Rebuilding Iraq, Bush style
April 4, 2003
In what is supposed to be a humanitarian process, the Bush administration
has turned the reconstruction of Iraq into a controversial and competitive
The White House authorized the U.S. Agency for International Development,
an independent federal agency that receives overall foreign policy guidance
from the State Department, to choose the main firm to receive $900 million
worth of projects to revive Iraq's economy.
USAID decided to solicit bids to rebuild Iraq in secret and by invitation
only to large political donors.
The USAID contract contains the plans to construct Iraqi airports, schools,
bridges, roads, hospitals and power plants.
USAID only asked seven companies to bid and did not put out contracts
on the Internet, like it otherwise would to make it eligible for other companies
USAID's excuse for soliciting bids the way they did was to make the
process move quicker and begin reconstruction as soon as the fighting in
Companies that are bidding are California's Bechtel in San Francisco,
Fluor in Aliso Viejo and Parsons in Pasadena, also the Washington Group.
in Boise, Idaho. These companies are to oversee the construction process
as well as to distribute and purchase food, medicine and textbooks.
Halliburton, the firm run by Vice President Dick Cheney before the 2000
election, declined to bid directly, but Kellog Brown and Root, Halliburton's
subsidiary, was awarded a U.S. contract to put out oil well fires in Iraq.
All of these companies are experienced, but some are also political
donors who made generous contributions to Bush's 2000 election campaign.
Andrew S. Natsios, administrator of USAID, said that in its 40-year
history, the agency has never spent so much money in one country in one
year. The Bush administration is expected to ask Congress $100 billion to
pay for the war and also a $2 billion provision for reconstruction. The
rebuilding of Iraq could take up to $10 billion a year over three years,
according to the United Nations Development Program.
So for USAID to successfully reconstruct Iraq, it must include unilateral
participation and not eliminate outside companies from bidding.
The stagnant global economy will bring in new business to corporations
in reconstructing Iraq and for non-U.S. corporations to be shunned from
the bidding; much of the work has already been singled out.
It is also extremely unfair for British contractors to be eliminated
from the bidding, considering that their troops are serving alongside U.S.
troops in Iraq. European contractors such as ABB Ltd. and Siemens AG were
also not involved in the bidding.
These closed-door talks have raised concern in European and Russian
officials. And how can it not?
Their companies have been sustaining Iraq's economy that is, until
now. Iraq has been capable of supporting its schools, hospitals, energy
grids and telephone lines due to a United Nations program that has allowed
Baghdad to sell oil for humanitarian goods.
The MOU trade, which has enabled this, is worth billions of dollars
each year, and countries such as France, Germany, Russia and China have
been greatly involved in marketing their wares, unlike the United States,
which did not show much involvement with the program until recently.
Russia has been the biggest participant in the oil-for-food trade, with
$1.3 billion in contracts in 2001. They were also promised $40 billion by
the Iraqis as soon as UN sanctions were lifted.
So why would the United States government deny outside bidders? It is
because it wants to guarantee their deals for corporations close to the
White House, and they want to eliminate foreign competition from bidding
for jobs that will eventually be worth tens of billions of dollars. Not
to mention the other reason the chance to win Iraqi public opinion
by demonstrating the good faith of the American people.