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entitled 'Rebuilding Iraq: More Comprehensive National Strategy Needed
to Help Achieve U.S. Goals' which was released on July 11, 2006.
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Report to Congressional Committees:
July 2006:
Rebuilding Iraq:
More Comprehensive National Strategy Needed to Help Achieve U.S. Goals:
GAO-06-788:
GAO Highlights:
Highlights of GAO-06-788, a report to congressional committees
Why GAO Did This Study:
According to the National Strategy for Victory in Iraq (NSVI) issued by
the National Security Council (NSC), prevailing in Iraq is a vital U.S.
interest because it will help win the war on terror and make America
safer, stronger, and more certain of its future.
This report (1) assesses the evolving U.S. national strategy for Iraq
and (2) evaluates whether the NSVI and its supporting documents address
the desirable characteristics of an effective national strategy
developed by GAO in previous work (see fig.) In this report, the NSVI
and supporting documents are collectively referred to as the U.S.
strategy for Iraq.
What GAO Found:
The November 2005 National Strategy for Victory in Iraq and supporting
documents incorporate the same desired end-state for U.S. stabilization
and reconstruction operations that were first established by the
coalition in 2003: a peaceful, united, stable, and secure Iraq, well
integrated into the international community, and a full partner in the
global war on terrorism. However, it is unclear how the United States
will achieve its desired end-state in Iraq given the significant
changes in the assumptions underlying the U.S. strategy. The original
plan assumed a permissive security environment. However, an
increasingly lethal insurgency undermined the development of effective
Iraqi government institutions and delayed plans for an early transfer
of security responsibilities to the Iraqis. The plan also assumed that
U.S. reconstruction funds would help restore Iraq’s essential services
to prewar levels, but Iraq’s capacity to maintain, sustain, and manage
its rebuilt infrastructure is still being developed. Finally, the plan
assumed that the Iraqi government and the international community would
help finance Iraq’s development needs, but Iraq has limited resources
to contribute to its own reconstruction, and Iraq’s estimated future
needs vastly exceed what has been offered by the international
community to date.
The NSVI is an improvement over previous planning efforts. However, the
NSVI and its supporting documents are incomplete because they do not
fully address all the desirable characteristics of an effective
national strategy. On one hand, the strategy’s purpose and scope is
clear because it identifies U.S. involvement in Iraq as a vital
national interest and central front in the war on terror. The strategy
also generally addresses the threats and risks facing the coalition
forces and provides a comprehensive description of the desired U.S.
political, security, and economic objectives in Iraq. On the other
hand, the strategy falls short in three key areas. First, it only
partially identifies the current and future costs of U.S. involvement
in Iraq, including the costs of maintaining U.S. military operations,
building Iraqi government capacity at the provincial and national
level, and rebuilding critical infrastructure. Second, it only
partially identifies which U.S. agencies implement key aspects of the
strategy or resolve conflicts among the many implementing agencies.
Third, it neither fully addresses how U.S. goals and objectives will be
integrated with those of the Iraqi government and the international
community, nor does it detail the Iraqi government’s anticipated
contribution to its future security and reconstruction needs. In
addition, the elements of the strategy are dispersed among the NSVI and
seven supporting documents, further limiting its usefulness as a
planning and oversight tool.
Table: Extent the U.S. Strategy for Iraq Addresses GAO's Desirable
Characteristics of an Effective National Strategy:
1. Clear Purpose, scope, and methodology: Generally addresses.
2. Detailed discussion of problems, risks, and threats: Generally
addresses.
3. Desired goals, objectives, activities, and performance measures:
Generally addresses.
4. Description of Future costs and resources needed: Partially
addresses.
5. Delineation of U.S. government roles and responsibilities: Partially
addresses.
6. Description of strategy's integration among and with other entities:
Partially addresses.
Source: GAO analysis of NSC, State, and DOD data.
[End of Table]
What GAO Recommends:
To help improve the U.S. strategy’s usefulness to Congress, this report
recommends that the NSC, along with Defense and State, complete the
strategy by addressing all six characteristics of an effective national
strategy in a single document.
State and DOD did not comment on GAO’s recommendations. State noted
that the NSVI’s purpose is to provide a broad overview. However,
without detailed information on costs and roles and responsibilities,
the strategy does not provide Congress with a clear road map for
achieving victory in Iraq.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-06-788].
To view the full product, including the scope and methodology, click on
the link above. For more information, contact Joseph Christoff at (202)
512-8979 or christoffj@gao.gov.
[End of Section]
Contents:
Letter:
Results in Brief:
Background:
NSVI Retains Original Desired End-State, but Changing Assumptions and
Circumstances Make it Unclear How It Will Achieve These Objectives:
The NSVI and Its Supporting Documents Do Not Address All the
Characteristics of an Effective National Strategy, thus Limiting Its
Usefulness as a Planning Tool:
Conclusion:
Recommendation for Executive Action:
Agency Comments and Our Evaluation:
Appendixes:
Appendix I: Scope and Methodology:
Appendix II: GAO's Description of the Six Characteristics of an
Effective National Strategy:
Appendix III: Comments from the Department of State:
GAO Comments:
Appendix IV: Comments from the Department of Defense:
Appendix V: GAO Contact and Staff Acknowledgments:
Related GAO Products:
Tables:
Table 1: National Strategy for Victory in Iraq:
Table 2: Desirable Characteristics for an Effective National Strategy:
Figures:
Figure 1: NSVI and Key Supporting Documents:
Figure 2: Evolution of the Objectives and Assumptions of U.S.
Stabilization and Reconstruction Efforts in Iraq:
Figure 3: Extent the U.S. Strategy for Iraq Addresses GAO's Desirable
Characteristics of an Effective Strategy:
Abbreviations:
CENTCOM: U.S. Central Command:
CPA: Coalition Provincial Authority:
DOD: Department of Defense:
IMF: International Monetary Fund:
IRRF2: Iraq Relief and Reconstruction Fund, Fiscal Year 2004:
ISF: Iraqi Security Forces:
ISSF: Iraq Security and Stabilization Fund:
IT: information technology:
mbpd: million barrels per day:
MNF-I: Multinational Forces-Iraq :
MNC-I: Multinational Corps-Iraq:
NSC: National Security Council:
NSPD: National Security Presidential Directive:
NSSI: National Strategy for Supporting Iraq:
NSVI: National Strategy for Victory in Iraq:
R&D: research and development:
July 11, 2006:
Congressional Committees:
In November 2005, the National Security Council (NSC) issued the
National Strategy for Victory in Iraq (NSVI) to clarify the President's
existing strategy for achieving U.S. political, security, and economic
goals in Iraq. According to this document, prevailing in Iraq is a
vital U.S. national interest because it will help win the war on terror
and make America safer, stronger, and more certain of its future. To
achieve victory, the strategy requires the United States to maintain
troops in Iraq until its objectives are achieved, adjusting the number
up or down as conditions warrant. Currently, the United States deploys
about 130,000 U.S. troops in support of the Iraqi government. Between
fiscal years 2003 and 2006, the U.S. government has allocated about
$311 billion to support U.S. stabilization and reconstruction efforts
in Iraq, including over $34 billion for reconstruction assistance
alone. Moreover, the administration has requested about an additional
$51 billion to support U.S. stabilization and reconstruction operations
in Iraq and Afghanistan in fiscal year 2007.[Footnote 1]
We initiated this review under the Comptroller General's authority
because of broad based congressional interest in Iraq issues.[Footnote
2] This report (1) describes the evolution of the U.S. national
strategy for Iraq in response to changing, security, reconstruction,
and economic circumstances and (2) evaluates whether the NSVI and its
supporting documents include the desirable characteristics of an
effective national strategy. In this report, the NSVI and its
supporting documents are referred to as the U.S. strategy for Iraq.
To accomplish our objectives, we obtained and analyzed records,
reports, and data from U.S. government and military officials in
Washington, D.C., and Baghdad, Iraq. We also examined the reports of
other oversight entities that performed internal control and management
reviews. We assessed the strategy using the six desirable
characteristics of an effective national strategy developed in previous
GAO work. For example, GAO has used this methodology to assess and
report on the administration's strategies relating to terrorism and
restructuring the Department of Defense's (DOD) global force
posture.[Footnote 3] National strategies with these characteristics
offer policy makers and implementing agencies a management tool that
can help ensure accountability and more effective results. The six
characteristics are (1) a clear purpose, scope, methodology; (2) a
detailed discussion of the problems, risks, and threats the strategy
intends to address; (3) the desired goals and objectives, and outcome-
related performance measures; (4) a description of the U.S. resources
needed to implement the strategy; (5) a clear delineation of the U.S.
government roles, responsibilities, and mechanisms for coordination;
and (6) a description of how the strategy is integrated internally
among U.S. agencies and externally with the Iraqi government and
international organizations. These six characteristics can be
subdivided into 27 separate elements for more detailed assessment.
We evaluated the NSVI alone and in conjunction with seven related
classified and unclassified supporting documents that Department of
State (State) and DOD officials said encompassed the U.S. strategy: (1)
the National Security Presidential Directive 36 (May 2004), (2)
Multinational Forces-Iraq (MNF-I) Campaign Plan (August 2004), (3) the
MNF-I/ U.S. Embassy Baghdad Joint Mission Statement on Iraq (December
2005), (4) the Multinational Corps-Iraq Operation Order 05-03 (December
2005), (5) the National Strategy for Supporting Iraq (updated January
2006), (6) the quarterly State Section 2207 reports to Congress
(through April 2006),[Footnote 4] and (7) the April 2006 Joint Campaign
Plan issued by the Chief of Mission and the Commander of the MNF-I. See
appendix I for a more detailed description of our scope and
methodology. See appendix II for details on GAO's six desirable
characteristics of an effective national strategy.
We conducted our review from October 2005 through June 2006 in
accordance with generally accepted government auditing standards.
Results in Brief:
The NSVI and supporting documents incorporate the same desired end-
state for U.S. stabilization and reconstruction operations in Iraq that
the coalition established in 2003: a peaceful, united, stable, and
secure Iraq, well integrated into the international community, and a
full partner in the global war on terrorism. Since then, however, the
strategy's underlying security, reconstruction, and economic
assumptions have evolved in response to changing circumstances. First,
the original plan assumed a permissive security environment, which
never materialized. An active and increasingly lethal insurgency
undermined the development of effective Iraqi governmental institutions
and delayed plans for an early transfer of security responsibilities to
the Iraqis. Second, the United States assumed that its U.S.-funded
reconstruction activities would help restore Iraq's essential services-
-oil production, electricity generation, and water treatment--to prewar
levels. However, U.S. efforts to achieve this goal have been hindered
by security, management, and maintenance challenges that undermine
efforts to improve the lives of the Iraqi people. For example, a March
2006 poll of Iraqi citizens indicated that a majority thought Iraq was
heading in the wrong direction, and growing numbers of people believe
that the security situation, the provision of electricity, and
corruption have worsened. Third, the strategy assumes that the Iraqi
government and international community will help finance Iraq's
development needs. However, Iraq has limited resources to contribute to
its own reconstruction, and while the international community has
offered some assistance, Iraq's estimated reconstruction needs vastly
exceed what has been offered to date. As a result, it is unclear how
the United States will achieve its desired end-state in Iraq given
these significant changes in the underlying assumptions.
