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Iraq is now the biggest construction site in the world.

By Akram Belkaïd-Ellyas

Translated from: La Tribune (Paris)
May 6, 2003

http://www.latribune.fr/Tribune/Online.nsf/Articles/20030506207939?OpenDocument

Projections of the cost of reconstruction in Iraq range from $300 billion to $600 billion over ten years.  Financing remains the principal issue to resolve, but not the only one.  The issue of the use of local labor is also on the table. 

Iraq is now the biggest construction site in the world.  Devastated, taken
apart, impoverished, in many respects Iraq has, in the twelve years since
James Baker's ominous threat to Tarik Aziz during their "last chance meeting"
in Geneva, returned to "the Stone Age."

"The extent to which they've gone backwards has been extraordinary.  I didn't
expect to find the country in such a state," confides Ahmad Mastiri (1) [(1)
Name changed at this person's request], an American businessman who has just
returned for a few days in his native land after nearly forty years of exile.
"Reconstruction will not just mean cleaning up the damage from the recent war.
 There's also the damage from the sanctions and from the war against Iran.
It's a wager of Pharaonical proportions that calls for a real Marshall Plan."

The truth is that the clichés about "modernization" used by Saddam Hussein
during his years in power hid a more ugly reality.  With the exception of
Baghdad, the showcase of the regime, and a few other Sunni cities, the rest of
the country was abandoned from the early 1980s on.  The wars and the sanctions
only partly explain the state of "hyper-underdevelopment" (a formula coined by
an Algerian diplomat married to an Iraqi woman) found in a country that might
have been an example of economic success for the Arab world.  "What has to be
overcome is an incredible negligence of investments of all kinds over the past
thirty years," agrees Peter Sluglett, who specializes on Iraq at Oxford
University.

ASTRONOMICAL SUMS

Although the World Bank puts out the optimistic figure of $3 billion per year
(see "La Tribune" of April 28), most of the other evaluations that have been
made are dizzying -- the low estimate comes in at $300 billion over ten years,
while the most pessimistic predictions propose the figure of $600 billion for
the same period.  And it should be noted that these figures do not take into
account the cost of the American presence, "which the Iraqis will end up
paying for one way or another," says Ahmad Mastiri.  As well as the various
debts and reparations owed by Iraq because of its past actions.

While the debates about the legitimacy of the war broadly mobilized the world
of thinkers and other experts, the post-war question, paradoxically, doesn't
seem to interest anyone.  Thus: "The United States was in a hurry to make war,
but it's clear that no one reflected upon the challenge of reconstruction,"
complains the Egyptian economist Ali Chamtayli.  "The 3 billion dollars frozen
by USAID seem ridiculous.  Where are we going to find the rest?"

Before military operations were launched, American diplomats implied that the
future of Iraq ought not to cause a problem because of its oil reserves.  But
at this point a simple calculation sweeps away that overconfident notion.
Beginning with a very optimistic assumption of $25 billion (or $250 billion
over ten years), it is clear that Iraq will need other resources if it is to
rebuild, and also repay its debt and answer to demands for reparations linked
to the invasion of Kuwait in 1990.

Not to mention the investments that will be necessary to get up and running an
oil industry that saw its production shrink by 100,000 barrels a day every
year since 1990.  Even the hypothetical confiscation of the property of Saddam
Hussein and his clan, estimated at between $2 billion and $10 billion, will
only slightly alleviate the Iraqi burden.  In fact, according to a preliminary
study by the center for strategic studies of the United Arab Emirates, it
would take, in present circumstances, a price-per-barrel of at least $55 to
give Iraq some breathing room.

A LOT IN ITS FAVOR

Iraq certainly has a lot in its favor.  Oil should keep it out of utter
poverty.  And with 24 million inhabitants, "its population is neither a
handicap -- as is the case for giant Egypt -- nor insufficient -- as is the
case for the Gulf Emirates," notes Peter Sluglett.  But in the opinion of this
expert, Iraq will have trouble getting away from "all oil," since the
preponderance of hydrocarbons (90%) in its foreign trade is likely to go on
indefinitely.  This reality makes comparisons with German reunification
inapplicable.  "Iraq is not the former East Germany.  It does not have a
significant industrial base," emphasizes Peter Sluglett.

In short, oil will not be enough.  So it's not surprising that there are calls
to reschedule dept and erase reparations due to Kuwait, as Adnan Pachachi, the
leader of the independent Iraqi democrats has explained in the columns of La
Tribune (April 18).

NEEDED: IRAQI BOSSES

And money will not be the only sinew of this new war, whose goal is to bring a
good part of Iraqi territory out of the Middle Ages.  According to Bart
Fisher, secretary of the US-Iraq Business Council, human resources also need
to be part of the thinking of those who are overseeing the reconstruction.  It
is certainly the case that the country can count on exiles like Ahmad Mastiri
to contribute their expertise (see accompanying article [not translated
here]).  But to allow Iraqi managers to emerge "will be vitally important for
Iraq's future," adds Bart Fisher.

"We have to give the best possible chance to the Iraqis," insists Joseph
Braude, an American researcher, a genuine regional specialist (he speaks
Arabic, Hebrew, and Farsi) and author of a recent work on the reconstruction
of Iraq. (2) [(2) *The New Iraq: Rebuilding the Country for Its People, the
Middle East and the World* (Basic Books, March 2003).]  "Iraqi society has
long been in a condition of despair," he observes, "but it is determined at
every level to catch up.  It is absolutely essential to involve the Iraqis in
the reconstruction."  For him, as for many Arab economists, this is not simply
a question of more or less skilled manual labor that needs quickly to find
employment, or even middle managers whose quality of life must be imporoved so
as to constitute the middle class that everyone speaks of as a source of
stability, which is so dear to George W. Bush.  No, for Joseph Braude the goal
is also to give a chance to "real bosses."  In a word, creating an Iraqi
entrepreneurial social fabric must go hand in hand with reconstruction.

WATCH OUT FOR THE MAFIA

"It's true, that's essential," agrees Bart Fisher, whose organization will
soon present a complete proposal for the reconstruction of Iraq.  But he
immediately cautions:  "We have to go slow and not skip essential phases," he
insists.  "You have to avoid the reconstruction boom permitting the emergence
of mafias, as was the case in the countries of Eastern Europe."

The same concern is expressed by the Iraqi economist Ahmed Al-Kuti.  "If
perchance the reconstruction of Iraq means unregulated privatizations of the
publicly owned enterprises of Iraq, we risk having quite a few scandals.  And
in the end, the population will conclude that capitalist mafiosos have
replaced Ba'ath mafiosos," he warns.  He recognizes, however, that it will be
difficult for Washington to resist insistent calls for the privatization of
Iraqi companies coming from the various neoconservative think tanks.

--
Translated by Mark K. Jensen
Associate Professor of French
Chair, Department of Languages and Literatures
Webpage: http://www.plu.edu/~jensenmk/
E-mail: jensenmk@plu.edu

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