The Iraqi government is expecting large profits this year because of U.S government spending on military fuel. The U.S is spending close to $153 million per month for fuel that is being extracted from Iraq. U.S officials added that currently Baghdad is unprepared to manage this revenue. Officials also mentioned that the government of Iraq will build up the capacity in due time to handle and use oil profits in a constructive way.
Adm. William Fallon, who is the top U.S military commander in the Middle East said that this money is not “just sitting in banks trying to get somebody rich on interest income.” He further commented, “It's because they're in a holding position now until they can figure out how to effectively disburse these moneys.”
Stuart Bowen, special inspector general for Iraq reconstruction said that Baghdad has been producing the high quantities of oil in recent months. This has been peak production ever since the war started five years ago.
Iraqi officials have disclosed that they have earned approximately $35 billion from oil revenue last fall. Bowen added the overall profits will reach close to $60 billion.
Sens. Carl Levin, D-Mich, and John Warner, R-Va, want to look deeper in to the matter by investigating how Iraq handles this money. Iraq pays for fuel that is required by its own army. It also heavily depends on U.S dollars to provide citizens with basic amenities. There is a large quantity of funds, close to $45 billion, required for reconstruction.
Levin and Warner wrote in a letter to the head of the Government Accountability Office describing that, “it has been overwhelmingly U.S. taxpayer money that has funded Iraq reconstruction over the last five years, despite Iraq earning billions of dollars in oil revenue over that time period that have ended up in non-Iraqi banks".
They further added that, "At the same time, our conversations with both Iraqis and Americans during our frequent visits to Iraq, as well as official government and unofficial media reports, have convinced us that the Iraqi government is not doing nearly enough to provide essential services and improve the quality of life of its citizens".
The senators have predicted that Iraq will earn at least $100 billion from oil revenues in 2007 and 2008. However, government and military officials have to say that Iraq is going to face difficulties in managing these funds. They convey that the problems related to the distribution of funds are not due to the laziness or corruption. However, Baghdad is unable to properly allocate these resources. This failure can be largely attributed to the inability of Iraqi officials in handing this matter.
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