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After the horror and destruction:

Rebuilding Iraq In Uncle Sam's Image?

ALREADY, WHILE a bitter and bloody war is still taking its grim toll in Iraq, the world's big powers are discussing what will happen when the war is over. A recent visit to Sarajevo, Bosnia, by a CWI member reveals what post-war reconstruction by the Western powers has really meant in practice in this war-torn country.

Learning the lessons of Bosnia

THERE IS hardly a building in Sarajevo undamaged in some way by the war. At best the walls are pock-marked with bullet holes. More often than not, blocks of flats are scarred by hollow husks of buildings where once a flat was before it was destroyed by shells.

Every so often a building has been completely destroyed. In the office I was working in was a map of the minefields round Sarajevo - from this map, dated 2002 it was clear that only a small minority of the minefields had been cleared.

The military presence of different international bodies was clearly visible - whether the helicopters of S-FOR at the airport or the soldiers going about the streets on their business.

If the city's infrastructure was damaged, the psychology of the population is even more scarred. People remember the feelings of betrayal they felt when they were advised by international diplomats to take certain actions and were then left defenceless.

There's a feeling of deep frustration at the political structures imposed on the country in an attempt by Western powers to balance the interests of the different nationalities. It is almost as if the calendar in Bosnia-Herzegovina differs from that of the rest of the world - people always refer to times as "before the war" or "after Dayton".

The Dayton Accords which were presented to the world as a peace settlement were in fact accompanied by a huge programme of "economic aid" aimed not at rebuilding industry in the country but in changing its very nature.

Huge amounts of donor aid have been pumped into the economy - a recent estimate says that up to 30% of the country's GDP consists of such aid. Large amounts have been drained off by corrupt officials and criminal gangs. Corruption now is far higher than at any time before the war.

Aid that does not simply disappear is used by Western powers as a political tool to force through privatisation. The construction industry is a prime example.

Privatisation programme

IN THE years before the war, when there was still state ownership of industry there were about ten construction companies operating in Sarajevo, some employing several thousand employees. Dayton however was accompanied by a programme of forced privatisation.

A scheme was used where every resident was given a voucher to buy a share of industry. These shares were then sold to companies, which used them to buy shares in the newly privatised companies.

In that way ownership was changed with no new investment. That in itself was bad enough but Bosnia's economy, ravaged by war, had no money left to provide for the rebuilding of homes and flats.

One building site, started before the war and consisting of 80 flats with no windows or utilities, was occupied by refugees as late as the year 2000. New buildings financed by foreign aid were banks and hotels for staff working for foreign aid institutions.

The former state building companies were consciously refused contracts to work on what rebuilding there was. Typically workers were left without wages, and in at least one of the organisations are still owed over a year's wages. Assets are being sold off to finance redundancies - from having several thousand workers, these companies are left with several hundred on the books.

Taking the place of these former state companies, over 500 small construction companies have sprung up. Usually employing less than ten people they can even pay higher wages than the former giants but for the simple reason that the new employers do not pay taxes and insurance for the staff.

More often than not, workers at these small companies are still formally employed by one of the giants, who pay their tax and insurance for them. Although many of these companies have earned a reputation as cowboys, they still have the advantage in competing for work as freed from "overheads" they can undercut the larger companies' prices.

Many of the smaller companies have direct connections to the bureaucrats and politicians who, at the behest of the Western powers, have divided up control of the country between themselves.

No talk here of a level playing field - Western donors openly encourage and assist the so-called small and medium companies, which they see as the basis of a new, private-sector dominated economy. And one of the most active Western donors is none other than Clare Short's Department for International Development!

Clearly, the same fate awaits "liberated" Iraq. Already USAid, the US government's foreign aid vehicle has announced its policy based on a rushed programme of privatisation.

After years of UN sanctions which have left millions of Iraqis in dire poverty and the devastation of war, the masses will see their jobs destroyed and living standards further devastated all for the sake of free enterprise.

Still Poor and Gangster-ridden

BOSNIA-HERZEGOVINA emerged, stillborn, out of the civil wars and chaos of the break-up of the former Yugoslavia.

Members of Yugoslavia's Stalinist ruling caste - who included Slobodan Milosevic in Serbia, Franjo Tudjman in Croatia and Alija Izetbegovic in Bosnia - tried to cling to power by carving out territory and promoting an oppressive nationalism.

