Securing, Stabilizing, and Rebuilding Iraq: Progress Report: Some Gains Made, Updated Strategy Needed
Published: 2008-07-23T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: In January 2007, the President announced a new U.S. strategy to stem the violence in Iraq and help the Iraqi government foster conditions for national reconciliation. In The New Way Forward, the Administration articulated near-term goals to achieve over a 12- to 18-month period and reasserted the end state for Iraq: a unified, democratic, federal Iraq that can govern, defend, and sustain itself and is an ally in the war on terror. To support this strategy, the United States increased its military presence and financial commitments for Iraq operations. This testimony discusses (1) progress in meeting key security, legislative, and economic goals of The New Way Forward; and (2) past and current U.S. strategies for Iraq and the need for an updated strategy. GAO reviewed documents and interviewed officials from U.S. agencies, MNF-I, the UN, and the Iraqi government. GAO also had staff stationed in Baghdad. Since 2003, GAO has issued about 140 Iraq-related products, which provided baseline information for this assessment.
section_title: What GAO Found
paragraphs: The United States has made some progress in achieving key goals stated in The New Way Forward. Looking forward, many challenges remain, and an updated strategy is essential. In the security area, violence--as measured by the number of enemy-initiated attacks--decreased about 80 percent from June 2007 to June 2008, trained Iraqi security forces have increased substantially, and many units are leading counterinsurgency operations. However, as of July 2008, 8 of 18 provincial governments do not yet have lead responsibility for security in their provinces, and DOD reported that, in June 2008, less than 10 percent of Iraqi security forces were at the highest readiness level and therefore considered capable of performing operations without coalition support. The security environment remains volatile and dangerous. In the legislative area, Iraq has enacted key legislation to return some Ba'athists to government, grant amnesty to detained Iraqis, and define provincial powers. The unfinished Iraqi legislative agenda includes enacting laws that will provide the legal framework for sharing oil revenues, disarming militias, and holding provincial elections. On economic and infrastructure issues, Iraq spent only 24 percent of the $27 billion it budgeted for its reconstruction efforts between 2005 and 2007. Although crude oil production improved for short periods, the early July 2008 average production capacity of about 2.5 million barrels per day was below the U.S. goal of 3 million barrels per day. In addition, while State reports that U.S. goals for Iraq's water sector are close to being reached, the daily supply of electricity in Iraq met only slightly more than half of demand in early July 2008. Since 2003, the United States has developed and revised multiple strategies to address security and reconstruction needs in Iraq. The New Way Forward responded to failures in prior U.S. plans and the escalating violence that occurred in 2006. However, this strategy and the military surge that was central to it end in July 2008, and many agree that the situation remains fragile.
section_title: What GAO Recommends
paragraphs: GAO recommends an updated strategy for Iraq for several reasons. First, much has changed in Iraq since The New Way Forward began in January 2007. Violence is down, U.S. surge forces are leaving, and the United States is negotiating a security agreement with Iraq to replace the expiring UN mandate. Second, The New Way Forward only articulates U.S. goals and objectives for the phase that ends in July 2008. Third, the goals and objectives of The New Way Forward are contained in disparate documents rather than a single strategic plan. Furthermore, the classified MNF-I/U.S. Embassy Joint Campaign Plan is not a strategic plan; it is an operational plan with limitations that GAO will discuss during the closed portion of the hearing.

section_title: Letter
paragraphs: I am pleased to be here today to discuss GAO’s recent report on U.S.  efforts to secure, stabilize and rebuild Iraq. This report addressed (1)  progress in meeting key security, legislative, and economic goals of The  New Way Forward; and (2) past and current U.S. strategies for Iraq and  the need for an updated strategy.
In January 2007, the President announced a new U.S. strategy to stem the  high levels of violence in Iraq and help the Iraqi government foster  conditions for national reconciliation. In The New Way Forward, the  Administration articulated near-term goals to achieve over a 12- to 18- month period and reasserted the long-term goal or end state for Iraq: a  unified, democratic, federal Iraq that can govern, defend, and sustain itself  and is an ally in the war on terror. In support of this new strategy, the  United States increased its military presence and financial commitments  for operations in Iraq. In April 2008, the U.S. Ambassador to Iraq and the  Commanding General of the Multinational Force-Iraq (MNF-I) testified  that significant progress had been made toward achieving U.S. goals but  that progress was fragile and reversible.
