Author: Paola Manduca Date: Subject: [NuovoLaboratorio] Fwd: The Reconstruction's Bottom-Line
>Date: Sat, 27 Dec 2003 14:39:22 +0700 >Subject: The Reconstruction's Bottom-Line
>From: Herbert Docena <herbert@???>
>To: Herbert Docena <herbert@???>
>X-Loop-Detect:1
>
>Dear all,
>
>Here's what I managed to put together from my recent trip to Iraq. Hope you
>find it of interest. Otherwise, sorry for filling-up your in-box.
>
>Best,
>
>Herbert
>
>================================================================
>THE RECONSTRUCTION¹S BOTTOM-LINE
>The US-led reconstruction business in Iraq is faltering because it is less
>about reconstruction than about business
>
>Summary: Nine months after the invasion, deteriorating living conditions
>marked by constant lack of electricity, a severe gasoline shortage, and
>massive unemployment highlight the failure of the US-led reconstruction of
>Iraq. While insecurity and incompetence are partly to blame, the problems
>could be more adequately explained by the US and its contractors¹
>determination to hang on to as big a portion of the post-war bounty as
>possible.
>
>BY Herbert Docena
>
>BAGHDAD EVEN IF THE OCCUPATION were working perfectly well, it would still
>be wrong. This has become trite commentary among Iraqis who bitterly want
>the occupation to fail but, at the same time, also earnestly hope that the
>reconstruction of their country succeeds. Still, no matter how successful
>the occupiers try to make the reconstruction go right, the US and its
>corporations still have no right staying here.
>
>What seems to be exasperating Iraqis more, however, is that they¹re not even
>trying.
>
>NO LIGHTS, NO GAS, NO PAYCHECKS
>At night, most of downtown Baghdad is still clad in darkness, with only the
>blue and red police sirens lighting the streets and the only the sound of
>intermittent gunfire puncturing the silence definitely not a picture of a
>festive newly liberated capital. With most of Iraq suffering from power
>interruptions lasting an average of 16 hours daily, it¹s a little hard to
>party in the dark. How many US soldiers does it take to change a light bulb?
>About 130,000 so far but don¹t hold your breath.
>
>South of the city, a double-columned queue of cars stretched up to three
>kilometers in length snake around street blocks, and cross a bridge over
>the Tigris, before finally terminating at a barb-wired gasoline station
>protected by a Humvee and an armored tank. Come closing time, so as not to
>abandon the queue and line up all over again the following day, most of the
>car owners decide to leave their vehicles parked overnight a nightly vigil
>for gasoline in a country with the world¹s second largest reserves of oil.
>
>During the day, some of Iraq¹s 12 million unemployed hang out in front of
>Checkpoint 3 of the Green Zone, the heavily fortified headquarters of the
>Coalition Provisional Authority (CPA). The chances of an American coming out
>of their version of Saddam¹s spider hole and handing resumes is next to nil
>but they come every day anyway. Others try their luck loitering at the hotel
>lobbies, besieging journalists or NGO workers in need of drivers and
>translators.
>
>With many unemployed former university professors, engineers, and civil
>servants choosing to become cab drivers instead, Baghdad probably has the
>most educated taxi drivers per square kilometer in the world today. Strike
>up a conversation and the cabbies will most likely tell you what seems to
>have become the conventional wisdom today: not even Saddam could have
>screwed up this badly.
>
>FRUSTRATED BEYOND BELIEF
>Not that they want him back but neither could they have expected the
>occupation forces to completely bungle up such simple tasks as switching
>back the light. The lack of power is most Iraqis number one gripe but the
>list is long: uninstalled phone lines, shoddily repaired schools, clogged
>roads, uncollected garbage, defective sewage, a nonexistent bureaucracy,
>mass unemployment and widespread poverty the general unexpected chaos that
>Iraq still is today.
