Reconstruction after war: Who Gains And Who Loses?

Reconstruction after war Who Gains And Who Loses?

FOLLOWING ITS bloody conquest of Iraq, the US administration is now trying to impose a ‘reconstruction’ plan on the country. But what will this mean for the working class and poor in Iraq? Will they at last have democratic rights, real control over the oil resources and an end to poverty? NIALL MULHOLLAND looks at other examples of ‘nation building’ since the end of the Cold War.

Bosnia Herzegovina

“We have lost all hope”

FROM 1992-1995, Bosnia Herzegovina suffered a bloody inter-ethnic war. Around 250,000 people died in the conflict between Serbs, Croats and Bosnian Muslims, as part of the process of the break-up of the Stalinist state of Yugoslavia and the disastrous restoration of capitalism.

Western powers intrigued in the Bosnia conflict for their own interests, including overseeing ‘ethnic cleansing’ crimes by one ethnic group against another. They did nothing to stop the massacre of 7,000 Muslims by Serb militias in Srebrenica and have allowed around 120,000 Serbs to be forced out of Sarajevo over the last decade.

The Dayton Agreement, imposed by the US, ‘ended’ the conflict in 1995. This was to be the first major test of imperialist ‘reconstruction’ since the end of the Cold War. The results however have been a nightmare for Bosnians.

The Dayton ‘accords’ formerly created a new single state, but in reality it is partitioned between Serbs and Muslim Croats. The country is only held together by the NATO-led Stabilisation Force, and is run by the International High Representative, Paddy Ashdown, who has colonial style power over the people.

Ethnic tensions are still rife, nearly half the workforce is jobless, the economy is on its knees and international aid is being cut back. Bosnia remains the poorest country in Europe. Corruption and crime are endemic and ethnic ‘integration’ almost non-existent.

Right-wing nationalist and ethnic-based parties dominate politics, despite growing disillusionment by voters with what they see as the failure of nationalist politicians to improve their lives.

The present parliament has pledged to introduce economic and social ‘reforms’. This means more neo-liberal policies that hit working people. The country is sold to Western corporations as a “cheap place to do business”.

Unsurprisingly, despair and cynicism reign amongst most Bosnians, especially the young. Many people have been driven from their homes or have emigrated. Out of the half million population of Sarajevo it is estimated only 100,000 to 150,000 lived there before the war. The rest are refugees from other areas.

Little wonder a Sarajevo youth described how since the ending of the war: “We have lost all hope”. However, working people are beginning to fight back against the rule of the Western powers and capitalist policies. Strikes against privatisations have taken place and, symbolically, protests against war in Iraq.


“They give us generators instead of electricity”

SERBIAN ‘STRONGMAN’ Slobodan Milosevic’s 1998 campaign of repression of the majority Albanian population in Kosova, a ‘province’ of the former Serb-dominated Yugoslavia, led to NATO intervening to “protect” Kosovans and to prevent the conflict spreading.

The Milosevic regime was defeated in 1999 after weeks of devastating NATO air raids that cost many lives and caused great destruction.

US-led imperialist forces occupied Kosova and set about trying to change the region to serve their interests. Under Michael Steiner, the United Nations (UN) Special Representative, the province is run along with right wing and corrupt Albanian parties. Parliament can pass ‘radical’ policies if it so wishes because all of its decisions have to be endorsed by Steiner, who has the right of veto.

The country remains very poor. The economy is bankrupt and for many people going to the West is the only way to make a living. Reconstruction after the 1999 conflict has proven to be “haphazard”. A Kosovan journalist remarked, “They give us generators instead of electricity and it’s the same with justice: all we get is complicated political arrangements.”

Ethnic and gangster violence is commonplace. After NATO’s victory over Serbian forces, the imperialist powers stood back and allowed the reactionary Kosova Liberation Front to ethnically cleanse tens of thousands of Serbs. The remaining minorities in Kosova are under constant threat. The 40,000 NATO troops in Kosova have proved incapable and unwilling to stop violent attacks on non-Albanian communities.

The three main Kosova Albanian parties are linked to organised crime. The parliamentary elections in November 2001 were followed by months of political crisis and revealed how the Albanian parties have nothing to offer voters but nationalism.

Although, in effect, Kosova is run separately from Serbia, the official future of the country is uncertain. For all their previous talk about Kosovan democratic rights, the Western powers fear that to allow Kosova to become a fully-fledged independent state would act as a powerful impetus towards ‘Greater Albanian’ ambitions in the region and renewed conflict.

Nothing short of a common struggle of Kosova Albanians, Serbs and the other working peoples of the Balkans against reactionary nationalists and capitalism can bring about genuine self-determination and democratic rights. Only this struggle can expel imperialism from the region.


“The smiling face of the Taliban”

THOUSANDS OF civilians died during the US war on Afghanistan in 2001. But the war was “worth it”, or so the Western powers said, because following the collapse of the reactionary Islamic Taliban regime the lives of millions of Afghanis would be transformed. Nothing of the sort has happened.

