Rebuilding Iraq: More Comprehensive National Strategy Needed to Help Achieve U.S. Goals
Published: 2006-07-11T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: According to the National Strategy for Victory in Iraq (NSVI) issued by the National Security Council (NSC), prevailing in Iraq is a vital U.S. interest because it will help win the war on terror and make America safer, stronger, and more certain of its future. This report (1) assesses the evolving U.S. national strategy for Iraq and (2) evaluates whether the NSVI and its supporting documents address the desirable characteristics of an effective national strategy developed by GAO in previous work. In this report, the NSVI and supporting documents are collectively referred to as the U.S. strategy for Iraq.
section_title: What GAO Found
paragraphs: The November 2005 National Strategy for Victory in Iraq and supporting documents incorporate the same desired end-state for U.S. stabilization and reconstruction operations that were first established by the coalition in 2003: a peaceful, united, stable, and secure Iraq, well integrated into the international community, and a full partner in the global war on terrorism. However, it is unclear how the United States will achieve its desired end-state in Iraq given the significant changes in the assumptions underlying the U.S. strategy. The original plan assumed a permissive security environment. However, an increasingly lethal insurgency undermined the development of effective Iraqi government institutions and delayed plans for an early transfer of security responsibilities to the Iraqis. The plan also assumed that U.S. reconstruction funds would help restore Iraq's essential services to prewar levels, but Iraq's capacity to maintain, sustain, and manage its rebuilt infrastructure is still being developed. Finally, the plan assumed that the Iraqi government and the international community would help finance Iraq's development needs, but Iraq has limited resources to contribute to its own reconstruction, and Iraq's estimated future needs vastly exceed what has been offered by the international community to date. The NSVI is an improvement over previous planning efforts. However, the NSVI and its supporting documents are incomplete because they do not fully address all the desirable characteristics of an effective national strategy. On one hand, the strategy's purpose and scope is clear because it identifies U.S. involvement in Iraq as a vital national interest and central front in the war on terror. The strategy also generally addresses the threats and risks facing the coalition forces and provides a comprehensive description of the desired U.S. political, security, and economic objectives in Iraq. On the other hand, the strategy falls short in three key areas. First, it only partially identifies the current and future costs of U.S. involvement in Iraq, including the costs of maintaining U.S. military operations, building Iraqi government capacity at the provincial and national level, and rebuilding critical infrastructure. Second, it only partially identifies which U.S. agencies implement key aspects of the strategy or resolve conflicts among the many implementing agencies. Third, it neither fully addresses how U.S. goals and objectives will be integrated with those of the Iraqi government and the international community, nor does it detail the Iraqi government's anticipated contribution to its future security and reconstruction needs. In addition, the elements of the strategy are dispersed among the NSVI and seven supporting documents, further limiting its usefulness as a planning and oversight tool.

section_title: Letter
paragraphs: In November 2005, the National Security Council (NSC) issued the National  Strategy for Victory in Iraq (NSVI) to clarify the President’s existing  strategy for achieving U.S. political, security, and economic goals in Iraq.  According to this document, prevailing in Iraq is a vital U.S. national  interest because it will help win the war on terror and make America safer,  stronger, and more certain of its future. To achieve victory, the strategy  requires the United States to maintain troops in Iraq until its objectives are  achieved, adjusting the number up or down as conditions warrant.  Currently, the United States deploys about 130,000 U.S. troops in support of  the Iraqi government. Between fiscal years 2003 and 2006, the U.S.  government has allocated about $311 billion to support U.S. stabilization  and reconstruction efforts in Iraq, including over $34 billion for  reconstruction assistance alone. Moreover, the administration has  requested about an additional $51 billion to support U.S. stabilization and  reconstruction operations in Iraq and Afghanistan in fiscal year 2007.
We initiated this review under the Comptroller General’s authority because  of broad based congressional interest in Iraq issues. This report (1)  describes the evolution of the U.S. national strategy for Iraq in response to  changing, security, reconstruction, and economic circumstances and (2)  evaluates whether the NSVI and its supporting documents include the  desirable characteristics of an effective national strategy. In this report, the  NSVI and its supporting documents are referred to as the U.S. strategy for  Iraq.
To accomplish our objectives, we obtained and analyzed records, reports,  and data from U.S. government and military officials in Washington, D.C.,  and Baghdad, Iraq. We also examined the reports of other oversight entities  that performed internal control and management reviews. We assessed the  strategy using the six desirable characteristics of an effective national  strategy developed in previous GAO work. For example, GAO has used this  methodology to assess and report on the administration’s strategies  relating to terrorism and restructuring the Department of Defense’s (DOD)  global force posture. National strategies with these characteristics offer  policy makers and implementing agencies a management tool that can help  ensure accountability and more effective results. The six characteristics  are (1) a clear purpose, scope, methodology; (2) a detailed discussion of  the problems, risks, and threats the strategy intends to address; (3) the  desired goals and objectives, and outcome-related performance measures;  (4) a description of the U.S. resources needed to implement the strategy;  (5) a clear delineation of the U.S. government roles, responsibilities, and  mechanisms for coordination; and (6) a description of how the strategy is  integrated internally among U.S. agencies and externally with the Iraqi  government and international organizations. These six characteristics can  be subdivided into 27 separate elements for more detailed assessment.
We evaluated the NSVI alone and in conjunction with seven related  classified and unclassified supporting documents that Department of State  (State) and DOD officials said encompassed the U.S. strategy: (1) the  National Security Presidential Directive 36 (May 2004), (2) Multinational  Forces-Iraq (MNF-I) Campaign Plan (August 2004), (3) the MNF-I/ U.S.  Embassy Baghdad Joint Mission Statement on Iraq (December 2005), (4)  the Multinational Corps-Iraq Operation Order 05-03 (December 2005), (5)  the National Strategy for Supporting Iraq (updated January 2006), (6) the  quarterly State Section 2207 reports to Congress (through April 2006), and  (7) the April 2006 Joint Campaign Plan issued by the Chief of Mission and  the Commander of the MNF-I. See appendix I for a more detailed  description of our scope and methodology. See appendix II for details on  GAO’s six desirable characteristics of an effective national strategy.
We conducted our review from October 2005 through June 2006 in  accordance with generally accepted government auditing standards.
subsections: section_title: Background
paragraphs: Prior to the fall of 2005, the U.S. stabilization and reconstruction effort in  Iraq lacked a clear, comprehensive, and integrated U.S. strategy. State  assessments and other U.S. government reports noted that this hindered  the implementation of U.S. stabilization and reconstruction plans. A review  of the U.S. mission completed in October 2005 found, among other things,  that (1) no unified strategic plan existed that effectively integrated U.S.  government political, military, and economic efforts; (2) multiple plans in  Iraq and Washington have resulted in competing priorities and funding  levels not proportional to the needs of overall mission objectives; (3)  focused leadership and clear roles are lacking among State, DOD, and other  agencies in the field and in Washington, D.C.; and (4) a more realistic  assessment of the capacity limitations of Iraqi central and local government  is needed.
The study made a series of recommendations that led to the creation of the  November 2005 NSVI, including (1) creating a single, joint civil-military  operational plan to clarify organizational leads; (2) providing better  strategic direction and more coordinated engagement with Iraqi  government and international donors; (3) establishing three mission teams  to address political, security, and economic tasks; and (4) establishing  provincial reconstruction teams to engage Iraqi leadership and foster  flexible reconstruction, local governance, and “bottom-up” economic  development. The study also called for a streamlined interagency support  office in Washington, D.C., to assist the mission’s working groups and  provide needed institutional memory and continuity. In response, the  administration created the NSVI in November 2005 to reorganize U.S.  government stabilization and reconstruction efforts around three broad  tracks—political, security, and economic—and eight strategic objectives  (see table 1).