>
>Iraqis are in broad agreement that life is deteriorating rather than
>improving. The prevailing sentiment is a complex mix of resentment and
>resignation, frustration and incredulity. On the one hand, Iraqis feel
>bitter about being occupied and yet many are resigned to entrusting their
>day-to-day survival at the hands of the Americans. On the other hand, they
>could not quite believe how despite all the time and money the world¹s
>sole superpower can¹t make the reconstruction process go right.
>
>For it¹s part, the US says the Iraqis are expecting too much too soon. ³The
>bottleneck is sheer time,² explained Ted Morse, the CPA¹s coordinator for
>the Baghdad region. ³Wherever you have had a true conflict situation, there
>is an impatience in that people think it can be done immediately. It
>cannot.²
>
>But Iraqis themselves have showed that it can. In 1991, after the first Gulf
>War and despite the UN-imposed sanctions, it took Iraq¹s bureaucrats and
>engineers only three months to restore electricity back to pre-war capacity,
>boasted Janan Behman, manager of Baghdad¹s Daura power station. Now after
>almost nine months and despite the involvement of Bechtel, builders of the
>Hoover Dam and some of the world¹s biggest engineering works Iraq¹s power
>sector is still only producing less than 20% or 3,600 MW out of the 20,000
>MW required. A daily power interruption of two to three hours would be
>acceptable after nine months, but 16 hours?
>
>IT¹S THE STUPIDITY, STUPID
>The occupation forces would not admit this, of course, but much of the
>problem could be attributed to the successful efforts of the resistance to
>ensure that nothing works as long as an illegal occupation stays in place.
>The resistance has kept the authorities too busy dodging bombs to spare time
>for such trifling matters as providing Iraqis with jobs. With the resistance
>targeting not just combatants but also those profiting from the occupation,
>it¹s a little too much to expect contractors to go out of their tightly
>guarded bubbles and move around.
>
>Bechtel employees, for example, only travel in military helicopters or armed
>convoys with at least one designated ³shooter² in every vehicle.[1] Now
>unless they find a way of transporting the power plants to the trailer camps
>where Bechtel employees live averse as they are from going to the plants
>themselves, nothing much would really get done.
>
>A lot of the mess could also be attributed to the sheer incompetence and
>lack of experience of the people running Iraq. Much has been said about how
>the administrators housed in the Green Zone have little or no experience
>whatsoever in public administration. There have also been various reports
>about the confusion and lack of coordination among the different agencies
>involved. Moreover, as in previous colonial administrations, it is often
>difficult to entice the best and the brightest to pack up, leave everything
>behind, relocate to some far-flung hardship post only to be welcomed with
>guns.
>
>HIDING THE MOON
>But insecurity and incompetence while part of the complete and complex
>picture do not go far enough in explaining why the reconstruction effort
>has so far been an evident failure.
>
>First, while only 1% of those surveyed in a recent Gallup poll buy the line
>that the US came to establish democracy, majority of the Iraqis are not
>actively fighting the occupation. While the resistance is growing, this is
>not an intifida yet. While a mere 6% of those surveyed believed the US are
>here to help [2], Iraqis who are in the position to assist in the
>reconstruction effort actually want to make it work not so much to prop up
>the occupying forces, they say, but to ensure that oil and electricity are
>kept available. Iraqis may not necessarily like the Americans but they would
>sure like some hot water in the morning this winter.
>
>³If this is the system, then I have to follow,² said Dathar al-Khshab,
>general director of the Daura oil refinery said. It¹s the only way to keep
>things moving then so be it, he said, echoing other utilities managers. Rank
>and file oil industry workers are likewise hesitant to shut down the
>refineries as a bargaining chip for negotiations and as a tactic to
>undermine the occupation. On the one hand, they know that this could
>paralyze the Americans. On the other, they are afraid of its effect on the
>Iraqi people. But asked whether they support the coalition forces, Hassan
>Jum¹a, leader of the Southern Oil Compamy union, was firm: ³You can¹t hide
>the moon. Every honest Iraqi should refuse the occupation.²
>
>LIKE DOGS
>The charge of incompetence is not completely convincing either because, for
>all the allegations of unfair competition and shadowy connections, it would
>be difficult to accuse Bechtel or Halliburton of not knowing what it is
>doing.
