Final Report on Lessons Learned Department of Defense Task Force for Business CENTER FOR STRATEGIC & CSIS INTERNATIONAL STUDIES and Stability Operations 1800 K Street, NW | Washington, DC 20006 authors Tel: (202) 887-0200 | Fax: (202) 775-3199 David J. Berteau E-mail: [email protected] | Web: www.csis.org Gregory Kiley Hardin Lang Matthew Zlatnik Tara Callahan Ashley Chandler Thomas Patterson June 2010 CENTER FOR STRATEGIC & CSIS INTERNATIONAL STUDIES Final Report on Lessons Learned Department of Defense Task Force for Business and Stability Operations authors David J. Berteau Gregory Kiley Hardin Lang Matthew Zlatnik Tara Callahan Ashley Chandler Thomas Patterson June 2010 About CSIS In an era of ever-changing global opportunities and challenges, the Center for Strategic and International Studies (CSIS) provides strategic insights and practical policy solutions to decisionmakers. CSIS conducts research and analysis and develops policy initiatives that look into the future and anticipate change. Founded by David M. Abshire and Admiral Arleigh Burke at the height of the Cold War, CSIS was dedicated to the simple but urgent goal of finding ways for America to survive as a nation and prosper as a people. Since 1962, CSIS has grown to become one of the world’s preeminent public policy institutions. Today, CSIS is a bipartisan, nonprofit organization headquartered in Washington, DC. More than 220 full-time staff and a large network of affiliated scholars focus their expertise on defense and security; on the world’s regions and the unique challenges inherent to them; and on the issues that know no boundary in an increasingly connected world. Former U.S. senator Sam Nunn became chairman of the CSIS Board of Trustees in 1999, and John J. Hamre has led CSIS as its president and chief executive officer since 2000. CSIS does not take specific policy positions; accordingly, all views expressed herein should be understood to be solely those of the author(s). © 2010 by the Center for Strategic and International Studies. All rights reserved. Center for Strategic and International Studies 1800 K Street, NW, Washington, DC 20006 Tel: (202) 775-3119 Fax: (202) 775-3199 Web: www.csis.org Contents Acknowledgments ..................................................................................................................................... iv 1. Introduction ............................................................................................................................................ 1 2. The CSIS Lessons Learned Study ......................................................................................................... 6 3. The Task Force for Business and Stability Operations ...................................................................... 9 4. Key Findings ......................................................................................................................................... 16 5. Task Force Activity in Iraq, 2006-2009: An Assessment ................................................................. 29 6. Moving Forward: Defense Department............................................................................................. 49 7. Moving Forward: Task Force for Business and Stability Operations ............................................ 52 8. The Context: Iraq’s Economy ............................................................................................................. 57 Appendices ................................................................................................................................................ 67 1. Timeline .................................................................................................................................... 68 2. Selected References ................................................................................................................. 69 3. Summary of Interviewees ....................................................................................................... 83 4. Abbreviations and Acronyms ................................................................................................ 86 About the Authors.................................................................................................................................... 87 | iii Acknowledgments CSIS began the Lessons Learned Project for the Defense Department and its Task Force for Business and Stability Operations in May 2009 and delivered this final report in November, under funds provided by the U.S. Central Command. The project benefitted from the assistance of a number of individuals throughout the process, and the authors wish to acknowledge the considerable support of all those individuals. In particular, we thank Rick Barton and Karin von Hippel of the CSIS Project on Post-Conflict Reconstruction for their involvement from the beginning; Jim Dyer and Kim Wincup for their insights at each stage of the project; and Tyson Brown, Nicholas Sever, and Dan LaGraffe of CSIS for their considerable research support. We also acknowledge the support of agencies and individuals across the federal government who provided data, insight, and assistance. Finally, CSIS is deeply indebted to the hundreds of people in the U.S., Iraq, and elsewhere who met with the authors on a basis of off-the-record comments that were not for attribution. This project would not have been possible without them. iv| final report on lessons learned 1. Introduction In 2006, the Deputy Secretary of Defense created the Task Force for Business and Stability Operations to support military missions in Iraq. His memorandum of June 22, 2006, called for the Task Force to “ensure alignment to theater commanders’ goals for reconstruction and economic development.” On March 11, 2009, Secretary of Defense Robert Gates extended the life of the Task Force with his own memorandum, stating that the Task Force should “sustain economic revitalization activities … to aid the Department’s on-going military operations and to fully leverage economic development as a strategic and operational tool.” Two months later, under U.S. Central Command (CENTCOM) funding, the Center for Strategic and International Studies (CSIS) was engaged by Washington Headquarters Services (WHS) to undertake an independent assessment of the Task Force’s work in Iraq to determine lessons learned and their applicability to other operating environments. This introduction summarizes the CSIS report. Background Iraq was in chaos in early 2006, with expanding violence and too few signs of hope. The level of violence had eliminated many traditional economic development activities, as the United Nations (UN) and other non-governmental organizations (NGOs) pulled out of Iraq and U.S. civilian-led initiatives were restricted by the violence level. Notwithstanding published National Security Presidential Directives, on the ground in Iraq it was unclear who had responsibility to develop and lead a new approach. Disagreements persisted between the Defense Department (DoD) and other federal entities, and they were not formally resolved. Military commanders felt that the economic mission was not keeping pace with the overall military mission, and they sought ways to enhance economic operations. Paul Brinkley’s initial mission to Iraq was in his capacity as the Deputy Under Secretary of Defense (DUSD) to whom the Business Transformation Agency reported, with the goal of helping the DoD’s Joint Contracting Command provide better contract support for U.S. forces. At the request of Multi-National Corps-Iraq (MNC-I) commander Lieutenant General Peter Chiarelli, DUSD Brinkley expanded his focus, which led to the creation of the Task Force. Ultimately, the Task Force established a number of “lines of operation” in support of the overall mission in Iraq. This report explores their history and results. This Report CSIS was chartered to determine lessons learned, and this assessment was oriented to that end. The war in Iraq has been through many stages, and there is insufficient reliable data over time that CSIS could use for this study. Much of the report is based therefore on hundreds of interviews and discussions with participants and observers (U.S., Iraqi, and third party). These discussions were off the record and not for attribution, and while they provide support for most of our lessons learned, the report is entirely the product of the CSIS team. CSIS found that, in order to assess lessons learned from the Task Force, it needed to look more broadly at the roles of the military, DoD, the rest of the U.S. government, and at the entirety of | 1 economic activity in Iraq since before the invasion. The lessons learned in this report therefore have implications for the Task Force, DoD, and the U.S. government as a whole. Economic Operations in Conflict Zones Initial economic development in Iraq under the Coalition Provisional Authority (CPA) was based on the assumption that adequate security had already been established and would continue. That assumption proved to be short-lived. Economic policies changed dramatically as the interim Iraqi government took control from the CPA, and early efforts at reconstruction produced less lasting value than planned. CSIS found that the early problems in Iraq had an additional, less visible cause. There is a substantial gap in U.S. government capability with regard to economic operations in conflict zones. That gap in capability is caused in part by resource shortfalls but also by significant and