From fiscal year 2001 through July 2008, Congress provided more than  $800 billion to the Department of Defense (DOD) for the Global War on  Terrorism. The majority of this amount has been for military operations in  support of Operation Iraqi Freedom. Moreover, since fiscal year 2003,  about $48 billion has been provided to U.S. agencies for stabilization and  reconstruction efforts in Iraq, including developing Iraq’s security forces,  enhancing Iraq’s capacity to govern, and rebuilding Iraq’s oil, electricity,  and water sectors, among others.
To complete our work, we reviewed documents and interviewed officials  from the Departments of Defense, State, and the Treasury; MNF-I and its  subordinate commands; the Defense Intelligence Agency; the National  Intelligence Council; and the United Nations (UN). We also reviewed  translated copies of Iraqi documents. In support of this work, we  extensively utilized staff stationed in Baghdad from January through  March 2008. Since 2003, we have issued about 140 Iraq-related reports and  testimonies, which provided baseline information for our assessment. We  performed this work in accordance with generally accepted government  auditing standards.
subsections: section_title: Some Gains Made; Certain Security, Legislative, and Economic Challenges Remain
paragraphs: The United States has made some progress in achieving key goals stated in  The New Way Forward; many challenges remain.
subsections: section_title: Progress Made in Improving Security Conditions and Building Iraqi Security Forces, but Security Issues Still Need to be Addressed
paragraphs: Establishing a basic level of security is a key component of The New Way  Forward. As we reported last month, overall violence fell from about 180  attacks per day in June 2007 to about 45 attacks per day in May 2008— primarily due to decreases in violence in Baghdad and Anbar provinces.  Since that report, the average number of enemy-initiated attacks  decreased to 30 per day in June 2008, representing the lowest level of  violence since March 2004. (See fig. 1.) DOD, State, and UN reports  attribute the reduction in violence to (1) the increase in U.S. combat  forces that allowed a change in tactics; (2) the creation of  nongovernmental security forces, such as Sons of Iraq; and (3) the Mahdi  Army’s declaration of a cease-fire. DOD had planned to withdraw U.S.  surge forces and draw down U.S. forces to 140,000 by the end of July 2008.  DOD reported that the number of U.S. forces in Iraq was about 153,300 as  of June 1, 2008.
The New Way Forward also set the goal of developing capable Iraqi  security forces and transferring security responsibilities to the Iraqi  government. Since 2003, the United States has provided more than $20  billion to develop Iraqi security forces. The number of trained Iraqi forces  increased from about 323,000 in January 2007 to about 478,500 as of April  30, 2008. DOD reports that about 65 percent of Iraqi army battalions are  leading counterinsurgency operations.  However, the number of units at  the highest readiness level, as assessed by DOD, accounts for less than 10  percent of total units (see fig. 2). The development of independent Iraqi  security forces was a benchmark established by Congress and derived  from commitments made by the Iraqi government. The number of  independent Iraqi security forces as measured by Operational Readiness  Assessments (ORA) level 1 continues to be an important measure of the  capabilities of Iraqi security forces. In late June 2008, DOD reported that  12 Iraqi army battalions were capable of planning, executing, and  sustaining counterinsurgency operations (ORA level 1) in January 2007  and April 2008.
Several factors have complicated the development of capable Iraqi  security forces, including the lack of a single unified force, sectarian and  militia influences, continued dependence on U.S. and coalition forces for  logistics and combat support, and training and leadership shortages.
The New Way Forward also stated that the Iraqi government would take  responsibility for security in all 18 provinces by November 2007. However,  as of mid-July 2008, 8 provincial governments do not yet have lead  responsibility for security in their provinces. According to the MNF-I  Commanding General, the coalition continues to provide planning,  logistics, and other assistance even after security responsibilities have  transferred to provincial Iraqi control.
Security conditions remain volatile and dangerous. In June 2008, DOD  reported that the influence and areas of operation of al Qaeda in Iraq have  been degraded, but the terrorist group remains a dangerous and adaptable  enemy capable of carrying out high-profile attacks. Thus, the United States  has not achieved its goal of defeating al Qaeda in Iraq and ensuring that no  terrorist safe haven exists in Iraq. In addition, Sons of Iraq have not  reconciled with the Iraqi government and the cease-fire agreement with  the Mahdi Army is tenuous. According to MNF-I, various Sons of Iraq  groups total at least 105,000 members while the Mahdi Army has 25,000 to  40,000 active members. Violence also has displaced many Iraqis from their  homes. The UN estimates that 2.7 million people have been displaced in  Iraq and 2 million additional Iraqis have fled the country, primarily to  Jordan and Syria.
