Nathaniel Catchpole
April-14th-2003, 06:16 AM
The main issue about post-war Iraq, whether democracy can be successfully exported, how long it will take for elections etc., and the immediate public order and humanitarian crisis are obscuring another issue that is hinted at, but rarely expressed, and is likely to have irreversible consequences on the way the country is run.
Regardless of how long it takes for free elections in Iraq, it will take very little time for American companies (or coalition, or international companies) to get in there reconstructing, with an estimated budget of about $100billion. Whether it's subsidiaries of Halliburton, or ExxonMobil or British Petroleum, or Nokia doesn't matter - the fact is that the entire infrastructure of the country will have been built and run by private companies for a long time before there is any internal political administration. Much is being made of which Iraqis will be chosen to form the interim administration, whether the US or the UN will be deciding who represents the Iraqi people in the short term. The most that's been heard about the administration of the economic reconstruction is a few sour grapes about which specific companies will get to do it, not that this represents one of the main threats to any kind of autonomy in the future of Iraq.
Having had three weeks of sped up infrastructural damage, and 12-30 years before that depending on who you ask, it is unlikely that anyone in Iraq will object to foreign companies coming in to sort things out in the short term. Delays with aid because of looting and irregular forces are criticised and cause enough problems as it is, so a delay waiting until a complex electoral system can be set up would be impossible. Since there is almost no infrastructure at all now, it provides a blank slate for these companies to bring technological and administrative systems into the country wholesale, and install them from scratch.
These large multinationals are the most likely companies to use patented systems incompatible with their competitors (look at the difference between US, UK and Japanese phone systems, which one will Iraq use?), and to set things up so that they can only be maintained with proprietory parts, and specially trained engineers. It is therefore going to be made as difficult as possible for any future Iraqi administration to either nationalise an industry, or to subject it to meaningful competition between international and domestic companies.
Regardless of the political system that arises there will be large scale private monopolies on public services, perhaps security, ports, hospitals and pharmaceuticals that will be pretty much impossible to remove without forcible nationalisation. Whether or not a democracy is set up successfully, corporate free trade will be; within a much tighter schedule and with consequences that will stretch just as far, directly impacting the capacity for an Iraqi administration to make basic decisions about how the country is run.
The coalition forces have said they won't leave until there is security and public services are being run effectively - or that they'll hand over to the UN to sort out public services when the country is secure. This may well be the only way to hand the country back over to the people, short of flying out and leaving them to it, but it ensures that the companies we know and love will be firmly entrenched in that country before there is even a whiff of democracy.
[Edited] >>
USAID: http://www.usaid.gov/iraq/activities.html
http://www.usaid.gov/press/releases/2003/fs030411.html
Note the sections where it states "competition was limited for expediency" - and that these contracts were awarded before the outbreak of the conflict -
"At that point, USAID decided to undertake specific procurement planning actions, but did not want to do anything that might have complicated diplomatic efforts to prevent war. Therefore, contract negotiations had to be conducted on a sensitive and expedited basis. Events have confirmed that these contracts needed to be awarded and available for use as soon as possible."
In other words the contracts were awarded without competitive tender and without public knowledge before the war started. My understanding that this is for the $2billion US fund from US taxpayers, not oil for food or anything, but clearly these companies, once in the country, will be best placed to keep doing the job they're doing.
Regardless of how long it takes for free elections in Iraq, it will take very little time for American companies (or coalition, or international companies) to get in there reconstructing, with an estimated budget of about $100billion. Whether it's subsidiaries of Halliburton, or ExxonMobil or British Petroleum, or Nokia doesn't matter - the fact is that the entire infrastructure of the country will have been built and run by private companies for a long time before there is any internal political administration. Much is being made of which Iraqis will be chosen to form the interim administration, whether the US or the UN will be deciding who represents the Iraqi people in the short term. The most that's been heard about the administration of the economic reconstruction is a few sour grapes about which specific companies will get to do it, not that this represents one of the main threats to any kind of autonomy in the future of Iraq.
Having had three weeks of sped up infrastructural damage, and 12-30 years before that depending on who you ask, it is unlikely that anyone in Iraq will object to foreign companies coming in to sort things out in the short term. Delays with aid because of looting and irregular forces are criticised and cause enough problems as it is, so a delay waiting until a complex electoral system can be set up would be impossible. Since there is almost no infrastructure at all now, it provides a blank slate for these companies to bring technological and administrative systems into the country wholesale, and install them from scratch.
These large multinationals are the most likely companies to use patented systems incompatible with their competitors (look at the difference between US, UK and Japanese phone systems, which one will Iraq use?), and to set things up so that they can only be maintained with proprietory parts, and specially trained engineers. It is therefore going to be made as difficult as possible for any future Iraqi administration to either nationalise an industry, or to subject it to meaningful competition between international and domestic companies.
Regardless of the political system that arises there will be large scale private monopolies on public services, perhaps security, ports, hospitals and pharmaceuticals that will be pretty much impossible to remove without forcible nationalisation. Whether or not a democracy is set up successfully, corporate free trade will be; within a much tighter schedule and with consequences that will stretch just as far, directly impacting the capacity for an Iraqi administration to make basic decisions about how the country is run.
The coalition forces have said they won't leave until there is security and public services are being run effectively - or that they'll hand over to the UN to sort out public services when the country is secure. This may well be the only way to hand the country back over to the people, short of flying out and leaving them to it, but it ensures that the companies we know and love will be firmly entrenched in that country before there is even a whiff of democracy.
[Edited] >>
USAID: http://www.usaid.gov/iraq/activities.html
http://www.usaid.gov/press/releases/2003/fs030411.html
Note the sections where it states "competition was limited for expediency" - and that these contracts were awarded before the outbreak of the conflict -
"At that point, USAID decided to undertake specific procurement planning actions, but did not want to do anything that might have complicated diplomatic efforts to prevent war. Therefore, contract negotiations had to be conducted on a sensitive and expedited basis. Events have confirmed that these contracts needed to be awarded and available for use as soon as possible."
In other words the contracts were awarded without competitive tender and without public knowledge before the war started. My understanding that this is for the $2billion US fund from US taxpayers, not oil for food or anything, but clearly these companies, once in the country, will be best placed to keep doing the job they're doing.