U.S. To Fuel Sick Economy With Reconstruction Contracts Paid By Iraqi Oil

US firms get $1.5bn deal to rebuild Iraq

Oliver Burkeman in Washington
Tuesday March 18, 2003
The Guardian

The United States plans to transform the infrastructure of Iraq within a year of a war ending, but has sidelined aid agencies by allocating almost all the funds available to private American firms.
Non-governmental organisations and the UN would get just $50m, a tiny fraction of the $1.5bn being offered to private companies, according to more than 100 pages of confidential contract documents leaked to the Wall Street Journal.

In the Azores at the weekend, President George Bush emphasised the need for a significant UN role in a postwar Iraq, a stance the administration considers essential to maintaining some degree of multilateral backing for military action and its aftermath.

But Washington's plan - backed by a request for cash that the White House is expected to submit to Congress soon - envisages a rapid reconstruction process led by US corporations, repairing Iraq's infrastructure and reforming its educational, healthcare and financial systems, with many results evident before a year has passed.

US administration officials would act as "shadow ministers", keeping a close eye on Iraq's new government.

The UN Development Programme, which has traditionally coordinated many postwar rebuilding schemes, estimates that reconstruction could cost $10bn a year, over at least three years - whereas the request to Congress is expected to demand a total of $1.8bn for reconstruction in the first year, and $800m for humanitarian assistance, the Journal reported.

Washington has restricted the initial bidding process - for contracts worth $900m - to American firms, invoking emergency regulations that allow companies to sidestep the usual open procedures.

A subsidiary of Halliburton, the firm formerly headed by the US vice-president, Dick Cheney, is a member of one of four consortia whose bids were invited in a secret process last month. Several of the firms are major Republican party donors.

The Bush administration intends to make sure the Iraqi people know that the US has taken the central role in rebuilding, in an effort to shore up public opinion there, the leaked documents suggest.

Officials at USAID, the government department coordinating the plan, believe that a more multilateral approach could see projects getting bogged down.

Ellen Yount, a USAID spokesperson, said non-American firms were not excluded from the process because they could serve in subcontract roles, and might be candidates for future bidding rounds.

The USAID plans have been roundly condemned by NGOs and representatives of the EU and UN.

Mark Malloch Brown, head of the UN Development Programme, said the one-year deadline "flies in the face of human history," while Chris Patten, the EU's external affairs commissioner, has called the US approach "exceptionally maladroit".