Overall, officials in DOD and State identified seven documents that  describe the U.S. government strategy for Iraq in addition to the NSVI. The  U.S. government uses these documents to plan, conduct, and track  different levels of the U.S. stabilization and reconstruction strategy as  follows:  National/strategic level: The President and the NSC established the  desired end-state, goals and objectives, and the integrated approach  incorporated in the NSVI. The May 2004 NSPD 36 made State  responsible for all U.S. activities in Iraq through its Chief of Mission in  Baghdad (Ambassador), with the exception of U.S. efforts relating to  security and military operations, which would be the responsibility of  DOD. The directive also continued the U.S. Central Command  (CENTCOM) responsibility for all U.S. government efforts to organize,  equip, and train Iraqi security forces. MNF-I oversees the effort to  rebuild the Iraqi security forces through a subordinate command. The  National Strategy for Supporting Iraq (NSSI) serves as a management  tool to match and coordinate U.S. stabilization and reconstruction needs  and priorities and provides updates on activities associated with each  strategic objective.
Operational level: The Joint Mission Statement clarified the roles and  responsibilities between the Chief of Mission in Baghdad and the  Commander of MNF-I and established mission milestones and target  dates for their achievement. The August 2004 campaign plan elaborated  and refined the original plan for transferring security responsibilities to  Iraqi forces. In April 2006, Commander of the MNF-I and the Chief of  Mission in Baghdad issued a new classified Joint Campaign Plan  incorporating the changes in organization laid out in the NSVI, although  some of the annexes to this campaign plan are being reworked and were  not available as of May 2006.
Implementation and reporting level: Operations Order 05-03  incorporates revised missions and objectives for the Multinational  Corps-Iraq (MNC-I), the MNF-I unit responsible for command and  control of operations throughout Iraq. This November 2005 order was  issued in anticipation of the New Joint Campaign Plan incorporating the  NSVI’s new objectives and organizational arrangements, according to  DOD officials. The campaign plans and the operations order also  established metrics for assessing their progress in achieving MNF-I’s  objectives. State’s 2207 reports track mission activity and funding status  by mission objective and funding sector.
Figure 1 depicts the relationship of the NSVI and the key supporting  strategy documents.
In addition to these documents, senior State officials stated that  Congressional Budget Justifications and publications on Iraq spending  provide additional details on the U.S. government resources, investments,  and risk management. DOD officials stated that its quarterly reports to  measure the results of its fiscal year 2005 Iraq Security and Stabilization  Fund programs in Iraq also provide information, but DOD did not cite these  reports as supporting documentation for the NSVI.
section_title: NSVI Retains Original Desired End-State, but Changing Assumptions and Circumstances Make it Unclear How It Will Achieve These Objectives
paragraphs: The NSVI, issued by the NSC in November 2005, incorporates the same  desired end-state for U.S. operations in Iraq that first was established by  the Coalition Provisional Authority (CPA) in 2003: a peaceful, united,  stable, secure Iraq, well integrated into the international community, and a  full partner in the global war on terrorism. Since then, however, the  strategy’s underlying security, reconstruction, and economic assumptions  have changed in response to changing circumstances (see fig. 2). First, the  original plan assumed a permissive security environment that never  materialized. Second, the CPA assumed that U.S. funded reconstruction  activities would help restore Iraq’s essential services to prewar levels but  has failed to achieve these goals. Third, the strategy assumes that the  international community and Iraqi government will help finance Iraq’s  development needs; however, these expectations have not yet been met. As  a result, it is unclear how the United States will achieve its desired   end-state in Iraq given these changes in assumptions and circumstances.
subsections: section_title: Permissive Security Environment Never Materialized
paragraphs: According to senior CPA and State officials, in 2003 the CPA assumed that  Iraq would have a permissive security environment. CPA expected that a  relatively small internal security force would replace the disbanded Iraqi  Army and would quickly assume responsibility for providing security from  the coalition forces. However, growing insurgent attacks led to (1) the  collapse of Iraqi forces in April 2004; (2) the delay of coalition plans to turn  responsibility for security over to the new Iraqi security forces beginning in  early 2004; and (3) the postponement of plans to draw down U.S. troop  levels below 138,000 until the end of 2005. In October 2004, State reported  to Congress that the uncertain security situation affected all potential  economic and political developments in Iraq and that enhanced Iraqi  security forces were critically needed to meet the new threat environment.  The coalition’s military commander and the U.S. Chief of Mission  conducted strategic and programmatic reviews in mid-2004 and reached  similar conclusions, noting that the hostile security situation required the  creation of substantially larger Iraqi security forces with coalition  assistance.
As a result, between 2003 and 2006, the projected Iraq security force  structure doubled in size, while U.S. appropriations for support of the Iraqi  security forces more than quadrupled. CPA projected the need for a  security force of about 162,000 personnel (including about 77,000 armed  forces and National Guard troops and 85,000 police) in 2003. Current plans  call for 325,500 security personnel to be organized under coalition  direction: including completing the initial training and equipping of the  137,500 in the Iraqi Armed Forces and 188,000 police and other interior  ministry forces by the end of December 2006. U.S. assistance appropriated  for Iraqi security forces and law enforcement has grown from $3.24 billion  in January 2004 to approximately $13.7 billion in June 2006. As GAO  recently reported, the insurgency remains strong and resilient in 2005 and  early 2006, the intensity and lethality of attacks have been growing, and the  insurgency threatens to undermine the development of effective Iraqi  governmental institutions.
section_title: Essential Services Have Not Been Restored to Prewar Levels, Undermining Efforts to Improve the Lives of Iraqi People
paragraphs: The U.S. strategy initially assumed that its U.S.-funded reconstruction  activities would help restore Iraq’s essential services—including oil  production, electricity generation, and water treatment—to prewar levels.  However, the U.S. efforts have yet to restore Iraq’s essential services to  prewar levels, and efforts to achieve these goals have been hindered by  security, management, and maintenance challenges. As a result, the United  States has yet to prove that it has made a difference in the Iraqi people’s  quality of life.
According to senior CPA and State officials responsible for the strategy, the  CPA’s 2003 reconstruction plan assumed (1) that creating or restoring basic  essential services for the Iraqi people took priority over jobs creation and  the economy and (2) that the United States should focus its resources on  long-term infrastructure reconstruction projects because of the expertise  the United States could provide. According to the senior CPA official  tasked with developing the reconstruction plan, CPA drew up a prioritized  list of more than 2,300 construction projects in 10 sectors to be completed  in about 3 years, which were to be funded by the $18.4 billion made  available in the fiscal year 2004 supplemental appropriation for the 2004  Iraq Relief and Reconstruction Fund (IRRF2). The U.S. reconstruction  effort focused primarily on building or restoring essential services to  prewar levels—or to a standard acceptable to and accessible by all Iraqi  citizens–over the long-term with less emphasis on more immediate  development tasks. CPA initially allocated about two-thirds of the IRRF2  funds to restore essential services in the oil, water, and electricity sectors,  while more immediate projects in democracy building, private sector  development, and the employment sector received about 3 percent.
However, the coalition’s decision in November 2003 to accelerate the  return of power to a sovereign Iraqi interim government and changes in the  security situation altered these assumptions, leading the U.S.  administration to reallocate a total of $3.5 billion between January 2004  and April 2006 from the water resources and sanitation and electric sectors  to security, law enforcement, justice, and democracy building and  employment programs. For example, the mission reallocated over $555  million in IRRF2 funds to democracy programs and reallocated $105  million to improve productivity and employment in the agriculture sector  to support the Iraqi government as it prepared for elections. A World Bank  report stated that the agriculture sector employed 18 percent of Iraq’s labor  force and accounted for about 10 percent of gross domestic product in  2004. Before this time, the United States had devoted no IRRF2 resources  to the agricultural sector.
