirer, June
26, 2003. “With Troops Under Fire and the Costs Mounting, Does the U.S. Have the Will
for the Long Haul in Iraq?,” Financial Times, June 30, 2003. “U.S.-Led Occupation in Iraq
Called ‘Stumbling Block’ to Entrepreneurs,” Washington Times, June 18, 2003. “We’re
Getting in Our Own Way,” Washington Post, June 22, 2003. “Appoint the Best to Iraq, Not
the Best-Connected,” Michael Massing in Washington Post, July 6, 2003. “Unrest Grows
Over Rebuilding Iraq,” Financial Times, June 25, 2003.
80 “‘Weakness’ in the White House,” Financial Times, September 15, 2003. “U.S. Urged
to Modify Approach to Postwar Iraq,” Washington Post, September 24, 2003.
“Inexperienced Hands Guide Iraq Rebuilding,” Washington Post, June 25, 2003.
“Washington Needs a Colonial Office,” Max Boot in Financial Times, July 3, 2003. “British
Refuse to Adopt U.S. Peace Tactics,” London Sunday Times, June 22, 2003.
81
John Hamre, and others. Iraq’s Post-Conflict Reconstruction: A Field Review and
Recommendations, July 17, 2003, page 5. Testimony of Brian Atwood to Senate Foreign
Relations Committee, September 23, 2003.

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decision-making by the Defense Department civilians who led the planning.”82
Others note a lack of coordination between U.S. government agencies responsible for
reconstruction.83 Indecision and changes of mind regarding reconstruction policy
have been common.84 There has been no clear plan for a long-term process leading
to final Iraqi government control.85 On the domestic front, Members of Congress
have complained about the failure of the Administration to provide a clear accounting
of anticipated costs and plans for the future of Iraq.86
82 “Wolfowitz Concedes Iraq Errors,” Washington Post, July 24, 2003.
83 “White House Admits to Mistakes in Iraq,” Financial Times, September 15, 2003.
84
“U.S. Urged to Modify Approach to Postwar Iraq,” Washington Post, September 24,
2003.
85 Brian Atwood, Testimony. Senate Foreign Relations Committee, September 23, 2003.
86 “Getting Back on Track in Postwar Iraq,” Joseph Lieberman in Washington Post, July 7,
2003. “Struggle for Democratic Iraq May Be Long and Costly, Says Senator,” Washington
File, June 30, 2003. “Facing Reality in Iraq,” Washington Post, July 8, 2003.

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