No Relief in Sight

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Saboteurs are successfully slowing Iraq’s recovery by blowing up crucial pieces of infrastructure like water mains. The statement from the group claiming responsibility for the latest blast says they don’t care whether Americans help rebuild the country, they just want them out. Meanwhile, the oil revenues that Americans have been banking on to rebuild the war-torn (and now sabotage-torn) country still haven’t materialized — and may not for a few more years, reports the Asia Times.

David Isenberg, writing for the Asia Times, reports that Iraq’s much-needed surplus oil income is declining and revenues aren’t likely to manifest themselves any time soon:

“The reality is there won’t be any surplus Iraqi oil income for at least three to five years under a best-case scenario. Considering that American administrator L Paul Bremer said, when last in Washington, that ‘oil revenues are 100 percent of our budget,’ that means that the Iraqi council next year that is going to be responsible for the 2004 budget is going to be allocating a deficit, and a huge one at that.

Since before the war many US officials said reconstruction would be paid for by oil revenues, this is a huge problem. Iraq only earned $12.5 billion in oil exports in 2002, and its current export capacity may be down from over 2 million barrels a day in 2000 to around 800,000 – if there is no further sabotage.

Bremer said in a press interview on July 31 that it could take $50 billion to $100 billion to reconstruct Iraq, and a $1.6 billion plan to rehabilitate Iraq’s oil industry was agreed to in late June.”

That “if there is no further sabotage” is a big if.

Should the sabotage continue, and even given only the sad state of Iraq’s pipelines, the company most likely to benefit from repair work is, surprise suprise, Halliburton — Dick Cheney’s old pals. Halliburton was given part of the lucrative job of overseeing the repair of Iraq’s oil infrastructure shortly after the invasion of Iraq. According to the Washington Times, last week’s bidding for another $1 billion in contracts to repair Iraq’s oil fields will most likely land once again in Halliburton’s lap — which its competitors are claiming is a clear case of favoritism. There is even some evidence that the bidding for this contract was rigged such that rivals weren’t actually able to bid for the same amount of work as Halliburton. If given the contract, Halliburton will serve as the prime contractor to help repair Iraq’s oil pipelines, restring power lines, and boost crude oil production.

The Baltimore Sun’s Mark Matthews argues that the Bush Administration continues to use American corporations like Halliburton to do the work that the United Nations and nongovernmental organizations could do more effectively and cheaply:

“Officials at nonprofit groups say the administration’s preference for American companies is misguided, maintaining that U.N. agencies and numerous NGOs, have special expertise that the administration should be taking advantage of.

‘The U.N. and NGOs bring extensive experience in areas of concern on the ground in Iraq, and they need to have a robust role in any relief and reconstruction effort,’ said Mary McClymont, president of InterAction, an umbrella organization of private aid groups.

The United Nations is practiced at various phases of postwar nation-building, from planning and logistics to road reconstruction, economic development and the creation of governments, said Victoria Holt, also of the Stimson Center.

‘It is clear that NGOs and the U.N. are cheaper for any given thing you do, but we don’t think necessarily that the U.N. and NGOs are the most appropriate response for a reconstruction-type activity,’ said Schieck, the USAID official whose agency awards and pays for much of the work.”

And so, the “reconstruction-type activity” will probably continue to be conducted by Halliburton. It remains unclear where the “reconstruction-type funds” will come from.


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