U.S. expectations about Iraq’s capacity to manage and sustain its own  reconstruction efforts have not been realized and have resulted in greater  U.S. emphasis on capacity development. As reported in prior GAO reports,  the U.S. reconstruction effort has encountered difficulties in maintaining  new and rehabilitated infrastructure, resulting in some U.S.-funded  projects becoming damaged or inoperable after being turned over to the  Iraqis. For example, as of June 2005, U.S.-funded water and sanitation  projects representing about $52 million of approximately $200 million  spent on completed projects were inoperable or were operating at lower  than normal capacity. Recent U.S. mission assessments have noted the Iraqi  government’s limited capacity to provide services to the Iraqi people due to  weak technical expertise, limitations in managers’ skills and training, and  an inability to identify and articulate strategic priorities, and other factors.  As a result, the administration reallocated $170 million for government  capacity building programs and $133 million for infrastructure operations  and maintenance needs in 2005 and early 2006.
As GAO has reported previously, these challenges contributed to the  cancellation or delay of projects in the essential services sectors, affecting  U.S. efforts to achieve its targets in the oil, electricity, and water sectors,  and undermining its efforts to improve the quality of life for the Iraqi  people. A March 2006 poll of Iraqi citizens indicated that over half the  respondents thought Iraq was heading in the wrong direction. Moreover,  the poll reports that over the last year, growing numbers believe that the  security situation, the provision of electricity, the prevalence of corruption,  and the state of the economy worsened.
section_title: Expected Level of Iraq and International Community Financial Support for Iraq’s Developmental Needs Have Not Yet Been Met
paragraphs: From the outset of the reconstruction and stabilization effort, the U.S.  strategy assumed that the Iraqis and the international community would  help finance Iraq’s developmental needs. However, these expectations have  not yet been met, and Iraq’s estimated future reconstruction needs vastly  exceed what has been offered to date. According to a CPA report and  senior CPA and State officials, the 2003 CPA plan assumed that the Iraqis  and the international community would support development needs that  were not financed by the United States. For example, a CPA report  assumed that Iraqi oil revenues could help pay for reconstruction costs  because it estimated that Iraq’s oil production would increase to about 2.8  to 3.0 million barrels per day (mbpd) by the end of 2004, a one-third  increase over 2002 levels, and generate about $15 billion in oil export  revenue for the year.
These expectations about Iraq’s ability to contribute to and manage its own  reconstruction have not been realized in practice. U.S. agency documents  estimated Iraq’s 2003 actual prewar crude oil production at 2.6 mbpd. In  March 2006, State reported that oil production was about 2 mbpd. A  combination of insurgent attacks on crude oil and product pipelines,  dilapidated infrastructure, and poor operations and maintenance have  hindered domestic refining and have required Iraq to import significant  portions of liquefied petroleum gas, gasoline, kerosene, and diesel. In  addition, although the capacity for export is theoretically as high as 2.5  mbpd, export levels averaged about 1.4 mbpd in 2005. Shortfalls in  expected oil production levels and increased security spending contributed  to reductions in Iraq’s own projections of how much of the budget would be  available to contribute to its own reconstruction. In 2005, Iraq’s  government budgeted approximately $5 billion for capital expenditures,  but a senior U.S. mission official stated that they managed to spend only a  few hundred million by the end of the year. He attributed this to Iraq  ministries’ lack of expertise to manage projects, write contracts, and  provide effective controls on the contracting process.
The strategy’s assumptions about the need for extensive international  donor support for rebuilding Iraq’s reconstruction have not significantly  changed since 2003, although the estimated cost of restoring Iraq’s  infrastructure has grown significantly since October 2003. At that time, a  World Bank, United Nations, and CPA assessment initially estimated that it  would cost about $56 billion to meet reconstruction needs across a variety  of sectors in Iraq. The United States committed about $24 billion for relief  and reconstruction in fiscal years 2003 and 2004, with the expectation the  Iraqis and the international community would provide the rest. Other  foreign donors pledged about $13.6 billion to rebuild Iraq. According to  State documents, international donors have provided over $3.5 billion in  the form of multilateral and bilateral grants as of April 2006. About $10  billion, or 70 percent, of the pledged amount is in the form of loans,  primarily from the World Bank, the International Monetary Fund (IMF),  and Japan. As GAO has reported previously, however, Iraq currently owes a  combined $84 billion to victims of its invasion of Kuwait and other external  creditors, which may limit its capacity to assume more debt. Moreover,  Iraq's needs are greater than originally anticipated due to severely  degraded infrastructure, postconflict looting and sabotage, and additional  security costs. In the oil sector alone, Iraq will now likely need an estimated  $30 billion over the next several years to reach and sustain an oil  production capacity of 5 million barrels per day, according to industry  experts and U.S. officials. For the electricity sector, Iraq projects that it will  need $20 billion through 2010 to boost electrical capacity, according to the  Department of Energy’s Energy Information Administration. While the  NSVI does not identify the magnitude of additional financing needed, it  acknowledges that there is “room for the international community to do  more.”
section_title: The NSVI and Its Supporting Documents Do Not Address All the Characteristics of an Effective National Strategy, thus Limiting Its Usefulness as a Planning Tool
paragraphs: The NSVI aims to improve U.S. strategic planning for Iraq; however, the  NSVI and its supporting documents are incomplete because they do not  fully address the six desirable characteristics of effective national  strategies that GAO has identified through its prior work. We used these  six characteristics to evaluate the NSVI and the supporting documents that  DOD and State officials said encompassed the U.S. strategy for rebuilding  and stabilizing Iraq. As figure 3 shows, the strategy generally addresses  three of the six characteristics but only partially addresses three others,  limiting its usefulness to guide agency implementation efforts and achieve  desired results. Moreover, since the strategy is dispersed among several  documents instead of one, its effectiveness as a planning tool for  implementing agencies and for informing Congress about the pace, costs,  and intended results of these efforts is limited.
subsections: section_title: Strategy Discusses Purpose and Scope, Identifies Risks and Threats, and Discusses Desired Goals and Objectives
paragraphs: The strategy generally addresses three of the six characteristics. As figure 3  shows, the strategy provides: (1) a clear statement of its purpose and  scope; (2) a detailed discussion of the problems the strategy intends to  address; and (3) an explanation of its goals, subordinate objectives, and  activities.
subsections: section_title: U.S. Strategy Identifies Purpose and Scope
paragraphs: This characteristic addresses why the strategy was produced, the scope of  its coverage, and the process by which it was developed. A complete  description of purpose, scope, and methodology make the document more  useful to organizations responsible for implementing the strategies, as well  as to oversight organizations such as Congress. The strategy identifies U.S.  involvement in Iraq as a vital national interest, identifies the risks and  threats facing coalition forces, and discusses overarching U.S. political,  security, and economic objectives. Specifically, the NSVI identifies U.S.  government efforts to rebuild and stabilize Iraq in terms of three  overarching political, security, and economic objectives and addresses the  assumptions that guided its development. For example, to help Iraq achieve  the strategic goal of forging a national compact for democratic  government, the strategy’s subordinate objectives state that the United  States would help promote transparency in the executive, legislative, and  judicial branches of government, and help build national institutions that  transcend regional and sectarian interests, among other activities. To help  achieve another strategic goal, building government capacity and providing  essential services, the strategy also states that the U.S. government is  helping to achieve this objective by rehabilitating critical infrastructure in  the fuel and electric power sectors. It is also rehabilitating schools,  providing new textbooks, computers, and materials; and training teachers  and school administrative staff. One supporting document, State’s 2207  report to Congress, provides additional supporting details and data for the  specific activities and projects funded through the $18.4 billion in fiscal  year 2004 reconstruction funds.
section_title: Strategy Identifies Risks and Threats
paragraphs: This characteristic addresses the particular risks and threats the strategy is  directed at, as well as risk assessment of the threats to and vulnerabilities  of critical assets and operations. Specific information on both risks and  threats helps responsible parties better implement the strategy by ensuring  that priorities are clear and focused on the greatest needs. The NSVI and  the supporting documents generally address some of the problems, risks,  and threats found in Iraq. For example, the NSVI identifies the risks posed  by the insurgency and identifies three basic types of insurgents— rejectionists, supporters of former Iraqi President Saddam Hussein, and  terrorists affiliated with or inspired by al Qaeda—and the different actions  needed to confront each one. In addition, various supporting documents  provide additional information on the threats the Shi’ite militias present,  and the corruption that could affect the Iraqi government’s ability to  become self-reliant, deliver essential services, reform its economy,  strengthen rule of law, maintain nonsectarian political institutions, and  increase international support.
section_title: Strategy Discusses Goals, Objectives, and Activities but Has Limited Discussion of Outcome-Related Performance Measures
paragraphs: This characteristic addresses what the national strategy strives to achieve  and the steps needed to garner those results, as well as the priorities,  milestones, and outcome-related performance measures to gauge results.  Identifying goals, objectives, and outcome-related performance measures  aids implementing parties in achieving results and enables more effective  oversight and accountability. In addition, identifying and measuring  outcome-related performance rather than output measures allow for more  accurate measurement of program results and assessment of program  effectiveness.
