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World Bank mulls whether millions in unspent Iraq aid should go elsewhere

BAQOUBA, Iraq--Outside the crumbling elementary school, goats feed on trash strewn across the front yard. Inside, the ceiling is rotting, toilets don't work and students scrunch hip-to-hip behind narrow desks.

Millions of dollars in international aid to build and repair Iraq's dilapidated schools have for years gone unspent. Now, Iraq's government risks losing the funding as the World Bank weighs whether some of it would be better used elsewhere.

The dilemma is one that echoes across the international aid community — whether to continue financing a government with vast oil resources and a US$100 billion annual budget or divert the assistance to needier nations. It also reflects growing frustration over the bureaucratic hurdles and contracting problems that have kept the money from being used.

The spending delays have left buildings like the scruffy al-Min elementary school in the former insurgent stronghold of Baqouba, 35 miles (60 kilometers) northeast of Baghdad, in limbo. It's one of thousands of schools across Iraq that desperately need money for repair.

“The building looks like a prison, not a school,” said headmaster Abdul-Karim Mohammed Sabti. “This is not an appropriate atmosphere for learning.”

The education aid is a slice of US$1.3 billion in grants and loans the World Bank and its donor nations have given Iraq since 2004 to fund efforts ranging from labor and welfare programs to providing emergency health services and protecting the environment. Initially, the money was intended to help rebuild the country after the 2003 U.S.-led invasion that ousted Saddam Hussein. But the bank maintained the assistance as it became clear the country desperately needed help as it faced years of violence.

More than one-third of the overall assistance — about US$469 million — has yet to be spent and the World Bank must decide soon whether to extend a deadline for several of the programs to close by the end of June, or face losing grants to rebuild schools.

“When we talk with the government, when we talk to the primary stakeholders in the country, we try to explain to them that it is a pity that this money is just sitting where it is and it is not being utilized,” said Marie-Helene Bricknell, the World Bank's special representative for Iraq.

Some of the money may have to be given back and distributed to the world's poorest counties if Iraq continues to sit on it, she said.

“It may difficult for us to argue (to keep) it if Africa needs the money, or if there is another food crisis in the world,” Bricknell said. “Given the austerity around the world, it may be very difficult.”

But World Bank officials in Baghdad also acknowledged the Iraqi government faced tremendous hurdles in trying to carry out the projects. There was no parliament when the first tranche of funding was provided, and the government was barely functional in the years the nation teetered on the brink in civil war.

The projects have picked up since Iraq's new government was seated in late 2010, but bureaucracy and contracting problems have stunted progress.

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In this April 25 file photo, a student passes by an abandoned school foundation, unfinished since 2006, in central Basra, 340 miles (550 kilometers) southeast of Baghdad.

(AP)

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