GAO: Where is Iraq’s Oil Money?

With Iraq’s infrastructure in shambles after five years of war, you’d think its oil-revenues would be spent on building roads and bridges or developing clean drinking water systems. Unfortunately, according to a scathing new U.S. government report, it looks like less than one percent of its budget is being spent on infrastructure projects.

The report (pdf), written by a non-partisan arm of Congress, says that Iraq stands to rake in between $67-$79 million in oil profits this year. The non-partisan Government Accountability Office says they won’t be able to account for that money because the data from Iraq’s Ministry of Finance is unreliable. But, based on trends from the last few years, it’s a pretty good bet the money won’t be used to rebuild the country’s infrastructure and security forces.

The GAO estimates the Iraqi government raised $94 billion in revenue between 2005 and 2007. Some $90.2 billion came from oil sales. Only about half of that money was actually spent. Somewhere, a budget surplus upwards of $50 billion supposedly sits untouched.

Of the money that was spent, 90 percent went to "operating expenses" which they list as "salaries, pensions, goods and services." Less than one percent was spent on infrastructure, like water and electricity projects. Perhaps more surprisingly, considering ongoing fighting, less than one percent went to training and providing weapons for Iraqi security forces.

The worldwide surge of fuel prices could have been a huge benefit for the people of Iraq, but there appears to be little hope the Iraqi government will spread the oil wealth around.