The strategy generally addresses goals and subordinate objectives by  identifying 8 strategic objectives (pillars), 46 subordinate objectives, or  “lines of action,” and numerous project activities but only partially  addresses outcome-related performance measures. The supporting  strategy documents also provide information on how progress will be  monitored and reported. In addition, the NSVI identifies the process for  monitoring and reporting on progress via interagency working groups. It  also identifies some metrics to assess progress, such as the number of  Iraqis willing to participate in the political process, the quality and quantity  of the Iraqi units trained, and barrels of oil produced and exported. The  NSVI also notes that detailed metrics on the results of training Iraqi  security forces and improvements in the economy and infrastructure are  collected and available elsewhere but did not include them in the strategy.  Supporting documents also identify some performance measures.
The metrics the strategy uses to report progress make it difficult to  determine the impact of the U.S. reconstruction effort. We reported  previously that in the water resources and sanitation sector little was  known about how U.S. efforts were improving the amount and quality of  water reaching Iraqi households or their access to the sanitation services  because the U.S. government only tracked the number of projects  completed or under way. For instance, as of March 2006, Iraq has the  capacity to produce 1.1 million cubic meters of water per day, but this level  overestimates the amount of potable water reaching Iraqi households. U.S.  officials estimate that 60 percent of water treatment output is lost due to  leakage, contamination, and illegal connections. The U.S. mission reported  in December 2005 that it had developed a set of metrics to better estimate  the potential impact of U.S. water and sanitation reconstruction efforts on  Iraqi households, but acknowledges it is impossible to measure how much  water Iraqis are actually receiving or whether the water is potable. The  report notes that without the comprehensive data these key measures  would provide, mission efforts to accurately assess the impact of U.S.  reconstruction efforts on water and sanitation services are seriously  limited.
In April 2006, we reported that in the electric sector U.S. agencies primarily  reported on generation measures such as levels of added or restored  generation capacity and daily power generation of electricity; numbers of  projects completed; and average daily hours of power. However, these data  did not show (1) whether the power generated was uninterrupted for the  period specified (e.g., average number hours per day), (2) if there were  regional or geographic differences in the quantity of power generated, or  (3) how much power was reaching intended users. Moreover, State’s 2005  assessment of its reconstruction effort noted that the reconstruction effort  lacked measurable milestones that tied short-term program objectives to  long-term strategic goals.
section_title: Strategy Partially Address Costs, Agency Responsibilities, and Integration
paragraphs: As figure 3 shows, the NSVI and supporting documents only partially (1)  identify what the strategy will cost and the sources of financing; (2)  delineate the roles and responsibilities of key U.S. government agencies,  and the mechanisms for coordination; (3) describe how the strategy will be  integrated among U.S. entities, the Iraqi government, and international  organizations.
subsections: section_title: Strategy Partially Addresses Future Costs and Resource Requirements
paragraphs: This characteristic addresses what the strategy will cost; where resources  will be targeted to achieve the end-state; and how the strategy balances  benefits, risks, and costs. Guidance on costs and resources needed using a  risk management approach helps implementing parties allocate resources  according to priorities; track costs and performance; and shift resources,  as appropriate. Such guidance also would assist Congress and the  administration in developing a more effective strategy to achieve the  desired end-state.
The strategy neither identifies the current and future costs of implementing  the strategy, nor does it identify the sources of funding (U.S. government,  international donors, or Iraqi government) needed to achieve U.S. political,  security, and economic objectives in Iraq. These costs would include the  costs of maintaining U.S. military operations, including the costs to repair  and replace equipment used during these operations, building the capacity  of key national ministries and the 18 provincial governments, completing  the U.S. program for training and equipping Iraqi security forces, and  restoring essential services. For example, between fiscal years 2003 and  2006, about $311 billion was allocated to support U.S. objectives in Iraq.  Approximately $276 billion has been provided to support U.S. military  operations and forces as of June 2006, which currently number about  130,000 troops, and over $34 billion to develop capable Iraqi security  forces, restore essential services, and rebuild Iraqi institutions. The  administration has also requested about $51 billion more for military and  reconstruction operations for fiscal year 2007: including $50 billion that the  Office of Management and Budget terms “bridge funding” to continue the  global war on terrorism in Iraq and Afghanistan and an additional $771  million for reconstruction operations in Iraq.
These cost data are not included in the strategy. As a result, neither DOD  nor Congress can reliably determine the cost of the war, nor do they have  details on how the appropriated funds are being spent or historical data  useful in considering future funding needs. Moreover, the strategy states  that the war in Iraq yields benefits in the global war on terrorism but does  not discuss substantial financial and other costs. In addition, GAO has  previously found numerous problems in DOD’s processes for accounting  for and reporting cost data for its operations in Iraq, which constitute about  90 percent of estimated total U.S. government costs. Given the current  fiscal challenges facing the U.S. government, such an assessment would  help clarify the future costs of U.S. involvement in Iraq.
The strategy also fails to project future costs and contributions from non- U.S. sources. It does not address the extent to which the Iraqi government  will contribute financially to its own rebuilding effort. While supporting  documents provide some information on current spending plans and  allocations, the dispersion of this budget information across numerous  budget documents makes it difficult to analyze how the objectives of the  NSVI will be funded. For example, State’s quarterly 2207 reports to  Congress describe the current status of the Iraq reconstruction funding  allocations and the status of international donations for reconstruction. In  February 2006, State issued two supplemental documents that provide  some additional information on how IRRF2 funds and fiscal year 2006 and  2007 budget appropriations were to be spent across the NSVI’s three tracks  (political, security, and economic). Other supporting documents partially  address these resource issues but do not identify future resource needs.  The unclassified version of the MNF-I/ U.S. Embassy Baghdad Joint  Mission Statement on Iraq indicates that budgetary and human capital  resources will be needed, and funding is expected from Congress and the  Iraqi government. However, it does not identify the specific amounts  needed to meet key U.S. goals. The 2207 reports discuss international  donor contribution levels and reports on the progress of projects funded  with international grants but does not relate these amounts to Iraqi  requirements.
In addition, none of the strategy documents takes into account the total  cost of Iraq’s reconstruction, which will be more than originally  anticipated, due to severely degraded infrastructure, postconflict looting  and sabotage, and additional security costs. Initial assessments in 2003  identified a total of $56 billion in Iraqi reconstruction needs in various  sectors, but more recent cost estimates suggest that the oil infrastructure  and electric sectors alone will require about $50 billion in the next several  years. These funding concerns have grown as resources have been shifted  from reconstruction projects to security needs. For example, between  January 2004 and April 2006, the administration reallocated $3.5 billion  from the water resources and sanitation and electric sectors to security;  justice, public safety, and civil society; and democracy building activities;  and other programs. This contributed to the cancellation, delay, or scaling  back of water and electricity projects and will complicate efforts to achieve  the objectives for these essential service sectors.