The NSVI aims to improve U.S. strategic planning for Iraq; however, the
NSVI and its supporting documents are incomplete because they do not
fully address all the desirable characteristics of an effective
national strategy. On one hand, the strategy's purpose and scope is
clear because it identifies U.S. involvement in Iraq as a vital
national interest and central front in the war on terror. The strategy
also discusses the threats and risks facing the coalition forces and
provides a comprehensive description of U.S. political, security, and
economic goals and objectives in Iraq. However, discussion of outcome-
related performance measures to assess progress in achieving these
goals and objectives is limited. The strategy falls short in three key
areas. First, it neither identifies the current and future costs of
U.S. involvement in Iraq, such as the costs of maintaining U.S.
military operations, building Iraqi government capacity at the
provincial and national level, completing the training and equipping of
Iraqi security forces, and rebuilding critical infrastructure, nor does
it address how these efforts should take the risk of corruption into
account when assessing the costs of achieving U.S. objectives in Iraq.
Second, the strategy does not clearly identify who will implement key
aspects of the strategy or a process for resolving conflict among the
many implementing agencies, a problem identified in prior State and
other agency reviews. Third, while the strategy recognizes the need to
integrate U.S. goals and objectives with the efforts of the
international partners and the Iraqi government, it neither addresses
how their goals and objectives are to be integrated with those of the
United States, nor does it provide details on the Iraqi government's
contribution to its future financing requirements. In addition, the
elements of the strategy are dispersed among a number of supporting
documents, further limiting its usefulness as a planning and oversight
tool.
To help improve the strategy's effectiveness as a planning tool and to
improve its usefulness to Congress, this report recommends that the NSC
in conjunction with the DOD and State complete the strategy by
addressing all six characteristics of an effective national strategy in
a single document. In particular, the revised strategy should address
the current costs and future military and civilian resources needed to
implement the strategy, clarify the roles and responsibilities of all
U.S. government agencies involved in reconstruction and stabilization
efforts, and detail potential Iraqi and international contributions to
future military and reconstruction needs. State and DOD did not comment
on our recommendations. In commenting on a draft of this report, State
asserted that GAO misrepresented the NSVI's purpose--to provide the
public a broad overview of the U.S. strategy in Iraq. Our analysis was
not limited to the publicly available, unclassified NSVI. With input
from DOD and State, we included in our assessment all the classified
and unclassified documents that collectively define the U.S. strategy
in Iraq. Collectively, these documents still lack all the key
characteristics of an effective national strategy. However, we refined
our recommendation to focus on the need to improve the U.S. strategy
for Iraq.
Background:
Prior to the fall of 2005, the U.S. stabilization and reconstruction
effort in Iraq lacked a clear, comprehensive, and integrated U.S.
strategy. State assessments and other U.S. government reports noted
that this hindered the implementation of U.S. stabilization and
reconstruction plans. A review of the U.S. mission completed in October
2005 found, among other things, that (1) no unified strategic plan
existed that effectively integrated U.S. government political,
military, and economic efforts; (2) multiple plans in Iraq and
Washington have resulted in competing priorities and funding levels not
proportional to the needs of overall mission objectives; (3) focused
leadership and clear roles are lacking among State, DOD, and other
agencies in the field and in Washington, D.C; and (4) a more realistic
assessment of the capacity limitations of Iraqi central and local
government is needed.
The study made a series of recommendations that led to the creation of
the November 2005 NSVI, including (1) creating a single, joint civil-
military operational plan to clarify organizational leads; (2)
providing better strategic direction and more coordinated engagement
with Iraqi government and international donors; (3) establishing three
mission teams to address political, security, and economic tasks; and
(4) establishing provincial reconstruction teams to engage Iraqi
leadership and foster flexible reconstruction, local governance, and
"bottom-up" economic development. The study also called for a
streamlined interagency support office in Washington, D.C., to assist
the mission's working groups and provide needed institutional memory
and continuity. In response, the administration created the NSVI in
November 2005 to reorganize U.S. government stabilization and
reconstruction efforts around three broad tracks--political, security,
and economic--and eight strategic objectives (see table 1).
Table 1: National Strategy for Victory in Iraq:
Purpose: To articulate the President's 2003 statement on the U.S.
strategy:
"The United States has no intention of determining the precise form of
Iraq's new government... Yet we will ensure that one brutal dictator is
not replaced by another. All Iraqis must have a voice in the new
government and all citizens must have their rights protected.
Rebuilding Iraq will require a sustained commitment from many nations,
including our own: we will remain in Iraq as long as necessary, and not
a day more.".
--President Bush, February 26, 2003;
Definition of victory: Victory in Iraq is a vital national interest.
Prevailing in Iraq will help win the war on terror as it will make
America safer, stronger, and more certain of its future:
Victory is tied to conditions on the ground and defined in the
following stages:
Short term: Steady progress fighting terrorists, meeting political
milestones, building democratic institutions, standing up security
forces.
Medium term: Iraq leads fight to defeat terrorists and provides own
security, constitutional government fully in place and is on its way
economically.
Long term: Peaceful, united, stable, secure, well integrated into the
international community, and a partner in war on terror;
Integrates U.S. efforts along three tracks:
Political (Isolate, Engage, Build):
* Isolate hardened enemies from those who can be won over;
* Engage those outside the political process and invite peaceful
participation;
* Build stable, pluralistic, and effective national institutions that
can protect the interests of all Iraqis.
Security (Clear, Hold, Build).
* Clear areas of enemy control;
* Hold freed areas by ensuring they remain under Iraqi government and
Iraqi security forces (ISF) control;
* Build ISF and local institutions to deliver services, advance rule of
law, and nurture civil society.
Economic (Restore, Reform, Build);
* Restore infrastructure;
* Reform economy;
* Build Iraqi capacity to maintain infrastructure, rejoin the
international economic community, and improve general welfare of all
Iraqis;
Objectives:
Encompasses the following eight strategic objectives:
1. Defeat the terrorists and neutralize the insurgency;
2. Help Iraq's security forces become self- reliant;
3. Help Iraqis forge a national compact for democratic government;
4. Help Iraq build government capacity and provide essential services;
5. Help Iraq strengthen its economy;
6. Help Iraq strengthen rule of law and promote civil rights;
7. Increase international support for Iraq; 8. Strengthen public
understanding of U.S.-led coalition efforts and public isolation of
insurgents.
Source: NSVI, November 2005.
[End of table]
Overall, officials in DOD and State identified seven documents that
describe the U.S. government strategy for Iraq in addition to the NSVI.
The U.S. government uses these documents to plan, conduct, and track
different levels of the U.S. stabilization and reconstruction strategy
as follows:
* National/strategic level: The President and the NSC established the
desired end-state, goals and objectives, and the integrated approach
incorporated in the NSVI. The May 2004 NSPD 36 made State responsible
for all U.S. activities in Iraq through its Chief of Mission in Baghdad
(Ambassador), with the exception of U.S. efforts relating to security
and military operations, which would be the responsibility of DOD. The
directive also continued the U.S. Central Command (CENTCOM)
responsibility for all U.S. government efforts to organize, equip, and
train Iraqi security forces. MNF-I oversees the effort to rebuild the
Iraqi security forces through a subordinate command. The National
Strategy for Supporting Iraq (NSSI) serves as a management tool to
match and coordinate U.S. stabilization and reconstruction needs and
priorities and provides updates on activities associated with each
strategic objective.
* Operational level: The Joint Mission Statement clarified the roles
and responsibilities between the Chief of Mission in Baghdad and the
Commander of MNF-I and established mission milestones and target dates
for their achievement. The August 2004 campaign plan elaborated and
refined the original plan for transferring security responsibilities to
Iraqi forces.[Footnote 5] In April 2006, Commander of the MNF-I and the
Chief of Mission in Baghdad issued a new classified Joint Campaign Plan
incorporating the changes in organization laid out in the NSVI,
although some of the annexes to this campaign plan are being reworked
and were not available as of May 2006.
* Implementation and reporting level: Operations Order 05-03
incorporates revised missions and objectives for the Multinational
Corps-Iraq (MNC-I), the MNF-I unit responsible for command and control
of operations throughout Iraq. This November 2005 order was issued in
anticipation of the New Joint Campaign Plan incorporating the NSVI's
new objectives and organizational arrangements, according to DOD
officials. The campaign plans and the operations order also established
metrics for assessing their progress in achieving MNF-I's objectives.
State's 2207 reports track mission activity and funding status by
mission objective and funding sector.
Figure 1 depicts the relationship of the NSVI and the key supporting
strategy documents.
Figure 1: NSVI and Key Supporting Documents:
[See PDF for image]
Source: GAO.
[End of figure]
In addition to these documents, senior State officials stated that
Congressional Budget Justifications and publications on Iraq spending
provide additional details on the U.S. government resources,
investments, and risk management. DOD officials stated that its
quarterly reports to measure the results of its fiscal year 2005 Iraq
Security and Stabilization Fund programs in Iraq also provide
information, but DOD did not cite these reports as supporting
documentation for the NSVI.
NSVI Retains Original Desired End-State, but Changing Assumptions and
Circumstances Make it Unclear How It Will Achieve These Objectives:
The NSVI, issued by the NSC in November 2005, incorporates the same
desired end-state for U.S. operations in Iraq that first was
established by the Coalition Provisional Authority (CPA) in 2003: a
peaceful, united, stable, secure Iraq, well integrated into the
international community, and a full partner in the global war on
terrorism.[Footnote 6] Since then, however, the strategy's underlying
security, reconstruction, and economic assumptions have changed in
response to changing circumstances (see fig. 2). First, the original
plan assumed a permissive security environment that never materialized.
Second, the CPA assumed that U.S. funded reconstruction activities
would help restore Iraq's essential services to prewar levels but has
failed to achieve these goals. Third, the strategy assumes that the
international community and Iraqi government will help finance Iraq's
development needs; however, these expectations have not yet been met.
As a result, it is unclear how the United States will achieve its
desired end-state in Iraq given these changes in assumptions and
circumstances.
Figure 2: Evolution of the Objectives and Assumptions of U.S.
Stabilization and Reconstruction Efforts in Iraq:
[See PDF for image]
Source: GAO analysis of CPA plans, NSSI, NSVI, and State 2207 reports.
[End of figure]
Permissive Security Environment Never Materialized:
According to senior CPA and State officials, in 2003 the CPA assumed
that Iraq would have a permissive security environment. CPA expected
that a relatively small internal security force would replace the
disbanded Iraqi Army and would quickly assume responsibility for
providing security from the coalition forces. However, growing
insurgent attacks led to (1) the collapse of Iraqi forces in April
2004; (2) the delay of coalition plans to turn responsibility for
security over to the new Iraqi security forces beginning in early 2004;
and (3) the postponement of plans to draw down U.S. troop levels below
138,000 until the end of 2005. In October 2004, State reported to
Congress that the uncertain security situation affected all potential
economic and political developments in Iraq and that enhanced Iraqi
security forces were critically needed to meet the new threat
environment. The coalition's military commander and the U.S. Chief of
Mission conducted strategic and programmatic reviews in mid-2004 and
reached similar conclusions, noting that the hostile security situation
required the creation of substantially larger Iraqi security forces
with coalition assistance.
As a result, between 2003 and 2006, the projected Iraq security force
structure doubled in size, while U.S. appropriations for support of the
Iraqi security forces more than quadrupled. CPA projected the need for
a security force of about 162,000 personnel (including about 77,000
armed forces and National Guard troops and 85,000 police) in 2003.
Current plans call for 325,500 security personnel to be organized under
coalition direction: including completing the initial training and
equipping of the 137,500 in the Iraqi Armed Forces and 188,000 police
and other interior ministry forces by the end of December 2006. U.S.
assistance appropriated for Iraqi security forces and law enforcement
has grown from $3.24 billion in January 2004 to approximately $13.7
billion in June 2006.[Footnote 7] As GAO recently reported, the
insurgency remains strong and resilient in 2005 and early 2006, the
intensity and lethality of attacks have been growing, and the
insurgency threatens to undermine the development of effective Iraqi
governmental institutions.[Footnote 8]
Essential Services Have Not Been Restored to Prewar Levels, Undermining
Efforts to Improve the Lives of Iraqi People:
The U.S. strategy initially assumed that its U.S.-funded reconstruction
activities would help restore Iraq's essential services--including oil
production, electricity generation, and water treatment--to prewar
levels. However, the U.S. efforts have yet to restore Iraq's essential
services to prewar levels, and efforts to achieve these goals have been
hindered by security, management, and maintenance challenges. As a
result, the United States has yet to prove that it has made a
difference in the Iraqi people's quality of life.