>
>With projects scattered all over the globe, Bechtel is one of the world¹s
>biggest construction firms and it has achieved some of history¹s most
>awesome engineering feats. Halliburton, on the other hand, has been
>repairing oil wells and refineries around the world for decades. Even Iraqi
>officials readily acknowledge that, technically speaking, they should be in
>good hands with these American contractors. As the grudging respect
>gradually gives way to disappointment, Iraqis are even more baffled as to
>how these corporations could fail their expectations.
>
>Another popular explanation making the rounds alleges that sabotaging the
>reconstruction is a conscious and deliberate effort on the part of the
>occupation forces to make the Iraqis completely dependent and subservient.
>Keeping a dog hungry not only keeps it from barking, it also makes the dog
>follow its master anywhere.
>
>The problem with this theory is that due to the relatively decentralized
>reconstruction process involving dozens of contractors and subcontractors,
>an explicit order for deliberate failure would have been almost impossible
>to secretly enforce. Moreover, faced with a mounting resistance, this tactic
>could be extremely risky because it undermines the effort to ³win hearts and
>minds.² Keeping a dog hungry could also turn it desperate and rabid.
>
>The answer to the mystery of why the reconstruction has so far been botched
>up could be less sinister in that it is not a deliberate tactic and more
>charitable in that it does not assume that the occupying forces are that
>stupid.
>
>MADE IN THE USA
>A clue lies at the Najibiya power station in Basrah, Iraq¹s second largest
>city located south of Baghdad. Sitting uninstalled between two decrepit
>turbines were massive brand new air-conditioning units shipped all the way
>from York Corporation in Oklahoma. Pasted on one side of each unit was a
>glittering sticker proudly displaying the ³Made in USA² sign complete with
>the stars and stripes.
>
>It¹s just what the Iraqis don¹t need at this time. Since May, Yaarub Jasim,
>general director for the southern region of Iraq¹s electricity ministry, has
>been pleading with Bechtel to deliver urgently needed spare parts for their
>antiquated turbines. ³We asked Bechtel many times to please help us because
>the demand for power is very high and we should cover this demand,² Jasim
>said. ³We asked many times, many times.²
>
>Two weeks ago, Bechtel finally came. Before it could deliver any of Jasim¹s
>request, however, Bechtel transported the air-conditioners useless until
>the start of summer six months from now.
>
>But even if the air-con units become eventually useful, stressed plant
>manager Hamad Salem, other spare parts would have been much more important.
>The air-conditioners, Salem pointed out, were not even in the list of the
>equipment and machine components that they submitted to Bechtel.
>
>NO STARS AND STRIPES
>Ideally, said Jasim, it would be best to get the spare parts from the
>companies that originally built the turbines because they would be more
>readily available and more suitable for their technology. Unfortunately,
>Jasim pointed out, Iraq¹s generators happened to have been provided by
>companies from France, Russia, and Germany the very countries banned last
>week by the Pentagon from getting contracts in Iraq as well as Japan. Upon
>inspection, it was clear that the turbines don¹t carry the stars and stripes
>logo. The dilapidated turbines in Najibiya, for example, still proudly wore
>³Made in USSR² plates.
>
>Why then have the required components not been delivered? Jasim replied
>dismissively, as though the answer was self-evident: ³Because no other
>company has been allowed by the US government, only Bechtel.²
>
>Unlike those of the other banned corporations, Bechtel carries the requisite
>brand. Since its founding, Bechtel¹s officials have had a long and very cozy
>relationship with and within the state now disbursing the billion-dollar
>contracts. For example, Bechtel board member George Schultz was former
>Treasury Secretary to Nixon, State Secretary to Reagan, and coincidentally
>enough chairman of the advisory board of the Committee for the Liberation
>of Iraq. Also once included in Bechtel¹s payroll were former Central
>Intelligence Agency chief John McCone, former Defense Secretary Casper
>Weinberger, and former NATO Supreme Allied Commander Jack Sheehan.
