The military surge in Iraq has created conditions favorable for long-term stability. Now a new approach to economic reconstruction is needed to sustain the hard-fought military gains.
The top-down model of the Iraq government and international donors isn't working: Last year Iraq spent only 4 percent of its $10 billion capital projects budget, according to the U.S. General Accountability Office. The problem is that Iraq lacks the national-level capacity to spend its money effectively. We propose a new approach — one predicated on local partnerships.
A starting point could be an Iraq Local Ownership Program backed by initial funding of $200 million — just 2 percent of the capital budget.
It could be based on local leadership of micro-level reconstruction projects, modeled after Afghanistan's successful National Solidarity Programme (NSP) and similar to the U.S. Commander's Emergency Response Program (CERP) in Iraq that has delivered impressive results on the street. NSP has developed the ability of local Afghan communities to identify, plan, execute and monitor their own development projects.
More than 80 percent of the NSP labor is local, costing a fraction of commercial contracts. The most significant and lasting benefit is that these localized programs motivate communities to maintain their reconstructed schools, roads, hospitals and wells — borne through local ownership of the entire process.
Housing and small-scale infrastructure projects like schools and medical clinics are well-suited to this approach. The housing shortage of as many as 3 million units has been exacerbated by the influx of Iraqis returning from abroad in response to the improved security situation and Syria's stricter visa regulations. Each of the Iraqi Provincial Reconstruction Development Councils (PRDCs) would determine the locations and type of housing and infrastructure best suited for the local circumstances, and these proposals should be posted in public and on the Internet.
Once approved by a joint Iraqi-international donor board, funds in the range of $60,000 to $180,000 per project would be disbursed in three phases and through a transparent process. The PRDCs would be required to hire local Iraqi contractors, establish reasonable timelines for stages of completion, and monitor and report progress to the local citizens and the oversight board. The U.S. Overseas Private Investment Corp., with an existing portfolio of $143 million in Iraq, could help finance investors who seek to provide these services to the small-scale construction sector.
The need for a change of course in economic reconstruction is overdue. Examples of large-scale reconstruction project failures are all too common, and most of these failures, if not all, have excluded Iraqis from any material role in planning, oversight and management.
Stuart W. Bowen Jr., the special inspector general for Iraq reconstruction, has reported that $10 billion in U.S. reconstruction funds have been wasted or poorly tracked. Examples abound: a $200 million international contract to build 142 health clinics was terminated after the contractor completed only six and agreed to finish only 14 more; a $72 million police academy crumbled from poor construction and faulty plumbing, rendering much of it unusable.
The idea of the Iraq Local Ownership Program is clear: empower the Iraqi people to tackle reconstruction projects that they plan, manage and own. The program would provide both tangible and emotional rewards. By March 2009, a significant increase in the housing, school and medical clinic infrastructure stock is possible. But more importantly, it would provide the Iraqis with ownership.
This program is not a panacea but rather a small step in the right direction of aligning pari passu Iraq's national trajectory with the Iraqi peoples' tangible interests. It is about time for the international community to take a fresh look at the model for rebuilding Iraq so the military gains are converted to economic progress.
Clare Lockhart is a former adviser to the Afghan government and is co-founder and executive director of the Institute for State Effectiveness. Joseph Konzelmann is an adjunct staff member of the Rand Corp. and a senior fellow of the Institute for State Effectiveness.
This commentary originally appeared in Washington Times on April 13, 2008. Commentary gives RAND researchers a platform to convey insights based on their professional expertise and often on their peer-reviewed research and analysis.