In 2008, Iraq will be earning double of what it did last year from its oilfields. This projection by US government auditors reveals that Iraq continues to park billions of dollars from its oil income in surplus funds, spending only a fraction of its earnings on reconstruction projects and services.

A report from the US Government Accountability Office revealed that between 2005 and 2007 Iraq earned around $96 billion in revenues of which 94% came from oil. Keeping in mind the 2008 average oil export of 2 million barrels a day and continuing oil prices, Iraq is projected to earn between $67 billion and $79 billion this year from oil alone. Other sources of revenue like taxes will provide another $7 billion.

The GAO report estimates that in 2008, Iraq will spend only around $35 billion of its $ 49.9. billion budget on investment. Between 2005 and 2007, Iraq allocated just about 10% of its total expenditures to reconstruction projects with only 1 percent being spent to maintain investments in roads, water, electricity and weapons which had already been funded by the United States.

In an election year, the findings of the GAO report are bound to fuel further discontent in the US Congress. Already the US government is under fire for approving increasingly larger funds not only for reconstruction projects in Iraq but also for maintaining around 90,000 non-military Iraqi security personnel. Many in the Congress feel that with Iraq earning almost a hundred billion dollars, the US should cease to spend its own tax-payers’ money in funding Iraqi projects.

-Kalyani Mookherji