05-05-2004, 06:07
http://www.palmbeachpost.com/opinion/content/aut
o/epaper/editions/sunday/opinion_0498996a96eac09800b3.html
Nevenue o gusher for taxpayers from Iraq's oil revenue
Palm Beach Post Editorial
Sunday, April 25, 2004
During his April 13 news conference, President Bush led U.S. taxpayers to
think that they might get relief from the cost of rebuilding Iraq. "One year
after the liberation of Iraq," he said, "the revenues of the oil stream is pretty
darn significant... It's their oil, and they'll use it to reconstruct the
country."
His remark tracks the year-ago prediction from Deputy Defense Secretary Paul
Wolfowitz, who told Congress just after the invasion, "We're dealing with a
country that can really finance its own reconstruction, and relatively soon."
Mr. Wolfowitz was naive, if not intentionally deceptive. President Bush's oddly
upbeat comment ignores everything the administration learned in the past year
about how wrong Mr. Wolfowitz was.
Iraq is producing 2.4 million barrels of oil a day, the pre-war level. Iraq
has collected $7.8 billion from exports in the past year, with all proceeds
deposited in the U.S.-run Development Fund for Iraq. While $7.8 billion might be
encouraging to the White House, at that rate it would take Iraq nearly a
decade to pay the estimated reconstruction costs -- for this year alone.
If Iraq spends less this year, it actually would be bad news. Spreading
violence could delay projects affecting oil production, transportation, power
generation, education -- and on and on. But no matter how much oil profit Iraq
eventually makes, U.S. taxpayers are not entitled to any repayment of the $18.6
billion Congress approved for reconstruction in this year's budget. President
Bush squashed all attempts to require reimbursement. Similarly, Iraq is not
required to repay any of the supplemental $51 billion approved for military
operations this year in Iraq, which will not cover the $4.7 billion-a-month cost.
Neither is Iraq likely to be billed for the extra $50 billion that the White
House concedes it might seek -- after the election.
At a donor conference last year, other countries pledged $13 billion to help
rebuild Iraq, but $9 billion of that was loans. Iraq also owed roughly $120
billion in foreign debt when Saddam Hussein fell. Countries have agreed to
forgive some of that debt, but how much remains to be worked out.
The overall picture is of more expense for U.S. taxpayers, not less. In a
sign that Iraq's energy production will not improve significantly soon, the Iraqi
Oil Ministry canceled an international conference of officials from energy
and investment firms that was to have boosted the country's oil and gas
industry. Security fears forced cancellation of the conference, which was scheduled
for last weekend, and that was before Wednesday's horrific attacks in Basra, the
city that was to have hosted the meeting.
Last week, members of Congress again tried to force the administration to
clarify how much the Iraq War and reconstruction will cost. As with so much
involving Iraq, it's not certain that the administration has any idea. One thing is
certain: Any claim that Iraq's oil will cover the cost is bogus.
o/epaper/editions/sunday/opinion_0498996a96eac09800b3.html
Nevenue o gusher for taxpayers from Iraq's oil revenue
Palm Beach Post Editorial
Sunday, April 25, 2004
During his April 13 news conference, President Bush led U.S. taxpayers to
think that they might get relief from the cost of rebuilding Iraq. "One year
after the liberation of Iraq," he said, "the revenues of the oil stream is pretty
darn significant... It's their oil, and they'll use it to reconstruct the
country."
His remark tracks the year-ago prediction from Deputy Defense Secretary Paul
Wolfowitz, who told Congress just after the invasion, "We're dealing with a
country that can really finance its own reconstruction, and relatively soon."
Mr. Wolfowitz was naive, if not intentionally deceptive. President Bush's oddly
upbeat comment ignores everything the administration learned in the past year
about how wrong Mr. Wolfowitz was.
Iraq is producing 2.4 million barrels of oil a day, the pre-war level. Iraq
has collected $7.8 billion from exports in the past year, with all proceeds
deposited in the U.S.-run Development Fund for Iraq. While $7.8 billion might be
encouraging to the White House, at that rate it would take Iraq nearly a
decade to pay the estimated reconstruction costs -- for this year alone.
If Iraq spends less this year, it actually would be bad news. Spreading
violence could delay projects affecting oil production, transportation, power
generation, education -- and on and on. But no matter how much oil profit Iraq
eventually makes, U.S. taxpayers are not entitled to any repayment of the $18.6
billion Congress approved for reconstruction in this year's budget. President
Bush squashed all attempts to require reimbursement. Similarly, Iraq is not
required to repay any of the supplemental $51 billion approved for military
operations this year in Iraq, which will not cover the $4.7 billion-a-month cost.
Neither is Iraq likely to be billed for the extra $50 billion that the White
House concedes it might seek -- after the election.
At a donor conference last year, other countries pledged $13 billion to help
rebuild Iraq, but $9 billion of that was loans. Iraq also owed roughly $120
billion in foreign debt when Saddam Hussein fell. Countries have agreed to
forgive some of that debt, but how much remains to be worked out.
The overall picture is of more expense for U.S. taxpayers, not less. In a
sign that Iraq's energy production will not improve significantly soon, the Iraqi
Oil Ministry canceled an international conference of officials from energy
and investment firms that was to have boosted the country's oil and gas
industry. Security fears forced cancellation of the conference, which was scheduled
for last weekend, and that was before Wednesday's horrific attacks in Basra, the
city that was to have hosted the meeting.
Last week, members of Congress again tried to force the administration to
clarify how much the Iraq War and reconstruction will cost. As with so much
involving Iraq, it's not certain that the administration has any idea. One thing is
certain: Any claim that Iraq's oil will cover the cost is bogus.