According to senior CPA and State officials responsible for the
strategy, the CPA's 2003 reconstruction plan assumed (1) that creating
or restoring basic essential services for the Iraqi people took
priority over jobs creation and the economy and (2) that the United
States should focus its resources on long-term infrastructure
reconstruction projects because of the expertise the United States
could provide. According to the senior CPA official tasked with
developing the reconstruction plan, CPA drew up a prioritized list of
more than 2,300 construction projects in 10 sectors to be completed in
about 3 years, which were to be funded by the $18.4 billion made
available in the fiscal year 2004 supplemental appropriation for the
2004 Iraq Relief and Reconstruction Fund (IRRF2).[Footnote 9] The U.S.
reconstruction effort focused primarily on building or restoring
essential services to prewar levels--or to a standard acceptable to and
accessible by all Iraqi citizens-over the long-term with less emphasis
on more immediate development tasks. CPA initially allocated about two-
thirds of the IRRF2 funds to restore essential services in the oil,
water, and electricity sectors, while more immediate projects in
democracy building, private sector development, and the employment
sector received about 3 percent.
However, the coalition's decision in November 2003 to accelerate the
return of power to a sovereign Iraqi interim government and changes in
the security situation altered these assumptions, leading the U.S.
administration to reallocate a total of $3.5 billion between January
2004 and April 2006 from the water resources and sanitation and
electric sectors to security, law enforcement, justice, and democracy
building and employment programs. For example, the mission reallocated
over $555 million in IRRF2 funds to democracy programs and reallocated
$105 million to improve productivity and employment in the agriculture
sector to support the Iraqi government as it prepared for elections. A
World Bank report stated that the agriculture sector employed 18
percent of Iraq's labor force and accounted for about 10 percent of
gross domestic product in 2004. Before this time, the United States had
devoted no IRRF2 resources to the agricultural sector.
U.S. expectations about Iraq's capacity to manage and sustain its own
reconstruction efforts have not been realized and have resulted in
greater U.S. emphasis on capacity development. As reported in prior GAO
reports, the U.S. reconstruction effort has encountered difficulties in
maintaining new and rehabilitated infrastructure, resulting in some
U.S.-funded projects becoming damaged or inoperable after being turned
over to the Iraqis.[Footnote 10] For example, as of June 2005, U.S.-
funded water and sanitation projects representing about $52 million of
approximately $200 million spent on completed projects were inoperable
or were operating at lower than normal capacity. Recent U.S. mission
assessments have noted the Iraqi government's limited capacity to
provide services to the Iraqi people due to weak technical expertise,
limitations in managers' skills and training, and an inability to
identify and articulate strategic priorities, and other factors. As a
result, the administration reallocated $170 million for government
capacity building programs and $133 million for infrastructure
operations and maintenance needs in 2005 and early 2006.
As GAO has reported previously, these challenges contributed to the
cancellation or delay of projects in the essential services sectors,
affecting U.S. efforts to achieve its targets in the oil, electricity,
and water sectors, and undermining its efforts to improve the quality
of life for the Iraqi people. A March 2006 poll of Iraqi citizens
indicated that over half the respondents thought Iraq was heading in
the wrong direction. Moreover, the poll reports that over the last
year, growing numbers believe that the security situation, the
provision of electricity, the prevalence of corruption, and the state
of the economy worsened.[Footnote 11]
Expected Level of Iraq and International Community Financial Support
for Iraq's Developmental Needs Have Not Yet Been Met:
From the outset of the reconstruction and stabilization effort, the
U.S. strategy assumed that the Iraqis and the international community
would help finance Iraq's developmental needs. However, these
expectations have not yet been met, and Iraq's estimated future
reconstruction needs vastly exceed what has been offered to date.
According to a CPA report and senior CPA and State officials, the 2003
CPA plan assumed that the Iraqis and the international community would
support development needs that were not financed by the United States.
For example, a CPA report assumed that Iraqi oil revenues could help
pay for reconstruction costs because it estimated that Iraq's oil
production would increase to about 2.8 to 3.0 million barrels per day
(mbpd) by the end of 2004, a one-third increase over 2002 levels, and
generate about $15 billion in oil export revenue for the year.
These expectations about Iraq's ability to contribute to and manage its
own reconstruction have not been realized in practice. U.S. agency
documents estimated Iraq's 2003 actual prewar crude oil production at
2.6 mbpd. In March 2006, State reported that oil production was about 2
mbpd. A combination of insurgent attacks on crude oil and product
pipelines, dilapidated infrastructure, and poor operations and
maintenance have hindered domestic refining and have required Iraq to
import significant portions of liquefied petroleum gas, gasoline,
kerosene, and diesel. In addition, although the capacity for export is
theoretically as high as 2.5 mbpd, export levels averaged about 1.4
mbpd in 2005. Shortfalls in expected oil production levels and
increased security spending contributed to reductions in Iraq's own
projections of how much of the budget would be available to contribute
to its own reconstruction.[Footnote 12] In 2005, Iraq's government
budgeted approximately $5 billion for capital expenditures, but a
senior U.S. mission official stated that they managed to spend only a
few hundred million by the end of the year. He attributed this to Iraq
ministries' lack of expertise to manage projects, write contracts, and
provide effective controls on the contracting process.
The strategy's assumptions about the need for extensive international
donor support for rebuilding Iraq's reconstruction have not
significantly changed since 2003, although the estimated cost of
restoring Iraq's infrastructure has grown significantly since October
2003. At that time, a World Bank, United Nations, and CPA assessment
initially estimated that it would cost about $56 billion to meet
reconstruction needs across a variety of sectors in Iraq. The United
States committed about $24 billion for relief and reconstruction in
fiscal years 2003 and 2004, with the expectation the Iraqis and the
international community would provide the rest. Other foreign donors
pledged about $13.6 billion to rebuild Iraq. According to State
documents, international donors have provided over $3.5 billion in the
form of multilateral and bilateral grants as of April 2006.[Footnote
13] About $10 billion, or 70 percent, of the pledged amount is in the
form of loans, primarily from the World Bank, the International
Monetary Fund (IMF), and Japan. As GAO has reported previously,
however, Iraq currently owes a combined $84 billion to victims of its
invasion of Kuwait and other external creditors, which may limit its
capacity to assume more debt. Moreover, Iraq's needs are greater than
originally anticipated due to severely degraded infrastructure,
postconflict looting and sabotage, and additional security costs. In
the oil sector alone, Iraq will now likely need an estimated $30
billion over the next several years to reach and sustain an oil
production capacity of 5 million barrels per day, according to industry
experts and U.S. officials. For the electricity sector, Iraq projects
that it will need $20 billion through 2010 to boost electrical
capacity, according to the Department of Energy's Energy Information
Administration. While the NSVI does not identify the magnitude of
additional financing needed, it acknowledges that there is "room for
the international community to do more."
The NSVI and Its Supporting Documents Do Not Address All the
Characteristics of an Effective National Strategy, thus Limiting Its
Usefulness as a Planning Tool:
The NSVI aims to improve U.S. strategic planning for Iraq; however, the
NSVI and its supporting documents are incomplete because they do not
fully address the six desirable characteristics of effective national
strategies that GAO has identified through its prior work.[Footnote 14]
We used these six characteristics to evaluate the NSVI and the
supporting documents that DOD and State officials said encompassed the
U.S. strategy for rebuilding and stabilizing Iraq. As figure 3 shows,
the strategy generally addresses three of the six characteristics but
only partially addresses three others, limiting its usefulness to guide
agency implementation efforts and achieve desired results.[Footnote 15]
Moreover, since the strategy is dispersed among several documents
instead of one, its effectiveness as a planning tool for implementing
agencies and for informing Congress about the pace, costs, and intended
results of these efforts is limited.
[This page left blank intentionally.]
Figure 3: Extent the U.S. Strategy for Iraq Addresses GAO's Desirable
Characteristics of an Effective Strategy:
[See PDF for image]
Source: GAO analysis of NSC, State, and DOD data.
[End of figure]
Strategy Discusses Purpose and Scope, Identifies Risks and Threats, and
Discusses Desired Goals and Objectives:
The strategy generally addresses three of the six characteristics. As
figure 3 shows, the strategy provides: (1) a clear statement of its
purpose and scope; (2) a detailed discussion of the problems the
strategy intends to address; and (3) an explanation of its goals,
subordinate objectives, and activities.
U.S. Strategy Identifies Purpose and Scope:
This characteristic addresses why the strategy was produced, the scope
of its coverage, and the process by which it was developed. A complete
description of purpose, scope, and methodology make the document more
useful to organizations responsible for implementing the strategies, as
well as to oversight organizations such as Congress. The strategy
identifies U.S. involvement in Iraq as a vital national interest,
identifies the risks and threats facing coalition forces, and discusses
overarching U.S. political, security, and economic objectives.
Specifically, the NSVI identifies U.S. government efforts to rebuild
and stabilize Iraq in terms of three overarching political, security,
and economic objectives and addresses the assumptions that guided its
development. For example, to help Iraq achieve the strategic goal of
forging a national compact for democratic government, the strategy's
subordinate objectives state that the United States would help promote
transparency in the executive, legislative, and judicial branches of
government, and help build national institutions that transcend
regional and sectarian interests, among other activities. To help
achieve another strategic goal, building government capacity and
providing essential services, the strategy also states that the U.S.
government is helping to achieve this objective by rehabilitating
critical infrastructure in the fuel and electric power sectors. It is
also rehabilitating schools, providing new textbooks, computers, and
materials; and training teachers and school administrative staff. One
supporting document, State's 2207 report to Congress, provides
additional supporting details and data for the specific activities and
projects funded through the $18.4 billion in fiscal year 2004
reconstruction funds.
Strategy Identifies Risks and Threats:
This characteristic addresses the particular risks and threats the
strategy is directed at, as well as risk assessment of the threats to
and vulnerabilities of critical assets and operations. Specific
information on both risks and threats helps responsible parties better
implement the strategy by ensuring that priorities are clear and
focused on the greatest needs. The NSVI and the supporting documents
generally address some of the problems, risks, and threats found in
Iraq. For example, the NSVI identifies the risks posed by the
insurgency and identifies three basic types of insurgents--
rejectionists, supporters of former Iraqi President Saddam Hussein, and
terrorists affiliated with or inspired by al Qaeda--and the different
actions needed to confront each one. In addition, various supporting
documents provide additional information on the threats the Shi'ite
militias present, and the corruption that could affect the Iraqi
government's ability to become self-reliant, deliver essential
services, reform its economy, strengthen rule of law, maintain
nonsectarian political institutions, and increase international
support.
Strategy Discusses Goals, Objectives, and Activities but Has Limited
Discussion of Outcome-Related Performance Measures:
This characteristic addresses what the national strategy strives to
achieve and the steps needed to garner those results, as well as the
priorities, milestones, and outcome-related performance measures to
gauge results. Identifying goals, objectives, and outcome-related
performance measures aids implementing parties in achieving results and
enables more effective oversight and accountability. In addition,
identifying and measuring outcome-related performance rather than
output measures allow for more accurate measurement of program results
and assessment of program effectiveness.
