"The training wheels are off," says Maj. Gen. Mark Hertling, the US Army commander for northern Iraq. For many months, he has restricted quick-fix discretionary spending by commanders in favor of Iraqi projects often channeled by the Americans, but put together and funded by Iraqis.
"They can't keep relying on the coalition forces to prop them up," says General Hertling. "We've got to see the strength and the weaknesses of the government come to the forefront."
Those are evident in the dusty agricultural town of Balad Ruz, where the main road separates two sectarian regions: to the north, a predominantly Shiite area; to the south, a once-mixed area where the majority Sunnis forced out all Shiites.
Attacks are still common. Iraqi forces announced Oct. 19 that in Balad Ruz they had shot dead a Saudi Arabian leader of AQI, who was wearing an explosive vest.
But Balad Ruz is also a frequent stop for Schlicher and his civil affairs team. During a recent visit, he was impressed to find Mayor Mohammed Marouf al-Hussein meeting with local irrigation officials about a project to cope with years of drought. Days before, they went with Iraqi police to inspect pipes.
"This is good news," says Schlicher, as he steps into the meeting in the mayor's office. "It's Iraqis finding solutions to Iraqi problems. Six months ago, it would not be happening."
Discussion ensues about the irrigation options, the cost of a project with advanced American-made equipment, and the price paid by farmers for such help during the Saddam Hussein-era.
"We've got to stop thinking of next week, but the next year or two, because every project the [US-led] coalition has started, the government has taken over," says Schlicher.
But the provincial government has problems, and insecurity has prevented Diyala Province from spending all its $140 million budget for three years in a row.