Although the NSVI acknowledges that rampant corruption is a challenge  threatening the success of U.S. reconstruction and stabilization efforts, the  strategy does not address how reconstruction efforts should take the risk  of corruption into account when assessing the costs of achieving U.S.  objectives in Iraq. For instance, IMF, the World Bank, Japan, and European  Union officials cite corruption in the oil sector as an especially serious  problem. In addition, according to State officials and reporting documents,  about 10 percent of refined fuels are diverted to the black market, and  about 30 percent of imported fuels are smuggled out of Iraq and sold for a  profit. By not addressing this risk, the strategy cannot provide adequate  guidance to implementing parties trying to assess priorities and allocate  resources.
section_title: Strategy Partially Addresses U.S. Roles, Responsibilities, and Coordination Mechanisms
paragraphs: This characteristic addresses which U.S. organization will implement the  strategy and their roles, responsibilities, and mechanisms for coordinating  their efforts. Addressing this characteristic fosters coordination and  enhances both implementation and accountability.
The NSVI and the supporting documents partially address the roles and  responsibilities of specific U.S. government agencies and offices and the  process for coordination. To organize U.S. efforts in Iraq, the NSVI breaks  down the political, security, and economic tracks of the strategy into eight  strategic objectives (pillars) that have lines of action assigned to military  and civilian units in Iraq. Each strategic objective has a corresponding  interagency working group to coordinate policy, review and assess the  progress, develop new proposals for action, and oversee implementation of  existing policies. National Security Presidential Directive 36 made the  Department of State responsible for nonsecurity aspects of reconstruction  and lays out key roles for the U.S. Chief of Mission in Baghdad and  CENTCOM. It directed that the Commander of CENTCOM will, with the  Chief of Mission’s policy guidance, direct all U.S. government efforts in  support of training and equipping Iraq security forces. It also established  the roles for the mission’s two supporting offices: the Iraq Reconstruction  Management Office and the Projects and Contracting Office.
Although the NSVI organizes the U.S. strategy along three broad tracks and  eight strategic objectives, it does not clearly identify the roles and  responsibilities of specific federal agencies for achieving these specific  objectives, or how disputes among them will be resolved. For example,  GAO found only one reference in the NSVI to the reconstruction  responsibilities of a particular U.S. government agency in Iraq when it  noted that the Federal Bureau of Investigation and other U.S. agencies  would assist an Iraqi antimajor crimes task force in the investigation of  terrorist attacks and assassinations. Thus, it is not clear which agency is  responsible for implementing the overlapping activities listed under the  eight strategic objectives. For instance, one activity is to promote  transparency in the executive, legislative, and judicial branches of the Iraqi  government; however, the strategy does not indicate which agency is  responsible for implementing this activity, or who to hold accountable for  results. Moreover, little guidance is provided to assist implementing  agencies in resolving conflicts among themselves, as well as with other  entities. In our prior work, we found that delays in reconstruction efforts  sometimes resulted from lack of agreement among U.S. agencies,  contractors, and Iraqi authorities about the scope and schedule for the  work to be performed. For example, in the water resources and sanitation  sector, Iraqi and U.S. officials’ disagreements over decisions to repair or  replace treatment facilities or to use brick instead of concrete have delayed  project execution.
section_title: Strategy Partially Addresses Integration with Iraqi Government and International Donors
paragraphs: This characteristic addresses both how a national strategy relates to the  goals, objectives, and activities of other strategies, to other government  and international entities, and relevant documents from implementing  organizations. A clear relationship between the strategy and other critical  implementing documents helps agencies and other entities understand  their roles and responsibilities, foster effective implementation, and  promote accountability.
The NSVI and supporting documents partially address how the strategy  relates to other international donors and Iraqi government goals,  objectives, and activities. For instance, the NSVI and supporting  documents identify the need to integrate the efforts of the coalition, the  Iraqi government, and other nations but do not discuss how the U.S. goals  and objectives are integrated with the strategies, goals, and objectives of  the international donors and the Iraqi government. The NSVI does identify  Web sites where other documents can be obtained but does not address  how these documents are integrated with the NSVI.
GAO has previously reported that victory in Iraq cannot be achieved  without an integrated U.S., international, and Iraqi effort to meet the  political, security, and economic needs of the Iraqi people. However, the  strategy has only partially addressed how it relates to the objectives and  activities of Iraq and the international community and does not address  what it expects the international community or the Iraqi government to pay  to achieve future objectives. This affects the strategy’s ability to address  the challenge of conducting an integrated operation dependent upon Iraq’s  limited capacity to contribute to its own reconstruction. For example, GAO  has reported that Iraq’s weak national and provincial governments limit  Iraq’s ability to operate and sustain new and rehabilitated infrastructure  projects. This has contributed to the failure to achieve key reconstruction  goals.
section_title: Dispersion of the U.S. Strategy across Many Documents Limits Its Usefulness as a Planning Tool
paragraphs: The dispersion of information across several documents limits the  strategy’s overall coherence and effectiveness as a management tool for  implementing agencies and as an oversight tool for informing Congress  about the pace, costs, and results of these efforts. Since these other  documents were written by different agencies at different points in time,  the information in them is not directly comparable, which diminishes their  value. State and DOD have separately released budget requests totaling  about $121 billion to continue U.S. stabilization and reconstruction  programs through fiscal year 2007. However, these documents do not  provide an estimate or range of estimates as to what it will cost to achieve  U.S. objectives in Iraq in the short-, medium-, and long-term. In addition,  these documents further disperse information about how the government  is addressing the key elements of an effective national strategy for Iraq.
section_title: Conclusion
paragraphs: The November 2005 NSVI represents the results of efforts to improve the  strategic planning process for the challenging and costly U.S. mission in  Iraq. Although the NSVI is an improvement over earlier efforts, it and the  supporting documents are incomplete. The desired end-state of the U.S.  strategy has remained unchanged since 2003, but the underlying  assumptions have changed in response to changing security and economic  conditions, calling into question the likelihood of achieving the desired  end-state. Moreover, the collective strategy neither identifies U.S. or other  resources needed to implement the objectives nor does it address its  integration with the efforts and funding plans of the Iraqi government or  the international community. The formation of the new Iraqi government  provides an opportunity to the United States government to reexamine its  strategy and more closely align its efforts and objectives with those of the  Iraqi people and other donors.
The dispersion of information across the NSVI and seven supporting  documents further limits the strategy’s usefulness as a tool for planning and  reporting on the costs, progress, and results of the U.S. mission in Iraq.  Since the current disparate reporting mechanisms do not provide a  comprehensive assessment of U.S. government efforts in Iraq, Congress  may lack critical information to judge U.S. progress in achieving objectives  and addressing key political, security, and economic challenges. In  addition, the strategy could be more useful to implementing agencies and  Congress if it fully addressed these characteristics in a single document.
section_title: Recommendation for Executive Action
paragraphs: To help improve the strategy’s effectiveness as a planning tool and to  improve its usefulness to Congress, this report recommends that the  National Security Council, in conjunction with DOD and State, complete  the strategy by addressing all six characteristics of an effective national  strategy in a single document. In particular, the revised strategy should  address the current costs and future military and civilian resources needed  to implement the strategy, clarify the roles and responsibilities of all U.S.  government agencies involved in reconstruction and stabilization efforts,  and detail potential Iraqi and international contributions to future military  and reconstruction needs.
section_title: Agency Comments and Our Evaluation
paragraphs: We provided a draft of this report to the NSC and to the Departments of  Defense and State for their review and comment. We received a written  response from State that is reprinted in appendix III. State also provided us  with technical comments and suggested wording changes that we  incorporated as appropriate. DOD deferred comment to the NSC; its letter  is reprinted in appendix IV. We did not receive oral or written comments  from the NSC in response to our request.