Under the UN’s auspices, a Loya Jerga – a traditional assembly of tribal representatives – formed an ‘interim administration’ in June 2002. It is tasked with governing until 2004, overseeing the formation of a new national army and preparing for elections.

In reality, the interim administration, headed by Hamid Karzai, and backed up by Western troops from the UN’s International Security Assistance Force, hardly controls the capital, Kabul, let alone the rest of the vast country. In-fighting between local commanders for power and territory is especially common in the southern and eastern regions. Local militias now control the Taliban’s former regional strongholds and carry out arbitrary justice and persecute minorities.

The effort to fund and organise a national army has failed. Only 3,000 soldiers have been trained and many have since returned to work for their former warlord bosses. To make matters worse, opium production has soared since the end of the war.

Despite promises of huge foreign aid and ‘nation building’ by the Western powers, the economy and infrastructure in Afghanistan are in ruins and many of its people are refugees. Life expectancy is 46 years for men and 45 years for women.

The failure of imperialist rule in Afghanistan can be measured by the negligible change to the status of women. In Kabul and across the country the limited freedoms granted to women after the fall of the Taliban are being attacked anew. Slogans on walls throughout the capital demand women to appear in public only when completely covered in burkas.

The Ministry of Islamic Education press women into adopting the “national official dress”, based on Islamic codes. The Ministry’s foot soldiers escort female “offenders” back to their homes where they reprimand the women’s husbands or relatives.

Not surprisingly, women prefer to wear burkas rather than face constant harassment. Rina Amiri, a UN officer working in Kabul, calls the moral police, “the smiling face of the Taliban”.

In many regions local chiefs or police officials who show just the same attitude towards women have replaced the Taliban. Elsewhere Taliban-era officials are still in power. Many women are routinely raped, especially among ethnic minorities such as the Pashtuns in northern Afghanistan.

Afghanistan’s strategic position means that it will always be fought over by the local and big powers. The poor of the country will always be the victims. Only a movement of workers and peasants, linked to the working people of neighbouring countries, can show a way out from endless misery and imperialist domination.

East Timor

“The usual UN two-tier society”

AFTER FOUR centuries of Portuguese colonial rule, Japanese occupation during WW2 and a brutal Indonesian invasion from 1975, East Timor became a new nation last year (now renamed Timor Lorosa’e).

Although a small island with a small population, Timor has always had great strategic importance and considerable oil and gas resources.

Indonesian occupation would not have been possible without the assent of the US, which for twenty years armed and trained the Indonesian military forces fighting East Timorese pro-independence guerrillas. Around 200,000 Timorese (almost a third of the population) were massacred.

Following the late 1990s revolution that overthrew the Suharto dictatorship in Indonesia, the grip of Indonesia over East Timor weakened. In 1999, the UN stepped in with the backing of the big powers and formed a ‘protectorate’.

The imperialist countries feared a popular revolt and aimed to contain the situation by channelling it along safe ‘constitutional’ lines. They were aided in this scheme by the ex-‘Marxist’ leadership of the hugely popular Fretlin (the Revolutionary Front for East Timorese Independence) that came to accept an imperialist-dictated ‘solution’.

In August 1999 a UN referendum on the island’s future was held, showing overwhelming support for independence. However, militias backed by the Indonesian military went on the rampage during which 10,000 East Timorese were killed and large parts of the infrastructure destroyed.

The UN oversaw the creation of a parliament that is dominated by Fretlin. Mari Alkatiri, the prime minister, is regarded as having “authoritarian tendencies”.

Real power however has resided with the UN, which promised to “rebuild” the country. The international media regards East Timor as one of the UN’s “biggest success stories” but how does its record add up for the poor inhabitants?

East Timor remains one of the world’s poorest countries. 90% of the people live off the land and annual income is a mere US$320 per head. Life expectancy for men is 49 years and 50 years for women.

The country’s main income today comes from ‘aid’ from the UN and loans from the World Bank. Personal expenditure by international aid workers and ‘peacekeepers’ provides a boost to the economy. But the East Timorese are not as ‘thankful’ as the Western agencies would expect.

Popular anger at the failure to improve living standards reached a boiling point in 2000, when “angry demonstrators filled the streets of Dili [the capital] protesting not only the usual UN two-tier society but the UN administrators’ luxury cars and lifestyle” (Le Monde diplomatique, June 2002).

Rather than call for the island’s natural resources to be put into public, democratic ownership to benefit the entire population, the Fretlin leadership went along with the West’s insistence on handing away the lucrative gas and oil.

From 2004, offshore oil and gas fields are due to be exploited following an agreement between the UN, acting on “behalf” of the Timorese, and the Australia government, which previously supported and aided the Suharto occupation and the theft of resources.

East Timor will “reap” only US$180 million a year from the gas shipped to Japan from the year 2006 – a tiny fraction of the expected bonanza. Furthermore the flow of gas will not bring any jobs to the island since the gas will be brought ashore in Australia.

