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Iraq expected to rack up 79-billion dollar surplus

New York - The high price of oil will allow the Iraqi government to rack up a budget surplus of 79 billion dollars by year's end, a report by the Government Accountability Office, quoted in Wednesday's New York Times said.

The report by the US federal oversight agency estimates that Iraqi oil revenue from 2005 through the end of this year will amount to at least 156 billion dollars, but that the government was spending a pittance on reconstruction projects that were still being funded by US taxpayers.

The report is likely to increase the debate in the US about the continuing cost of reconstruction, costing some 48 billion dollars since 2002.

According to the report, the US has spent 23.2 billion dollars in the critical areas of security, oil, electricity and water since the 2003 invasion. But from 2005 through April 2008, Iraq has spent just 3.9 billion dollars on similar services. At the same time only 10 per cent of Iraq's expenditures went toward reconstruction, with just 1 per cent spent on maintaining US and Iraqi-funded investments in roads, water, electricity and weapons.

The report was requested by two senior senators, Carl Levin, Democrat of Michigan, and John Warner, Republican of Virginia, who both blasted the Iraqi government.

‘The Iraqi government now has tens of billions of dollars at its disposal to fund large-scale reconstruction projects,’ the senators said in a joint statement. ‘It is inexcusable for US taxpayers to continue to foot the bill for projects the Iraqis are fully capable of funding themselves. We should not be paying for Iraqi projects, while Iraqi oil revenues continue to pile up in the bank.’