State did not comment on our report recommendations. In commenting on  a draft of this report, State asserted that our draft report misrepresented  the NSVI’s purpose—to provide the public a broad overview of the U.S.  strategy in Iraq and not to provide details available elsewhere. We  acknowledge that the purpose of the NSVI was to provide the public with  an overview of a multitiered, classified strategy and not to set forth every  detail on information readily available elsewhere. Our analysis was not  limited to the publicly available, unclassified NSVI. With input from DOD  and State, we included in our assessment all the classified and unclassified  documents that collectively define the U.S. strategy in Iraq: (1) the National  Security Presidential Directive 36 (May 2004), (2) Multinational Forces-Iraq  (MNF-I) Campaign Plan (August 2004), (3) the MNF-I/ U.S. Embassy  Baghdad Joint Mission Statement on Iraq (December 2005), (4) the  Multinational Corps-Iraq Operation Order 05-03 (December 2005), (5) the  National Strategy for Supporting Iraq (updated January 2006), and (6) the  quarterly State Section 2207 reports to Congress (through April 2006), and  (7) the April 2006 Joint Campaign Plan issued by the Chief of Mission and  the Commander of the MNF-I. Collectively, these documents still lack all  the key characteristics of an effective national strategy. However, we  refined our recommendation to focus on the need to improve the U.S.  strategy for Iraq.
We are sending copies of this report to interested congressional  committees. We will also make copies available to other on request. In  addition, this report is available on GAO’s Web site at http://www.gao.gov. If  you or your staff have any questions, please contact me at (202) 512-8979 or  christoffj@gao.gov. Contact points for our Offices of Congressional  Relations and Public Affairs may be found on the last page of this report.  Key contributors to this report are listed in appendix V.
section_title: Scope and Methodology
paragraphs: As part of GAO’s review of reconstruction and stabilization efforts in Iraq  initiated under the Comptroller General’s authority, we examined the U.S.  strategy for achieving victory in Iraq. Specifically, we (1) assess the  evolution of the U.S. national strategy for Iraq in response to changing  political, security and economic circumstances and (2) evaluate whether  the November 2005 National Strategy for Victory in Iraq (NSVI) and its  supporting documents include the desirable characteristics of an effective  national strategy. In this report, the NSVI and its supporting documents are  referred to as the U.S. strategy for Iraq.
To describe the goals and objectives of the U.S. national strategy for Iraq  and its relationship to other existing strategy documents, we interviewed  Coalition Provisional Authority (CPA), U.S. government, and Iraqi officials,  and reviewed planning and reporting documents obtained from the former  CPA; Departments of State (State) and Defense (DOD), and U.S. Agency for  International Development; the U.S. mission in Baghdad; and the  Multinational Forces-Iraq (MNF-I). We analyzed records, reports and data  from the Iraqi government, and from U.S. government and military officials  in Washington, D.C., and Baghdad, Iraq. We also examined the reports of  other oversight entities that performed internal control and management  reviews, including audits of the Special Inspector General for Iraq and  internal U.S. Mission Baghdad reports and briefings. We also collected and  reviewed documents from the United Nations, the World Bank, the  International Monetary Fund, and the Iraqi government‘s National  Development Strategy for 2005-2007.
We evaluated the NSVI along with seven related classified and unclassified  supporting documents identified as having key details about the strategy by  State’s Office of the Coordinator for Iraq, the Bureau of Near Eastern  Affairs, and by DOD’s Defense Reconstruction Support Office and Near  Eastern South Asian Affairs office. These included (1) the National Security  Presidential Directive 36 (May 2004), (2) the MNF-I Campaign Plan (August  2004), (3) the MNF-I/ U.S. Embassy Baghdad Joint Mission Statement on  Iraq (December 2005), (4) the Multinational Corps-Iraq Operation Order 05- 03 (December 2005), (5) the National Strategy for Supporting Iraq (updated  January 2006), (6) the quarterly State’s 2207 reports to Congress (January  and April 2006); and (7) the April 2006 Joint Campaign Plan issued by the  Chief of Mission and the Commander of the MNF-I. In particular, we  discussed the relationship between the NSVI, the National Strategy for  Supporting Iraq (NSSI), and the MNF-I Campaign Plan with the Secretary of  State’s Special Coordinator for Iraq and his staff, National Security Council  staff, and DOD’s Office of the Secretary of Defense and the Defense  Reconstruction Support Office. In addition to these documents, we also  reviewed other U.S. government documents not identified as key  supporting documents by State and DOD officials but which also provide  useful information, including the fiscal year 2006 supplemental funding  request, the fiscal year 2007 budget request, and two reports issued by State  in February 2006: Rebuilding Iraq: U.S. Achievements Through the Iraq  Relief and Reconstruction Fund; and Advancing the President’s National  Strategy for Victory in Iraq: Funding Iraq’s Transition to Self-Reliance in  2006 and 2007 and Support for the Counterinsurgency Campaign. We  also reviewed DOD’s periodic reports on the status of its security and  stability programs financed by the fiscal year 2005 supplemental Iraq  Security and Stabilization Fund (ISSF) and DOD’s report to Congress under  Section 1227 of National Defense Authorization Act for Fiscal Year 2006  (Pub. L. No. 109-163). Finally, we reviewed the NSVI for consistency with  the administration’s National Security Strategy of the United States of  America released in March 2006.
To assess whether the NSVI contains all the desirable characteristics of an  effective national strategy, we first developed a checklist using the six  desirable characteristics of an effective national strategy developed in prior  GAO work as criteria. Three analysts independently assessed two selected  strategy documents using the checklist to verify its relevance and then  convened as a panel to test their ability to apply the checklist to the  information contained in the document. The team concluded that the  checklist was relevant and appropriate for assessing the NSVI. The three  analysts independently assessed the NSVI and recorded the results on  separate checklists and then met as a panel to reconcile the differences in  their scores. A separate panel of three other analysts also independently  assessed the NSVI using the same methodology, and then the two panels  met as a group to discuss similarities and resolve differences in their  scoring. In addition, the first panel of three analysts evaluated seven  additional documents applying the same criteria in the checklist. On the  basis of these evaluations, we developed a consolidated summary of the  extent that the NSVI and the supporting documents addressed the 27  elements and six characteristics of an effective national strategy. These  results are presented in figure 3 of this report.
We gave each of the 27 elements under the six characteristics an individual  rating of either: “addresses,” “partially addresses,” or “does not address.”  According to our methodology, a strategy “addresses” an element of a  characteristic when it explicitly cites all parts of the element, and the  document has sufficient specificity and detail. Within our designation of  “partially addresses,” there is a wide variation between a strategy that  addresses most parts of an element of a characteristic and a strategy that  addresses few parts of an element of a characteristic. A strategy “does not  address” an element of a characteristic when it does not explicitly cite or  discuss any parts of the element of that characteristic or any implicit  references are either too vague or general to be useful. See appendix II for  a more detailed description of the six characteristics. We further evaluated  the six related classified and unclassified documents that State and DOD  officials said provided key details about the strategy. Three analysts  evaluated each of these documents using the same methodology described  above.
We conducted our review from October 2005 through June 2006 in  accordance with generally accepted government auditing standards.
section_title: GAO’s Description of the Six Characteristics of an Effective National Strategy
paragraphs: In a prior report, GAO identified six desirable characteristics of an effective  national strategy that would enable its implementers to effectively shape  policies, programs, priorities, resource allocations, and standards and that  would enable federal departments and other stakeholders to achieve the  identified results. GAO further determined in that report that national  strategies with the six characteristics can provide policy makers and  implementing agencies with a planning tool that can help ensure  accountability and more effective results. To develop these six desirable  characteristics of an effective national strategy, GAO reviewed several  sources of information. First, GAO gathered statutory requirements  pertaining to national strategies, as well as legislative and executive branch  guidance. GAO also consulted the Government Performance and Results  Act of 1993, general literature on strategic planning and performance, and  guidance from the Office of Management and Budget on the President’s  Management Agenda. In addition, among other things, GAO studied past  reports and testimonies for findings and recommendations pertaining to  the desirable elements of a national strategy. Furthermore, we consulted  widely within GAO to obtain updated information on strategic planning,  integration across and between the government and its partners,  implementation, and other related subjects.
GAO developed these six desirable characteristics based on their  underlying support in legislative or executive guidance and the frequency  with which they were cited in other sources. GAO then grouped similar  items together in a logical sequence, from conception to implementation.  Table 2 provides these desirable characteristics and examples of their  elements.