The strategy generally addresses goals and subordinate objectives by
identifying 8 strategic objectives (pillars), 46 subordinate
objectives, or "lines of action," and numerous project activities but
only partially addresses outcome-related performance measures. The
supporting strategy documents also provide information on how progress
will be monitored and reported. In addition, the NSVI identifies the
process for monitoring and reporting on progress via interagency
working groups. It also identifies some metrics to assess progress,
such as the number of Iraqis willing to participate in the political
process, the quality and quantity of the Iraqi units trained, and
barrels of oil produced and exported. The NSVI also notes that detailed
metrics on the results of training Iraqi security forces and
improvements in the economy and infrastructure are collected and
available elsewhere but did not include them in the strategy.
Supporting documents also identify some performance measures.
The metrics the strategy uses to report progress make it difficult to
determine the impact of the U.S. reconstruction effort. We reported
previously that in the water resources and sanitation sector little was
known about how U.S. efforts were improving the amount and quality of
water reaching Iraqi households or their access to the sanitation
services because the U.S. government only tracked the number of
projects completed or under way.[Footnote 16] For instance, as of March
2006, Iraq has the capacity to produce 1.1 million cubic meters of
water per day, but this level overestimates the amount of potable water
reaching Iraqi households. U.S. officials estimate that 60 percent of
water treatment output is lost due to leakage, contamination, and
illegal connections. The U.S. mission reported in December 2005 that it
had developed a set of metrics to better estimate the potential impact
of U.S. water and sanitation reconstruction efforts on Iraqi
households, but acknowledges it is impossible to measure how much water
Iraqis are actually receiving or whether the water is potable. The
report notes that without the comprehensive data these key measures
would provide, mission efforts to accurately assess the impact of U.S.
reconstruction efforts on water and sanitation services are seriously
limited.
In April 2006, we reported that in the electric sector U.S. agencies
primarily reported on generation measures such as levels of added or
restored generation capacity and daily power generation of electricity;
numbers of projects completed; and average daily hours of power.
However, these data did not show (1) whether the power generated was
uninterrupted for the period specified (e.g., average number hours per
day), (2) if there were regional or geographic differences in the
quantity of power generated, or (3) how much power was reaching
intended users.[Footnote 17] Moreover, State's 2005 assessment of its
reconstruction effort noted that the reconstruction effort lacked
measurable milestones that tied short-term program objectives to long-
term strategic goals.
Strategy Partially Address Costs, Agency Responsibilities, and
Integration:
As figure 3 shows, the NSVI and supporting documents only partially (1)
identify what the strategy will cost and the sources of financing; (2)
delineate the roles and responsibilities of key U.S. government
agencies, and the mechanisms for coordination; (3) describe how the
strategy will be integrated among U.S. entities, the Iraqi government,
and international organizations.
Strategy Partially Addresses Future Costs and Resource Requirements:
This characteristic addresses what the strategy will cost; where
resources will be targeted to achieve the end-state; and how the
strategy balances benefits, risks, and costs. Guidance on costs and
resources needed using a risk management approach helps implementing
parties allocate resources according to priorities; track costs and
performance; and shift resources, as appropriate. Such guidance also
would assist Congress and the administration in developing a more
effective strategy to achieve the desired end-state.
The strategy neither identifies the current and future costs of
implementing the strategy, nor does it identify the sources of funding
(U.S. government, international donors, or Iraqi government) needed to
achieve U.S. political, security, and economic objectives in Iraq.
These costs would include the costs of maintaining U.S. military
operations, including the costs to repair and replace equipment used
during these operations, building the capacity of key national
ministries and the 18 provincial governments, completing the U.S.
program for training and equipping Iraqi security forces, and restoring
essential services. For example, between fiscal years 2003 and 2006,
about $311 billion was allocated to support U.S. objectives in Iraq.
Approximately $276 billion has been provided to support U.S. military
operations and forces as of June 2006, which currently number about
130,000 troops, and over $34 billion to develop capable Iraqi security
forces, restore essential services, and rebuild Iraqi institutions. The
administration has also requested about $51 billion more for military
and reconstruction operations for fiscal year 2007: including $50
billion that the Office of Management and Budget terms "bridge funding"
to continue the global war on terrorism in Iraq and Afghanistan and an
additional $771 million for reconstruction operations in Iraq.
These cost data are not included in the strategy. As a result, neither
DOD nor Congress can reliably determine the cost of the war, nor do
they have details on how the appropriated funds are being spent or
historical data useful in considering future funding needs.[Footnote
18] Moreover, the strategy states that the war in Iraq yields benefits
in the global war on terrorism but does not discuss substantial
financial and other costs. In addition, GAO has previously found
numerous problems in DOD's processes for accounting for and reporting
cost data for its operations in Iraq, which constitute about 90 percent
of estimated total U.S. government costs. Given the current fiscal
challenges facing the U.S. government, such an assessment would help
clarify the future costs of U.S. involvement in Iraq.
The strategy also fails to project future costs and contributions from
non-U.S. sources. It does not address the extent to which the Iraqi
government will contribute financially to its own rebuilding effort.
While supporting documents provide some information on current spending
plans and allocations, the dispersion of this budget information across
numerous budget documents makes it difficult to analyze how the
objectives of the NSVI will be funded. For example, State's quarterly
2207 reports to Congress describe the current status of the Iraq
reconstruction funding allocations and the status of international
donations for reconstruction. In February 2006, State issued two
supplemental documents that provide some additional information on how
IRRF2 funds and fiscal year 2006 and 2007 budget appropriations were to
be spent across the NSVI's three tracks (political, security, and
economic). Other supporting documents partially address these resource
issues but do not identify future resource needs. The unclassified
version of the MNF-I/ U.S. Embassy Baghdad Joint Mission Statement on
Iraq indicates that budgetary and human capital resources will be
needed, and funding is expected from Congress and the Iraqi government.
However, it does not identify the specific amounts needed to meet key
U.S. goals. The 2207 reports discuss international donor contribution
levels and reports on the progress of projects funded with
international grants but does not relate these amounts to Iraqi
requirements.
In addition, none of the strategy documents takes into account the
total cost of Iraq's reconstruction, which will be more than originally
anticipated, due to severely degraded infrastructure, postconflict
looting and sabotage, and additional security costs. Initial
assessments in 2003 identified a total of $56 billion in Iraqi
reconstruction needs in various sectors, but more recent cost estimates
suggest that the oil infrastructure and electric sectors alone will
require about $50 billion in the next several years. These funding
concerns have grown as resources have been shifted from reconstruction
projects to security needs. For example, between January 2004 and April
2006, the administration reallocated $3.5 billion from the water
resources and sanitation and electric sectors to security; justice,
public safety, and civil society; and democracy building activities;
and other programs. This contributed to the cancellation, delay, or
scaling back of water and electricity projects and will complicate
efforts to achieve the objectives for these essential service sectors.
Although the NSVI acknowledges that rampant corruption is a challenge
threatening the success of U.S. reconstruction and stabilization
efforts, the strategy does not address how reconstruction efforts
should take the risk of corruption into account when assessing the
costs of achieving U.S. objectives in Iraq. For instance, IMF, the
World Bank, Japan, and European Union officials cite corruption in the
oil sector as an especially serious problem. In addition, according to
State officials and reporting documents, about 10 percent of refined
fuels are diverted to the black market, and about 30 percent of
imported fuels are smuggled out of Iraq and sold for a profit. By not
addressing this risk, the strategy cannot provide adequate guidance to
implementing parties trying to assess priorities and allocate
resources.
Strategy Partially Addresses U.S. Roles, Responsibilities, and
Coordination Mechanisms:
This characteristic addresses which U.S. organization will implement
the strategy and their roles, responsibilities, and mechanisms for
coordinating their efforts. Addressing this characteristic fosters
coordination and enhances both implementation and accountability.
The NSVI and the supporting documents partially address the roles and
responsibilities of specific U.S. government agencies and offices and
the process for coordination. To organize U.S. efforts in Iraq, the
NSVI breaks down the political, security, and economic tracks of the
strategy into eight strategic objectives (pillars) that have lines of
action assigned to military and civilian units in Iraq. Each strategic
objective has a corresponding interagency working group to coordinate
policy, review and assess the progress, develop new proposals for
action, and oversee implementation of existing policies. National
Security Presidential Directive 36 made the Department of State
responsible for nonsecurity aspects of reconstruction and lays out key
roles for the U.S. Chief of Mission in Baghdad and CENTCOM. It directed
that the Commander of CENTCOM will, with the Chief of Mission's policy
guidance, direct all U.S. government efforts in support of training and
equipping Iraq security forces. It also established the roles for the
mission's two supporting offices: the Iraq Reconstruction Management
Office and the Projects and Contracting Office.
Although the NSVI organizes the U.S. strategy along three broad tracks
and eight strategic objectives, it does not clearly identify the roles
and responsibilities of specific federal agencies for achieving these
specific objectives, or how disputes among them will be resolved. For
example, GAO found only one reference in the NSVI to the reconstruction
responsibilities of a particular U.S. government agency in Iraq when it
noted that the Federal Bureau of Investigation and other U.S. agencies
would assist an Iraqi antimajor crimes task force in the investigation
of terrorist attacks and assassinations. Thus, it is not clear which
agency is responsible for implementing the overlapping activities
listed under the eight strategic objectives. For instance, one activity
is to promote transparency in the executive, legislative, and judicial
branches of the Iraqi government; however, the strategy does not
indicate which agency is responsible for implementing this activity, or
who to hold accountable for results. Moreover, little guidance is
provided to assist implementing agencies in resolving conflicts among
themselves, as well as with other entities. In our prior work, we found
that delays in reconstruction efforts sometimes resulted from lack of
agreement among U.S. agencies, contractors, and Iraqi authorities about
the scope and schedule for the work to be performed. For example, in
the water resources and sanitation sector, Iraqi and U.S. officials'
disagreements over decisions to repair or replace treatment facilities
or to use brick instead of concrete have delayed project
execution.[Footnote 19]
Strategy Partially Addresses Integration with Iraqi Government and
International Donors:
This characteristic addresses both how a national strategy relates to
the goals, objectives, and activities of other strategies, to other
government and international entities, and relevant documents from
implementing organizations. A clear relationship between the strategy
and other critical implementing documents helps agencies and other
entities understand their roles and responsibilities, foster effective
implementation, and promote accountability.
The NSVI and supporting documents partially address how the strategy
relates to other international donors and Iraqi government goals,
objectives, and activities.[Footnote 20] For instance, the NSVI and
supporting documents identify the need to integrate the efforts of the
coalition, the Iraqi government, and other nations but do not discuss
how the U.S. goals and objectives are integrated with the strategies,
goals, and objectives of the international donors and the Iraqi
government. The NSVI does identify Web sites where other documents can
be obtained but does not address how these documents are integrated
with the NSVI.
GAO has previously reported that victory in Iraq cannot be achieved
without an integrated U.S., international, and Iraqi effort to meet the
political, security, and economic needs of the Iraqi people. However,
the strategy has only partially addressed how it relates to the
objectives and activities of Iraq and the international community and
does not address what it expects the international community or the
Iraqi government to pay to achieve future objectives. This affects the
strategy's ability to address the challenge of conducting an integrated
operation dependent upon Iraq's limited capacity to contribute to its
own reconstruction. For example, GAO has reported that Iraq's weak
national and provincial governments limit Iraq's ability to operate and
sustain new and rehabilitated infrastructure projects. This has
contributed to the failure to achieve key reconstruction goals.
Dispersion of the U.S. Strategy across Many Documents Limits Its
Usefulness as a Planning Tool:
The dispersion of information across several documents limits the
strategy's overall coherence and effectiveness as a management tool for
implementing agencies and as an oversight tool for informing Congress
about the pace, costs, and results of these efforts. Since these other
documents were written by different agencies at different points in
time, the information in them is not directly comparable, which
diminishes their value. State and DOD have separately released budget
requests totaling about $121 billion to continue U.S. stabilization and
reconstruction programs through fiscal year 2007. However, these
documents do not provide an estimate or range of estimates as to what
it will cost to achieve U.S. objectives in Iraq in the short-, medium-
, and long-term. In addition, these documents further disperse
information about how the government is addressing the key elements of
an effective national strategy for Iraq.
