Minding their own business

CurrentAffairsAnyone who wishes to understand why things are going wrong in Iraq must read this book. The Bush administration's war was followed by several decisions that have transformed Iraq into a failed state.

The first was to deploy too few troops to impose order after the fall of the Baathist regime, the second was to disband the Iraqi security forces, the third was to dismiss Baathist civil servants, and the fourth was to entrust reconstruction and democratisation to US corporate contractors.

Within the covers of this slim volume, Pratap Chatterjee, managing editor of Corpwatch, an oversight firm based in California, systematically presents a wealth of information on how these firms have been profiteering from the occupation while failing to deliver goods and services, leaving Iraqis without security, water, fuel, electricity and jobs.

On the reconstruction front, Chatterjee shows that US hiring practices deprive tens of thousands of Iraqis of jobs by employing anybody but Iraqis, adding to the 440,000 soldiers and bureaucrats who lost jobs and swelling the ranks of the insurgents. Furthermore, Iraqis hired for unskilled jobs may be paid $100 to $200 a month while Indians and Pakistanis receive $300 to $500 and Texans $8,000. When Iraqi trade unions protested, they were banned.

Firms do not observe transparency and accountability and operate on a basis that encourages abuses. Chatterjee writes that Halliburton, the main military contractor, "does not care how much it spends, because under its contracts, the military pays Halliburton for costs plus a small profit margin of 1 per cent". This means Halliburton does sweetheart deals with subcontractors and costs soar due to a lack of competition. In July 2003, Halliburton charged for 42,042 meals for US troops but served 14,053. Halliburton was also caught overcharging the military by $100 million for petrol.

Bechtel, the firm chosen to restore power and repair schools, has failed to deliver money, spare parts and turbines, so that 20 months after the war, Iraqis do not have an adequate and constant stable electricity supply and most schools are in poor condition. Bechtel's earnings reached a record level of $16.3 billion in 2003 as compared with $11.6 billion in 2002.

Most of the money for reconstruction projects has come from Iraqi oil revenues while 93 per cent of the $18.5 billion in emergency aid voted by Congress 13 months ago remains unspent. Iraqi money that could have been used fruitfully in the country has been pocketed by wealthy US corporations or frittered away in serial subcontracts.

US contractors have also failed miserably on the political front. A few weeks before the war, one of the leading Pentagon and CIA contractors, Science Applications International Corporation of San Diego, was hired to set up the Iraqi Reconstruction and Development Council. Chatterjee says this was "effectively a shadow 'government in exile' of Iraqi Americans" who would plan and take part in the running of the country.

Eventually 150 were deployed in the central ministries and provinces in order to "promote the Pentagon's goals over those of the State Department" rather than run Iraq. Millions of dollars were wasted but as a military contractor, Chatterjee says, its contracts "can never be publicly audited".

An unknown North Carolina company, Research Triangle Institute International, was chosen to develop democracy at the municipal level. Chatterjee writes: "A Mormon preacher from Utah, a city manager from Huston and a professor of anthropology from New York city were dispatched to Iraq for the grand experiment." Grassroots Iraqi town councils, formed after the war, were replaced by [Research Triangle Institute] councils comprised of "moderates" and "non-rejectionists" who had no popular credibility.

During the first year, the firm submitted bills totalling $156 million but less than 10 per cent was spent on the ground in Iraq.

By employing Iraqi-American watchdogs at both central and provincial levels and adopting the "selection system" over elections, Washington demonstrated that it was not prepared to allow the Iraqi people to evolve their own version of democracy.

The outsourcing of physical reconstruction and democracy-building have created chaos and strengthened the rejectionists, argues Chatterjee. Conspiracy theorists might, in future, claim the real reason the Bush administration went to war was to create business opportunities for its friends. After all, the business of the US is business.

Michael Jansen has been based in and writing about the Middle East for many years. She visited Iraq before and after the 2003 war and has reported on events there for The Irish Times

Iraq, Inc: A Profitable Occupation By Pratap Chatterjee Seven Stories Press, 250pp. $11.95