>
>GRAND BUSINESS PLANS
>Awaiting urgent rehabilitation, Iraq¹s French, Russian, German, and
>Japanese-made power infrastructure is slowly disintegrating. At the station,
>workers are trying to make full use of the turbines by cooking pots of rice
>on the surface of the rusting hot pipes. If the stations are not
>rehabilitated any time soon, repairs will no longer be enough to keep them
>running, warned Jasim.
>
>To finally end Iraq¹s crippling power shortage and to ensure that the
>turbines are not completely degraded, Bechtel should either quickly
>manufacture the required spare parts itself a very long and very costly
>process, buy the spare parts from the Russian company directly, or hire the
>Russian firm as a subcontractor. That or they just allow the crumbling
>turbines to turn completely useless. Then, they bid for building new
>billion-dollar power generators themselves.
>
>Incidentally, part of Bechtel¹s contract includes making "roadmaps for
>future longer term needs and investments." In other words, Bechtel is
>currently being paid to determine what the Iraqis will ³need² to buy in the
>future using the Iraqis and the US taxpayers¹ money. According to
>independent estimates, Bechtel stands to get up to $20 billion worth of
>reconstruction contracts in the next few years. [3]
>
>If Bechtel has grander plans for Iraq¹s power sector, however, they¹re not
>telling the Iraqis. The utilities managers interviewed said they are not
>being consulted at all regarding Iraq¹s strategic energy plans. Bechtel
>officials don¹t even bother to explain what¹s taking them so long to deliver
>the parts they need. ³They just collect papers,² said Jasim.
>
>AN INCENTIVE TO FAIL
>Iraq¹s power sector problem is illustrative of the bigger pattern.
>
>Iraqis spend up to five hours lining up for gasoline not only because of the
>sabotage of pipelines but also because there¹s limited electricity to run
>oil refineries that are crying for quicker action from Kellog, Brown, and
>Root (KBR), the Halliburton subsidiary and contractor for rehabilitating the
>oil infrastructure. According to workers from the South Oil Company in
>Basrah, which KBR is obliged to rehabilitate, they are not aware of any
>repairs KBR has actually undertaken.
>
>With Iraq¹s oil refineries still awaiting rehabilitation, Iraq cannot refine
>enough crude oil to meet domestic consumption. The US is instead exporting
>Iraq¹s crude oil and employing KBR under a no-bid cost-plus-fixed fee
>contract to import gasoline from neighboring Turkey and Kuwait.
>
>Last week, an official Pentagon investigation revealed that KBR is charging
>the US government more than twice what others are paying for imported
>gasoline. What was left unsaid, however, is the conflict of interest
>inherent in hiring KBR for both the oil infrastructure reconstruction and
>the oil importation. If Iraq¹s pipelines and refineries were suddenly fully
>functional and Iraq is able to produce all the oil it needs, it would be the
>end of KBR¹s lucrative oil-importing business.
>
>There has been no evidence that KBR is deliberately delaying the repair the
>refineries, only that there is an obvious disincentive to speed things up.
>There is a serious but overlooked clash of incentives when the same company
>tasked to revive the oil industry is simultaneously making money from a
>condition in which that industry stays in tatters.
>
>NO MONEY AT ALL?
>Just outside the CPA headquarters, a small unorganized group of employees of
>the former regime gathered and unfurled their banner: ³We Need our Salaries
>Now.² They were demanding 10 months worth of back-wages. ³We thank you
>because you saved our lives from Saddam. But we want to live so you should
>help us,² their unofficial spokesperson, Karim Hassin, said indignantly,
>addressing the unresponsive 10-foot high wall protecting the compound. ³Paul
>Bremer promised us salaries. We heard it with our own ears. What happened to
>these promises?²
>
>A day after that the Pentagon¹s investigation on KBR was publicized, 300
>soldiers walked out of the US-created 700-member New Iraqi Army decrying
>unreasonably low wages. Most of the deserters were recruited from Saddam¹s
>former army but for only $50 a month, they had decided to transfer their
>allegiance to the occupation forces. Trained by the military contractor
>Vinnell Corporation, their only demand from their new masters was a raise in
>pay to $120 a month. That would have amounted to a mere monthly increase in
>spending of only $49,000 small change put beside the US¹ $4 billion
>monthly military spending in Iraq and a miniscule amount compared to the $61
>million in overcharges by KBR.
