Monday, June 28, 2004

Right when everyone is sitting back, basking in the glory of UNSC's
'historic agreement' on transfer of "sovereignty" in Iraq, Naomi Klein
writing in the Guardian, brings us a timely reminder of the real

The multibillion robbery the US calls reconstruction

Naomi Klein

Saturday June 26, 2004

The Guardian

Good news out of Baghdad: the Program Management Office, which oversees
the $18.4bn in US reconstruction funds, has finally set a goal it can
meet. Sure, electricity is below pre-war levels, the streets are rivers of
sewage and more Iraqis have been fired than hired. But now the PMO has
contracted the British mercenary firm Aegis to protect its employees from
"assassination, kidnapping, injury and" - get this - "embarrassment". I
don't know if Aegis will succeed in protecting PMO employees from violent
attack, but embarrassment? I'd say mission already accomplished. The
people in charge of rebuilding Iraq can't be embarrassed, because,
clearly, they have no shame.

In the run-up to the June 30 underhand (sorry, I can't bring myself to
call it a "handover"), US occupation powers have been unabashed in their
efforts to steal money that is supposed to aid a war-ravaged people. The
state department has taken $184m earmarked for drinking water projects and
moved it to the budget for the lavish new US embassy in Saddam Hussein's
former palace. Short of $1bn for the embassy, Richard Armitage, the deputy
secretary of state, said he might have to "rob from Peter in my fiefdom to
pay Paul". In fact, he is robbing Iraq's people, who, according to a
recent study by the consumer group Public Citizen, are facing "massive
outbreaks of cholera, diarrhoea, nausea and kidney stones" from drinking
contaminated water.

If the occupation chief Paul Bremer and his staff were capable of
embarrassment, they might be a little sheepish about having spent only
$3.2bn of the $18.4bn Congress allotted - the reason the reconstruction is
so disastrously behind schedule. At first, Bremer said the money would be
spent by the time Iraq was sovereign, but apparently someone had a better
idea: parcel it out over five years so Ambassador John Negroponte can use
it as leverage. With $15bn outstanding, how likely are Iraq's politicians
to refuse US demands for military bases and economic "reforms"?

Unwilling to let go of their own money, the shameless ones have had no
qualms about dipping into funds belonging to Iraqis. After losing the
fight to keep control of Iraq's oil money after the underhand, occupation
authorities grabbed $2.5bn of those revenues and are now spending the
money on projects that are supposedly already covered by American tax

But then, if financial scandals made you blush, the entire reconstruction
of Iraq would be pretty mortifying. From the start, its architects
rejected the idea that it should be a New Deal-style public works project
for Iraqis to reclaim their country. Instead, it was treated as an
ideological experiment in privatisation. The dream was for multinational
firms, mostly from the US, to swoop in and dazzle the Iraqis with their
speed and efficiency.

Iraqis saw something else: desperately needed jobs going to Americans,
Europeans and south Asians; roads crowded with trucks shipping in supplies
produced in foreign plants, while Iraqi factories were not even supplied
with emergency generators. As a result, the reconstruction was seen not as
a recovery from war but as an extension of the occupation, a foreign
invasion of a different sort. And so, as the resistance grew, the
reconstruction itself became a prime target.

The contractors have responded by behaving even more like an invading
army, building elaborate fortresses in the green zone - the walled-in city
within a city that houses the occupation authority in Baghdad - and
surrounding themselves with mercenaries. And being hated is expensive.
According to the latest estimates, security costs are eating up 25% of
reconstruction contracts - money not being spent on hospitals,
water-treatment plants or telephone exchanges.

Meanwhile, insurance brokers selling sudden-death policies to contractors
in Iraq have doubled their premiums, with insurance costs reaching 30% of
payroll. That means many companies are spending half their budgets arming
and insuring themselves against the people they are supposedly in Iraq to
help. And, according to Charles Adwan of Transparency International,
quoted on US National Public Radio's Marketplace programme, "at least 20%
of US spending in Iraq is lost to corruption". How much is actually left
over for reconstruction? Don't do the maths.

Rather than models of speed and efficiency, the contractors look more like
overcharging, underperforming, lumbering beasts, barely able to move for
fear of the hatred they have helped generate. The problem goes well beyond
the latest reports of Halliburton drivers abandoning $85,000 trucks on the
road because they don't carry spare tyres. Private contractors are also
accused of playing leadership roles in the torture of prisoners at Abu
Ghraib. A landmark class-action lawsuit filed by the Centre for
Constitutional Rights alleges that Titan Corporation and CACI
International conspired to "humiliate, torture and abuse persons" in order
to increase demand for their "interrogation services".

And then there's Aegis, the company being paid $293m to save the PMO from
embarrassment. It turns out that Aegis's CEO, Tim Spicer, has a bit of an
embarrassing past himself. In the 90s, he helped to put down rebels and
stage a military coup in Papua New Guinea, as well as hatching a plan to
break an arms embargo in Sierra Leone.

If Iraq's occupiers were capable of feeling shame, they might have
responded by imposing tough new regulations. Instead, Senate Republicans
have just defeated an attempt to bar private contractors from
interrogating prisoners and also voted down a proposal to impose stiffer
penalties on contractors who overcharge. Meanwhile, the White House is
also trying to get immunity from prosecution for US contractors in Iraq
and has requested the exemption from the new prime minister, Iyad Allawi.

It seems likely that Allawi will agree, since he is, after all, a kind of
US contractor himself. A former CIA spy, he is already threatening to
declare martial law, while his defence minister says of resistance
fighters: "We will cut off their hands, and we will behead them." In a
final feat of outsourcing, Iraqi governance has been subcontracted to even
more brutal surrogates. Is this embarrassing, after an invasion to
overthrow a dictatorship? Not at all; this is what the occupiers call
"sovereignty". The Aegis guys can relax - embarrassment is not going to be
an issue.

A version of this article first appeared in the Nation

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