Senators: Where is Iraq's oil money going? - CNN

[Yrys]

Senators: Where is Iraq's oil money going?

BAGHDAD, Iraq (CNN) -- Two senators are asking congressional investigators to look at Iraq's oil revenues and see if the war-ravaged nation
can pay for its own reconstruction, an effort that has been bankrolled to this point mostly by U.S. taxpayers. Carl Levin, D-Michigan, and John Warner,
R-Virginia, said in their Friday letter to the Government Accountability Office that Iraq has "tremendous resources" in banks worldwide but is doing little
to improve security and reconstruction efforts.

Iraqi officials did not immediately respond to the senators' allegations.

"We believe 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," wrote the senators, who are their party's top members on the Armed
Services Committee. The senators cited testimony of then-Deputy Defense Secretary Paul Wolfowitz who told a House subcommittee in March 2003 that the
U.S. would not foot the entire bill for rebuilding Iraq. Wolfowitz predicted then that Iraq's oil revenues could reach between $50 billion and $100 billion in the
next two or three years.

"We are dealing with a country that can really finance its own reconstruction and relatively soon," Wolfowitz said in 2003.

Senators want answers

The senators want investigators to find out:
• Iraqi oil revenues for 2003-2007
• What the U.S. and Iraq spent in that time on security, reconstruction, governance and economic development
• Iraq's projected oil revenue for 2008
• How much money the Iraqi government has earned from oil but not spent
• How much the Iraqi government has deposited in banks, and in which countries
• Why Iraq hasn't spent more on services for its people

Using numbers from the U.S. State Department and Iraqi Oil Ministry, the senators said Iraq hopes to produce 2.2 million barrels of oil a day this year.
Weekly averages suggest that the number has climbed as high as 2.51 million barrels a day. That kind of oil production could earn Iraq a projected
$56.4 billion this year, an estimate the senators say is low given the rising cost of crude.

"In essence, we believe that Iraq will accrue at least $100.0 billion in oil revenues in 2007 and 2008," the letter said. It added, "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."

Iraq's ability to spend its $10.1 billion capital projects budget in 2007 was one of the 18 benchmarks used to assess U.S. progress in stabilizing and rebuilding Iraq,
according to the GAO. The United States has spent more than $47 billion on Iraqi reconstruction efforts since 2003, according to the 2008 quarterly audit by the
special inspector general for Iraq reconstruction.

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In other developments:

• A mass grave holding an estimated 100 bodies was found Saturday in an orchard near Khalis in Iraq's Diyala province, officials said. It appears
the bodies had been at the site "for a long time," military spokesman Maj. Brad Leighton said in a statement.

• Thousands of people in the southern city of Basra marched on police headquarters Saturday demanding better security for their crime-ridden city.
Kidnappings, murders and thefts have risen in Iraq's second largest city since British troops handed over responsibility for the province to Iraqi
authorities. Shiite groups have been fighting for control of the oil-rich area

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[Yrys]

Studies: Iraq war will cost $12 billion a month

Economists project a much higher ‘burn rate’ than government estimates - AP

The flow of blood may be ebbing, but the flood of money into the Iraq war is steadily rising, new analyses show.

In 2008, its sixth year, the war will cost approximately $12 billion a month, triple the "burn" rate of its earliest years, Nobel Prize-winning economist
Joseph E. Stiglitz and co-author Linda J. Bilmes report in a new book. Beyond 2008, working with "best-case" and "realistic-moderate" scenarios,
they project the Iraq and Afghan wars, including long-term U.S. military occupations of those countries, will cost the U.S. budget between $1.7 trillion
and $2.7 trillion — or more — by 2017. Interest on money borrowed to pay those costs could alone add $816 billion to that bottom line, they say.

The nonpartisan Congressional Budget Office (CBO) has done its own projections and comes in lower, forecasting a cumulative cost by 2017 of $1.2
trillion to $1.7 trillion for the two wars, with Iraq generally accounting for three-quarters of the costs. Variations in such estimates stem from the sliding
scales of assumptions, scenarios and budget items that are counted. But whatever the estimate, the cost will be huge, the auditors of the Government
Accountability Office say. In a Jan. 30 report to Congress, the GAO observed that the U.S. will be committing "significant" future resources to the wars,
"requiring decision makers to consider difficult trade-offs as the nation faces an increasing long-range fiscal challenge."

These numbers don't include the war's cost to the rest of the world. In Iraq itself, the 2003 U.S.-led invasion _ with its devastating air bombardments
— and the looting and arson that followed, severely damaged electricity and other utilities, the oil industry, countless factories, hospitals, schools and
other underpinnings of an economy.

Untold economic damage

No one has tried to calculate the economic damage done to Iraq, said spokesman Niels Buenemann of the International Monetary Fund, which closely
tracks national economies. But millions of Iraqis have been left without jobs, and hundreds of thousands of professionals, managers and other
middle-class citizens have fled the country.

