Iraqi Reconstruction

Building on Sand

Members of Iraq’s Governing Council are demanding the immediate transfer of sovereignty. Nine months after the fall of Saddam Hussein’s regime, the planned reconstruction of the country, which requires an investment of US$55 billion, has not yet begun, and impatience is mounting in a country that is barely surviving. Lack of security is paralyzing almost every initiative. Many functionaries and analysts say with certainty that without the presence of American troops, there would be disaster. But the immense majority support the thesis that as long as the occupation goes on, there will be neither stability nor prosperity.

“Washington should start to transfer power immediately,” demands Naseer Kamel Chaderji, a member of the Governing Council. “The coalition’s Provisional Authority cannot continue to make final decisions on finance and security,” adds Seyyid Mohamed Bahar al-Ulum, a Shiite leader who was on the council, which cannot do anything without the blessings of Paul Bremer, the American administrator.

Abd al-Zobra al-Waheed, spokesman for the Planning Ministry, sets priorities: “Electricity is the principal economic problem. The replacement of infrastructure has not begun because of lack of security. And reconstruction will not start until well into the year, when the foreign companies come.” The country’s 800 power plants are in “terrible” condition, according to Electricity Minister Ayham al-Samarrai. And there is no reason for optimism. Al-Samarrai says the current production is 3,600 megawatts. “In June it will rise to 4,000. Perhaps 7,000 with help from neighboring countries.” That is not enough. “Iraq needs 20,000 megawatts.”

Tens of thousands of merchants and ordinary citizens have their own generators. In Baghdad, power blackouts last more than five hours per day. The roar of these generators is an accepted part of life, just like the tremendous lines at gas stations, more and more of which are guarded by American tanks. After Saudi Arabia, Iraq has the world’s second-largest proven reserves of crude. But it is virtually certain that the lines of vehicles waiting to fill their tanks have no parallel. The average oil production these days is about 2.2 million barrels. In March, according to forecasts by the Petroleum Ministry, it will reach 2.8 million, the level before the war. But if guerrillas continue their sabotage of oil pipelines—90 since May 1—shortages will not end. Some believe the shortages are deliberate. “When people have to wait hours to fill up, they cannot be working on other more dangerous things,” says Ali, an engineer who teaches classes at the university for $170 per month, the amount a qualified professional makes.

Only the cellular phone industry, one of the most profitable sectors in a country where the hard-wired system has been destroyed, appears to be a short-term success. Two Kuwaiti companies—Wataniya and Mobile Telecommunications Co.—dominate the consortia that have secured concessions in northern and southern Iraq. In the central part, Egypt’s Orascom is in charge. And importers of food, cars, and electric appliances are doing well. In the Ali Shorcha market in Baghdad, there is plenty of grain from Guatemala, raisins from Iran, coconuts from Sri Lanka, bananas from Ecuador, sausage from Brazil, Chinese mushrooms, Lebanese meat.

But there is another factor that feeds the paralysis of reconstruction.  A Western diplomat emphasizes that many members of the Governing Council are more interested in taking care of their own interests or those of their communities than in working for the country’s progress. At the end of 2003, the budget for 2004 was still being negotiated. “We have forecast $13.4 billion for 2004,” says the Planning Ministry’s Al-Waheed. “There is a special account for industrial projects comprised of funds collected at the donors’ conference in Madrid. But it is not being invested, either, because it is awaiting foreign companies [to arrive to begin reconstruction],” he admits.

Sana al-Uari, who has a doctorate in economics, is straightforward about things: “The new political class does not know the country; there is enormous corruption, and no stability.”

In addition, Iraq is burdened with a $120-billion foreign debt, not to mention the $200 billion to Kuwait for war reparations. It is true that Western creditors have announced forgiveness of a substantial amount of their share of the debt. But time is short. Rafik Abd al-Kader, a 40-year-old engineer, has no faith in the new authorities. All he is interested in is getting a passport to emigrate. “It is all just promises,” he says. “In Iraq, the various ethnic groups are going to fight for power—the Kurds and Arabs, the Sunnis and the Shiites. And there are also the Americans. Look at Afghanistan. Has it really begun to improve? I do not want to get old waiting.”