Conclusion:
The November 2005 NSVI represents the results of efforts to improve the
strategic planning process for the challenging and costly U.S. mission
in Iraq. Although the NSVI is an improvement over earlier efforts, it
and the supporting documents are incomplete. The desired end-state of
the U.S. strategy has remained unchanged since 2003, but the underlying
assumptions have changed in response to changing security and economic
conditions, calling into question the likelihood of achieving the
desired end-state. Moreover, the collective strategy neither identifies
U.S. or other resources needed to implement the objectives nor does it
address its integration with the efforts and funding plans of the Iraqi
government or the international community. The formation of the new
Iraqi government provides an opportunity to the United States
government to reexamine its strategy and more closely align its efforts
and objectives with those of the Iraqi people and other donors.
The dispersion of information across the NSVI and seven supporting
documents further limits the strategy's usefulness as a tool for
planning and reporting on the costs, progress, and results of the U.S.
mission in Iraq. Since the current disparate reporting mechanisms do
not provide a comprehensive assessment of U.S. government efforts in
Iraq, Congress may lack critical information to judge U.S. progress in
achieving objectives and addressing key political, security, and
economic challenges. In addition, the strategy could be more useful to
implementing agencies and Congress if it fully addressed these
characteristics in a single document.
Recommendation for Executive Action:
To help improve the strategy's effectiveness as a planning tool and to
improve its usefulness to Congress, this report recommends that the
National Security Council, in conjunction with DOD and State, complete
the strategy by addressing all six characteristics of an effective
national strategy in a single document. In particular, the revised
strategy should address the current costs and future military and
civilian resources needed to implement the strategy, clarify the roles
and responsibilities of all U.S. government agencies involved in
reconstruction and stabilization efforts, and detail potential Iraqi
and international contributions to future military and reconstruction
needs.
Agency Comments and Our Evaluation:
We provided a draft of this report to the NSC and to the Departments of
Defense and State for their review and comment. We received a written
response from State that is reprinted in appendix III. State also
provided us with technical comments and suggested wording changes that
we incorporated as appropriate. DOD deferred comment to the NSC; its
letter is reprinted in appendix IV. We did not receive oral or written
comments from the NSC in response to our request.
State did not comment on our report recommendations. In commenting on a
draft of this report, State asserted that our draft report
misrepresented the NSVI's purpose--to provide the public a broad
overview of the U.S. strategy in Iraq and not to provide details
available elsewhere. We acknowledge that the purpose of the NSVI was to
provide the public with an overview of a multitiered, classified
strategy and not to set forth every detail on information readily
available elsewhere. Our analysis was not limited to the publicly
available, unclassified NSVI. With input from DOD and State, we
included in our assessment all the classified and unclassified
documents that collectively define the U.S. strategy in Iraq: (1) the
National Security Presidential Directive 36 (May 2004), (2)
Multinational Forces-Iraq (MNF-I) Campaign Plan (August 2004), (3) the
MNF-I/ U.S. Embassy Baghdad Joint Mission Statement on Iraq (December
2005), (4) the Multinational Corps-Iraq Operation Order 05-03 (December
2005), (5) the National Strategy for Supporting Iraq (updated January
2006), and (6) the quarterly State Section 2207 reports to Congress
(through April 2006), and (7) the April 2006 Joint Campaign Plan issued
by the Chief of Mission and the Commander of the MNF-I. Collectively,
these documents still lack all the key characteristics of an effective
national strategy. However, we refined our recommendation to focus on
the need to improve the U.S. strategy for Iraq.
We are sending copies of this report to interested congressional
committees. We will also make copies available to other on request. In
addition, this report is available on GAO's Web site at [Hyperlink,
http://www.gao.gov]. If you or your staff have any questions, please
contact me at (202) 512-8979 or c [Hyperlink, christoffj@gao.gov]
hristoffj@gao.gov. Contact points for our Offices of Congressional
Relations and Public Affairs may be found on the last page of this
report. Key contributors to this report are listed in appendix V.
Signed by:
Joseph A. Christoff:
Director, International Affairs and Trade:
List of Committees:
The Honorable Mitch McConnell:
Chairman:
The Honorable Patrick J. Leahy:
Ranking Minority Member:
Subcommittee on State, Foreign Operations, and Related Programs:
Committee on Appropriations:
United States Senate:
The Honorable Ted Stevens:
Chairman:
The Honorable Daniel K. Inouye:
Ranking Minority Member:
Subcommittee on Defense:
Committee on Appropriations:
United States Senate:
The Honorable John Warner:
Chairman:
The Honorable Carl Levin:
Ranking Minority Member:
Committee on Armed Services:
United States Senate:
The Honorable Richard G. Lugar:
Chairman:
The Honorable Joseph R. Biden, Jr.:
Ranking Minority Member:
Committee on Foreign Relations:
United States Senate:
The Honorable Susan M. Collins:
Chairman:
The Honorable Joseph I. Lieberman:
Ranking Minority Member:
Committee on Homeland Security and Governmental Affairs:
United States Senate:
The Honorable C. W. Bill Young:
Chairman:
The Honorable John P. Murtha:
Ranking Minority Member:
Subcommittee on Defense:
Committee on Appropriations:
House of Representatives:
The Honorable Jim Kolbe:
Chairman:
The Honorable Nita M. Lowey:
Ranking Minority Member:
Subcommittee on Foreign Operations, Export Financing, and Related
Programs:
Committee on Appropriations:
House of Representatives:
The Honorable Duncan L. Hunter:
Chairman:
The Honorable Ike Skelton:
Ranking Minority Member:
Committee on Armed Services:
House of Representatives:
The Honorable Tom Davis:
Chairman:
The Honorable Henry A. Waxman:
Ranking Minority Member:
Committee on Government Reform:
House of Representatives:
The Honorable Christopher Shays:
Chairman:
The Honorable Dennis J. Kucinich:
Ranking Minority Member:
Subcommittee on National Security, Emerging Threats, and International
Relations:
Committee on Government:
Reform House of Representatives:
The Honorable Henry J. Hyde:
Chairman:
The Honorable Tom Lantos:
Ranking Minority Member:
Committee on International Relations:
House of Representatives:
[End of section]
Appendix I: Scope and Methodology:
As part of GAO's review of reconstruction and stabilization efforts in
Iraq initiated under the Comptroller General's authority, we examined
the U.S. strategy for achieving victory in Iraq. Specifically, we (1)
assess the evolution of the U.S. national strategy for Iraq in response
to changing political, security and economic circumstances and (2)
evaluate whether the November 2005 National Strategy for Victory in
Iraq (NSVI) and its supporting documents include the desirable
characteristics of an effective national strategy. In this report, the
NSVI and its supporting documents are referred to as the U.S. strategy
for Iraq.
To describe the goals and objectives of the U.S. national strategy for
Iraq and its relationship to other existing strategy documents, we
interviewed Coalition Provisional Authority (CPA), U.S. government, and
Iraqi officials, and reviewed planning and reporting documents obtained
from the former CPA; Departments of State (State) and Defense (DOD),
and U.S. Agency for International Development; the U.S. mission in
Baghdad; and the Multinational Forces-Iraq (MNF-I). We analyzed
records, reports and data from the Iraqi government, and from U.S.
government and military officials in Washington, D.C., and Baghdad,
Iraq. We also examined the reports of other oversight entities that
performed internal control and management reviews, including audits of
the Special Inspector General for Iraq and internal U.S. Mission
Baghdad reports and briefings. We also collected and reviewed documents
from the United Nations, the World Bank, the International Monetary
Fund, and the Iraqi government's National Development Strategy for 2005-
2007.
We evaluated the NSVI along with seven related classified and
unclassified supporting documents identified as having key details
about the strategy by State's Office of the Coordinator for Iraq, the
Bureau of Near Eastern Affairs, and by DOD's Defense Reconstruction
Support Office and Near Eastern South Asian Affairs office. These
included (1) the National Security Presidential Directive 36 (May
2004), (2) the MNF-I Campaign Plan (August 2004), (3) the MNF-I/ U.S.
Embassy Baghdad Joint Mission Statement on Iraq (December 2005), (4)
the Multinational Corps-Iraq Operation Order 05-03 (December 2005), (5)
the National Strategy for Supporting Iraq (updated January 2006), (6)
the quarterly State's 2207 reports to Congress (January and April
2006); and (7) the April 2006 Joint Campaign Plan issued by the Chief
of Mission and the Commander of the MNF-I. In particular, we discussed
the relationship between the NSVI, the National Strategy for Supporting
Iraq (NSSI), and the MNF-I Campaign Plan with the Secretary of State's
Special Coordinator for Iraq and his staff, National Security Council
staff, and DOD's Office of the Secretary of Defense and the Defense
Reconstruction Support Office. In addition to these documents, we also
reviewed other U.S. government documents not identified as key
supporting documents by State and DOD officials but which also provide
useful information, including the fiscal year 2006 supplemental funding
request, the fiscal year 2007 budget request, and two reports issued by
State in February 2006: Rebuilding Iraq: U.S. Achievements Through the
Iraq Relief and Reconstruction Fund; and Advancing the President's
National Strategy for Victory in Iraq: Funding Iraq's Transition to
Self-Reliance in 2006 and 2007 and Support for the Counterinsurgency
Campaign. We also reviewed DOD's periodic reports on the status of its
security and stability programs financed by the fiscal year 2005
supplemental Iraq Security and Stabilization Fund (ISSF) and DOD's
report to Congress under Section 1227 of National Defense Authorization
Act for Fiscal Year 2006 (Pub. L. No. 109-163). Finally, we reviewed
the NSVI for consistency with the administration's National Security
Strategy of the United States of America released in March 2006.
To assess whether the NSVI contains all the desirable characteristics
of an effective national strategy, we first developed a checklist using
the six desirable characteristics of an effective national strategy
developed in prior GAO work as criteria. Three analysts independently
assessed two selected strategy documents using the checklist to verify
its relevance and then convened as a panel to test their ability to
apply the checklist to the information contained in the document. The
team concluded that the checklist was relevant and appropriate for
assessing the NSVI. The three analysts independently assessed the NSVI
and recorded the results on separate checklists and then met as a panel
to reconcile the differences in their scores. A separate panel of three
other analysts also independently assessed the NSVI using the same
methodology, and then the two panels met as a group to discuss
similarities and resolve differences in their scoring. In addition, the
first panel of three analysts evaluated seven additional documents
applying the same criteria in the checklist. On the basis of these
evaluations, we developed a consolidated summary of the extent that the
NSVI and the supporting documents addressed the 27 elements and six
characteristics of an effective national strategy. These results are
presented in figure 3 of this report.
We gave each of the 27 elements under the six characteristics an
individual rating of either: "addresses," "partially addresses," or
"does not address." According to our methodology, a strategy
"addresses" an element of a characteristic when it explicitly cites all
parts of the element, and the document has sufficient specificity and
detail. Within our designation of "partially addresses," there is a
wide variation between a strategy that addresses most parts of an
element of a characteristic and a strategy that addresses few parts of
an element of a characteristic. A strategy "does not address" an
element of a characteristic when it does not explicitly cite or discuss
any parts of the element of that characteristic or any implicit
references are either too vague or general to be useful. See appendix
II for a more detailed description of the six characteristics. We
further evaluated the six related classified and unclassified documents
that State and DOD officials said provided key details about the
strategy. Three analysts evaluated each of these documents using the
same methodology described above.
