A CBO PAPER: Paying for Iraq'a Reconstruction

REBUILDING Iraq after 25 years of rule by Saddam Hussein and the war that overthrew his government will be one of the United States' foreign policy priorities in the coming years. By some estimates, the cost of reconstructing Iraq ranges from $50 billion to $100 billion. However, substantial disagreement exists about that cost, as well as about how much aid from the international community may be needed to rebuild the country, whether that aid should take the form of grants or loans, how much the United States should contribute, and how much Iraq can finance itself from its future sources of revenue. To assess the scope of the reconstruction job, the Coalition Provisional Authority (CPA), the United Nations and World Bank, and the Bechtel Corporation (under contract to the U.S. Agency for International Development) carried out surveys of Iraq's needs in 2003. The needs that they identified are mainly associated with the deterioration of Iraqi infrastructure that has occurred since Iraq invaded Iran in 1980. The surveys indicate that although sanctions imposed during the 1990s and damage from recent postwar looting have worsened the condition of Iraq's infrastructure, they are not the most significant cause of its poor state.