The Economy of the Occupation… To Whom it May Concern
Kamal Qaissi Al Hayat - 08/10/05//
Many believed that the US invasion and occupation of Iraq will be a new starting point for the Iraqi people and a golden opportunity for the US to build its new vassal "model state".
To achieve this model, the coalition authority, under the leadership of Paul Bremer, promulgated several laws, which fundamentally represent reform measures that were implemented in the mid 1990s in Eastern Europe economies, since they were applicable on economies going through a transitory phase. The US also instructed the International Monetary Fund (IMF) to impose the implementation of its reform programs, restructure the economy and institutions, chiefly the oil sector, and reach agreements to reschedule debts.
In September 2004, Iraq agreed to cooperate with the IMF in order to restructure its economy in exchange of credit facilities amounting to 437 million dollars. Many believed that these laws and measures were capable to change the Iraqi economy and turn it into one of the most open economic systems in the Arab region. However, the actual reality indisputably showed that promulgating these laws, in light of the situation and repercussions brought about by the occupation, was a list of wishes and dreams of the architects of hegemony and capital invasion.
More than two years after the occupation of Iraq, mystery still surrounds the present political and economic chaos, which led to the decline of the economic sectors and infrastructure to the point that they became worse than they were before. This is due to the volume of disasters generated by the occupation and to the delay in the rehabilitation and reconstruction programs in various sectors due to the lack of security and mismanagement of the available funds.
Many examples stand witness to this situation, chiefly the following:
1- The oil proceeds were, and still are, under the total control of the occupation. The details thereof are not clearly known since they are surrounded by mystery. The report issued by the General Accounting Office points out that contracts, amounting to billions of dollars, were spent out of the Iraqi Development Fund, without being reviewed by any independent party. The committee affiliated to the Senates' Council also stated that the 20 billion dollars of the Iraqi funds that were spent one week before the transfer of the authority to the Iraqis "were described as waste, fraud, and abuse".
After handing out the authority to the temporary Iraqi Council of Governance on 28/6/2004, it is unknown yet who is the authority the US relies on in spending the Iraqi funds, distributing and approving contracts?! The official US spokesperson in Baghdad says, "resuming funds allocation has been agreed upon by the dissolved coalition authority and the Iraqi officials."!
2- Concerning international aids, despite the fact that many international donors announced granting billions of dollars, a scarce portion has been actually received. The reason is that some European countries are reluctant in paying their shares due to the lack of security and their actual fear that the money will be used to fund operations benefiting US entrepreneurs. I believe that the main reason for the reluctance (in addition to other reasons) is the fact that the European political and economic role is unclear in light of the present US hegemony and single-handedness in managing the crisis in Iraq.
3- The rise of security expenses - soaring to more than 36% out of the cost of projects allocated to Iraq - has led to the exhaustion of a big share of the funds allocated to restructure the water, electricity, and health care projects. The Pentagon estimates that there are roughly 60 private security companies in Iraq, employing 25,000 recruits, each of whom nearly earns 33 thousand dollars a month.
4- The corruption has led the Transparency International Organization to state that if Iraq "doesn't comply with the proposed and pressing standards, the biggest corruption scandal in history will take place therein." It is hard to be able to curtail dishonesty and organized corruption due to the lack of transparency and the multiplicity and continuity of cases.
5- The rise of unemployment among citizens to more than 65%, the decline of the standard of living, the mounting poverty, and the children's malnutrition, whereby the malnutrition rate has doubled when compared to the time of the previous regime. The nutrition program carried out by the Minister of Commerce showed that one in four Iraqis survives on the portion distributed to him only, and that 2.6 million Iraqis are reselling, due to poverty, their portions in the market in order to buy some needs, like medicine.
6- The spiraling rise of the human and social expenses generated by the material ruin, the ongoing violence, and the lack of stability.
Making decisions carried out by the US occupation authorities in Iraq is considered a violation of the provisions of the Geneva Convention of 1949 and The Hague Judiciary Conventions of 1907. In addition, the occupation authority's total control of the financial aspects of Iraq, its management practices, and its direct supervision of the economic sectors through "its experts and consultants", are also considered illegal. What aggravates the problem is that the temporary transitory government lacks the proper legitimacy to take effective and binding strategic decisions. Moreover, doing the latter is considered an illegal seizure of the rights and duties of the government that is set to be elected in January 2005.
Reaching national sovereignty and independent political will, as well as security and stability, are all basic conditions for the creation and implementation of a successful economic administration, since its absence renders any economic reform measures fruitless.
As such, it is possible to say that the occupation has placed Iraq in a closed circle of intertwined political, economic, and social disasters, which needs to be broken in order to evacuate the occupant as soon as possible and allow for the rise of a national Iraqi government, which complies with the general international principles agreed upon in the process of reform and economic development.
*Mr. Kamal Qaissi is an Economic Expert
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