We conducted our review from October 2005 through June 2006 in
accordance with generally accepted government auditing standards.
[End of section]
Appendix II: GAO's Description of the Six Characteristics of an
Effective National Strategy:
In a prior report, GAO identified six desirable characteristics of an
effective national strategy that would enable its implementers to
effectively shape policies, programs, priorities, resource allocations,
and standards and that would enable federal departments and other
stakeholders to achieve the identified results.[Footnote 21] GAO
further determined in that report that national strategies with the six
characteristics can provide policy makers and implementing agencies
with a planning tool that can help ensure accountability and more
effective results. To develop these six desirable characteristics of an
effective national strategy, GAO reviewed several sources of
information. First, GAO gathered statutory requirements pertaining to
national strategies, as well as legislative and executive branch
guidance. GAO also consulted the Government Performance and Results Act
of 1993, general literature on strategic planning and performance, and
guidance from the Office of Management and Budget on the President's
Management Agenda. In addition, among other things, GAO studied past
reports and testimonies for findings and recommendations pertaining to
the desirable elements of a national strategy. Furthermore, we
consulted widely within GAO to obtain updated information on strategic
planning, integration across and between the government and its
partners, implementation, and other related subjects.
GAO developed these six desirable characteristics based on their
underlying support in legislative or executive guidance and the
frequency with which they were cited in other sources. GAO then grouped
similar items together in a logical sequence, from conception to
implementation. Table 2 provides these desirable characteristics and
examples of their elements.
Table 2: Desirable Characteristics for an Effective National Strategy:
Desirable characteristic: Purpose, scope, and methodology;
Description: Addresses why the strategy was produced, the scope of its
coverage, and the process by which it was developed;
Examples of elements:
* Principles guiding development;
* Impetus: e.g., legislation;
* Definition of key terms;
* Process and methodology to produce strategy (via interagency task
force, private input, etc.)
Desirable characteristic: Detailed discussion of problems, risks, and
threats;
Description: Addresses the particular national problems and threats at
which the strategy is directed;
Examples of elements:
* Discussion or definition of problems, causes, and operating
environment;
* Risk assessment, including analysis of threat and vulnerabilities;
* Quality of data: constraints, deficiencies, unknowns.
Desirable characteristic: Desired goals, objectives, activities, and
outcome-related performance measures;
Description: Addresses what the strategy is trying to achieve, steps to
achieve those results, as well as the priorities, milestones, and
performance measures to gauge results;
Examples of elements:
* Overall results desired: end-state;
* Hierarchy of goals and subordinate objectives;
* Priorities, milestones, and performance measures to gauge results;
* Specific performance measures and activities to achieve results;
* Limitations on progress indicators.
Desirable characteristic: Description of future costs and resources
needed;
Description: Addresses what the strategy will cost, the sources and
types of resources and investments needed, and where resources and
investments should be targeted by balancing risk reductions and costs;
Examples of elements:
* Resources and investments associated with strategy;
* Types of resources required;
* Sources of resources;
* Economic principles, e.g., balancing benefits and costs;
* Resource allocation mechanisms, such as grants, in-kind services,
loans;
* Mandates/incentives to spur action;
* Importance of fiscal discipline;
* Linkage to other resource documents, e.g., federal budget;
* Risk management principles.
Desirable characteristic: Delineation of U.S. government roles,
responsibilities and coordination mechanism;
Description: Addresses who will be implementing the strategy, what
their roles will be compared to others, and mechanisms for them to
coordinate their efforts;
Examples of elements:
* Lead, support, and partner roles and responsibilities;
* Accountability and oversight framework;
* Potential changes to structure;
* Specific coordination processes;
* Conflict resolution mechanism.
Desirable characteristic: Description of strategy's integration among
and with other entities;
Description: Addresses how a national strategy relates to other
strategies' goals, objectives, and activities and to subordinate levels
of government and their plans to implement the strategy;
Examples of elements:
* Integration with other national strategies (horizontal);
* Integration with relevant documents from other implementing
organizations (vertical);
* Implementation guidance;
* Details on subordinate strategies and plans for implementation (e.g.,
human capital, enterprise architecture).
Source: GAO.
[End of table]
The following sections provide more detail on the six desirable
characteristics.
Purpose, Scope, and Methodology:
This characteristic addresses why the strategy was produced, the scope
of its coverage, and the process by which it was developed. For
example, a strategy should discuss the specific impetus that led to its
being written (or updated), such as statutory requirements, executive
mandates, or other events like the global war on terrorism.
Furthermore, a strategy would enhance clarity by including definitions
of key, relevant terms. In addition to describing what it is meant to
do and the major functions, mission areas, or activities it covers, a
national strategy would ideally address its methodology. For example, a
strategy should discuss the principles or theories that guided its
development, the organizations or offices that drafted the document, or
working groups that were consulted in its development.
Problems, Risks, and Threats:
This characteristic addresses the particular national problems and
threats at which the strategy is directed. Specifically, this means a
detailed discussion or definition of the problems the strategy intends
to address, their causes, and operating environment. In addition, this
characteristic entails a risk assessment, including an analysis of the
threats to and vulnerabilities of critical assets and operations. If
the details of these analyses are classified or preliminary, an
unclassified version of the strategy should at least include a broad
description of the analyses and stress the importance of risk
assessment to implementing parties. A discussion of the quality of data
available regarding this characteristic, such as known constraints or
deficiencies, would also be useful.
Goals, Objectives, Activities, and Outcome-Related Performance
Measures:
This characteristic addresses what the national strategy strives to
achieve and the steps needed to garner those results, as well as the
priorities, milestones, and performance measures to gauge results. At
the highest level, this could be a description of an ideal end-state,
followed by a logical hierarchy of major goals, subordinate objectives,
and specific activities to achieve results. In addition, it would be
helpful if the strategy discussed the importance of implementing
parties' efforts to establish priorities, milestones, and performance
measures, which help ensure accountability. Ideally, a national
strategy would set clear desired results and priorities, specific
milestones, and outcome-related performance measures while giving
implementing parties flexibility to pursue and achieve those results
within a reasonable time frame. If significant limitations on
performance measures exist, other parts of the strategy should address
plans to obtain better data or measurements, such as national standards
or indicators of preparedness.
Future Costs and Resources Needed:
This characteristic addresses what the strategy will cost, the sources
and types of resources and investments needed, and where those
resources and investments should be targeted. Ideally, a strategy would
also identify appropriate mechanisms to allocate resources.
Furthermore, a national strategy should elaborate on the risk
assessment mentioned earlier and give guidance to implementing parties
to manage their resources and investments accordingly. It should also
address the difficult, but critical, issues about who pays and how such
efforts will be funded and sustained in the future. Furthermore, a
strategy should include a discussion of the type of resources required,
such as budgetary, human capital, information, information technology
(IT), research and development (R&D), procurement of equipment, or
contract services. A national strategy should also discuss linkages to
other resource documents, such as federal agency budgets or human
capital, IT, R&D, and acquisition strategies. Finally, a national
strategy should also discuss in greater detail how risk management will
aid implementing parties in prioritizing and allocating resources,
including how this approach will create society-wide benefits and
balance these with the cost to society. Related to this, a national
strategy should discuss the economic principle of risk-adjusted return
on resources.
U.S. Government Roles and Responsibilities and Coordination Mechanism:
This characteristic addresses what organizations will implement the
strategy, their roles and responsibilities, and mechanisms for
coordinating their efforts. It helps to answer the question about who
is in charge during times of crisis and during all phases of the
victory in Iraq efforts: prevention, vulnerability reduction, and
response and recovery. This characteristic entails identifying the
specific federal departments, agencies, or offices involved, as well as
the roles and responsibilities of private and international sectors. A
strategy would ideally clarify implementing organizations'
relationships in terms of leading, supporting, and partnering. In
addition, a strategy should describe the organizations that will
provide the overall framework for accountability and oversight, such as
the National Security Council, Office of Management and Budget,
Congress, or other organizations. Furthermore, a strategy should also
identify specific processes for coordination and collaboration between
sectors and organizations--and address how any conflicts would be
resolved.
Strategy's Integration Among and with Other Entities:
This characteristic addresses both how a national strategy relates to
other strategies' goals, objectives, and activities (horizontal
integration)--and to subordinate levels of government and other
organizations and their plans to implement the strategy (vertical
integration). For example, a national strategy should discuss how its
scope complements, expands upon, or overlaps with other national
strategies of the Iraqi government and other international donors.
Similarly, related strategies should highlight their common or shared
goals, subordinate objectives, and activities. In addition, a national
strategy should address its relationship with relevant documents from
implementing organizations, such as the strategic plans, annual
performance plans, or the annual performance reports the Government
Performance and Results Act requires of federal agencies. A strategy
should also discuss, as appropriate, various strategies and plans
produced by the state, local, private, or international sectors. A
strategy also should provide guidance such as the development of
national standards to link together more effectively the roles,
responsibilities, and capabilities of the implementing parties.
[End of section]
Appendix III: Comments from the Department of State:
United States Department of State:
Assistant Secretary for Resource Management and Chief Financial
Officer:
Washington, D.C. 20520:
Ms. Jacquelyn Williams-Bridgers:
Managing Director:
International Affairs and Trade:
Government Accountability Office:
441 G Street, N.W.:
Washington, D.C. 20548-0001:
Jun 30 2006:
Dear Ms. Williams-Bridgers:
We appreciate the opportunity to review your draft report, "Rebuilding
Iraq: More Comprehensive National Strategy Needed to Help Achieve U.S.
Goals," GAO Job Code 320401.
The enclosed Department of State comments are provided for
incorporation with this letter as an appendix to the final report.
If you have any questions concerning this response, please contact
Matthew Finston, Desk Officer, Bureau of Near Eastern Affairs, at (202)
647-9883.
Sincerely,
Signed by:
Bradford R. Higgins:
cc: GAO - Joseph Christoff:
NEA - C. David Welch:
State/OIG - Mark Duda:
Department of State Comments on GAO Draft Report:
Rebuilding Iraq: More Comprehensive National Strategy Needed to Help
Achieve U.S. Goals, (GAO-06-788, GAO Code 320401):
The Department of State appreciates the opportunity to review and
comment on the GAO Draft Report, Rebuilding Iraq: More Comprehensive
National Strategy Needed to Help Achieve U.S. Goals. We are
disappointed that GAO did not properly notify the Department of the
change in subject and scope of this review, depriving the Department of
an opportunity to participate meaningfully in GAO's inquiry. The
Department was initially notified in November 2004 that this review
would focus on the management of U.S. reconstruction efforts in Iraq,
e.g. how the U.S. government is organized to supervise and direct the
reconstruction effort in the post-transition phase. However, the
Department was not aware of GAO's intention to assess the November 2005
National Strategy for Victory in Iraq (NSVI) and compare it with GAO's
characteristics of an effective national strategy.
The National Strategy for Supporting Iraq (NSSI) is the classified
strategic document that links the overriding principles of the NSVI to
specific lines of action and goals. The NSSI is a national-level
strategy and should not be placed at the implementation level, as it is
in Figure 1 of the draft report. Contrary to two of GAO's criticisms,
the NSSI links current goals to resources and specifies the responsible
parties for particular actions. At this time the NSSI does not specify
future military and civilian resources necessary for achieving the
strategic objectives, another of the GAO's recommendations. This is not
a valid criticism, however. In order to make resources more explicit we
are in the process of incorporating the FY 2006 supplemental budget
into the NSSI, next to their appropriate Lines of Action. The GAO
report does not take into account that the FY 2006 supplemental and the
FY 2007 budget request made extensive reference to the NSVI in their
justifications, clearly demonstrating that they are the implementation
of the NSVI.
