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The Bush administration has a new economic coordinator in Iraq. He's in charge of reconstruction efforts in that country. He's a veteran diplomat who left Iraq three years ago, angry over U.S. policy. And now he's back.

NPR's Anne Garrels reports.

ANNE GARRELS: Ambassador Tim Carney is no stranger to tough assignments. For the last three decades, he's been in Cambodia, Haiti, and Sudan among other places. In his debut press conference back in Baghdad, Ambassador Carney said there can be no doubt about his earlier disputes with the administration.

Ambassador TIM CARNEY (Economic Coordinator, Iraq): In 2003, the coalition, notably the United States, failed to invite Iraqis into our councils. And that failure is what has led to the situation in which the country finds itself today.

GARRELS: A situation where U.S. federal oversight agencies say billions of dollars in U.S. aid was wasted, or not spent on what the Iraqis needed. But Carney says the situation is improving.

Ambassador CARNEY: The big difference now is that Iraqis are inviting us into their councils to try to help use our resources to actually get things done.

GARRELS: As economic coordinator, Ambassador Carney will juggle a dizzying, and often overlapping list of U.S. funding organizations - USAID, the U.S. Treasury, the U.S. Army Corp of Engineers.

Ambassador CARNEY: That's a fairly large plate to coordinate.

GARRELS: But with U.S. reconstruction money drying up, his biggest job will be to help Iraqi spend their own money primarily from oil revenues. Despite the deteriorating state of the country's electricity, roads, you name it, the ministries have managed to spend as little as 15 percent of their budgets.

The reasons are numerous - problems finding companies to do the work in dangerous places, a lack of skilled contracting officers, and American-sponsored anti-corruption programs that have intimidated bureaucrats. Again, Ambassador Carney.

Ambassador CARNEY: This is still a relatively new government. This government needs to demonstrate convincingly to the Iraqi people that they are governing for the benefit of all Iraqis.

GARRELS: In part, Carney will rely on the state department's Provincial Reconstruction Teams, known as PRTs.

Unidentified Man #1: And now he's (unintelligible) his hands.

Unidentified Man #2: It is always a hassle.

GARRELS: Because of security concerns, the Baghdad PRT is a well-guarded office inside the heavily fortified Green Zone. If getting in is difficult, getting out to meet the Iraqi officials they want to help is even more so. Each time they want to do it, deputy director Colonel Bob Ruch has to organize an elaborate security convoy.

Colonel BOB RUCH (Deputy Director, PRT): We're trying to teach governance right now, two hours at a time. You get in the convoy, you drive down there, you meet with them, you leave. It's frustrating.

GARRELS: The PRT program was launched a year ago to help the Iraqi government function better. The program has been criticized for not having the right people with the right skills. Baghdad PRT director Joe Gregoire says the state department has had trouble finding certain people.

Mr. JOE GREGOIRE (Director, PRT, Baghdad): The problem is finding people who are very specific to certain subject matters, real business development, as you would expect from people who might be working for the department of commerce.

GARRELS: President Bush proposed last month doubling the number of PRT teams, saying such civilians are now central to American efforts. Just filling the jobs of the original PRTs is a challenge. U.S. officials say expanding them will take until the end of the year at least. By then, officials hope the risks may not be as great as they are now.

Anne Garrels, NPR News, Baghdad.

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