The following sections provide more detail on the six desirable  characteristics.
subsections: section_title: Purpose, Scope, and Methodology
paragraphs: This characteristic addresses why the strategy was produced, the scope of  its coverage, and the process by which it was developed. For example, a  strategy should discuss the specific impetus that led to its being written (or  updated), such as statutory requirements, executive mandates, or other  events like the global war on terrorism. Furthermore, a strategy would  enhance clarity by including definitions of key, relevant terms. In addition  to describing what it is meant to do and the major functions, mission areas,  or activities it covers, a national strategy would ideally address its  methodology. For example, a strategy should discuss the principles or  theories that guided its development, the organizations or offices that  drafted the document, or working groups that were consulted in its  development.
section_title: Problems, Risks, and Threats
paragraphs: This characteristic addresses the particular national problems and threats  at which the strategy is directed. Specifically, this means a detailed  discussion or definition of the problems the strategy intends to address,  their causes, and operating environment. In addition, this characteristic  entails a risk assessment, including an analysis of the threats to and  vulnerabilities of critical assets and operations. If the details of these  analyses are classified or preliminary, an unclassified version of the  strategy should at least include a broad description of the analyses and  stress the importance of risk assessment to implementing parties. A  discussion of the quality of data available regarding this characteristic,  such as known constraints or deficiencies, would also be useful.
section_title: Goals, Objectives, Activities, and Outcome-Related Performance Measures
paragraphs: This characteristic addresses what the national strategy strives to achieve  and the steps needed to garner those results, as well as the priorities,  milestones, and performance measures to gauge results. At the highest  level, this could be a description of an ideal end-state, followed by a logical  hierarchy of major goals, subordinate objectives, and specific activities to  achieve results. In addition, it would be helpful if the strategy discussed the  importance of implementing parties’ efforts to establish priorities,  milestones, and performance measures, which help ensure accountability.  Ideally, a national strategy would set clear desired results and priorities,  specific milestones, and outcome-related performance measures while  giving implementing parties flexibility to pursue and achieve those results  within a reasonable time frame. If significant limitations on performance  measures exist, other parts of the strategy should address plans to obtain  better data or measurements, such as national standards or indicators of  preparedness.
section_title: Future Costs and Resources Needed
paragraphs: This characteristic addresses what the strategy will cost, the sources and  types of resources and investments needed, and where those resources and  investments should be targeted. Ideally, a strategy would also identify  appropriate mechanisms to allocate resources. Furthermore, a national  strategy should elaborate on the risk assessment mentioned earlier and  give guidance to implementing parties to manage their resources and  investments accordingly. It should also address the difficult, but critical,  issues about who pays and how such efforts will be funded and sustained in  the future. Furthermore, a strategy should include a discussion of the type  of resources required, such as budgetary, human capital, information,  information technology (IT), research and development (R&D),  procurement of equipment, or contract services. A national strategy should  also discuss linkages to other resource documents, such as federal agency  budgets or human capital, IT, R&D, and acquisition strategies. Finally, a  national strategy should also discuss in greater detail how risk  management will aid implementing parties in prioritizing and allocating  resources, including how this approach will create society-wide benefits  and balance these with the cost to society. Related to this, a national  strategy should discuss the economic principle of risk-adjusted return on  resources.
section_title: U.S. Government Roles and Responsibilities and Coordination Mechanism
paragraphs: This characteristic addresses what organizations will implement the  strategy, their roles and responsibilities, and mechanisms for coordinating  their efforts. It helps to answer the question about who is in charge during  times of crisis and during all phases of the victory in Iraq efforts:  prevention, vulnerability reduction, and response and recovery. This  characteristic entails identifying the specific federal departments, agencies,  or offices involved, as well as the roles and responsibilities of private and  international sectors. A strategy would ideally clarify implementing  organizations’ relationships in terms of leading, supporting, and partnering.  In addition, a strategy should describe the organizations that will provide  the overall framework for accountability and oversight, such as the  National Security Council, Office of Management and Budget, Congress, or  other organizations. Furthermore, a strategy should also identify specific  processes for coordination and collaboration between sectors and  organizations—and address how any conflicts would be resolved.
section_title: Strategy’s Integration Among and with Other Entities
paragraphs: This characteristic addresses both how a national strategy relates to other  strategies’ goals, objectives, and activities (horizontal integration)—and to  subordinate levels of government and other organizations and their plans  to implement the strategy (vertical integration). For example, a national  strategy should discuss how its scope complements, expands upon, or  overlaps with other national strategies of the Iraqi government and other  international donors. Similarly, related strategies should highlight their  common or shared goals, subordinate objectives, and activities. In addition,  a national strategy should address its relationship with relevant documents  from implementing organizations, such as the strategic plans, annual  performance plans, or the annual performance reports the Government  Performance and Results Act requires of federal agencies. A strategy  should also discuss, as appropriate, various strategies and plans produced  by the state, local, private, or international sectors. A strategy also should  provide guidance such as the development of national standards to link  together more effectively the roles, responsibilities, and capabilities of the  implementing parties.
section_title: Comments from the Department of State
paragraphs: The following are GAO’s comments on the Department of State’s letter  dated June 30, 2006.
subsections: section_title: GAO Comments
paragraphs: 1. We notified the Department of State (State) of the scope of our review.
After the National Strategy for Victory in Iraq (NSVI) was released in  November 2005, we focused our review on whether the new strategy  and related planning documents identified by State and the Department  of Defense (DOD) addressed the desirable characteristics of an  effective national strategy. On February 10, 2006, we met with senior  State officials from the Bureau of Near East and Asia and the office of  the Senior Advisor to the Secretary of State and Coordinator for Iraq  Affairs to describe our plans and methodology for assessing the NSVI.  State officials acknowledged our methodology and identified the key  documents (both unclassified and classified) that, when combined with  the NSVI, served as the collective U.S. strategy for Iraq.  2. We modified figure 1 to place the National Strategy for Supporting Iraq  (NSSI) at the strategic level. However, we disagree that the NSSI links  goals to resources. In fact, State’s comments note that the NSSI does  not specify the future military and civilian resources necessary for  achieving U.S. strategic objectives, and it is in the process of  incorporating the fiscal year 2006 supplemental budget into the NSSI.  Until State completes this linkage, it is difficult to assess whether the  NSSI will adequately link goals to resources.  3. We disagree with State’s contention that we did not take into account  the fiscal year 2006 supplemental and the fiscal year 2007 budget  requests in our assessment of the NSVI. We evaluated these as part of  our review. Even though State officials did not include these documents  among those they identified as supporting the strategy. In addition, we  reviewed other U.S. government documents that provided useful  context and information, including two related reports issued by State  in February 2006: (1) Rebuilding Iraq: U.S. Achievements Through the  Iraq Relief  and Reconstruction Fund; and (2) Advancing the  President’s National Strategy for Victory in Iraq : Funding Iraq’s  Transition to Self-Reliance in 2006 and 2007 and Support for the  Counterinsurgency Campaign.  