Barbara Bodine, a senior American official in charge of running Baghdad, is on her way out.
Iraqis are becoming sceptical of American promises to restore order
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Her departure comes amid growing criticism of the coalition's chaotic and ill-prepared attempts to reconstruct Iraq, especially noticeable in Baghdad.
It also coincides with the appointment of career diplomat Paul Bremer as the senior civilian in charge of rebuilding the country's government and infrastructure, effectively demoting the current head, retired general Jay Garner.
Nathan Jones, a spokesman for the coalition administration, said Ms Bodine's departure was part of a normal turnover.
Expectations 'too high'
"The team continues to build," he said. "Obviously you're going to have changes in the team, but the focus of the team is very much on the Iraqi people and assisting them, getting them what they need."
Administration officials insist that progress in reconstruction efforts is steady, if slow, and that expectations for quick change may be too high in a country ravaged not only by war but also by more than a decade of UN sanctions.
Since they came nothing has been done, and I am asking them now, where is security, where is freedom
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But there are persistent reports that those same officials are running a disorganised and under-resourced operation, largely out of touch with the Iraqis they are trying to serve.
They are grandly headquartered in one of Saddam Hussein's palaces, yet with barely enough pens, according to one insider, never mind an efficient communications system.
"We can't even run ourselves, let alone Iraq," he said.
Frustrations
Iraqis are getting more and more frustrated with Mr Garner's operation, saying he has refused to fulfil promises to restore public services, pay salaries and, above all, bring security to the streets.
"Where are the American promises that they did for us," shouted one angry man as a crowd gathered to watch the central telecommunications building go up in flames, with looters inside. It wasn't clear how the fire had started.
Barbara Bodine is on her way out
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"Since they came nothing has been done, and I am asking them now, where is security, where is freedom, the streets are full of criminals and looters."
"The central bank of Iraq was looted and destroyed in front of them," said another, "and after it was destroyed, they came to defend it, and now after the destruction of this building, they'll come to defend it."
Privately, some diplomats have welcomed American moves to replace Jay Garner, saying he has not proved to be up to the job.