Middle East

The lucrative business of rebuilding Iraq
By Ehsan Ahrari

The Arab Middle East, where mushrooming of conspiracy theories is a frequent phenomenon, is convinced about one more such theory. It states that the US invasion of Iraq is really about controlling the vast oil reserves of that country, about using its ensuing occupation of Iraq to redraw the strategic map of the entire region for only its own dominance, and to use its dominance of the region to extract the acceptance of Israeli dominance by all Arab states. But when one examines various "plans" that are bandied about to rebuild Iraq in Washington these days, it is, indeed, difficult to dismiss the recent theory as merely a figment of someone's fertile imagination.

There is one plan that the US Agency for International Development (USAID) issued, "The Vision of Post Conflict Iraq". This plan was sent to a number of US companies. Somehow, the Wall Street Journal got hold of it and promptly leaked it. Soon thereafter, the London Times and Middle East Economic Digest (MEED, also London-based) published the contents of that plan. According to the USAID plan, US$900 million in US government contracts will be offered to US companies for the initial rebuilding of infrastructures in Iraq that will be shattered by US bombs and missiles.

Needless to say, the "scramble for Iraq" is on. The London Times dispatch of March 6, after examining various other US documents on reconstruction of Iraq, writes, "The documents ... will lend weight to the suspicions that America has been planning a war regardless of international opinion ... Most of the construction contracts which are being awarded by a variety of American government agencies," it continues, "look set to be handed to large American companies, much to the anger of their British counterparts."

But the explanation on the US side is that these contracts are limited to US corporations because the USAID "invoked a clause in government procurement procedures allowing it to bypass the normal competitive bidding process on the grounds of 'urgent circumstances'". An additional explanation is that a prerequisite for winning the contracts is the ability to get Pentagon's security clearance. Five US companies are invited to submit bidding. They are Kellogg Brown & Root, Parsons Engineering, Louis Berger, Bechtel Corp, and Flour Daniel. These firms will be in charge of carrying out eight "separate prime contracts: port administration, airport administration, capital construction, theater logistics support, public health, education, personnel support, and local government".

It is interesting to note that Kellogg Brown & Root is a subsidiary of Halliburton. Vice President Dick Cheney was the chief executive officer of that company from 1995-2000, when he joined the Bush-Cheney ticket in the presidential elections. Bechtel Corp has equally impressive government connections. George Schultz and Caspar Weinberger - who were secretaries of state and defense, respectively, during president Ronald Reagan's administration - were top executives of that corporation. Halliburton is also reaping the bonanza from its past association with Cheney by getting a number of construction projects in Afghanistan.

But an even clearer picture of the United States' reconstruction plans and the related financial bonanza emerges when one examines the activities of the Office of Reconstruction and Humanitarian Assistance, created at the end of January, under the leadership of a retired US Army general, Jay Garner. Its original intent was to rebuild Iraq by using existing bureaucracy. After the occupation of Iraq is complete, an interim Iraqi administration will be created. An Iraqi expatriate based either in Washington or London - derisively described in Washington as part of the "Gucci guerrilla corps" - is expected to be named as head of that administration.

Disaster Assistance Response Teams (DARTs) will enter the post-Saddam Iraq. The Office of Reconstruction and Humanitarian Assistance will start its actual work to rebuild Iraq. General Tommy Franks, commander in chief of the United States Central Command, is expected to be the top US authority in Iraq, a la General Douglas MacArthur in post-World War II Japan. However, at least according to present plans, Franks' main focus will be on enhancing the internal security of Iraq, not on becoming its viceroy. Garner will be in charge of civil administration. At least the roles of Garner and his office role appear quite firm, given the fact that he has been preoccupied for quite awhile in developing his plans for the governance of Iraq, and has a staff of about 200 former military officers and diplomats to administer that country.

But who will pay for the awesome task of governing Iraq during its occupation by US forces? There are several highly controversial aspects of this issue. First, the administration of President George W Bush has not yet requested funds from Congress for the war's aftermath.

Second, the bipartisan, New York-based Council on Foreign Relations has stated that just the cost of deploying 75,000 US troops will be at least $20 billion. At least initially, the United States will have to rely on its taxpayers to foot the bill for occupation. That proposition is destined to create acrimonious domestic debates, given the already sagging nature of the US economy.

Third, the European Union, after going through rancorous debates over the issue of Iraqi invasion before the fact, will not be very enthusiastic, if at all, about offering financial assistance, especially if those funds are to be utilized to bankroll the US occupation of Iraq under the highly contentious euphemism of "liberation", which remains a highly unpopular concept in Europe.

Finally, the United Nations, as the only and the ultimate embodiment of the international community, is likely to save the day for the United States by offering its legitimacy, know-how, and even its capability to invigorate international passion and, equally important, raise finances for rebuilding Iraq. A sad irony related to such a potential development is that the sitting US president succeeded in whipping up anti-UN passions in the United States before the invasion by making an argument about the purported irrelevance of the world body. In the coming months, that entity will re-emerge as a true symbol of global resolve to ameliorate the misery of the ever-suffering Iraqis.

The Bush administration has been coy about offering sporadic and somewhat ambiguous evidence of its thinking that Iraqi oil reserves will pay for the US invasion, and for the rebuilding of that country. It was only on Monday of this week that Bush submitted to Congress a request for $75 billion, out of which $62.5 billion is for the Department of Defense. The White House's assumption underlying that estimate is that Saddam Hussein will be ousted in 30 days. About $8 billion was listed as aid for "Israel, Afghanistan and other US allies, a down payment on humanitarian aid for Iraq and for rebuilding the country, and money to increase security for American diplomats".

A report published in the neo-conservative magazine National Interest makes a case for "the reintegration of Iraq's oil industry into the global marketplace" so that it could provide "numerous opportunities for the region and the world". It advocates the privatization of Iraq's abundant oil assets as "a model for privations by other OPEC members, thereby weakening the cartel's domination of the energy market". It goes on to add, "The United States should offer its guidance on establishing sound economic and trade policies to stimulate growth and recovery." Given the existing political clout of the neo-cons in and outside the Bush administration, that suggestion may not be dismissed.

The very suggestion of changing the regional order to weaken the Organization of Petroleum Exporting Countries (OPEC) sounds dangerously ambitious, and, if followed through, assigns the United States the role as a sole determiner for creating economic conditions that, first and foremost, are beneficial to its own private enterprises. Washington knows only too well how crucial oil has been in the geopolitics of the Middle East in the two previous centuries, and how the great powers of those eras maneuvered to sustain their own supremacy over the peoples of that region for the control of oil. When the colonial period ended, it was hoped that Western domination had also ended once and for all. Arab oil producers established their independence over Western oil companies in the 1970s through a variety of tactics and maneuvers of their own.

But through the dismantlement of the Iraqi government in the beginning of the 21st century, the United States appears to be re-establishing its unquestioned dominance in Iraq and, through it, on other oil-producing countries of the region. That, in the final analysis, might be the ultimate lucrative price of a regime change in Iraq.

Ehsan Ahrari, PhD, is an Alexandria, Virginia, US-based independent strategic analyst.

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Mar 26, 2003



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