"Is This Any Way to Rebuild Iraq?"

Since "the U.S. economy is weak and our own bridges, roads and airports are in desperate need of repair," Linda Bilmes and Joseph Stiglitz want Iraq to pick up a greater share of the cost of its own reconstruction:

Is this any way to rebuild Iraq?, by Linda J. Bilmes and Joseph E. Stiglitz, Commentary, Financial Times: Across the Middle East, ... the dizzying rise in oil prices has fueled a construction and employment boom. Yet in Iraq, one-quarter of the population remains jobless, and Baghdad gets only 11 hours of electricity a day. Four million Iraqis have been displaced from their homes and are urgently in need of resettlement. After five years of war, the country is still desperately in need of rebuilding.

It's not that Iraq has failed to share in the oil windfall. ... A new report by the U.S. Government Accountability Office shows that Iraqi oil revenues will reach up to $85 billion this year, resulting in a budget surplus of as much as $50 billion. But despite all the money that is pouring in, Iraq is not taking responsibility for its own reconstruction.

Instead, the U.S. military is footing the reconstruction bill. Over the last two years, while Iraq has earned nearly $100 billion in oil revenues (and spent just $2 billion on capital investments such as roads, water and electricity), U.S. taxpayers have plowed $48 billion into reconstruction activities in Iraq. About half of that has gone to the oil and electricity infrastructures. The U.S. has also helped to renovate 3,000 schools, train 30,000 teachers, distribute 8 million textbooks and rebuild irrigation infrastructure for 400,000 people, as well as fund projects to improve drinking water, bridges, roads, sewage treatment, airports and, of course, oil pipelines and refineries.

True, it was the United States that invaded Iraq, and none of the work we've done there since is adequate compensation for the ... suffering that the Iraqi people have endured. But at a time when the U.S. economy is weak and our own bridges, roads and airports are in desperate need of repair, there is a real question of whether we can sustain subsidizing Iraq's rebuilding on this scale.

Adding insult to injury is the fact that Iraqis pay a heavily subsidized $1.35 for a gallon of gas..., while the U.S. military -- the largest single consumer of oil in the world -- is stuck paying world prices of $3.23... Kuwait, by contrast, offers U.S. forces a steep discount...

This means that even as the U.S. is bankrolling Iraq's reconstruction, it is ... transferring to the Iraqis extra money, which, it turns out, is being squirreled away in unproductive international bank accounts. The oil windfall is yet another example of the ongoing financial fallout of the war, which is costing the U.S. more than $13 billion a month (not counting the future costs of caring for war veterans and replenishing military equipment).

It is time for the newly solvent Iraqi government to begin helping financially (as well as militarily) to get the country back on its feet. And it is time for the U.S. to ... concentrate ... on helping the Iraqi government rebuild its capacity to undertake such projects on its own. ...

Whatever the specifics, it is important to move quickly. Elections are looming in Iraq and the U.S., and the two countries are trying to agree on America's future role. Iraq's future reconstruction program needs to be home grown -- both for the sake of Iraq and for the U.S. taxpayers who need relief from the endless cost of this foolish war.

Comments

[hari]

Maliki/PM was recently in Berlin to discuss industrial and infrastructure redevelopment with German private sector. It's clear that Germany will invest heavily in its former investment partner - once peace and security is guranteed.

The EU is devloping its own package of development aid programmes for Iraq after American military departure.

[anne]

"The U.S. has also helped to renovate 3,000 schools, train 30,000 teachers, distribute 8 million textbooks...."

I'm like all, "hooray."

[anne]

"The EU is devloping its own package of development aid programmes for Iraq after American military departure."

Rubbish.

[anne]

http://www.juancole.com/2008/08/bombing-kills-26-pilgrims-iraq-seeks.html

August 15, 2008

John Tirman questions the GOP's victory narrative about Iraq. *

It is a measure of the Orwellian state of the US media and politics that he should have to bother. I mean, the place is a burned out hulk where hundreds die every month in political violence, where armed militias are ubiquitous, where nearly 5 million people remain displaced from their homes, where you have unemployment rates of 50% in some major cities, and where pro-Iranian Shiite fundamentalists face off against Sunni Arab nationalists and Salafis and Kurdish separatists. If this is a success, I'd hate to see a failure.