section_title: Iraq Has Enacted Legislation to Promote Reconciliation, but Critical Laws Are Still Being Debated
paragraphs: To facilitate national reconciliation, The New Way Forward identified  legislation that the Iraqi government committed to enact with U.S. support  and set a goal for enacting all key legislation by December 2007. In early  2008, the Iraqi government enacted laws to return some Ba’athists to  government service, give amnesty to certain detainees in Iraq’s justice  system, and define provincial powers. However, questions remain about  how these laws will be implemented and whether the intended outcomes  can be achieved. For example, the government has not established the  commission needed to reinstate former Ba’athists in the government or  released most of the 20,000 prisoners and detainees approved for release.
Three additional laws considered critical for national reconciliation have  not been enacted. These include laws that set the rules for Iraq’s provincial  elections, define the control and management of Iraq’s oil and gas  resources, and provide for disarmament and demobilization of Iraq’s  armed groups. The Iraqi government also faces logistical and security  challenges in holding the scheduled 2008 provincial elections—a key  element of reconciliation for Sunnis. UN and IFES reports estimate that it  would take about 8 months to prepare for the elections, while State  estimates that elections could be held 4 to 5 months after an elections law  is passed. Finally, the government has not completed its constitutional  review to resolve issues such as the status of disputed territories and the  balance of power between federal and regional governments.
section_title: Iraq Has Made Limited Progress in Spending Its Capital Investment Budgets and Has Not Met Oil Production Goals or Demand for Electricity
paragraphs: The New Way Forward emphasized the need to build capacity in Iraq’s  ministries and help the government execute its capital investment budget;  this is particularly important as the $48 billion in U.S. funding for Iraq  reconstruction and stabilization efforts is almost 90 percent obligated.  However, expenditure data from Iraq’s Ministry of Finance show that,  between 2005 and 2007, Iraq spent only 24 percent of the $27 billion it  budgeted for its own reconstruction efforts.
As displayed in figure 3, total government spending for capital investments  increased from 23 percent in 2005 to 28 percent in 2007. However, Iraq’s  central ministries, responsible for security and essential services, spent  only 11 percent of their capital investment budgets in 2007—a decline  from similarly low spending rates of 14 and 13 percent in 2005 and 2006,  respectively. Spending rates for central ministries critical to the delivery of  essential services varied from the 41 percent spent by the Water Resources  Ministry to the less than 1 percent spent by the Ministries of Oil and  Electricity in 2007. Iraq is expected to have additional resources to spend  on reconstruction projects in 2008. As of May 2008, Iraqi crude oil was  selling at about $104 per barrel, higher than the $57 per barrel used to  develop Iraq’s 2008 budget.
U.S. government, coalition, and international agencies have identified a  number of factors that challenge the Iraqi government’s efforts to fully  spend its budget for capital projects. These challenges include violence  and sectarian strife, a shortage of trained staff, and weak procurement and  budgeting systems.
Developing competent and loyal Iraqi ministries is critical to stabilizing  and rebuilding Iraq. In 2005 and 2006, the United States provided about  $169 million for programs to help build the capacity of key civilian  ministries and the Ministries of Defense and Interior. As part of The New  Way Forward, the Administration sought an additional $395 million for  these efforts in fiscal years 2007 and 2008. We found that multiple U.S.  agencies were leading individual efforts and recommended that Congress  consider conditioning future appropriations on the completion of an  integrated strategy for U.S. capacity development efforts. In June 2008,  State noted that the embassy was in the process of implementing GAO’s  recommendation.
Providing essential services to all Iraqi areas and communities and helping  Iraq maintain and expand its oil exports are key goals of The New Way  Forward. Overall crude oil production has increased or improved for short  periods; however, the early July 2008 average crude oil production  capacity of about 2.5 million barrels per day has not reached the U.S. goal  of 3 million barrels per day. Meanwhile, the daily supply of electricity met  only 54 percent of demand in early July 2008.