The draft report rests on a flawed understanding of the strategic
architecture guiding United States policy in Iraq. As the NSVI itself
explains, its purpose was to provide the public with an overview of
what is a comprehensive, multi-tiered, and classified strategy, not to
set forth every detail on information readily available elsewhere -
such as the inter- agency resources employed to achieve our objectives.
Much of the information contained in the draft report is thus largely
irrelevant to a fair and honest assessment of the NSVI or U.S. strategy
in Iraq more generally.
Specific Comments:
The draft report says repeatedly (starting on page 6) that the goals
cited in the NSVI have not changed since 2003, although the assumptions
and conditions on the ground have changed. Conditions on the ground
have changed, but that does not change our goals ("a peaceful stable
and united Iraq. integrated into the international community. and a
partner in the war on terrorism"). The means and time required to reach
those goals may have changed, but the goals themselves are still valid
and necessary.
It is incorrect to say that the USG or its agencies "assumed that U.S.
funded reconstruction activities would help restore Iraq's essential
services to prewar levels." (Pages 6, 12, 15) Helping to reach prewar
levels was a "purpose" or "intention", but it was not an assumption.
U.S. funded reconstruction activities have indeed helped restore
essential services, in some sectors to and even beyond prewar levels.
The NSVI and numerous other USG documents on Iraq have explicitly
stated that the purpose of the Iraq Relief and Reconstruction Fund
(IRRF) was to kick-start Iraq's essential services and economy to
enable Iraq to begin meeting its own needs. The Iraqi government has
become demonstrably more capable in these areas.
Iraq's current crude oil production exceeds prewar production. Iraq's
average production for 2002 was 2 mbpd. The draft report incorrectly
states on that "Before the war, oil production in Iraq averaged 2.6
(mbpd)." (Page 17) While there is some disagreement (see Special
Inspector General for Iraq Reconstruction reporting) our information is
that Iraq has not sustained that level of production since 1999, and
average crude oil production has fallen below that level every year
since.
Iraq's average peak electricity generation in 2005 (4,300 MW) equaled
the pre-war level in 2002; hours of power are higher than pre-war
levels, with the notable exception of Baghdad.
It is not possible to make definitive statements about a baseline for
the total number of people nationwide with access to clean drinking
water during the pre-war period, because reliable data do not exist on
the level and quality of services for this period. The Iraq
Reconstruction Management Office at Embassy Baghdad (IRMO) has
developed a set of metrics and standard methodologies to reasonably
track the potential impact of IRRF-funded reconstruction efforts. These
metrics and methodologies have been employed since being finalized in
December 2005. As of June 2006, IRRF-funded potable water projects had
added or restored 1.3 million cubic meters per day of treatment
capacity in Iraq, through new or rehabilitation projects. To avoid
overestimating the number of potential beneficiaries, factors such as
water usage rates and system inefficiency are taken into account. A
physical loss factor of 60 percent is used to calculate these usage
rates, as current estimates indicate that 50 to 60 percent of treated
water may be lost in distribution before reaching the end users. Using
IRMO's methodology, IRRF reconstruction projects to date have restored
or expanded access to potable water for 4.2 million Iraqis.
There are 6.5 million telephone subscribers in Iraq, compared to fewer
than 1 million pre-war subscribers; U.S. programs have provided both
telecommunications infrastructure and technical assistance to help
enable significant private investment in this sector.
The draft report says that the Government of Iraq (GOI) does not have
significant resources to contribute to its own reconstruction. (Page
17) While oil production has been lower than expected, oil export
revenues were actually above target at $16.6 billion in 2004. In 2005,
Iraq budgeted for $17 billion in oil revenue but earned $20-22 billion
because of higher world oil prices. The Iraqi budget for 2006 includes
$33 billion in expenditures, $28 billion funded by revenues from oil
exports. It also includes $6.2 billion in capital expenditures. As oil
exports and revenues grow in coming years, the GOI's ability to pay for
its own reconstruction likewise will grow. The GAO report unnecessarily
downplays the contribution Iraq has already made, and will continue to
make towards its own reconstruction and development.
The draft report says that the cost of reconstructing Iraq has gone up
significantly from the $56 billion the World Bank estimated in 2003,
and that it is not clear where the resources will come from. (Page 18
and elsewhere) The report mischaracterizes the nature of the World Bank
study, which was an initial estimate done to help prepare attendees of
the Madrid donors' conference in October 2003. It never was represented
as a comprehensive survey. Since that time, the U.S. and other donors
have developed a much better understanding of the conditions on the
ground, including the extent to which Saddam neglected essential
service infrastructure. U.S. assistance programs also have changed
according to changing requirements on the ground and the requests of
the GOI. Thus, while we believe more than $56 billion will ultimately
be needed to bring Iraq back to a status equivalent to other oil
producing developing countries, we do not think that the "cost" has
"gone up."
The draft report notes Iraq may not be able to utilize $10 billion in
international loan assistance pledges because of its $85 billion
reparations/foreign debt burden. (Page l 8) Debt relief is in fact a
big success story. Paris Club creditors have already reached agreements
that will eventually result in forgiveness for a minimum of 80% ($30
billion) of Iraq's $40 billion in Paris Club debt. Agreement has been
reached on similar debt relief for approximately $18 billion of Iraq's
$22 billion in commercial debt. We are confident that ongoing
discussions with other sovereign creditors will result in debt relief
on Paris Club or better terms for the remainder of Iraq's debt,
eventually allowing Iraq to access new lending. Also, current loan
assistance offered is all on concessional terms.
The draft report incorrectly states that only $2.7 billion of $13.5
billion in pledged international donor assistance has been delivered.
(Page 18) Disbursements are now approximately $3.6 billion. The pledges
were to be disbursed over a five-year period, which has not yet
expired.
The draft report states that it will take $30 billion over several
years to increase oil production to 5 mbpd. (Page 19) This is
misleading because $30 billion investment would go far beyond
reconstruction. Iraq has never sustained production of 5 mbpd. In the
highest year for which we have data, 1979, production averaged only 3.3
mbpd.
The draft report comments that the NSVI and other documents do not take
the risk of corruption into account when assessing the costs of
achieving U.S. objectives. (Page 27) We recognize that corruption is a
major problem in Iraq and anti-corruption efforts are a major part of
our overall strategy, as cited presently in the NSSI and other
documents. Insufficient data make it very difficult to accurately
account for corruption as a "cost" in achieving our overall goal.
The draft report states that the NSVI does not sufficiently cover how
reconstruction is to be coordinated with the GOI and other donors.
(Page 29) Other supporting documents, however, cite various
coordination mechanisms, including the International Reconstruction
Fund Facility for Iraq (IRFFI) and the GOI-hosted donor coordination
process in Baghdad. The "Compact' now envisioned between Iraq and the
international community will provide a vehicle for both more
coordination and more assistance pledges.
The following are GAO's comments on the Department of State's letter
dated June 30, 2006.
GAO Comments:
1. We notified the Department of State (State) of the scope of our
review. After the National Strategy for Victory in Iraq (NSVI) was
released in November 2005, we focused our review on whether the new
strategy and related planning documents identified by State and the
Department of Defense (DOD) addressed the desirable characteristics of
an effective national strategy. On February 10, 2006, we met with
senior State officials from the Bureau of Near East and Asia and the
office of the Senior Advisor to the Secretary of State and Coordinator
for Iraq Affairs to describe our plans and methodology for assessing
the NSVI. State officials acknowledged our methodology and identified
the key documents (both unclassified and classified) that, when
combined with the NSVI, served as the collective U.S. strategy for
Iraq.
2. We modified figure 1 to place the National Strategy for Supporting
Iraq (NSSI) at the strategic level. However, we disagree that the NSSI
links goals to resources. In fact, State's comments note that the NSSI
does not specify the future military and civilian resources necessary
for achieving U.S. strategic objectives, and it is in the process of
incorporating the fiscal year 2006 supplemental budget into the NSSI.
Until State completes this linkage, it is difficult to assess whether
the NSSI will adequately link goals to resources.
3. We disagree with State's contention that we did not take into
account the fiscal year 2006 supplemental and the fiscal year 2007
budget requests in our assessment of the NSVI. We evaluated these as
part of our review. Even though State officials did not include these
documents among those they identified as supporting the strategy. In
addition, we reviewed other U.S. government documents that provided
useful context and information, including two related reports issued by
State in February 2006: (1) Rebuilding Iraq: U.S. Achievements Through
the Iraq Relief and Reconstruction Fund; and (2) Advancing the
President's National Strategy for Victory in Iraq : Funding Iraq's
Transition to Self-Reliance in 2006 and 2007 and Support for the
Counterinsurgency Campaign.
4. We acknowledge that the purpose of the NSVI was to provide the
public with an overview of a multitiered, classified strategy and not
to set forth every detail on information readily available elsewhere.
Our analysis was not limited to the publicly available, unclassified
NSVI. With input from DOD and State, we included in our assessment all
the classified and unclassified documents that collectively define the
U.S. strategy in Iraq: (1) the National Security Presidential Directive
36 (May 2004), (2) Multinational Forces-Iraq (MNF-I) Campaign Plan
(August 2004), (3) the MNF-I/ U.S. Embassy Baghdad Joint Mission
Statement on Iraq (December 2005), (4) the Multinational Corps-Iraq
Operation Order 05-03 (December 2005), (5) the National Strategy for
Supporting Iraq (updated January 2006), and (6) the quarterly State
Section 2207 reports to Congress (through April 2006), and (7) the
April 2006 Joint Campaign Plan issued by the Chief of Mission and the
Commander of the MNF-I. Collectively, these documents still lack all
the key characteristics of an effective national strategy. However, we
refined our recommendation to focus on the need to improve the U.S.
strategy for Iraq.
5. We disagree with State's comment that helping restore essential
services to prewar levels was not an assumption of the early U.S.
reconstruction strategy. According to the key architects of the
original Coalition Provisional Authority plan, restoring essential
services to a prewar level was a key assumption of the U.S. strategy.
6. Documents we received from State and the Department of Energy
estimated that Iraq's 2003 actual prewar crude oil production was 2.6
million barrels per day. State did not provide any additional
documentation to support their contention. In addition, the 4,300
megawatts figure cited by State is below the postwar peak of 5,400
megawatts and the planned U.S. goal of 6,000 megawatts.
7. We agree that it is not possible to make definitive statements about
the number of people nationwide with access to clean drinking water
during the prewar period because reliable data did not exist. We have
noted this problem in previous reports and testimonies. This report
describes U.S. mission efforts announced in December 2005 to develop an
improved set of metrics to better estimate the potential impact of U.S.
water and sanitation reconstruction efforts on Iraqi households. We
reviewed excerpts from this reporting and included it in our report.
However, State has not complied with our request to provide us with a
complete copy of its metrics plan to better allow us to judge the
results of its efforts.
8. As we have previously reported, subsidies for food, fuel, and
electricity, rising costs for security forces, and high costs to
sustain Iraq's bureaucracy limit Iraq's ability to contribute to its
own reconstruction efforts. While Iraq budgeted about $5 billion for
capital expenditures in 2005, it only provided a few hundred million
dollars by the end of the year. Accordingly, it is too early to
determine if the Iraqi government will spend the $6.2 billion it has
budgeted for capital expenditures in 2006.
9. We clarified the report to characterize the 2003 World Bank study as
an initial estimate and not a comprehensive survey. While acknowledging
that more than $56 billon will be needed to bring Iraq to a status
equivalent to other oil-producing developing nations, State does not
think that "costs" have gone up. However, recent State and Department
of Energy cost estimates show that the oil infrastructure and electric
sectors alone will require about $50 billion in the next several years.
In addition, June 2006 reporting from the Department of Energy states
that Iraq could need $100 billion or more for long-term reconstruction
efforts.