* http://www.boston.com/bostonglobe/editorial_opinion/oped/articles/2008/08/15/what_counts_as_success_in_iraq/

-- Juan Cole

[ken melvin]

Some one doesn't understand contract law.

[bakho]

Stiglitz ideas might take most of the profit out of the war. The beneficiaries of the Iraq War are the contractors who are raking in billions for not rebuilding Iraq.

Empowering Iraqis to rebuild their own country would reduce their 50% unemployment rate, provide alternative careers to being a militant or criminal, promote the welfare of the Iraqis and establish their economy on a solid basis. Given the hostility to "illegal aliens" in the US, the Iraqis must really be angry about the US calling all the shots and paying the big bucks to "foreigners to Iraq" to take jobs that Iraqis rightfully believe should belong to them. Having a rebuilding program that actually benefitted the Iraqis would mean much less war profit for American contractors, a major consideration in Bush Iraq policy.

[TigerPaw]

And why should Iraq pay for fixing the mess? They didn't create it the US did.

Sure Saddam was a nasty piece of work, but by most measures things were better when he was running the show. Certainly you weren't allowed to poke your nose into how the country was run, but public services operated, you didn't have crime out of control, sectarian battles didn't take place every other day, electricity production was higher, etc. etc.

Bad as Saddam was, it wasn't as bad as what they have now.

[Real Person from the Real World]

The US tax payer has paid aid over and over to other countries, including Israel, that paid us back with a spy to get our secrets. Meanwhile, everyone outside the US hates the US as a "bully". They all envy our lifestyle, and wealth, or rather what they see in movies.

However, when it comes to resources, even if all they have is manpower, they (understandably) wield that to their advantage and our disadvantage in global markets. Maybe it is time to cut the US gov't spigot, and let them do their thing with the global corporations. The influence the aid buys, is not doing us much good and even harms us in some cases, and our own (*ownership*) society is becoming so impoverished, we need to put our own house in order.

[hari]

@ Anne -

If your *rubbish* means American military departure will not take place in any time soon, I accept it. However, in the event BO wins, there is good chance your *rubbish* will have to be eaten by you lock stoke and barrel. Because there is a good chance - in the absence of American military combat forces - a lot can be done by multilateral intenvention to redevelop the ruined countryside of Iraq after American milotary invasion and occuption.

Someone will write a book on *US Occupation and Its Impact on Iraq.* It won't be a pleasant reading. However it will surely be a better product than Stiglitz's version.

[anne]

This essay is beyond absurd, as the response. All that matters for Iraq is whether America will be leaving quickly and completely; therein rests the only hope of development. We are not developing Iraq, we have rather done all that shock and awe could do to destroy Iraq. The thought of Europe developing Iraq is even more ludicrous. Only Iraq can develop Iraq, and only in the absence of military occupation, though whether that will occupation will actually end or development take hold in the reasonable future is completely unclear.

The idea that we built 2 million schools and ordered 72 million books for the 2 million schools, as though this could ever mean anything is the wake of the destruction we have wrought is beyond ridicule.

[Will]

Yes, everyone knows the Marshall Plan was an abject failure. Vast amounts of money spent on infrastructure — and now Europe has a huge economy that's competing with the U.S.! We should force Iraq to pay crippling reparations like after WWI, just like Germany did.

That worked out perfectly, right?

(/sarcasm)

[Bruce Wilder]

JS: "Over the last two years, . . . U.S. taxpayers have plowed $48 billion into reconstruction activities in Iraq."

I'd like to see a fact-check on this assertion.

The U.S. did, in fact, spend about $50 billion on reconstruction in Iraq, but that spending ended two years ago. The execrable Michael O'Hanlon tracked these things in his Brookings' Iraq Index, and if the U.S. Congress had appropriated $48 billion in additional reconstruction funds, I think I would have heard about it. One of the many, many valid criticisms of The Surge™, which are never uttered in our corporate, right-wing Media, is that it involved too little spending on civil society and the economy to achieve any worthwhile, pacific objective. Without that spending, Petraeus has just provided a screen for ethnic cleansing, and training for all sides, waiting for civil war to break out.

