Iraq doles out $350 million to 3 'hot spots'

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The Iraqi government is pumping $350 million into three of the war-torn nation's most embattled areas in an effort to stem violence by producing jobs and reinvigorating social programs, as U.S. lawmakers are pushing for the oil-rich country to pick up its reconstruction tab.

Iraqi Ambassador to the United States Samir Sumaida'ie told The Washington Times that the emergency aid is for "hot spots, troubled areas," such as Mosul and Basra, where people are joining the insurgency for economic reasons — a point made by many analysts.

"It's very important to get people working and to wean them away from violence," said Mr. Sumaida'ie. "This is consistent with government policy of linking economic development with improvement in security."

One senior U.S. military official based in Baghdad said Iraq will distribute up to $1 billion of its own money in emergency aid in the coming months.

On Capitol Hill, Democrats, who have repeatedly lost standoffs with the White House over war funding and troop pullout plans, see an opportunity to gain bipartisan traction by challenging oil-rich Baghdad's reliance on the United States to pay for reconstruction.

Sen. Ben Nelson, Nebraska Democrat, introduced a bill last week that would call for an end what he called the White House's "blank-check policy" for Iraq.

"Over the past five years, American taxpayers have funded $45 billion in reconstruction in Iraq," he said. "Now, with Iraq looking at record surpluses in government revenue, it is time for that nation to invest their own resources in building and rebuilding infrastructure."

Mr. Nelson said the nonbinding resolution, which is co-sponsored by Republican Sen. Susan Collins of Maine, is a precursor to upcoming consideration of the administration's $102 billion war request for 2008, to which he may offer an amendment requiring that reconstruction and other costs be provided to the Iraq government in the form of a loan.

In January, The Times first disclosed that increased Iraqi oil revenues stemming from high prices and improved security are piling up in the Federal Reserve Bank of New York rather than being spent on needed reconstruction projects.

Mr. Sumaida'ie would not detail the source of the money — specifically whether it was oil revenue — but said $100 million of the "urgently allocated" money will be given to the Shi'ite city of Basra, were Iraqi security forces were fighting factions of Shi'ite cleric Muqtada al-Sadr's Mahdi Army.