The collapse of Yugoslavia in 1990 was encouraged by Western leaders, especially Margaret Thatcher and Germany's Helmut Kohl, who were keen to restore capitalism to the region.

Despite Bosnia's multi-ethnic make-up and a cosmopolitan capital, Sarajevo, without a mass socialist alternative to challenge the ex-Stalinist nationalists and pro-capitalist elements, the working class was divided. This led to the country's break-up after 'independence' in 1991, followed immediately by a bloody war with millions of refugees and genocidal 'ethnic cleansing'.

The arming of Muslim and Croat nationalist armies by the US eventually tipped the military balance against the Serb forces and in December 1995 Milosevic signed the US-brokered Dayton Agreement.

Dayton was meant to secure a prosperous, peaceful multi-ethnic state. In reality Bosnia remains a cantonised, impoverished entity, run by corrupt nationalists and dependent upon Western cash and 12,000 armed "peacekeepers" of Nato's Stabilisation Force (S-FOR).

WAR IN Bosnia caused production to collapse by 80% from 1990 to 1995. National output (GDP) remains below the 1990 level. Unemployment is at 40%. International reconstruction aid often ends up in the coffers of the gangster nationalist political parties that are considered the chief obstacles to peace.

Powell's speech deepens capitalist splits

"We didn't take on this huge burden with our coalition partners not to be able to have a significant dominating control over how it unfolds in the future."

US Secretary of State Colin Powell

US IMPERIALISM is paying for this war, unlike in the 1990-91 Gulf War when other countries financially under-wrote US war plans and paid for nine-tenths of it. So the US ruling class are determined that nobody, especially the United Nations, gets in the way of their controlling Iraq.

US Secretary of State Colin Powell said on 26 March "We didn't take on this huge burden with our coalition partners not to be able to have a significant dominating control over how it unfolds in the future. We wouldn't support... handing everything over to the UN or to someone designated by the UN to suddenly become in charge."

Powell says after they "liberate" Iraq they'll run it firstly under US military occupation then as a US protectorate. The US authorities have already said that Jay Garner - a retired US general and arms trader - will be in charge of reconstruction and humanitarian relief in post-war Iraq. They insist that the UN plays no part in reconstruction.

Blair was on his way to Camp David at the time Powell spoke, supposedly to try to persuade George W Bush that the UN should play a role in post-war Iraq. Bush however wants to limit the UN role to distributing aid so poodle Blair just kept quiet.

Bush's attitude is causing ructions among other capitalist states. Germany's Development Minister Heidemarie Wieczorek-Zeul, said that the US government should pay for post-war reconstruction: "Those that do the damage carry the main financial burden for reconstruction." But, she said, Iraq's redevelopment should be controlled by the UN, not just by the USA.

Germany was one of the main countries that paid for the 1990-91 Gulf War. This time the major European powers - France, Germany and Russia, worried about what this 'war/invasion' would mean - stopped Bush getting UN support for his war. They're still concerned.

France insists that "the UN must be at the heart of the reconstruction and administration of Iraq." French foreign minister Dominique de Villepin warns that pre-emptive strikes by individual forces against countries deemed to be rogue states will lead to more terrorism and global instability.

We would reject US rule and its "dominating control" but France and Germany's idea of UN control is hardly any better. The United Nations talking shop is a collection of capitalist states and no more trustworthy collectively than the member states are separately. The UN not only brought sanctions to Iraq, it also failed miserably to stop this war.

The UN's role in Bosnia and other countries reflects the interests of its stronger capitalist members. A recent Financial Times editorial let the cat out of this diplomatic bag.

It says the UN should take over post-war Iraq to give "post-facto vindication" of the invasion and prevent regional anger at "what would be widely seen as imperialism".

In other words these representatives of capitalism support UN involvement, not as a peaceful way to resolve conflict or maximise the help for the peoples of a devastated Iraq, but as a cover for the recolonisation of Iraq.

So, basically do the governments of France and Germany with the added hope that their capitalist class will get some of the economic benefits which the USA plans to monopolise.

Who will pay the costs of war?

