Iraqi budget shortfalls force security hiring freeze

UMM QASR, Iraq -- The drop in oil prices has forced Iraq's military and police to put recruiting on hold even as the U.S. hands over more responsibility for protecting the country.

The freeze is stalling efforts to hire Sunni ex-insurgents and has prompted the Iraqi military to transfer hundreds of soldiers to the navy to protect vital oil installations in the Persian Gulf.

Iraq will also have to scale back purchases of equipment and weapons, raising new questions about its ability to defend the country's borders and prevent a resurgence of violence.

All this comes as the Iraqi military is preparing for the 2011 departure of U.S. forces, who often provide everything from clean drinking water to fuel.

It's unlikely to affect the withdrawal schedule, which was set in a security agreement that took effect Jan. 1. But unless oil prices rebound, the crisis could threaten hard-won security gains.

The freeze began without fanfare in the police ministry in December and expanded when the government had to revise its 2009 budget early this year. It was confirmed this week by U.S. and Iraqi officials.

This month, Iraq's parliament passed a $58.6 billion budget, which was sharply reduced twice from $79 billion after oil prices plummeted from a high of nearly $150 a barrel last July to $51 a barrel Friday. Iraq relies on oil sales for about 90 percent of its revenue.

One of the biggest concerns is the government effort to bring tens of thousands of Sunni fighters who turned against al-Qaida in Iraq into the security forces to keep them employed and away from violence.

The government has promised to hire 20 percent of the so-called Sons of Iraq into the army or police, but the transition has gone slowly.

The transfer of more than 91,000 Sunnis who left the insurgency and joined security groups initially funded by the U.S. to Iraqi government control is due to be completed next month. Just more than 3,000 have joined the army and police, although Iraq's government is paying the others a small salary.

Brig. Gen. Frederick Rudesheim, a deputy commander of U.S. forces in Baghdad, said the hiring freeze has slowed the process even further.

"There has been a commitment, a previous commitment to reintegrate the Sons of Iraq into security forces, primarily the police and perhaps the army in fairly large numbers," he told reporters recently. "That has happened but not to the degree that was anticipated."

Interior Minister Jawad al-Bolani said the budget crisis has forced his ministry to postpone plans to increase the national police force of nearly 500,000 and establish a brigade in each province.

"We hope that by the middle of this year oil prices will increase to bring in funds to help us implement these plans," he said.

Iraqi security forces number more than 610,000, including police, soldiers, sailors and support forces.

Anthony Cordesman, a national security analyst at the Center for Strategic and International Studies in Washington, said much depends on how long the budget crisis lasts.

"It's going to be a problem in terms of equipment, in terms of sustainability, in terms of construction," he said in a telephone interview. "It is a symptom of the fact that one of the things that holds the country together ... has been large flows of oil."

He also noted that the drop in oil prices coincides with an overall reduction in international aid for Iraq due to the global economic crisis.

"Nobody basically is budgeting large amounts of aid for the coming year. So they're getting hit from two directions, not just one," Cordesman said. "This budget squeeze is going to affect every aspect of Iraqi stability."

Iraqi defense officials played down concerns, saying the ground forces are sufficiently staffed for now.

Maj. Gen. Mohammed al-Askari said the tiny air force was still accepting applications from experienced pilots and ground crews and "if any other branch needs forces we will open recruiting."

The Iraqi navy, however, has been left with more than 60 percent of its slots unfilled less than two months before it is due to take over one of two oil terminals floating in a disputed waterway that borders Iran.

To make up for the shortfall, the Iraqi military is shifting some 500 soldiers from the army to the southern oil port of Umm Qasr.

Commanders overseeing the transition said the Iraqis are on schedule to take over the security of the Khor al-Amaya oil terminal by the end of April and the area's perimeter security by the end of the year.

"What they are able to do is that they are moving resources internally," said Brig. Gen. Mark Lacey, the British deputy commander of military transition teams in Iraq. "They're not actively going out and recruiting ... and that is to do with the budget. But that is only something that is going to be there in the short-term."

The Iraqi navy's takeover of the oil terminal -- a rusty, rat-infested platform that was built in 1959 and is fed by only one 42-inch pipeline -- is a small but important step, officials said.

U.S. and British forces will remain a few miles away on the newer al-Basra oil terminal, which officers called "the crown jewel" for its two 48-inch pipelines that produce 80 percent of Iraq's crude exports.

U.S. Navy Capt. Karl Van Deusen of St. Petersburg, Fla., said the Iraqi takeover of the Khor al-Amaya terminal would provide crucial training for the Iraqis as they face the coming U.S. troop withdrawal.

"We're accepting a little more risk up here for the training benefit," Van Deusen said during a recent briefing in a recreation room at the Khor al-Amaya terminal.

The Iraqi navy was destroyed by U.S. bombing during the 1991 Gulf War. Partially sunken Iraqi warships still dot the Khor Abdullah channel that connects the port of Umm Qasr with the Persian Gulf.

Threats range from bombings and smuggling to an Iranian incursion.

U.S.-led forces took over protection of the oil platforms after an April 24, 2004, suicide boat attack struck them, killing two American sailors and a Coast Guardsman.

Iraq's navy has about 3,000 sailors and marines with a force goal of 7,900. Of 500 Iraqi army soldiers being deployed, nearly 200 have arrived and officers said many were not happy with their forced career change.

U.S.-led forces also will take their secure communications systems and Internet access with them -- making the Iraqis vulnerable to eavesdropping from Iran. The only cell phone signals on the oil terminal come from Kuwait and Iran.

Iraqi sailors also need more weapons. The U.S. military said 30 heavy machine guns were being delivered from elsewhere in Iraq but the Iraqis needed help maintaining them.