Iraq: Could-Have-Been
by Adam Reed
I recently returned from a trip to Poland, where one of my friends was involved in the subsequently aborted plan for Poland to manage the reconstruction of Iraq. Poland is historically the most pro-American country in Europe, but the Polish plan was based on more than just pro-Americanism. The regime of Saddam Hussein was a clear threat not only to the United States, but to the entire free world, including Europe and Poland. Saddam had recruited his own terrorist organizations, modeled on al-Qaida but under his personal control, and capable of delivering weaponized chemical and biological agents anywhere in the world. He had active programs for weaponizing Sarin and Anthrax, and while both programs were spectacular failures, there was no way for the West to know at the time that those programs had failed. And Saddam could not be deterred by the threat that we would do to him what we had done to Osama bin Laden. Because what we did, or more accurately what we did not do to Osama bin Laden, eliminated all credibility of US deterrence. Poland decided on proportional participation in the effort to topple Saddam, and in the subsequent effort to prevent the recurrence of the toppled threat.
The Polish offer to manage the post-war reconstruction of Iraq was prompted by several circumstances that made Poland uniquely qualified for this role. Until 1989 Poland was ruled by a military dictatorship similar to Saddam's. The Poles have recent, successful experience in transforming a former military dictatorship into a market democracy.
Iraqi oil pipelines were for the most part redesigned and rebuilt by the Soviets using the same technology that was used in Poland for pipelines exporting Soviet oil to East Germany and the West. Pipelines are the key element in getting (or not getting) Iraqi oil to refineries and ports. The Poles had experience with the construction, operation and maintenance of oil pipelines that use the same technology as the existing pipelines in Iraq.
Finally, since the 16th century Poland had been the main refuge for liberal Moslems persecuted by radical Islamist regimes in Tartaria and in the Ottoman Empire. While small, Poland's Moslem community is the world's most liberal and westernized, and potentially a viable and attractive alternative to the authoritarian and repressive tendencies in current Middle-Eastern Islam, both Sunni and Shia.
The Polish plan was designed by market-oriented economists to minimize the cost and risk of transition for both Poland and the United States. Polish personnel would be minimal, making maximum use of local human and material resources. They would remain in Iraq as briefly as possible, and limit their temporary role to securing the conditions for transition to a liberal democracy and a market economy. And finally, they would receive renumeration between one-quarter and one-half of what would have been drawn by their American or British equivalents. It was an offer that a low-tax, fiscally conservative American government, which is what the Polish planners mistakenly took the Bush government to be, would have been eager to accept.
The strategy was to privatize the Iraqi oil industry using the same procedures that had been used to privatize former state-owned industries in Poland. The result would re-employ Iraqi oil workers and give them additional free-market incentives. Iraq would re-enter the world market as a competitive, high-volume, low-cost supplier of oil and petrochemicals.
Competitive bids for the reconstruction of Iraq's infrastructure would be open to British and American as well as new Iraqi enterprises, but to stay competitive foreign bidders would need to maximize their use of lowest-cost local subcontractors and labor. Iraqi workers and engineers would be re-employed quickly and efficiently, and would retain and develop the skills needed to keep Iraq in operation when the foreigners left. That, at least, was the Polish plan.
What went wrong was that the Bush White House had a plan of its own. Part of that plan coincided with the Polish design: to flood the world with Iraqi oil, disabling the OPEC cartel and cutting off the funds that had enabled Iran and Saudi Arabia to finance the spread of Islamist terrorism. But instead of letting the profits get invested by private Iraqi oil enterprises in a vigorous Iraqi market economy, the Bush plan was to use the revenue to reward favored corporations and buy votes in the United States.
When the American military administration began to put out bids for the reconstruction of Iraq's pipelines, bridges and roads, the Requests for Proposals, written under US government contract by Haliburton Corporation, specified that all engineering work was to be performed by engineers licensed to practice in the United States or in Great Britain. And all employees, even laborers, were to be guaranteed compensation and benefits conforming to US Labor Department standards. These standards are most easily met by employing members of American labor unions. In other words, the bulk of work on contracts financed by Iraqi oil revenues would be done by American workers from the Rust Belt states, which in gratitude would eventually vote to give Bush another four years in office. American corporations winning the rigged bids would contribute to Bush's re-election campaign. And since all this was to be paid for by Iraqi oil rather than American taxes, it would not cost Bush any votes in the rest of the country. That, at least, was the plan.
The Poles withdrew their offer. Kwasniewski patiently explained to Bush that liberal democracy depends on private investment in local markets; if Iraqi oil revenues were siphoned out of the country, then neither markets nor democracy had any chance in Iraq. Bush, according to a Pole who was there, did not have the intelligence or the knowledge to understand this.
Iraqi engineers, like engineers the world over, are internet-connected and aware of opportunities. One newly formed Iraqi engineering firm tendered a bid to rebuild a damaged bridge for one million dollars, having priced the job at $ 700,000. and hoping for a $ 300,000. profit. Their bid was rejected, for failing to meet specified licensing and labor standards. An American corporation "won" the bid at fifty million.
The Iraqi oil pipeline network was last re-built with Russian technology, constrained in part by Russian military doctrine: when invaded, withdraw with minimal engagement, then exhaust the overextended enemy by, among other tactics, sabotaging the infrastructure behind enemy lines. The result is a pipeline network that is both easy to sabotage and impossible to run without constant maintenance.
If the pipeline network were re-built with American technology by American corporations with American labor, Iraqi engineers and workers will be left without the skills and experience to maintain this network when the Americans leave. Even if the oil revenues were eventually to get to the Iraqis, and their oil industry were privatized, it would continue to depend on American contract labor for long afterward. It is now obvious to every engineer and skilled worker in Iraq's oil industry that they will never get their jobs back unless the Americans fail. And so Iraqis who know how the pipelines work are now working, without pay, on finding the weak spots for the anti-American resistance to sabotage.
This sabotage has kept the flow of Iraqi oil to refineries and ports at exactly zero. The American administration is now arranging emergency purchases of oil from Iraq and Saudi Arabia. With Iraqi supply at zero, international oil prices have risen to unprecedented levels. The Iranian and Saudi governments are better able to fund Islamist terror now than before Bush's "War on Terror." And with Iraqi oil revenues negative for the forseeable future, Bush has asked Congress for an "emergency" appropriation of 85,000,000,000. US dollars to keep the sweetheart bids flowing to the corporate pull-peddlers. Fleecing the voters is one thing, but failing to keep one's promises to the corporate sponsors could put a hole in corporate funding for one's next electoral campaign.
Our Polish friends send their regrets, to the United States that once was and could have been.
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