Defeat of ISIS in Iraq caused $45.7 billion in damage to infrastructure, study finds

Defeat of ISIS in Iraq caused $45.7 billion in damage to infrastructure, study finds
Mon Feb 12, 2018 09:15:29

Assessment is expected to frame deliberations at conference this week on how to rebuild country.

(Wall Street Journal) -- The U.S.-backed military campaign that defeated ISIS terrorists in Iraq has resulted in $45.7 billion in damage to the country’s houses, power plants, schools and other civilian infrastructure, according to a new assessment by experts at the World Bank and the Iraqi government.


Teams of experts pored over satellite imagery, conducted on-site checks and studied social media to prepare the report, which is the most extensive inventory to date of the destruction caused by more than three years of war.


The study comes at a critical moment for Iraq as it gears up to try to rebuild areas that once formed the heart of the militants’ self-styled caliphate, two months after Prime Minister Haider al-Abadi claimed victory over ISIS.


The assessment is expected to frame deliberations at a three-day conference this week in Kuwait on how to rebuild Iraq that will be attended that by international investors, aid experts and ranking diplomats, including U.S. Secretary of State Rex Tillerson.


The rebuilding challenge has enormous implications for Iraq’s ability to seal the peace and prevent terrorists who have already reverted to insurgent warfare from gaining traction again.


“Iraq is emerging from a devastating period of conflict and violence,” the study said. “The immediate concern is to restore the productive means of livelihood for millions of people in agriculture, services, and industry.”


Most of the fighting was concentrated in seven predominantly Sunni provinces in northern and western Iraq. Failure by the government in Baghdad to reconstruct those areas so that Iraqis displaced by the conflict can return and rebuild their lives could leave them vulnerable to extremist influences and aggravate tensions.


Last month, the number of Iraqis who have returned home surpassed the number of those who are still displaced. More than two million remain uprooted, however, and many of those who have gone back are living in ruined buildings with limited services. In Mosul’s old city, where ISIS made its last stand, corpses are still buried beneath the rubble.


The damage to the housing sector is $16 billion, while damage to electrical power plants and the power sector is $7 billion, according to the assessment. Damage to the educational sector is assessed at $2.4 billion. Repairing schools is a priority for a country in which the median age is 20 years old. Most of the schools in Mosul, Ramadi and Fallujah have been damaged or destroyed.


The report assessed the damage by comparing the condition of Iraq’s infrastructure in December 2017 with the period before ISIS attacked in the country in 2014. By and large, the assessment doesn’t try to determine who or what caused the damage—whether it was ISIS car bombs and mortars, for example, or American air strikes.


While repairing the war damage is costly, the ultimate cost of getting the seven provinces back on their feet is almost twice the damage figure. When the costs of improving governance, upgrading oil and gas infrastructure and other “recovery” expenses are factored in, the needs of the largely Sunni areas rise to $88.2 billion, the assessment said.


Iraqi officials, who note that the years of fighting diverted resources that might have been used to upgrade Shia-dominated areas, are hoping to attract even more funds. All told, the Iraq government is seeking about $100 billion in foreign investment for its energy, agricultural and transport sectors.


“It’s a huge amount of money,” Mr. Abadi acknowledged last month in Davos, Switzerland, where he went to drum up interest among investors attending the World Economic Forum.


“We know we cannot provide it through our own budget. We know we cannot provide it through donations: It’s almost impossible. That’s why we resorted to investment and reconstruction through investment."


Iraq’s own finances have been strained by low oil prices, making it more dependent on foreign investment or aid to rebuild. Oil exports account for the vast majority of state revenue.


How far the conference will go in meeting Iraq’s needs isn’t clear.  The U.S. hopes its Persian Gulf allies will step up.


“There’s going to be a need for financing so I think Gulf countries, not even necessarily the government—financiers, sovereign wealth funds and others in the Gulf—could play a very significant role in helping to finance those projects that are done by private-sector companies inside Iraq,” said a senior U.S. government official.


The U.S., which has already spent billions of dollars on the war against ISIS and in providing aid to displaced Iraqis and Syrians, doesn’t intend to donate funds for Iraq’s reconstruction. Rather, the U.S. Export-Import Bank plans to sign a memorandum of understanding to facilitate project financing. U.S. officials haven’t specified the amount, but it is expected to be in the neighborhood of $2 billion to $3 billion.


The recognition that international donors weren’t lining up to contribute billions—the original hope when the conference was first conceived in 2016—has led the organizers to put the emphasis on securing investment from the private sector.

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