|For Sale: Iraq
For Sale: A fertile, wealthy country with a population of around 25
million- plus around 150,000 foreign troops, and a handful of puppets.
Conditions of sale: should be either an American or British corporation
(forget it if you're French) preferably affiliated with Halliburton.
Please contact one of the members of the Governing Council in Baghdad,
Iraq for more information.
To hear of the first of the economic reforms announced by Kamil
Al-Gaylani, the new Iraqi Finance Minister, you d think Iraq was a
Utopia and the economy was perfect only lacking in foreign investment.
As the BBC so wonderfully summarized it: the sale of all state
industries except for oil and other natural resources. Basically, that
means the privatization of water, electricity, communications,
transportation, health. The BBC calls it a surprise - why were we not
After all, the Puppets have been bought- why not buy the stage too? Iraq
is being sold- piece by piece. People are outraged. The companies are
going to start buying chunks of Iraq. Or, rather, they re going to start
buying the chunks the Governing Council and CPA don t reward to the
Supporters of Freedom .
The irony of the situation is that the oil industry, the one industry
that is *not* going to be sold out, is actually being run by foreigners
The whole neighborhood knows about S. who lives exactly two streets
away. He s what is called a merchant or tajir . He likes to call
himself a businessman . For the last six years, S. has worked with the
Ministry of Oil, importing spare parts for oil tankers under the
surveillance and guidelines of the Food for Oil Program . In early
March, all contracts were put on hold in expectation of the war.
Thousands of contracts with international companies were either
cancelled or postponed.
S. was in a frenzy: he had a shipment of engines coming in from a
certain country and they were waiting on the border . Everywhere he
went, he chain-smoked one cigarette after another and talked of letters
of credit, comm. numbers, and nasty truck drivers who were getting
After the war, the CPA decided that certain contracts would be approved.
The contracts that had priority over the rest were the contracts that
were going to get the oil pumping again. S. was lucky- his engines were
going to find their way through, hopefully.
Unfortunately, every time he tried to get the go-ahead to bring in the
engines, he was sent from person to person until he found himself, and
his engines, tangled up in a bureaucratic mess in-between the CPA, the
Ministry of Oil and the UNOPS. By the time things were somewhat sorted
out, and he was communicating directly with the Ministry of Oil, he was
given a tip . He was told that he shouldn t bother doing anything if he
wasn t known to KBR. If KBR didn t approve of him, or recommend him, he
needn t bother with anything.
For a week, the whole neighborhood was discussing the KBR. Who were
they? What did they do? We all had our own speculations. E. said it was
probably some sort of committee like the CPA, but in charge of the
contracts or reconstruction of the oil infrastructure. I expected it was
probably another company- but where was it from? Was it Russian? Was it
French? It didn t matter so long as it wasn t Halliburton or Bechtel. It
was a fresh new name or, at least, a fresh new set of initials. Well, it
was fresh for a whole half-hour until curiosity got the better of me
and I looked it up on the internet.
KBR stands for Kellogg, Brown and Root, a subsidiary of guess who?!...
Halliburton. They handle construction and engineering services for the
energy community , amongst other things. Apparently, KBR is famous for
more than just its reconstruction efforts. In 1997, KBR was sued $6
million dollars for overcharging the American army on sheets of plywood!
You can read something about the whole sordid affair here
They are currently located in the Conference Palace . The Conference
Palace is a series of large conference rooms, located in front of the
Rashid Hotel and was reserved in the past for major international
conferences. It is now the headquarters of KBR, or so they say. So
foreign companies can t completely own the oil industry, but they can
run it- just like they'll never own Iraq, but they can run the Governing
Someone sent me an email a couple of weeks back praising Halliburton and
Bechtel to the skies. The argument was that we should consider ourselves
lucky to have such prestigious corporations running the oil industry
and heading the reconstruction efforts because a. they are efficient,
and b. they employ the locals .
Ok. Fine. I ll pretend I never read that article that said it would take
at least two years to get the electricity back to pre-war levels. I ll
pretend that it hasn t been 5 months since the end of the war and the
very efficient companies are terrified of beginning work because the
security situation is so messed up.
As for employing the locals, things are becoming a little bit clearer.
Major reconstruction contracts are being given to the huge companies,
like Bechtel and Halliburton, for millions of dollars. These companies,
in turn, employ the Iraqis in the following way: they first ask for bids
on specific projects. The Iraqi company with the lowest bid is selected
to do the work. The Iraqi company gets *exactly* what it bid from the
huge conglomerate, which is usually only a fraction of the original
contract price. Hence, projects that should cost $1,000,000 end up
Now, call me naïve, or daft, or whatever you want, but wouldn t it be a.
more economical and b. more profitable to the Iraqis to hand the work
over directly to experienced Iraqi companies? Why not work directly with
one of the 87 companies and factories that once worked under the Iraqi
Military Council and made everything from missiles to electrical
components? Why not work directly with one of the 158 factories and
companies under the former Ministry of Industry and Minerals that
produced everything from candy to steel girders? Why not work with the
bridge, housing and building companies under the Ministry of Housing
that have been heading the reconstruction efforts ever since 1991?
Some of the best engineers, scientists, architects and technicians are
currently out of work because their companies have nothing to do and
there are no funds to keep them functioning. The employees get together
a couple of days a week and spend several hours brooding over istikans
of lukewarm tea and finjans of Turkish coffee. Instead of spending the
endless billions on multinational companies, why not spend only millions
on importing spare parts and renovating factories and plants?
My father has a friend with a wife and 3 children who is currently
working for an Italian internet company. He communicates online with his
boss who sits thousands of kilometers away, in Rome, safe and sure
that there are people who need to feed their families doing the work in
Baghdad. This friend, and a crew of male techies, work 10 hours a day, 6
days a week. They travel all over Baghdad, setting up networks. They
travel in a beat-up SUV armed with cables, wires, pliers, network cards,
installation CDs, and a Klashnikov for--you know--technical emergencies.
Each of the 20 guys who work with this company get $100/month. A hundred
dollars for 260 hours a month comes to $0.38/hour. My 16-year-old
babysitter used to get more. The Italian company, like many other
foreign companies, seems to think that $100 is appropriate for the
present situation. One wonders the price of the original contract the
Italian company got- how many countless millions are being spent so 20
guys can make $100/month to set up networks?
John Snow, US Treasury Secretary, claimed that the reforms were the
proposals, ideas, and concepts of the Governing Council" with no
pressure from the American administration. If that s true, then Bush can
pull out the troops any time he wants because he ll be leaving behind a
Governing Council that is obviously more solicitous of Halliburton and
Co. than he and Cheney can ever hope to be.