Iraq’s Catch-22

By Paul McLeary

“That’s some catch, that Catch-22,” Yossarian observed.

“It’s the best thing there is,” Doc Daneeka agreed.

— Joseph Heller, Catch 22

Like much else in the Iraq today, the number of unemployed Iraqis remains a subject of some speculation. The chaos that still reigns on the ground more than six months after the president famously declared “major combat operations in Iraq have ended” precludes a serious tallying of many things — the death toll, crime rates, and unemployment statistics are just a few.

What we do know is that in late May, Presidential Envoy to Iraq Paul Bremer disbanded the Iraqi army, putting some 400,000 troops and support personnel out of work in one fell swoop. While some unofficial estimates claim that up to 60 percent of Iraqis are unemployed, many of these reports are of, as they say, suspect authenticity. The closest thing we have to an official figure was released in October by Minister of Labor and Social Affairs Sami Azara al-Majoun, who estimated 8.5 million jobless Iraqis. In a country of 23 million people, that’s nothing short of devastating.

Adding to the problem is an estimate that more than 10,000 Iraqi plants and workshops are either out of service or working at a mere 10 percent of their prewar capacity. Given these facts, it’s easy enough to conclude that the Coalition Provisional Authority (CPA), headed up by Bremer, needs to start making some serious headway in rebuilding the infrastructure and getting people back to work.

The solution seems self-evident. Rebuild the economy along with the roads.

With Iraq’s infrastructure literally having to be rebuilt from the ground up, the solution would seem self-evident. You have billions of dollars coming in for reconstruction projects, and a pool of millions of unemployed desperately in need of a job. In a well-coordinated effort, two proverbial birds could be killed with one stone. The money could be directly poured into kick starting the local economy by paying Iraqis to rebuild roads, utilities and schools.

But it’s not playing out this way. Many U.S. subcontractors tasked with rebuilding Iraq are refusing to hire Iraqis to do the work, opting instead for cheaper migrant labor from South Asia. In a Financial Times article in October, Colonel Damon Walsh, head of the CPA’s procurement office, was quoted as saying “We don’t want to overlook Iraqis, but we want to protect ourselves. From a force protection standpoint, Iraqis are more vulnerable to a ‘bad guy’ influence.”

The same piece also quoted a Pakistani manager in Baghdad for the Tamimi Company, which is contracted to cater for 60,000 soldiers in Iraq, as saying “Iraqis are a security threat. We cannot depend on them.” Costs could be reduced by up to 90�But that would be bad for the economy. Some in Congress are making noise about this potentially disastrous situation. This past September, Rep. Henry Waxman (D-Calif.), Ranking Minority Member of the Committee on Government Reform, sent a letter to director of the White House Office of Management and Budget Joshua Bolton, complaining about lack of transparency in government spending in Iraq.

The letter points out the activities of the U.S. government’s two largest contractors in Iraq, Halliburton and Bechtel, who together are being paid $3.14 billion of American taxpayers’ money to head up reconstruction efforts. Waxman cited several instances of dubious decision-making and favoritism costing the American taxpayer millions of dollars, and possibly further fueling the destabilization of the country.

“Members of the Iraqi Governing Council told my staff that the costs to the American taxpayer of many reconstruction projects could be reduced by 90 percent, if the projects were awarded to local Iraqi companies rather than large government contracts like Halliburton and Bechtel.” the letter states. He offers several damning examples, including that of a project to rebuild an Iraqi cement plant that U.S. contractors claimed would cost $15 million. Feeling that number was too high, regional commander Major General David Petraeus handed the project over to local Iraqis, who had the plant up and running for $80,000.

Nice work if you can get it.But if you’re Iraqi, you can’t.

Furthermore, Iraqi companies that do manage to submit a bid to the big contractors often have to jump through almost impossible hoops in order to win the work. In an August 19th piece in the Santa Monica Daily News, reporter Kelly Hayes-Raitt details a Bechtel-sponsored bidding meeting she snuck into in Baghdad.

When one Iraqi questioned how he was to go about submitting a bid, he was told by a Bechtel employee that he first needed to purchase a $2 million insurance contract, but with only one insurance company left in Iraq after the war, the Bechtel rep told him: “If you don’t have insurance, you can’t get a contract with Bechtel. But don’t worry, there will be American insurance companies coming in to sell you insurance.”

It’s a pretty good racket these companies have set up, but the consequences could be far more dire than a simple fleecing of the American taxpayer. The actions of Bechtel, Haliburton, and others, with the implied consent of the White House, are seriously undermining an already imperiled occupation.

Iraq: the new Palestine?

With thousands of Iraqi citizens being denied the available jobs being given to foreigners right under their noses, two things are likely to happen: Iraqis, desperate to feed their families, will turn to crime. Second, these actions will create an angry and humiliated class of people more likely to lash out at coalition troops, as we are already seeing. Journalist Josh Marshall recently pointed out in his blog “Talking Points Memo” the potential for the scenario to resemble that of Israel:

“As violence has spiraled in Israel over the last two decades,” he says, “the Israelis have brought in more and more foreign workers to fill jobs once held by Palestinians. This, of course, is terrible on a symbolic level. And it also deals a crushing blow to the Palestinian economy — which itself creates a sort of low-term terrorist blowback because it creates a fertile breeding ground for groups like Hamas.”

Questions of the justifiability of the war are almost inconsequential now that we’re tasked with rebuilding this physically and emotionally shattered country. If the American government and the companies it hires to perform these tasks ignore the suffering of the 8.5 million unemployed Iraqis, we’ll all pay a heavy price in the end.