The second obstacle deals with people, and investing in human capital. It's more subtle than the funding problem, but it magnifies the problems caused by the first obstacle - a switchback in the road after a long dangerous grade. Most of the contractors working on Iraq's reconstruction are from the US and its allies. They're bringing in third world labor for menial jobs, and reserving the absurdly high-paying jobs - the skilled labor and manager positions - for their citizens and expatriates, not Iraqis. All those wages are quickly leaving the country they're supposed to be helping.
But that's not all. Because the contractors are relying on imported skilled workers and managers, there's no training for locals - and those locals who already had job skills are leaving if they can. When the contractors prepare to leave, there isn't going to be any local talent ready to "stand up when we stand down" - because we didn't train them. That leaves Iraq with only one choice - to keep paying the same foreign companies to keep importing skilled labor. When that money's coming from loans, that only makes the debt burden worse.