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U.S. watchdog says billions of U.S. aid wasted in Iraq

WASHINGTON (Reuters) - About $3 billion to $5 billion in U.S. aid for rebuilding Iraq has been wasted since 2003, and similar problems will likely haunt development in Afghanistan, a top U.S. watchdog said on Wednesday.

U.S. soldiers stand guard during a graduation ceremony of former neighbourhood patrol members, known locally as "Sahwas" from a training course in Baghdad's Jihad District, March 24, 2009. REUTERS/Bassim Shati

Stuart Bowen, the U.S. special inspector general for Iraq reconstruction, told Congress that sums wasted on ill-designed or failed projects in Iraq translate into 15-20 percent of the $21 billion Iraqi Relief and Reconstruction Fund set up by Congress after the 2003 U.S.-led invasion.

Bowen, who appeared before the House of Representatives Armed Services Committee, did not give specific examples but faulted an ad hoc U.S. approach that sought to modernize every aspect of Iraqi society from banking to traffic laws, poor security and a lack of structure for mobilizing resources.

The figures were the result of about 135 audits conducted by Bowen’s team in recent years.

Bowen said reconstruction in both Iraq and Afghanistan suffers because the United States has no established framework for relief and contingency operations.

Congress has appropriated $48 billion in reconstruction aid to Iraq and $32 billion for Afghanistan. In both cases, much of the aid has gone to developing local army and police forces.

The House panel met as President Barack Obama prepares to unveil a new U.S. strategy for Afghanistan and Pakistan, a region where rising violence has heightened Western concerns about the stability of both countries.

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The main thrust of the new strategy is expected to involve economic and political development.

But two top watchdogs on Afghanistan told lawmakers they have not been consulted by the White House despite the Obama administration’s pledge to seek input as broadly as possible for the new strategy expected to be unveiled this week.

“We have not been specifically asked to advise (on) the new strategy,” said Arnold Fields, a former Marine major general who was appointed by former President George W. Bush as the special inspector general for Afghanistan.

The Government Accountability Office, a nonpartisan investigative arm of Congress, said the White House has ignored its requests for a look at early drafts of the strategy.

Bowen said he did advise the White House about Iraq reconstruction and its potential lessons for Afghanistan.

GAO figures forecast ballooning multibillion-dollar shortfalls in the Afghan government’s U.S.-backed five-year plan for meeting security, development and anti-corruption goals. The program is in trouble because of declining levels of assistance from the international community, the GAO said.

A GAO chart showed the shortfall leaping from $503 million this year to $5.8 billion in four years.

Reporting by David Morgan; Editing by Cynthia Osterman