The State Department reports that U.S. goals for Iraq’s water sector are  close to being reached. Since April 2006, U.S. efforts have focused on  producing enough clean water to reach up to an additional 8.5 million  Iraqis. As of March 2008, State reported that U.S.-funded projects had  provided an additional 8 million Iraqis with access to potable water.  Several factors present challenges in delivering essential services,  including an unstable security environment, corruption, a lack of technical  capacity, and inadequate strategic planning. Our May 2007 report  recommended that U.S. agencies work with the Iraqi government to  develop an integrated energy strategy for the oil and electricity sectors. In  June 2008, State indicated that it was encouraging the Iraqi government to  develop an integrated energy strategy.
section_title: Need for Updated U.S. Strategy in Iraq
paragraphs: Since late 2003, the United States has employed numerous strategies and  plans to address the security and reconstruction needs of Iraq. For  example, the multinational force’s security transition plan called for Iraqi  security forces to assume security responsibilities on an accelerated basis  during spring 2004. This attempt failed when Iraqi security forces  performed poorly during an insurgent uprising. Further, a series of  campaign plans and a strategy document attempted to integrate U.S.  military and civilian efforts in Iraq but did not anticipate the escalation in  violence during 2006. To address the high levels of violence, the  administration announced The New Way Forward strategy in January  2007. While the documents that comprise The New Way Forward and the  phase that follows clearly state the importance the Administration places  on continued U.S. support for Iraq, they represent an incomplete strategic  plan because they only articulate goals and objectives for the near-term  phase that ends in July 2008.
subsections: section_title: The United States Has Used Several Strategies to Address Security and Reconstruction Challenges in Iraq
paragraphs: In October 2003, the multinational force outlined a four-phased plan for  transferring security missions to Iraqi security forces. The plan’s  objective was to allow a gradual drawdown of coalition forces first in  conjunction with the neutralization of Iraq’s insurgency and second with  the development of Iraqi forces capable of securing their country. Citing  the growing capability of Iraqi security forces, MNF-I attempted to shift  responsibilities to them in February 2004 but did not succeed in this effort.  Iraqi police and military units performed poorly during an escalation of  insurgent attacks against the coalition in April 2004.
After the collapse of the Iraqi security forces in early 2004, the  Administration completed three key documents that outlined the evolving  U.S. strategy for Iraq. First, during the summer of 2004, MNF-I completed a  campaign plan that elaborated on and refined the original strategy for  transferring security responsibilities to Iraqi forces at the local, regional,  and national levels. Further details on this campaign plan are classified.  Second, 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. The administration prepared this strategy document in response to  a study of the U.S. mission that found, among other things, that no unified  strategic plan existed to effectively integrate U.S. government political,  military, and economic efforts. Third, in April 2006, MNF-I and the U.S.  embassy in Baghdad issued the first joint campaign plan, which attempted  to integrate U.S. political, military, and economic efforts in Iraq. Further  details of this campaign plan are classified.
In July 2006, we reported that the NSVI represented an incomplete  strategy. The NSVI’s purpose and scope were clear because the strategy  identified U.S. involvement in Iraq as a vital national interest and Iraq as a  central front in the war on terror. The strategy also discussed the threats  and risks facing the coalition forces and provided a comprehensive  description of U.S. political, security, and economic goals and objectives  in Iraq over the short, medium, and long term. However, the NSVI only  partially identified the agencies responsible for implementing it, the  current and future costs of U.S. involvement in Iraq, and Iraq’s  contribution to its future needs.
The NSVI did not anticipate that security conditions in Iraq would  deteriorate as evidenced by the increased numbers of attacks that  followed the February 2006 bombing of the Golden Mosque in Samarra.  Enemy-initiated attacks against the coalition and its Iraqi partners  increased through October 2006 and remained at high levels through the  end of the year. During 2006, according to State and UN reports,  insurgents, death squads, militias, and terrorists increased their attacks  against civilians, largely on a sectarian basis.
section_title: Current Strategic and Operational Plans for Iraq
paragraphs: In response to the escalating violence, the President in January 2007  announced The New Way Forward, which established a new phase in U.S.  operations in Iraq. The strategy altered the administration’s assumptions  regarding the security and political conditions in Iraq and their effect on  the achievement of U.S. goals. The administration, however, has not  revised its strategic plan for Iraq to include U.S. goals and objectives for  The New Way Forward, which ends this month, or for the phase that  follows. Instead, according to State and DOD officials, the administration  is relying on a set of 8 documents to explain U.S. strategic goals and  objectives for Iraq (see table 1). Four documents defined the original  strategic goals and objectives of The New Way Forward phase. The  administration believed the strategy’s goals and objectives were  achievable by the end of a 12 month- to 18 month-long phase, which ends  in July 2008. Four different documents describe the phase that follows The  New Way Forward.