>
>Hearing about all these developments, it would appear as though the
>occupation forces have come to liberate Iraq on a really tight budget. The
>common refrain of the Iraqis who have chosen to work with the US-installed
>bureaucracy, is that there is no quid. Pressed to explain the failure of his
>ministry to significantly increase power, for example, Iraq¹s electricity
>chief, Ayhem Al-Samaraie, grudgingly admitted: ³I have no money in my
>ministry at all.²
>
>Indeed, a quick visual survey of Baghdad from the unkempt streets, the
>aging machines, the raging workers to the unbelievably long lines for
>gasoline makes this explanation for Iraq¹s reconstruction problems sound
>almost convincing. That the reconstruction effort is in shambles because
>there is no money almost seems plausible.
>
>NONE FOR IRAQ, BILLIONS FOR BECHTEL
>But it isn¹t. Last November, the US Congress eventually passed Bush¹s $87
>billion request for Iraq with nary a fuss. Before that, the US had already
>spent $79 billion for both Iraq and Afghanistan. On top of this, the US also
>has complete control of the UN-authorized Development Fund for Iraq (DFI)
>which contains all of the former government¹s assets as well as past and
>future revenues from Iraq¹s oil exports, including leftover from the UN Oil
>for Food Program.
>
>By the end of the year, the DFI would have given the occupation forces
>access to a total of $10 billion in disposable funds.[4] Though control
>would be less direct, the occupation forces can also tap a few more billions
>from the estimated $13 billion grants and loans raised during the Madrid
>donors¹ conference on Iraq last October.
>
>On paper, the amount that will be paid to contractors like Bechtel will come
>from US taxpayers¹ money. In practice, however, all that is being spent on
>Iraq¹s reconstruction is mixed in a pot containing the US¹ and other
>coalition-member countries¹ grants plus the Iraqis¹ own funds.
>
>So there¹s money; it¹s just not going around. And here perhaps lies the
>solution to the mystery of how the world¹s superpower and the world¹s
>biggest corporations can¹t even begin to put Iraq together again after
>almost nine months: The reconstruction is less about reconstruction than
>about making the most money possible.
>
>Firms like Raytheon, Boeing, and Northrop Gruman will get their fair share
>of the $4 billion that the US is spending monthly on military expenses in
>Iraq; but there will not be an extra dime for the New Iraqi Army recruits.
>Bechtel¹s useless Oklahoma-made air-conditioners will be paid under the $680
>million no-bid contract; but there will be no money for the direly needed
>Russian-made components for Najibiya¹s turbines. Halliburton and its
>subcontractors creamed off $61 million dollars importing oil from Kuwait;
>but there will be no pay-raise for Iraq¹s oil refinery workers.
>
>While the US finds it increasingly harder to raise funds for the occupation,
>there is still enough money for the most critical aspects of the
>reconstruction. Those profiting from it, however, are determined to keep the
>biggest share possible to themselves. The bottom-line of the reconstruction
>mess is the bottom-line: little gets done because contractors could not see
>beyond the dollar sign.
>
>THE BUSINESS OF MAKING MONEY
> ³The profit motive is what brings companies to dangerous locations. But
>that is what capitalism is all about,² Richard Dowling, spokesperson of the
>US Army Corps of Engineers, the agency that contracted KBR, explained. ³If
>it takes profit to motivate an organization to take on a tough job, we can
>live with that. Yes, there¹s a profit motive but the result is the job gets
>done.²
>
>The problem is, as evidenced most clearly by the case of Bechtel and KBR,
>the job is not even getting half-done. Profit-maximization has not resulted
>in the most efficient restoration of power and oil production possible. On
>the contrary, it gets in the way of doing things right. The power plants
>will eventually be built and the oil refineries will run again, but not
>after unnecessary deprivation on the part of Iraqis and not after Bechtel
>has made the most of the opportunity.
