Grass roots spending taking hold in Iraq

NY Times:

This mostly easygoing provincial capital, where the Euphrates River winds around as if it is in no hurry to go farther south, holds the latest sign that political power in Iraq is leaving its historical home in Baghdad for outlying regions. That sign is a local government that knows how to spend money.

Because of security threats and a seemingly immovable bureaucracy, the federal ministries in Baghdad largely failed to spend billions of dollars of Iraqi oil revenues set aside last year to rebuild things like roads, schools, hospitals and power plants.

Although some ministries have improved slightly, what has really caught the eye of Iraqi politicians is the way some local governments have begun bypassing the morass in Baghdad by using hundreds of millions of dollars of the reconstruction money they receive from the government to finance regional projects.

The approach has found such favor among some political leaders that Iraq’s deputy prime minister, Barham Salih, arrived here with an all-star cast of senior government officials on Sunday to announce that Babil Province, whose capital is Hilla, would be rewarded with $70 million in new money and financing for a major loan program for small businesses and individuals.

Participants at a meeting where that announcement was made said they had already seen modest effects of Babil’s talent for spending money in the form of new schools, road repairs, small electricity projects and the improving commercial vigor of Hilla, where smoke can be seen rising from brick factories and the streets do not have the deserted feel of many districts in Baghdad, 50 miles north.

For a province whose entire 2007 capital budget is $112 million, $70 million is a stunning addition. In fact, the rate of spending has some authorities concerned that the push for provincial spending could drive a wave of corruption. They fear it could also unleash new centrifugal forces in a country already on the verge of breaking into semiautonomous regions.

But in Mr. Salih’s view, the degree of independence exercised by provinces like Babil in local rebuilding is consistent with Iraq’s Constitution, which envisions a federal system with substantial powers granted to regions.

Those moves were an indicator of the increasing uselessness of the old Iraqi apparatus of centralized government, Mr. Salih said.

“This central bureaucracy is broken,” he said. “The national ministries have proven incapable of spending their budgets.”

To illustrate his frustration, he related the case of a school in Babil that he said had been built with provincial money. But once it was built, the national education ministry proved so dysfunctional that it could not furnish it.

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The capital budget for the entire country, including the provinces, was $6 billion in 2006 and $10 billion in 2007. But some national ministries spent as little as 15 percent of their share last year, citing problems such as a shortage of employees trained to write contracts, the flight of scientific and engineering expertise from the country and the danger from militias and the insurgency.

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Iraq is just now breaking out of the centralize command economy imposed by the Baathist socialism. It is just learning how to do things for itself on a local level without waiting from on high for direction. This has the potential to greatly strengthen the rest of Iraq, the way it already has in the Kurdish region. It is another indication that the grass roots movements with the sheiks on security is just one part of local Iraqis taking responsibility for their own security and future.