THE FINANCIAL costs of this war are rising fast. George W Bush has asked the US Congress for a total war budget of $74.7 billion. Amazingly this sum is seven times the gross domestic product of Iraq, the country they are trying to destroy at present!

This grossly swollen expenditure includes $60 billion for the military campaign in Iraq, based on an "optimistic" US assumption that the war lasts 30 days. At present $500 million of bombs is dropped on Iraq daily.

It includes $1.7 billion to help rebuild Iraq after the conflict and a pitiful sum of $750 million for humanitarian aid. After spending a fortune dropping bombs on Iraq, the US government are spending one-eightieth as much on caring for the wounded, the sick and the homeless.

America's working class will probably pick up most of the bill for this spending through cuts in US public services expenditure.

In Britain, US imperialism's very junior partner, chancellor Gordon Brown announced a mini-version of Bush's plea. He announced to the House of Commons an extra 1.25 billion of funding to cover the war in Iraq, taking the total of the Ministry of Defence's special reserves to 3 billion.

This is a definite underestimate. Brown said before the war started that he would "pay whatever it takes" to get rid of Saddam Hussein. Already it seems likely that 10 billion has been allocated for this war.

If the war continues for any length of time, Brown's assumptions about the economy will be made even more doubtful. Accountants Deloitte and Touche predict that next week's budget will be plunged even further into deficit.

The cost of military action, together with the slump in company tax receipts and stamp duty due to war and economic recession, could blow a 12 billion hole in the budget. That may well mean tax rises, public spending cuts or even both.

Arms firms profit from war

US FIRMS are set to make a lot of money from contracts for Iraq's 'reconstruction' after this war is over. At least $1 billion worth of contracts are up for grabs to rebuild Iraq's infrastructure.

The most controversial tendering group is Halliburton where Dick Cheney, the current US Vice-President, spent five very profitable years as chief executive officer until Bush's election 'victory'.

Halliburton's subsidiary, Kellogg Brown and Root, have won a contract to put out oil-well fires in Iraq as well as getting the country's oil infrastructure back to normal after years of sanctions - and bombs sent by Cheney's commander in chief Bush!

Four other companies, Bechtel (which also has strong links to right-wing Republican politicians) Fluor, Louis Berger and Parsons also stand to reconstruct their profits post-war.

Such favouring of US firms, not to say cronyism, has got up the noses of foreign companies and governments, including Blair's whose trade and industry spokesperson Patricia Hewitt has been demanding a 'level playing field' for companies bidding for contracts.

An unseemly spat between America and other companies has grown - it's not that these firms have any moral objection to making money out of Iraq's misery but non-American companies feel themselves shut out of profitable markets.

Garner's appointment (see article below) will increase the potential for splits. Everyone will suspect that this war is payback time for the 'big oil' firms which paid for the election campaigns of the axis of oil - Bush, Cheney, Rumsfeld etc.

Destroyer becomes reconstructor

RETIRED US General Jay Garner is president of an arms company SY Coleman - a subsidiary of defence electronics group L-3 - which provides technical services and advice on how to run the Patriot missile system.

The Patriot has been used to try to blow the people of Iraq back into the Stone Age. SY Coleman also won a Star Wars contract in 1999 worth hundreds of millions of dollars. SY's new boss company L-3 is the ninth largest contributor to US political parties in the defence electronics sector.

US military planners expect this ex-general, arms trader and political co-thinker of Bush, Rumsfeld etc to take over as the US 'viceroy' in Iraq after this new colonial war.

Garner will work alongside the military governor, present-day General Tommy Franks. This arms expert's job will be heading the Office for Reconstruction, ostensibly to help Iraq recover from his government's - and his company's - huge destruction!


Home  |  The Socialist 5 April 2003  |  Subscribe  |  News 

Join the Socialist Party  |  Donate  |  Bookshop

In this issue

The Bloody Price Of War

Reject Agenda For Change

UNISON elections

School Students Put Blair On Trial

Opposing Imperialist War...

International reports

Building The Anti-War Movement

Iraq Invasion - Igniting Arab Opinion

Kurds - A History Of Western Betrayals

After the horror and destruction: Rebuilding Iraq In Uncle Sam's Image?

Powell's speech deepens capitalist splits

Local election campaign: Anti-War? Anti-Privatisation? Vote Socialist Alternative!


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