- The Washington Times - Sunday, July 13, 2008

BAGHDAD | It is a politician’s dream: handing out cold, hard cash to people on the street as they plead for help. Iraq’s prime minister has been doing just that in recent weeks, doling out Iraqi dinars as an aide trails behind, keeping a tally.

The handouts by Prime Minister Nouri al-Maliki and a few other top officials are authorized - as long as each goes no higher than about $8,000 and the same people don’t get them twice. Aides say the handouts are meant merely to ease the pain, and are motivated by a belief that better conditions will lead to more security.

The cash handouts are just one small - if eye-catching - part of a major investment push this summer by Iraq’s government. The aim is to rebuild basic services and jump-start Iraq’s damaged economy by quickly distributing as much of the country’s glut of oil revenue as possible.

U.S. officials and a fed-up American public are urging exactly that: for Iraq to spend its own money, not that of the United States, to rebuild the country now that violence has eased.

Yet the new Iraqi effort runs a high risk of failure: The government is disorganized, fears of favoritism remain and the shadow of corruption haunts every step.

“Money is not a problem,” Mr. al-Maliki told a recent gathering of tribal chiefs in the southern city of Basra, after government forces defeated Shi’ite extremists there. “But we must put it in honest hands to spend.”

Despite such problems, Iraq’s oil revenues, an estimated $70 billion this year, still provide the best chance of leveraging the country’s fragile period of calm into something more lasting, many officials say.

Top U.S. commander Gen. David H. Petraeus has repeatedly called money a crucial weapon to lure neighborhoods from extremists and stabilize Iraq. The chairman of the Joint Chiefs of Staff, Adm. Michael G. Mullen, urged the government to pass out money even faster in recent days on a trip to devastated Mosul in the north.

The United States has been doling out cash itself, most effectively to former Sunni militants who switched sides to fight al Qaeda. Yet most recent big spending announcements have been Iraqi.

But discrepancies feed fears of favoritism. One violence-battered and needy northern province, Ninevah, which is mostly Sunni and Kurdish, has received only 20 percent of what the central government has promised, U.S. officials said.

Many of the provinces where Mr. al-Maliki, a Shi’ite, has pledged money are Shi’ite.

Yet signs of small improvement are emerging, other officials say. First Lt. Paul Horton, an assistant civil military operations officer in Diyala, a mixed area north of Baghdad, sees it in efforts to get government money to local farmers suffering from drought.

“We’re starting to get a lot more attention and a lot more love,” he said.

Associated Press writers Hamza Hendawi and Robert Burns contributed to this report from Baghdad

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