4. We acknowledge that the purpose of the NSVI was to provide the public  with an overview of a multitiered, classified strategy and not to set  forth every detail on information readily available elsewhere. Our  analysis was not limited to the publicly available, unclassified NSVI.  With input from DOD and State, we included in our assessment all the  classified and unclassified documents that collectively define the U.S.  strategy in Iraq:  (1) the National Security Presidential Directive 36  (May 2004), (2) Multinational Forces-Iraq (MNF-I) Campaign Plan  (August 2004), (3) the MNF-I/ U.S. Embassy Baghdad Joint Mission  Statement on Iraq (December 2005), (4) the Multinational Corps-Iraq  Operation Order 05-03 (December 2005), (5) the National Strategy for   Supporting Iraq (updated January 2006), and (6)  the quarterly State  Section 2207 reports to Congress (through April 2006), and (7) the April  2006 Joint Campaign Plan issued by the Chief of Mission and the  Commander of the MNF-I. Collectively, these documents still lack all  the key characteristics of an effective national strategy. However, we  refined our recommendation to focus on the need to improve the U.S.  strategy for Iraq. 5. We disagree with State’s comment that helping restore essential  services to prewar levels was not an assumption of the early U.S.  reconstruction strategy. According to the key architects of the original  Coalition Provisional Authority plan, restoring essential services to a  prewar level was a key assumption of the U.S. strategy.  6. Documents we received from State and the Department of Energy  estimated that Iraq’s 2003 actual prewar crude oil production was 2.6  million barrels per day. State did not provide any additional  documentation to support their contention. In addition, the 4,300  megawatts figure cited by State is below the postwar peak of 5,400  megawatts and the planned U.S. goal of 6,000 megawatts. 7. We agree that it is not possible to make definitive statements about the  number of people nationwide with access to clean drinking water  during the prewar period because reliable data did not exist. We have  noted this problem in previous reports and testimonies. This report  describes U.S. mission efforts announced in December 2005 to develop  an improved set of metrics to better estimate the potential impact of  U.S. water and sanitation reconstruction efforts on Iraqi households.  We reviewed excerpts from this reporting and included it in our report.  However, State has not complied with our request to provide us with a  complete copy of its metrics plan to better allow us to judge the results  of its efforts.  8. As we have previously reported, subsidies for food, fuel, and electricity,  rising costs for security forces, and high costs to sustain Iraq’s  bureaucracy limit Iraq’s ability to contribute to its own reconstruction  efforts. While Iraq budgeted about $5 billion for capital expenditures in  2005, it only provided a few hundred million dollars by the end of the  year. Accordingly, it is too early to determine if the Iraqi government  will spend the $6.2 billion it has budgeted for capital expenditures in  2006.  9. We clarified the report to characterize the 2003 World Bank study as an  initial estimate and not a comprehensive survey. While acknowledging  that more than $56 billon will be needed to bring Iraq to a status  equivalent to other oil-producing developing nations, State does not  think that “costs” have gone up. However, recent State and Department  of Energy cost estimates show that the oil infrastructure and electric  sectors alone will require about $50 billion in the next several years. In  addition, June 2006 reporting from the Department of Energy states  that Iraq could need $100 billion or more for long-term reconstruction  efforts.  10. We agree that the Iraq and U.S. governments have succeeded in  achieving debt relief for Iraq from the Paris Club and commercial  creditors. However, there is a significant amount of debt remaining,  amounting to $84 billion. This debt includes war reparations that Iraq  owes from its invasion of Kuwait. This remaining debt imposes a  continuing financial burden on the country.  11. We revised our report to include updated April 2006 figures. 12. We included the $30 billion estimate for the oil sector to illustrate the  significant future costs to restore a critical sector—a sector from which  Iraq derives 90 percent of its budgetary revenues. State’s Iraq  Reconstruction Management Office developed these estimates. In  addition, as noted in comment 9 above, Iraq could need $100 billion or  more for long-term reconstruction, according to a June 2006 report by  the Department of Energy.  13. We agree that it is very difficult to accurately account for corruption as  a cost in achieving the overall goals for Iraq. We recognize that State  launched an anticorruption strategy in December 2005, but this strategy  was not reflected in the documents we reviewed. We included State  estimates that help describe the magnitude of the corruption problem.
For example, State reports that 10 percent of refined fuels are diverted  to the black market, and about 30 percent of imported fuels are  smuggled out of Iraq and sold for a profit.  14. The recently announced International Compact could be a useful  vehicle for better international coordination, but the details of the  compact’s scope and function and linkage to the new donor  coordination process have not been specified. The International  Reconstruction Fund Facility for Iraq provides a coordination  mechanism among United Nations agencies, but its linkage to U.S.- funded projects is also unclear. More importantly, no single document  describes how the goals and projects of the United States, Iraq, and the  international community are or will be linked to achieve maximum  effectiveness and avoid duplication of effort.
section_title: Comments from the Department of Defense
section_title: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Staff Acknowledgments
paragraphs: Stephen M. Lord, Assistant Director; Kelly Baumgartner; Lynn Cothern;  Jared Hermalin; B. Patrick Hickey; Rhonda Horried; Guy Lofaro; and Alper  Tunca made key contributions to this report. Terry Richardson provided  technical assistance.
section_title: Related GAO Products
paragraphs: Rebuilding Iraq:  Actions Still Needed to Improve Use of Private Security  Providers. GAO-06-865T. Washington, D.C.: June 13, 2006.
Rebuilding Iraq: Governance, Security, Reconstruction, and Financing  Challenges. GAO-06-697T. Washington, D.C.: April 25, 2006.
United Nations: Oil for Food Program Provides Lessons for Future  Sanctions and Ongoing Reform. GAO-06-711T. Washington, D.C.: May 2,  2006.
United Nations: Lessons Learned from Oil for Food Program Indicate the  Need to Strengthen UN Internal Controls and Oversight Activities. GAO- 06-330.  Washington, D.C.: April 25, 2006.
Rebuilding Iraq: Stabilization, Reconstruction, and Financing  Challenges. GAO-06-428T.  Washington, D.C.: February 8, 2006.
Rebuilding Iraq: DOD Reports Should Link Economic Governance and  Security Indicators to Conditions for Stabilizing Iraq. GAO-06-152C.  Washington, D.C.: October 31, 2005.
Rebuilding Iraq: Enhancing Security, Measuring Program Results, and  Maintaining Infrastructure Are Necessary to Make Significant and  Sustainable Progress. GAO-06-179T.  Washington, D.C.: October 18, 2005.
Global War on Terrorism: DOD Needs to Improve the Reliability of Cost  Data and Provide Additional Guidance to Control Costs. GAO-05-882.  Washington, D.C.:  September 21, 2005.
Rebuilding Iraq: U.S. Assistance for the January 2005 Elections. GAO-05- 932R.  Washington, D.C.: September 7, 2005.
Rebuilding Iraq: U.S. Water and Sanitation Efforts Need Improved  Measures for Assessing Impact and Sustained Resources for  Maintaining Facilities. GAO-05-872.  Washington, D.C.: September 7,  2005.
Rebuilding Iraq: Actions Needed To Improve Use of Private Security  Providers. GAO-05-737. Washington, D.C.: July 28, 2005.
Rebuilding Iraq: Status of Funding and Reconstruction Efforts. GAO-05- 876.  Washington, D.C.: July 28, 2005.
Rebuilding Iraq: Preliminary Observations on Challenges in  Transferring Security Responsibilities to Iraqi Military and Police. GAO- 05-431T.  Washington, D.C.: March 14, 2005.
Rebuilding Iraq: Resource, Security, Governance, Essential Services, and  Oversight Issues. GAO-04-902R.  Washington, D.C.: June 28, 2004.
United Nations: Observations on the Oil for Food Program and Iraq's  Food Security. GAO-04-880T.  Washington, D.C.: June 16, 2004.
Contract Management: Contracting for Iraq Reconstruction and for  Global Logistics Support. GAO-04-869T.  Washington, D.C.: June 15, 2004.
Rebuilding Iraq: Fiscal Year 2003 Contract Award Procedures and  Management Challenges. GAO-04-605.  Washington, D.C.: June 1, 2004.
Iraq's Transitional Law. GAO-04-746R.  Washington, D.C.: May 25, 2004.
State Department: Issues Affecting Funding of Iraqi National Congress  Support Foundation. GAO-04-559.  Washington, D.C.: April 30, 2004.
Recovering Iraq's Assets: Preliminary Observations on U.S. Efforts and  Challenges. GAO-04-579T.  Washington, D.C.: March 18, 2004.
Defense Logistics: Preliminary Observations on the Effectiveness of  Logistics Activities During Operation Iraqi Freedom. GAO-04-305R.  Washington, D.C.: December 18, 2003.
Rebuilding Iraq. GAO-03-792R.  Washington, D.C.: May 15, 2003.