The Bush administration on Thursday conceded that key sectors of the Iraqi economy had fallen below pre-war levels because of the insurgency, but insisted it was making enough progress on the political and security fronts to press ahead with reductions in US forces. Condoleezza Rice, the secretary of state, told the Senate budget committee that production of crude oil and electricity was down from three years ago. Attacks had also hit oil exports. According to latest statistics – which Ms Rice did not mention – crude oil production this month is running at 1.7m barrels a day, down from a post-invasion peak of 2.5m in September 2004 that was close to prewar levels. Ms Rice initially asserted that “many more Iraqis were now getting potable water and sewerage services. However, under intense questioning from Kent Conrad, a North Dakota Democrat, she conceded that although “capacity had increased, fewer Iraqis were actually receiving those services. Senator Conrad, citing the special inspector general, said almost all economic indices showed Iraq was better off before the US had invaded. Republicans, too, are sceptical of administration claims of progress. Senator Chuck Hagel told Ms Rice on Wednesday he believed the […]