The country also faces a huge refugee repatriation problem, ethnic differences and the possibility of renewed violence. There will be no significant improvement in the lives of the Timorese under capitalist ‘independence’ – the fate of the island is bound up with the struggle for socialism by the working people of the region.

Global Capitalism

A sick system

THE WORLD Bank estimates that the total cost of rebuilding Iraq after years of wars and sanctions is $600 billion over the next 20 years.

But as PER OLSSON explains, the capitalist economy is in a worse condition to handle the problems of the world than it was after the 1990-91 Gulf War.

THE WORLD’S three biggest economies – the US, Japan and Germany – are all either in, or on the brink of, recession.

US capitalism is slowing down. “The risks to the global economy, taken together are now greater than at any time since the 1973-74 oil crisis” warned John Llewellyn, the chief economist with Lehman Brother, in February.

The US economy needs to expand at an annual rate of at least 3 to 3.5% to continue acting as the solitary engine of world capitalism and spark off a global recovery.

But The Economist warned in March that: “Many forecasters now expect GDP growth [in the US] of only 1% to 1.5% at annual rate in the first half of this year”.

“Success” in the war won’t alter the fundamental course that global capitalism has taken over the last years.

US capitalism has now started to pay the ultimate price of acting as the world’s buyer and lender of last resort.

This, together with Bush’s imperial ambitions, has caused huge imbalances in the world economy. US current account deficit has reached an unprecedented level – Goldman Sachs expects it to reach $600 billion in 2003.

The US budget deficit is growing faster with every new report and the 2003 budget shortfall could reach $400 billion.

Capital inflows into the US equities were close to zero in January this year. Even if capital inflows were at their 2000 peak, it would still not be enough to fund the 2003 deficit at the current level of the dollar.

US capitalism is literally living on borrowed time and can no longer offer the same return as before.

The capitalist bubble of the 1990s – the biggest in history – has not yet fully burst. The debt overhang and the “excess of capacity” still haunt the economy and around the corner is the threat of deflationary crisis as in Japan. “Even if the war is a success, there is much less in the world economy to be optimistic about”. [The Economist, 29 March]

Bush would not be the first and certainly not the last conqueror that wins the war, but at the price of losing peace and prosperity as the process of “imperial overstretch” sets in.

Oil can’t solve Iraq’s problems

IRAQ IS different, argue Bush, Blair and apologists for the war. It has oil and is potentially a wealthy country.

This oil will be used to benefit the Iraqi people, bringing them prosperity and stability.

It’s true that, with the second-largest oil reserves in the world, Iraq is very different from Afghanistan, for example, one of the poorest countries internationally.

But analysts estimate that years of under-investment and UN sanctions have left the oil industry in a state of disrepair.

According to The Economist, it would take billions of dollars and at least a year just to get back to pre-war oil exports of 2.5 million barrels a day.

To get back to the pre-1991 level of 3.5 million barrels would take several years and between $5 billion and $7 billion of investment.

Anthony Cordesman from the US think tank the Centre for Strategic and International Studies says: “A command economy with a failed agricultural sector, no real investment since 1982 and no effective banking system has to be completely restructured.

“There is no way in hell oil can solve all Iraq’s problems”. (Financial Times 28 March)

25% of oil earnings currently go in reparations instituted after the first Gulf War. Iraq’s external debt (mostly owed to states in the Middle East) is estimated to be between $62 billion and $130 billion – two to four times the size of the economy.

According to Cordesman: “Divide all that [debt] by current oil earnings and most Iraqis would be dead before they got anything”.

Plans are now being discussed to reschedule Iraq’s debt. But the Financial Times concludes: “The Iraqis had better hope that a co-ordinated reconstruction plan with broad political backing rapidly appears.

“If not, their battered economy will struggle to do much more than feed its people, never mind reverse 20 years of neglect”.

The ruin of the former USSR

IRAQIS SHOULDN’T hold out much hope for their country to be rebuilt by international capitalist investors and institutions, as the example of the old Soviet Union shows.

Russians have seen their dreams of a prosperous capitalist future smashed in the decade or so since the collapse of Stalinism.

Living standards, life expectancy and many other indices showing the social health of Russia have plummeted in the years following capitalist restoration, while a small number of former officials have amassed fabulous wealth.

From 1991 to 1998 (when the rouble bombed) output fell by 50% and poverty increased from 2% to 40%.

GDP (roughly, domestic economic output) is 30% below its 1990 level, despite increased oil/gas output.

Investment is only one-tenth of what it was in 1990.

For many of the smaller republics that once constituted the Soviet Union, the situation is more dire. eg in Tajikistan GDP per head collapsed from $1,920 in 1990 to $591 in 1996.

Economics professor Joseph Stiglitz writing in the Financial Times last week said: “A transition during which poverty and inequality increase enormously as a few become wealthy, cannot be called a victory for capitalism or democracy.”