Iraq army buildup in budget crunch

BAGHDAD - Iraq's budget shortfall, caused by the drop in world oil prices, presents a challenge to building up the country's army and raises questions about whether it will be able to protect itself when U.S. troops leave, a top American commander said yesterday.

Plummeting oil revenue has hampered efforts to buy ships, planes, and weapons and is slowing down the construction of the necessary national supply chain.

"The budget, no question, is a challenge," Army Lt. Gen. Frank Helmick, head of the U.S. training command in Iraq, told reporters in Baghdad.

With a looming deadline for American troops to pull out of Iraq by 2012 under a U.S.-Iraqi security pact, the clock is ticking on U.S. training efforts.

His assessment came as the top U.S. commander in Iraq, Army Gen. Ray Odierno, prepared to tell the House Armed Services Committee of the early exit of more than 4,000 troops next month from Iraq.

President Obama has ordered all combat troops out of Iraq by Aug. 31, 2010, leaving about 50,000 troops to train and advise until the end of 2011.

Iraqi Deputy Finance Minister Fadhil Othman said Tuesday that the proposed 2010 budget was 20 percent bigger than the current one but that it still fell short of Iraq's needs.

The Iraqi government had to cut its 2009 budget from $79 billion to $58.6 billion as oil prices plummeted from a high of nearly $150 per barrel. The final 2009 budget figure was based on an average oil price of $50 per barrel.

Crude prices have since rebounded to about $66 per barrel; the 2010 budget is based on an average price of $60.

The Iraqi government relies on oil sales for more than 90 percent of its revenue.

This year's budget constraints forced Iraqi defense officials to impose a hiring freeze and limit its military spending. Iraq has still not purchased navy ships and patrol planes it requires.

Helmick, holding his last news conference as head of the transition command, said that by the time the last U.S. troops leave, Iraq will have a security force that can protect itself on the ground. But Iraq's army needs logistics help, the security ministries need help with strategic planning, and the navy and air force need additional time to provide adequate security, he said.