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Monday, April 10. 2006

UPDATE: 3 years of U.S. aid for Iraq equal to 7 years of U.S. aid for Germany

Posted by Editors in International Economics on Monday, April 10. 2006

A Congressional Research Service report, obtained by the Federation of American Scientists, shows that the U.S. appropriated $28.9 billion in foreign assistance to Iraq in the last three years, while "U.S. assistance to Germany totaled some $4.3 billion ($29.3 billion in 2005 dollars) for the years of direct military government (May 1945-May 1949) and the overlapping Marshall Plan years (1948/1949-1952)." (HT: Think Progress)
TomPaine.com criticizes Iraqi reconstruction shortcomings and corruption and demands:
Congress should establish a permanent committee on war profiteering and corruption modeled after the one Harry Truman chaired during World War II. The president’s own administration officials report that the reconstruction of Iraq has been botched. In early February, the Special Inspector General for Iraq Reconstruction, Stuart Bowen, released a report to the Senate Armed Services Committee that describes a significant gulf between the aims of U.S. reconstruction officials and what they will be able to accomplish. What Bowen called a “reconstruction gap” mostly affects three sectors essential to the success of Iraq’s reconstruction: water, electricity and oil. After an investment of billions, Bowen reports that slightly more than a third of all water projects planned will ever actually be completed. Currently, two of three Iraqis are left with no potable water; only one in five has sewerage.
UPDATE: The Washington Post writes that democratisation is not a priority in the U.S. budget:
While President Bush vows to transform Iraq into a beacon of democracy in the Middle East, his administration has been scaling back funding for the main organizations trying to carry out his vision by building democratic institutions such as political parties and civil society groups. (...) Among the projects facing closure is the Iraq Civil Society and Media Program, funded by USAID and run by America's Development Foundation and the International Research & Exchanges Board. The program has established four civil society resource centers around the country, conducted hundreds of workshops and forums, and trained thousands of government officials in transparency and accountability. It also helped Iraqis set up the National Iraqi News Agency, the first independent news agency in the Arab world. The program was supposed to run at least through June 2007 but without $15 million more, it will have to close this summer.
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PierreM - #1 - 2006-04-10 23:27 - (Reply)

Try correcting the figures for inflation: total Marshall Plan aid was about $130 billion USD in 2006 dollars.

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Jorg - #1.1 - 2006-04-11 00:45 - (Reply)

Congressional Research Service says the $4.3 billion of the Marshall plan money for Germany are $29.3 billion in 2005 dollars.

Where do you have your number from?

I guess the 130 billion refers to the money for all of Europe.

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joe - #2 - 2006-04-15 21:22 - (Reply)

What is misleading in this report is the environment in which the Marshall Plan was established when compared to Iraq today.

The Marshall Plan represented approximately 7% of the total US Federal Budget at the time. In fact, in 1948 it consumed half of what was spent on National Defense.

Given the current level of funding not only for Iraq but also for other nations, both allies and former enemies, it can be said Congress is nowhere nearly as enlightened today, as it was toward Americans allies and former enemies in the late 1940’s.

The FY2005 US Federal Budget was 2,479,404 (in millions). This would mean to reach a comparative level of 7%, 173,558 (in millions) would have to be appropriated.

So all in all one can easily say the Europeans to include the Germans got a real boost from the US while it would appear Iraq and Afghanistan will not.

Equally it can be said it is both disappointing and unfortunate that those nations, which benefited the most from the Marshall Plan, are not demonstrating the same level of generosity today.

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Jorg - #2.1 - 2006-04-15 22:01 - (Reply)

I hear you. There is never enough generosity. However, ressources are scarce.
Germany pays more foreign aid than the US as a percentage of GDP.

Re Iraq:
"The Federal Government’s share of debt relief therefore amounts to approximately 3.1 billion euro, and German exporters’ share to approximately 1.6 billion euro. Altogether, the Federal Government and German exporters will forgive a total of 4.7 billion euro in debt."

And: "Germany has pledged some 200 million euros in aid for the stabilization and reconstruction of Iraq."

Source: http://www.germany.info/relaunch/info/archives/background/Factsheet_German_Iraq_march2005.pdf

So, if you consider Germany's size and economic power, how does this compare to the Marshall plan?

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joe - #3 - 2006-04-15 23:31 - (Reply)

Jorg,

Really I was making no comparsion to Germany.

I have to assume by your reply, you consider Germany's aide efforts to be more than enough given it is the third largest economy in the world.

I would not put a lot of faith in the numbers you quote as it seems some consider there has been some double counting - considering debt relief as the same as aid.

Of course you might consider the loans made to Saddam the equivlant to funds provided to the current government in Iraq to be equal. I for one do not.

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Jorg - #3.1 - 2006-04-15 23:50 - (Reply)

Are we still the third largest economy in the world?

"it seems some consider there has been some double counting - considering debt relief as the same as aid."

You seem to refer to [url]http://atlanticreview.org/archives/294-Americans-donate-and-volunteer-a-lot-for-good-causes-abroad-Update.html[/url]

Thanks for reading the Atlantic Review so thoroughly.

In the case of Iraq aid, however, that can't be possible. Germany pledged 200 million in aid and forgave 4.7 billion euro in debt. Debt relief can't be counted as aid, since debt relief is bigger than aid...

I don't know if 200 million aid for Iraq is a lot or not. How much aid do other more poor countries receive?

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joe - #4 - 2006-04-16 05:30 - (Reply)

Jorg,

Actually, my reference was to a EU analyst of the difference between the announced aide and the actual aide distributed.

If you did report this, then I have to admit I missed it. Having said that it is good that you are attempting to present a balanced view of the true aide picture.

This is something the M$M tends to ignore or just overlook.

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