We found that the documents for the phase that follows The New Way  Forward do not specify the administration’s strategic goals and objectives  in Iraq or how it intends to achieve them, although they clearly state the  importance the administration places on continued U.S. involvement in  and support for Iraq. Further, while they predict continued progress in the  security, political, and economic areas, they do not address the remaining  challenges to achieving either unmet U.S. goals and objectives or the  desired U.S. end state for Iraq.
Moreover, the current UN mandate for the multinational force in Iraq,  under Security Resolution 1790, will expire December 31, 2008, without  further UN action. This resolution reaffirmed MNF-I’s authority to take all  necessary measures to maintain security and stability in Iraq, in  accordance with the Iraqi government’s request for the continued  presence of MNF-I. The United States and Iraq are negotiating an  agreement to provide the United States and its coalition partners with the  legal basis necessary to conduct operations to support the Iraqi  government after the UN mandate ends.
State and DOD cite the classified MNF-I/U.S. Embassy Joint Campaign  Plan as providing a roadmap for future U.S. operations in Iraq. According  to a May 2008 State Department report, the Joint Campaign Plan supports  the implementation of U.S. efforts in Iraq along four lines of operation:  political, security, economic, and diplomatic. The plan recognizes the  importance of enhancing security and protecting the Iraqi population and  of advancing the political line of operation to help Iraqis establish  legitimate, representative governance in their country at both the national  and provincial levels.
A campaign plan, however, is an operational, not a strategic plan,  according DOD’s doctrine for joint operation planning. A campaign plan  must rely on strategic guidance from national authorities for its  development. For example, the April 2006 MNF-I/U.S. embassy Baghdad  Joint Campaign Plan relied on the NSC’s prior strategic plan, the NSVI, as  a basis for the plan’s development. Activities at the strategic level include  establishing national and multinational military objectives, as well as  defining limits and assessing risks for the use of military and other  instruments of national power. In contrast, activities at the operational  level establish objectives that link tactics on the ground to high-level  strategic objectives. The development of a campaign plan, according to  doctrine, should be based on suitable and feasible national strategic  objectives formulated by the President, the Secretary of Defense, and the  Chairman of the Joint Chiefs of Staff—with appropriate consultation with  additional NSC members, other U.S. government agencies, and  multinational partners.
Joint doctrine also states that effective planning cannot occur without a  clear understanding of the end state and the conditions that must exist to  end military operations and draw down forces. According to doctrine, a  campaign plan should provide an estimate of the time and forces required  to reach the conditions for mission success or termination. Our review of  the classified Joint Campaign Plan, however, identified limitations in these  areas, which are discussed in a classified GAO report. We will provide  more information on the Joint Campaign Plan in the closed portion of this  hearing.
section_title: Recommendation
paragraphs: The New Way Forward and the military surge that was central to it end in  July 2008. Moreover, the UN mandate authorizing MNF-I to maintain  security and stability in Iraq expires December 31, 2008; the United States  and Iraq are negotiating the legal framework to allow the United States  and its coalition partners to conduct operations to support the Iraqi  government after the UN mandate ends. Given these uncertainties, the  decreasing levels of enemy-initiated attacks, and weaknesses in current  DOD and State plans, an updated strategy is needed for how the United  States will help Iraq achieve key security, legislative, and economic goals.  Accordingly, we recommend that DOD and State, in conjunction with  relevant U.S. agencies, develop an updated strategy for Iraq that defines  U.S. goals and objectives after July 2008 and addresses the long-term goal  of achieving an Iraq that can govern, defend, and sustain itself. This  strategy should build on recent security and legislative gains, address the  remaining unmet goals and challenges for the near and long term, clearly  articulate goals, objectives, roles and responsibilities, and the resources  needed, as well as address prior GAO recommendations.
Mr. Chairman, this concludes my statement. I would be pleased to answer  questions that you or other Members have at this time.
section_title: GAO Contact and Staff Acknowledgments
paragraphs: For questions regarding this testimony, please call Joseph A. Christoff,  Director, International Affairs and Trade, on (202) 512-8979. Other key  contributors to this statement include Audrey Solis, Assistant Director;  Judith McCloskey, Assistant Director; Ashley Alley; Monica Brym; Daniel  Chen; Lynn Cothern; Leah DeWolf; Walker Fullerton; Tetsuo Miyabara;  and Kathleen Monahan. Edward George, Jr.; Andrea Miller; Jena Sinkfield;  and Cynthia Taylor provided technical assistance.
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