Corporate Nation Building

The administration seems to be establishing a new corporate model for post-war reconstruction efforts. There has been some talk about involving the United Nations in these efforts. Most in the international community certainly think that this is the only way to go. "It's impossible - impossible - to reconstruct without Europe, not just in terms of money but to push the international community toward your position, you have to offer them a piece of cake," says Bernard Kouchner, a former UN special representative in Kosovo.1

But the administration is putting its money in a very different place. "At least to start, we intend to handle the big jobs ourselves," a senior administration official said.2 They have put almost all of the emphasis and funding for humanitarian relief and reconstruction efforts in corporate hands: $1.5 billion in contracts to private companies, $50 million to a small number of non-governmental groups.3 In this model the "pieces of the cake" are going exclusively to US companies, most of whom are also major contributors to the Republican party, including Kellogg Brown & Root, a subsidiary of Halliburton, Vice President Dick Cheney's former employer.

This shift also brings humanitarian relief closely in alignment with the military. "This is unique in our history," says Bernd McConnell, head of USAID Office of Foreign Disaster Assistance.4 Thus, private companies and the US military, not international non-government organizations or the United Nations, will take care of roads, schools, hospitals, financial system, the central bank, and provide US shadow ministers for all aspects of government.5 "They are already screaming in the Middle East - you call us corrupt, look at you giving contracts to American companies and no one else," notes Frances D. Cook, former American ambassador to Oman. 6

To reassure lawmakers that the new corporate nation building model would not require very much money, the Office of Management and Budget reported to Congress on March 28 that, "The United States is committed to helping Iraq recover from the conflict, but Iraq will not require sustained aid." The administration is trying to quell criticism that its $74.7 billion war-related supplemental appropriations request is just the tip of the funding iceberg. "At every step of the way, the administration has sought to downplay the true costs of this war," a Senate Democratic leadership aide told the Washington Post. "This is just another example. Oil won't cover it."

But this is exactly the administration's plan. OMB Director Mitchell E. Daniels Jr. told reporters that the US would use Iraq's oil to pay for the US occupation. In addition, Daniels said much of the reconstruction could be financed through the assets of Hussein and his cohorts that the United States has moved to seize. These funds "are abundant," he said, "and a lot of people have simply not noticed yet."

But funding shortfalls could cripple corporate construction projects. While Iraq could take in as much as $20 billion in oil revenue next year, Robert E. Ebel, energy program director at the Center for Strategic and International Studies in Washington told the Washington Post, "It's foolish to presume that money from oil exports will do much to help reconstruction. The likely oil revenue will be well short of satisfying every hand reaching toward the pot."

Sources

1Elizabeth Becker, "U.S. Business Will Get Role in Rebuilding Occupied Iraq," The New York Times, March 18, 2003.
2 Neil King, "Bush Has An Audacious Plan to Rebuild Iraq Within a Year," The Wall Street Journal, March 17, 2003.
3Ibid.
4 Mark Fineman and John Hendren, "Civilian Team Poised To Move In, Rebuild Iraq," The Los Angeles Times, March 19, 2003.
5 Neil King, "Bush Has An Audacious Plan to Rebuild Iraq Within a Year," The Wall Street Journal, March 17, 2003.
6 Elizabeth Becker, "U.S. Business Will Get Role in Rebuilding Occupied Iraq," The New York Times, March 18, 2003.

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