The cynic, with a clear view, knows that the coalition behind the current Iraqi government, has been saving up, in anticipation of the civil war, which will breakout, as soon as the U.S. is safely out of the country.

The cynic also knows the Bush Administration, a bunch of moral lepers, spent the $50 billion as a way of feeding corruption amidst their own ranks as well as in the Iraqi body politic.

I hesitate to use the term, "legitimate U.S. objectives" because the U.S. could scarcely have legitimate objectives after the war crime of aggressive war, committed in the unprovoked invasion of Iraq, but if you can hold your nose long enough in a hypothetical, it is pretty easy to see by any reasonable standard -- an imaginary policy actually aimed at strengthening and benefitting Iraq -- that Bush's policy has been vicious and corrupt throughout the conflict.

Bush's objectives can only be inferred from the policy as pursued, of course, because he's an opportunistic and routine liar. But, it is reasonable to suppose that it is been all about profits from oil exports. A strong, vibrant Iraqi economy and society is incompatible with such objectives. First, because a strong Iraqi economy implies a strong Iraqi government, which would not need U.S. military support and could be counted on to expel the U.S. Second, because a strong Iraqi economy is going to be a big consumer of oil. It makes no sense for Iraq to export oil in the long-run; Iraq, in its own interest, should exploit oil to leverage the oil to develop as an industrial and agricultural powerhouse.

U.S. policy, as executed, of course, has aimed to destroy Iraq, weaken it, grind its economy into the dust of the desert, and put the worst sort of leaders in charge, so that they can corruptly sell their country's future.

It is bad enough that the U.S. government should be turned over to the administration of vicious Mafia conglomerations like the House of Bush, but the bullying of the corporate right-wing Media prevents any frank discussion of the consequences of putting war criminals in charge of U.S. foreign policy, and handicaps any hope of reform.

[David]

see this Cunning Realist post on Iraqis with cash buying up property in Cairo

http://cunningrealist.blogspot.com/2008/08/new-pharaohs.html

[ken melvin]

I suspect we shall see the day when Iraq will sue the US and win huge damages.

[Real Person from the Real World]

Ken Melvin says the US may one day be sued by Iraq. Possibly. From the start, I don't think the administration actually believed there were WMD. I think they wanted to cause a tipping point in the middle east. The US would invade Iraq, finish Gulf War I, and the people would be greeting the US soldiers with flowers, and a new democratic country would be formed. Instead, the attempts to re-engineer the country in the image of the US failed, like Frankenstein's monster, and is now a money pit. We need to get out, but then there is the danger of real chaos. In a parallel situation, the GOP has tried to re-engineer the US over the last 30 years into the ownership society, and look at the mess we're in now, economically. Perhaps we ought to just study models, and deal with things on a priority/need basis.

[anne]

[Notice the title, which is correct.]

http://www.time.com/time/world/article/0,8599,1833362,00.html

August 15, 2008

Why Iraq is Still Oil Poor
By MARK KUKIS

BASRA

Roughly once a week a flotilla of half a dozen or so tankers heaves into the steamy southern Iraqi port of Khur al-Zubar, and the normally sleepy docks jump to life. Teams of workers scramble over ships arriving mainly from Dubai, Bahrain and other points around the Persian Gulf to connect hoses for the flow of diesel, kerosene and gasoline. Old-fashioned gas station tickers beside the ships clatter as thousands of liquid tons begin moving.

All that would seem business as usual at a harbor for a major oil producer, except that much of what's flowing through Khur al-Zubar is coming into Iraq rather than heading out. These days, the facility, originally built more than 30 years ago for exporting oil, takes in roughly 66,460 metric tons of fuel a month, only slightly less than the amount of oil the area pumps for sale on the world market. (Iraq, as a whole, imports roughly a fifth of its oil.) "It's a problem," says port manager Hussein Hamid al-Maliki, who's working on building another jetty to up the inflow still further. "Iraq bringing benzene and gasoline from outside? It's a joke." ...