10. We agree that the Iraq and U.S. governments have succeeded in
achieving debt relief for Iraq from the Paris Club and commercial
creditors. However, there is a significant amount of debt remaining,
amounting to $84 billion. This debt includes war reparations that Iraq
owes from its invasion of Kuwait. This remaining debt imposes a
continuing financial burden on the country.
11. We revised our report to include updated April 2006 figures.
12. We included the $30 billion estimate for the oil sector to
illustrate the significant future costs to restore a critical sector--
a sector from which Iraq derives 90 percent of its budgetary revenues.
State's Iraq Reconstruction Management Office developed these
estimates. In addition, as noted in comment 9 above, Iraq could need
$100 billion or more for long-term reconstruction, according to a June
2006 report by the Department of Energy.
13. We agree that it is very difficult to accurately account for
corruption as a cost in achieving the overall goals for Iraq. We
recognize that State launched an anticorruption strategy in December
2005, but this strategy was not reflected in the documents we reviewed.
We included State estimates that help describe the magnitude of the
corruption problem. For example, State reports that 10 percent of
refined fuels are diverted to the black market, and about 30 percent of
imported fuels are smuggled out of Iraq and sold for a profit.
14. The recently announced International Compact could be a useful
vehicle for better international coordination, but the details of the
compact's scope and function and linkage to the new donor coordination
process have not been specified. The International Reconstruction Fund
Facility for Iraq provides a coordination mechanism among United
Nations agencies, but its linkage to U.S.-funded projects is also
unclear. More importantly, no single document describes how the goals
and projects of the United States, Iraq, and the international
community are or will be linked to achieve maximum effectiveness and
avoid duplication of effort.
[End of section]
Appendix IV: Comments from the Department of Defense:
Assistant Secretary Of Defense:
2400 Defense Pentagon:
Washington, DC 20301 -2400:
Jun 30 2006:
Mr. Joseph A. Christoff:
Director, International Affairs and Trade:
U. S. Government Accountability Office:
441 G Street, N.W.:
Washington, D C. 20548:
Dear Mr. Christoff.
Thank you for the opportunity to comment on your draft report, GAO-06-
788. "Rebuilding Iraq-More Comprehensive National Strategy Needed to
Help Achieve U.S. Goals" dated June 14, 2006 (GAO Code 320401).
DOD defers comment on the draft report to the National Security
Council. The report is directed at the National Strategy for Victory in
Iraq, issued by that office.
Please let me know if we can be of any further assistance.
Sincerely,
Signed by:
Peter W. Rodman:
[End of section]
Appendix V: GAO Contact and Staff Acknowledgments:
GAO Contact:
Joseph A. Christoff, Director, (202) 512-8979, christoffj@gao.gov
Staff Acknowledgments:
Stephen M. Lord, Assistant Director; Kelly Baumgartner; Lynn Cothern;
Jared Hermalin; B. Patrick Hickey; Rhonda Horried; Guy Lofaro; and
Alper Tunca made key contributions to this report. Terry Richardson
provided technical assistance.
[End of section]
Related GAO Products:
Rebuilding Iraq: Actions Still Needed to Improve Use of Private
Security Providers. GAO-06-865T. Washington, D.C.: June 13, 2006.
Rebuilding Iraq: Governance, Security, Reconstruction, and Financing
Challenges. GAO-06-697T. Washington, D.C.: April 25, 2006.
United Nations: Oil for Food Program Provides Lessons for Future
Sanctions and Ongoing Reform. GAO-06-711T. Washington, D.C.: May 2,
2006.
United Nations: Lessons Learned from Oil for Food Program Indicate the
Need to Strengthen UN Internal Controls and Oversight Activities. GAO-
06-330. Washington, D.C.: April 25, 2006.
Rebuilding Iraq: Stabilization, Reconstruction, and Financing
Challenges. GAO-06-428T. Washington, D.C.: February 8, 2006.
Rebuilding Iraq: DOD Reports Should Link Economic Governance and
Security Indicators to Conditions for Stabilizing Iraq. GAO-06-152C.
Washington, D.C.: October 31, 2005.
Rebuilding Iraq: Enhancing Security, Measuring Program Results, and
Maintaining Infrastructure Are Necessary to Make Significant and
Sustainable Progress. GAO-06-179T. Washington, D.C.: October 18, 2005.
Global War on Terrorism: DOD Needs to Improve the Reliability of Cost
Data and Provide Additional Guidance to Control Costs. GAO-05-882.
Washington, D.C.: September 21, 2005.
Rebuilding Iraq: U.S. Assistance for the January 2005 Elections. GAO-
05- 932R. Washington, D.C.: September 7, 2005.
Rebuilding Iraq: U.S. Water and Sanitation Efforts Need Improved
Measures for Assessing Impact and Sustained Resources for Maintaining
Facilities. GAO-05-872. Washington, D.C.: September 7, 2005.
Rebuilding Iraq: Actions Needed To Improve Use of Private Security
Providers. GAO-05-737. Washington, D.C.: July 28, 2005.
Rebuilding Iraq: Status of Funding and Reconstruction Efforts. GAO-05-
876. Washington, D.C.: July 28, 2005.
Rebuilding Iraq: Preliminary Observations on Challenges in Transferring
Security Responsibilities to Iraqi Military and Police. GAO-05-431T.
Washington, D.C.: March 14, 2005.
Rebuilding Iraq: Resource, Security, Governance, Essential Services,
and Oversight Issues. GAO-04-902R. Washington, D.C.: June 28, 2004.
United Nations: Observations on the Oil for Food Program and Iraq's
Food Security. GAO-04-880T. Washington, D.C.: June 16, 2004.
Contract Management: Contracting for Iraq Reconstruction and for Global
Logistics Support. GAO-04-869T. Washington, D.C.: June 15, 2004.
Rebuilding Iraq: Fiscal Year 2003 Contract Award Procedures and
Management Challenges. GAO-04-605. Washington, D.C.: June 1, 2004.
Iraq's Transitional Law. GAO-04-746R. Washington, D.C.: May 25, 2004.
State Department: Issues Affecting Funding of Iraqi National Congress
Support Foundation. GAO-04-559. Washington, D.C.: April 30, 2004.
Recovering Iraq's Assets: Preliminary Observations on U.S. Efforts and
Challenges. GAO-04-579T. Washington, D.C.: March 18, 2004.
Defense Logistics: Preliminary Observations on the Effectiveness of
Logistics Activities During Operation Iraqi Freedom. GAO-04-305R.
Washington, D.C.: December 18, 2003.
Rebuilding Iraq. GAO-03-792R. Washington, D.C.: May 15, 2003.
(320401):
FOOTNOTES
[1] These figures include funds appropriated in the Emergency
Supplemental Appropriations Act for Defense, the Global War on Terror
and Hurricane Recovery 2006, Pub. L. No. 109-234, signed into law by
the President on June 15, 2006. The supplemental includes $54.9 billion
for defense operations in Iraq, plus $3 billion to develop Iraqi
security forces and $1.5 billion to continue reconstruction efforts in
Iraq. For fiscal year 2007, the defense budget request includes $50
billion that the Office of Management and Budget terms "bridge funding"
to continue the global war on terrorism in Iraq and Afghanistan. The
Department of State's 2007 budget submission requests an additional
$771 million for reconstruction activities in Iraq.
[2] Since 2003, GAO has issued 22 reports and testimonies on the
rebuilding of Iraq. See the list of Related GAO Products at the end of
this report.
[3] See GAO, Combating Terrorism: Evaluation of Selected
Characteristics in National Strategies Related to Terrorism, GAO-04-
408T (Washington, D.C.: Feb. 3, 2004) and GAO, Defense Management:
Comprehensive Strategy and Periodic Reporting Are Needed to Gauge
Progress and Costs of DOD's Global Posture Restructuring. GAO-06-486C
(Washington, D.C.: May 26, 2006).
[4] Required by section 2207 of the Emergency Supplemental
Appropriations Act for Defense and for the Reconstruction of Iraq and
Afghanistan, fiscal year 2004, Pub. L. No. 108-106.
[5] For changes and updates in the campaign plan, see GAO's classified
report, GAO, Rebuilding Iraq: DOD Reports Should Link Economic,
Governance, and Security Indicators to Conditions for Stabilizing Iraq,
GAO-05-868C (Washington, D.C.: Sept. 29, 2005).
[6] The CPA, established in May 2003, was a U.N.-recognized entity
responsible for the temporary governance of Iraq, and for overseeing,
directing, and coordinating the reconstruction effort. In August 2003,
the CPA began to draw up a multiyear strategy to implement the
reconstruction and stabilization of Iraq based on 10 spending
categories identified in the Emergency Supplemental Appropriations Act
for Defense and for Reconstruction of Iraq and Afghanistan, 2004, Pub.
L. No. 108-106, which made available $18.4 billion for the Iraq Relief
and Reconstruction Fund. The CPA was dissolved once a sovereign Iraqi
government assumed power on June 28, 2004. Management authority and
responsibility of the U.S. reconstruction program also transitioned
from DOD to State at that time.
[7] This figure includes $5 billion from the IRRF2 funds, $5.7 billion
to support Iraqi security forces appropriated in the Emergency
Supplemental Act for Defense, the Global War on Terror and Tsunami
Relief 2005, Pub. L. No. 109-13, and $3 billion in supplemental fiscal
year 2006 funds to support Iraqi security forces.
[8] See GAO, Rebuilding Iraq: Governance, Security, Reconstruction, and
Financing Challenges GAO-06-697T (Washington D.C.: Apr. 25, 2006).
[9] The 10 sectors are: (1) security and law enforcement: (2) justice,
public safety, and civil society (including democracy building
activities); (3) electric sector; (4) oil infrastructure; (5) water
resources and sanitation; (6) transportation and telecommunications;
(7) roads, bridges, and construction; (8) health care; (9) private
sector development; and (10) education, refugees, human rights, and
governance.
[10] See GAO, Rebuilding Iraq: Stabilization, Reconstruction, and
Financing Challenges, GAO-06-428T (Washington, D.C.: Feb. 8, 2006), and
GAO, Rebuilding Iraq: U.S. Water and Sanitation Efforts Need Improved
Measures for Assessing Impact and Sustained Resources for Maintaining
Facilities, GAO-05-872 (Washington, D.C.: Sept. 7, 2005).
[11] Survey of Iraqi Public Opinion, International Republican Institute
(Washington, D.C.: March 23-31, 2006).
[12] As of April 2006, Iraq's security-related spending is currently
projected to be about $5.3 billion in 2006, growing from 7 to about 13
percent of projected GDP. The amount reflects the rising costs of
security and the transfer of security responsibilities from the United
States to Iraq.
[13] Donors also have provided bilateral assistance for Iraq
reconstruction activities; however, complete information on this
assistance is not readily available.
[14] GAO-04-408T.
[15] We use the term "strategy" collectively to refer to the NSVI and
its supporting documents.
[16] See GAO-05-872.
[17] See GAO, Rebuilding Iraq: Governance, Security, Reconstruction,
and Financing Challenges, GAO-06-697T (Washington D.C.: Apr. 25, 2005).
[18] See GAO, Global War on Terrorism: DOD Needs to Improve the
Reliability of Cost Data and Provide Additional Guidance to Control
Costs, GAO-05-882 (Washington, D.C.: Sept. 21, 2005).
[19] See GAO-05-872.
[20] Past GAO work has highlighted the importance of integrated
cooperation between the United States, host governments, and foreign
donors in such operations. See GAO, Foreign Assistance: Observations on
Post-Conflict Assistance in Bosnia, Kosovo, and Afghanistan, GAO-03-
980T (Washington, D.C.: July 18, 2003).
[21] GAO-04-408T and GAO-06-486C.
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