Iraq learning how to spend oil wealth

As much of the world grapples with the credit crisis, Iraq's government has an unusual money problem -- it can't spend its oil riches fast enough.

The United States is trying to change that by training Iraqi bureaucrats struggling to emerge from a centralized system in which nearly all decisions -- from where to build a water treatment plant to which workers would do the job -- came from the top.

With the greatly improved security climate, Iraq's oil wells are pumping liquid gold at a steady rate. That oil wealth came to the fore this summer when the U.S. Government Accountability Office predicted Iraq could finish the year with as much as a $79 billion cumulative surplus.

The August report drew anger in Congress, where members asked why the Iraqis haven't spent more of their own money on reconstruction efforts while U.S. taxpayers shell out $12 billion a month for military operations.

U.S. and Iraqi officials dispute the GAO figures, arguing they are inflated and do not reflect Iraqi accounting procedures. They also say Iraqi spending on reconstruction is expected to increase by 50 percent from 2007 to 2008.

The U.S. Agency for International Development's Tatweer project is designed to train Iraqi civil servants in basic decision-making skills to help them allocate funds and effectively deliver government services such as electricity, water and security.

~ Star Tribune ~