U.S. Economic and Reconstruction Assistance

Building the capacity of the Iraqi government should be at the heart
of U.S. reconstruction efforts, and capacity building demands
additional U.S. resources.

Progress in providing essential government services is necessary to
sustain any progress on the political or security front. The period of
large U.S.-funded reconstruction projects is over, yet the Iraqi
government is still in great need of technical assistance and advice
to build the capacity of its institutions. The Iraqi government needs
help with all aspects of its operations, including improved
procedures, greater delegation of authority, and better internal
controls. The strong emphasis on building capable central ministries
must be accompanied by efforts to develop functioning, effective
provincial government institutions with local citizen participation.

Job creation is also essential. There is no substitute for private-sector
job generation, but the Commander's Emergency Response Program
is a necessary transitional mechanism until security and the economic
climate improve. It provides immediate economic assistance for trash
pickup, water, sewers, and electricity in conjunction with clear,
hold, and build operations, and it should be funded generously. A
total of $753 million was appropriated for this program in FY 2006.

RECOMMENDATION 64: U.S. economic assistance should be increased to a
level of $5 billion per year rather than being permitted to decline.
The President needs to ask for the necessary resources and must work
hard to win the support of Congress. Capacity building and job
creation, including reliance on the Commander's Emergency Response
Program, should be U.S. priorities. Economic assistance should be
provided on a nonsectarian basis.

The New Diplomatic Offensive can help draw in more international
partners to assist with the reconstruction mission. The United
Nations, the World Bank, the European Union, the Organization for
Economic Cooperation and Development, and some Arab League members
need to become hands-on participants in Iraq's reconstruction.

RECOMMENDATION 65: An essential part of reconstruction efforts in Iraq
should be greater involvement by and with international partners, who
should do more than just contribute money. They should also actively
participate in the design and construction of projects.

The number of refugees and internally displaced persons within Iraq is