DOD JUNE 2007 IRAQ PROGRESS REPORT

The report measures both progress and setbacks between mid-February and mid-May. It’s the first report for which the entire period took place under the new strategy for Iraq that President Bush announced in January.

Highlights:

However, oil production, the principal economic driver in Iraq, is not growing and remained at about the same levels as during this period in 2006 due to poor infrastructure and inadequate security. (page iv)

...the Shi’a-dominated government is vulnerable to pressure from large numbers of economically disadvantaged, marginalized Shi’a who have little access to public services and oppose the Coalition presence—a gap that militias and radicals such as Jaysh al-Mahdi (JAM) have exploited by attacking Coalition and Iraqi forces to build “street-level” support.

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There is also significant evidence of violence against Sunni Arabs, sometimes involving government security forces, that undermines reconciliation efforts and has contributed to the displacement of an estimated two million Iraqis from their homes.(page 2)

Iraqi politicians continue to make little progress toward enacting laws that could advance reconciliation. (page 3)

Provincial Reconstruction Teams (PRTs)
PRTs are a mainstay of U.S. efforts to build the capacity of Iraq’s local, municipal, and provincial governments to deliver goods and services to the Iraqi people, given the limited capacity of the central government to do so. (page 6)

...economic performance continues to be spotty. For example, improved ministerial budget execution is needed to address shortfalls in delivery of basic services to all Iraqis and to revitalize the oil sector. During the past quarter, oil production remained constant at about two million barrels per day due to poor infrastructure and inadequate security.(page 9)

The Iraqi government’s Central Statistical Organization (COSIT) estimates 17.6% unemployment and 38.1% underemployment.

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The National Investment Commission, which began to form in February 2007, will focus on fully implementing the Foreign Direct Investment legislation and have responsibility for designing implementing regulations. The Commission is not yet fully formed, however, and the Chairman recently resigned, citing lack of support from the government.(page 11)


Attacks on oil infrastructure, limited availability of electricity from the government grid, limited investment, fires, wear and tear resulting from poor maintenance, and lack of spare parts have hindered increased production of refined product and crude oil for export. Crude oil production from January to April 2007 was 1.97 million barrels per day (mbbl/d) compared with 1.95 mbbl/d in the same period in 2006.

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National refined product stock levels remained critically low because of inadequate refining capacity, lack of security for crude pipelines and for trucks that deliver refined fuels to areas in need, and inadequate funding for imports. Refineries suffer from old equipment, poor maintenance practices, lack of spare parts, unreliable electricity supplies, interdiction of pipelines, lack of storage, poor distribution practices, lack of an efficient private-sector mechanism to supply imported refined fuels, and criminal infiltration and theft. (page 12)


A variety of criminal, insurgent, and militia groups engage in the theft and illicit sale of oil to fund their activities. This denies the GoI a significant portion of revenue and contributes to the shortfalls in fuel allocation that ministries rely upon to operate vehicles, generators, and other equipment. Elements of the MoD’s Strategic Infrastructure Battalions and the MoO’s Oil Protection Force, tasked with protecting infrastructure, are sometimes suspected of being complicit in interdiction and smuggling. As much as 70% of the fuel processed at Bayji was lost to the black market—possibly as much as US$2 billion a year.

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Improving the availability of basic services such as electricity, water, and healthcare could improve the Iraqi public’s confidence in the government. Over the past quarter the Iraqi government has made little progress. (page 13)

Power production is hampered by the MoE’s inability to deploy repair teams to work on the frequently attacked 400 kV transmission grid,continued degradation of legacy power generation stations, severe shortage of proper fuels for power generation units, inadequate security, and ineffective operations and maintenance practices across the generation and transmission infrastructure. (page 14)


The increasingly complex conflict has remained a struggle among and within ethnosectarian,criminal, insurgent and terrorist groups to wrest political and economic power from the elected GoI. Much of the violence is attributable to sectarian friction, and each faction is driven by its own political and economic power relationships. (page 17)

The overall level of violence in Iraq this quarter remained similar to the previous
reporting period but shifted location. ... Outside Baghdad and Anbar, reductions in Coalition force presence and reliance upon local Iraqi security forces have resulted in a tenuous security situation. (page 19)

The aggregate level of violence in Iraq remained relatively unchanged during this reporting period. Violence has decreased in the Baghdad security districts and Anbar, but has increased in most provinces, particularly in the outlying areas of Baghdad Province and Diyala and Ninewa Provinces. (page 23)