>
>This war to liberate Iraq was never about liberating the Iraqis.
>Unsurprisingly then, the reconstruction effort is also not about
>reconstruction. In this occupation, the US and its allies¹ primary goal is
>not to rebuild what they have destroyed; it¹s to make a fast buck.
>Contractors like Bechtel and KBR are assured of getting paid no matter what;
>that the power plants will eventually be constructed is just incidental.
>They will be built in order to justify the pretext for the profit-making:
>that a war had to be waged and that everything that was destroyed have to be
>rebuilt.
>
>As Stephen Bechtel, the company¹s founder, once made clear, ³We are not in
>the construction and engineering business. We are in the business of making
>money.² Billed as the biggest rebuilding effort since World War II, the
>reconstruction of Iraq is expected to cost $100 billion some even say $200
>billion -- depending on how long they stay. For the post-war contractors,
>this is not a reconstruction business; it is a hundred-billion-dollar
>bonanza.
>
>NOT EVEN TRYING
>The US and its contractors are not even trying for a simple reason: it¹s not
>the point. To assume that they are striving but are merely failing because
>of factors beyond their control is to presuppose that there is an earnest
>effort to succeed. There isn¹t. If there were, there should have been a
>coherent plan and process in which the welfare of the Iraqis and not of
>the corporations actually comes first. Instead, the Iraqis¹ need for
>electricity comes after Bechtel¹s need for billion-dollar projects. The
>Iraqis need for decent living wages becomes relevant only after Halliburton
>has maximized its profits.
>
>Indeed, if there were a sincere attempt to succeed, the US as responsible
>occupying powers should have had no qualms giving Iraqis what many
>empathically say they need to finally make thing¹s work: the authority and
>the resources. ³If only the money and spare parts were provided,² Jasim
>said, ³we could do a surgical operation.² ³If I¹m going to do it without
>KBR, I can do it,² said Al-Khshab. ³We have been doing this for the past
>thirty years without KBR. Give me the money and give me the proper authority
>and I¹ll do it.² But the US won¹t because who knows what the Iraqis would
>do. Ask the Russians to repair their power plants? Actually succeed in
>reconstructing their country without the involvement of Bechtel and
>Halliburton?
>
>The US taxpayers are not parting with billions of dollars of their
>hard-earned pay to give away to some lucky Russian firm. US and coalitions
>soldiers are not sacrificing their lives to protect the wussy French. The US
>did not liberate Iraq in order to let the long disempowered Iraqis rebuild
>their own country.
>
>As the reconstruction process continues to disillusion Iraqis, the myth that
>the US is here to help is also steadily collapsing. With no light, no
>gasoline, and no paychecks, more and more Iraqis are no longer just cursing
>the darkness. ³If you want to live in peace, Americans, give us our salary,²
>warned Hassim, the Iraqi protesting at the gates of the CPA. ³If you do not,
>next time we¹ll come back with weapons.² The logic of this occupation
>carries with it its own contradiction: If the resistance succeeds, the drive
>for more that propelled the war could also bring it to a halt.#
>
>
>(Herbert Docena (herbert at focusweb.org <mailto:herbert@focusweb.org> ) is
>with Focus on the Global South (www.focusweb.org) and the Iraq International
>Occupation Watch Center (www.occupationwatch.org.)
>
>
>NOTES:
>[1] Steve Schifferes, ³The challenge of rebuilding Iraq,² BBC News Oct 21,
>2003
>[2] Walter Pincus, ³Skepticism About U.S. Deep, Iraq Poll Shows,² Washington
>Post, November 12, 2003
>[3] Elizabeth Becker, ³Companies From All Over Seek a Piece of Action
>Rebuilding Iraq,² New York Times, May 21, 2003
>[4]Christian Aid, ³Iraq: The Missing Billions: Transition and Transparency
>in Post-War Iraq² Briefing Paper for the Madrid Donor¹s Conference, October
>23-24, 2003
>
>
>
>------ End of Forwarded Message