In their book, "The Three Trillion Dollar War," Stiglitz, of Columbia University, and Bilmes, of Harvard, report the two wars will have cost the U.S.
budget $845 billion in 2007 dollars by next Sept. 30, end of fiscal year 2008, assuming Congress fully funds Bush administration requests. That counts
not just military operations, but embassy costs, reconstruction and other war-related expenses.

That total far surpasses the $670 billion in 2007 dollars the Congressional Research Service says was the U.S. price tag for the 12-year Vietnam War.
Although American military and Iraqi civilian casualties have declined in recent months, the rate of spending has shot up. A fully funded 2008 war budget
will be 155 percent higher than 2004's, the CBO reports.

Surge in spending

The reasons are numerous: the "surge" of additional U.S. units into Iraq; rising fuel costs; fattened bonuses to attract re-enlistments; and particularly
the need to "reset," that is, repair or replace worn-out, destroyed or damaged military equipment. Almost $17 billion is appropriated this year for
advanced armored vehicles to protect troops against roadside bombs. Looking ahead, both the CBO and Stiglitz-Bilmes construct two scenarios, one in
which U.S. troop levels in Iraq and Afghanistan drop sharply and early — to 30,000 by late 2009 for the CBO, and to 55,000 by 2012 for Stiglitz-Bilmes
— and a second in which the drawdown is more gradual.

Significantly, the two studies view different time frames, the CBO calculating possible costs met in the next 10 years, while Stiglitz and Bilmes also include
costs incurred during that period but paid for later, such as equipment replaced in post-2017 budgets.

Official projections too short-sighted?

This factor figures most in the category of veterans' medical care and disability payments, where the CBO foresees $9 billion to $13 billion in costs by 2017.
Stiglitz and Bilmes, meanwhile, project $422 billion to $717 billion in costs over the lifetime of soldiers who by 2017 are wounded or otherwise mentally or
physically disabled by the wars. "The CBO is only looking 10 years out on everything," Bilmes noted in an interview.

For its part, a CBO critique suggested that Bilmes and Stiglitz might be overstating the expense of treating veterans' brain injuries, a costly category. The two
economists say their calculations are conservative, because they don't encompass many "hidden" items in the U.S. budget. Their basic projections also exclude
the potentially huge debt-service cost — on which CBO approximately agrees — and the cost to the U.S. economy of global oil prices that have quadrupled since
2003, an increase analysts blame partly on the Iraq upheaval.

Critics: Leaving has costs, too

Estimating all economic and social costs might push the U.S. war bill up toward $5 trillion by 2017, they say.

Their book already figures in the stay-or-leave debate over Iraq. When Stiglitz testified on Feb. 28 before the congressional Joint Economic Committee, the ranking
Republican, Rep. Jim Saxton, complained that such projections are too imprecise to help determine relative costs and benefits of the Iraq war. Saxton said a rapid
U.S. pullout could lead to full-scale civil war and Iranian domination of Iraq, "enormous costs" that he said should be weighed in any calculation.

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[Yrys]

In U.K. :

Iraq and Afghan costs 'to double'

The costs of military operations in Afghanistan and Iraq this year are likely to almost double to £3.297bn, a committee of MPs has warned.

The Commons defence committee said operational costs for this financial year were now forecast to reach £3.297bn - a 94% increase on last year.
This included a 72% rise in spending on Iraq to £1.648bn, despite ongoing falls in troop numbers. Last year's total spending on the two conflicts was £1.698bn.
The cost of the Afghan conflict would rise 122% to £1.649bn this year, the MPs said.

'Better information'

While the committee recommended that the House of Commons should accept the estimates, it said the Ministry of Defence needed to provide more information
on how the additional cash was being spent. Chairman James Arbuthnot said: "Few people will object to the investment being made in better facilities and
equipment for our troops in Iraq and Afghanistan. "However, this estimate represents a lot of public money. The MoD needs to provide better information about
what it is all being spent on."

Overall, the MoD has said it needs an additional £2.192 billion for the current financial year compared with its previous estimate made at the end of 2007.

The committee said it was concerned that the forecasts were "insufficiently robust". "While we accept the difficulty of predicting costs when operations are ongoing,
the difference between the forecasts at the time of the winter and spring supplementary estimates appears unreasonably large," it said.

But Armed Forces Minister Bob Ainsworth told the BBC: "The numbers of personnel [in Iraq] have declined but they are still doing a vital and dangerous job and
we have continued to invest in force protection... "The threat changes... We have to stay ahead of the enemy as much as we can and that's not cheap."

Liberal Democrat defence spokesman Nick Harvey said: "This clearly shows how the Iraq war is continuing to bleed our finances dry, leaving soldiers in Afghanistan
overstretched and under-equipped."

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