Reconstruction effort
Sirajul Islam, Dhaka
With the reconstruction effort proving inadequate, near about four months after the end of the Iraq occupation, Paul Bremer, US administrator in Iraq announced at the end of July a "detailed timetable and clear benchmarks" to restore crucial services to pre-war levels in 60 days. Experts are sceptical, however. In the case of electricity supply, for example, this would require increasing generation from 3,000 MW at present to 4,000 MW. But security problems, ageing equipment, lack of spare parts and the effects of the guerrilla tactics of cutting of high voltage power lines imply that such an increase, even if achieved, would not be sustainable.Even though reconstruction has been slow, policies to ensure that the gains from occupation would accrue to corporate America and the US economy are being rapidly put in place. In particular, the CPA (Coalition Provisional authority) has initiated moves that would open up the Iraqi economy for foreign operators. In July, the CPA while announcing a competition for mobile phone licenses in Iraq promised to waive Iraqi legislation requiring foreign investors to allocate a 51 per cent equity share in projects in Iraq to Iraqi entities. Another example is the call for proposals from international banks and consulting firms to help restructure Iraq's two biggest state-owned banks -- the Rafidain Bank, with deposits of over US$1 billion, and the smaller Rasheed bank -- with 150 branches each. This restructuring process is seen as a prelude to allowing the contractor who undertakes the process to buy into the banks' equity. The "privatisation" in favour of foreign investors is problematic because of evidence that it is primarily US firms that are benefiting and are likely to benefit from the still limited reconstruction effort. On July 31, Halliburton, the second biggest oilfield service company in the world and one of the largest private contractors in Iraq, reported that work in Iraq had boosted its revenue and helped it swing from a loss to record second-quarter net income of US$26 million. Dick Cheney was the chief executive of Halliburton from 1995 to 2000 before he became US Vice-President and its activities have been controversial because its German subsidiary Halliburton Company Germany GmBH has contracts with Libya even though the Iran-Libya Sanctions Act passed in 1996 by the US Congress seeks to keep US companies out of Libya. On May 30, Halliburton had announced that it had finalised a US$6 million agreement to settle 20 lawsuits alleging that the company used deceptive accounting practices when Dick Cheney ran the company. Halliburton's role in Iraq has been controversial since the US Army's Corps of Engineers awarded it a contract worth US$7 billion to extinguish oil-well fires and undertake emergency repairs without calling for bids from competitors. Recently, its rival Bechtel, the company with which US ex-Secretary of State George Shultz is associated, announced that it would not participate in two calls for bids totalling US$1 billion for repairs in Iraq's oil sector.
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