Foreign rush for Iraq rebuild dollars

While gunfire and explosions raze Iraqi buildings, businesses are assessing the opportunities involved in reconstruction. 

London protesters say Iraqis must plan their economic future

Iraq Procurement 2004, held in London from 26 to 28 April, was billed by its organisers as “an exclusive opportunity for international companies to meet the key Iraqi business leaders and decision makers”, with a view to “form partnering agreements … and sign procurement contracts”.

The event website notes that reconstruction is expected to cost “in excess of $100 billion”.

Around 300 companies were invited to attend the conference, including Shell, ChevronTexaco, ExxonMobil, the US arms company Raytheon and several security firms.

Also in attendance were Brian Wilson, the British government’s special envoy on reconstruction, and US Rear-Admiral David Nash, who holds the purse strings to the $18 billion of US taxpayers’ money earmarked for rebuilding Iraq.

A spokesperson for UK Trade & Investment, the government organisation that supports companies in the UK trading internationally, says of the event: “Our priority is to put Iraq back on its feet. Reconstruction is a priority.”

Meanwhile, a conference attendee from the Arab-British Chamber of Commerce, one of the event organisers, described the event as “very positive, full of eagerness and a want to help the business and the people of Iraq succeed”.

Not everyone would agree with such an analysis.

Pigs in suits

Outside the conference building in central London, protesters made their assessment clear: Some demonstrators dressed up as pigs in suits and gorged themselves on handfuls of paper money, described as “Iraqi occupation dollars”, from a trough.

“Iraqis should be allowed to determine their own economic future, for a reconstruction process directed by the Iraqi people for the benefit
of the Iraqi people –
not by big business
for its own profit”

Gabriel Carlyle,
Voices UK

The message was reinforced by one demonstrator wearing a bomb-shaped hat describing the event as a “bomb and buy sale”.

Gabriel Carlyle, of Voices UK, which campaigns against war and economic sanctions on Iraq, says there is no disagreement that Iraq urgently needs a rebuilt infrastructure, but questions the “procurement” method.

“Iraqis should be allowed to determine their own economic future, for a reconstruction process directed by the Iraqi people for the benefit of the Iraqi people – not by big business for its own profit.”

Broken trust

Others similarly question the legitimacy of the Coalition Provisional Authority (CPA) in making reconstruction agreements – not just on the grounds of democratic principle, but also on the basis of outcome.

Paul Ingram, a Green party European candidate, says: “It is crucial that reconstruction resources are allocated in such a way that the Iraqi people have absolute confidence that it is done in their interests. The last people they have trust in today would be the US and the UK.”

On the contrary, Mike O’Brien, Minister for Trade, Investment and Foreign Affairs, argues that Iraqis appreciate UK assistance.

“UK companies have been able to bring their expertise to bear, in partnership with Iraqi workers and technicians, to tackle the very real problems that exist from years of under-investment and neglect,” he says.

Unlimited profits

But trust has, arguably, already been eroded by laws passed under the CPA defining the context of reconstruction.

Last September, the administration unveiled new rules by which foreign firms would have the right to wholly own Iraqi companies, bar those in oil, gas and mineral industries.

Critics of the programme say profits will end up outside Iraq 
Critics of the programme say profits will end up outside Iraq 

Critics of the programme say
profits will end up outside Iraq 

It also removed any limit on profits that could be taken out of Iraq by foreign companies, and capped corporate tax at 15%.

Meanwhile, mistrust is further engendered by the belief that contracts are awarded on the basis of cronyism.

Economist Paul Krugman wrote in the New York Times last year that the Bush administration was “treating [reconstruction] contracts as prizes to be handed to their friends … delaying Iraq’s recovery, with potentially catastrophic consequences”.

Iraqis sidelined

So has Iraq been frozen out of its own reconstruction? Yes, says Hani Lazim of Iraqi Democrats Against Occupation, based in the UK.

“This conference is to invite an elite to take bribes and to steal. And there are no honest or responsible Iraqis to watch over them while this stealing and corruption takes place.”

“This conference is to invite an elite to take bribes and to steal”

Hani Lazim,
Iraqi Democrats Against Occupation

Yasar Hassan, of Jubilee Iraq, similarly describes the Iraqi presence as “rich businessmen working as collaborators, not dissimilar to those who collaborated with Saddam”.

The event organiser, Windrush Communications, was not available for comment.

What galls Hassan and others is that, as the American senator Henry Waxman documented, Iraq can repair and rebuild itself for 10% of the cost quoted by foreign corporations.

Waxman spoke last year of “waste and gold-plating … costing the US taxpayer millions and imperilling the goal of Iraqi reconstruction”.

Globalised economy

Hassan, meanwhile, fears that Iraqis, desperate for work, sanitation and safety will be “forced to play the game of the globalised economy, working for peanuts for a company that takes its money out of the country, and meanwhile being slowly strangled by the noose of national debt”.

Unemployment in Iraq is around 70%; the average wage is $100 a month.

War has turned much of Iraq'sinfrastructure to rubble 
War has turned much of Iraq’sinfrastructure to rubble 

War has turned much of Iraq’s
infrastructure to rubble 

O’Brien says: “We are committed to helping Iraq to rebuild the capacity and skill of its workforce. We are not doing this behind closed doors or in isolation from others. The UK maintains a regular dialogue with Iraqi civil society organisations.”

Ingram adds that reconstruction of this flavour is an abuse of Western taxpayers’ money.

“We are paying to enable companies to make a profit out of the destruction, also paid for by us, caused by bombing Iraq. The biggest gainers are the arms companies and the corporations that go in and clean up, with these closed contracts and huge profit margins.”

Meanwhile if, as its organisers claim, the intentions of Iraq Procurement are honourable, its timing can only be described as bizarre.

As Carlyle  says: “How much can you reconstruct over the barrel of a gun?”

No future in Iraq

As more firms pull out of Iraq – on 29 April BP’s chief executive said his company “has no future there” – the British government appears keen to reassure business.

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Western firms will gain from
fixing what the West damaged

At a reception for Iraqi ministers on 28 April, O’Brien, said: “There has been a great deal of media speculation about UK and other foreign firms pulling out of Iraq.

“In reality, few UK companies are pulling out. Business people are telling us that the British private sector remains committed to Iraq.”

He also pointed out that insurance cover, although at an escalating premium, was still available to British companies trading in Iraq.

One of the claims of the Iraq Procurement website is that “there exists an excellent opportunity to do business in Iraq without having to visit the country”.

But perhaps the timing of such a conference renders it, at best, an opportunity to get a foot in the door.

Carlyle adds: “Companies getting involved in reconstruction now must hope that it will lead to more contracts if and when Iraq turns into the neo-liberal paradise envisaged by Bush.”

For those corporations that can afford the risk, the rewards are sure to be plenty.

Source: Al Jazeera