I cannot see anything on this list that inherently precludes economic benefits to Iraqis. Assuming (and it is an assumption) that some or all of these items are to be filled by Americans or members of other Western nations, we are only talking about the installation process, and not the long term maintenance and support of the businesses that these items and services generate.
Take, for example, garbage trucks. There are only a handful of companies that manufacture such vehicles, and I doubt that any of those plants are located in Iraq or, for that matter, anywhere in the Middle East. The $50K price tag per truck is a terrific deal, especially when you include the expense of freighting them to a virtually landlocked country cursed with harsh terrain. Once they hit the Iraqi border, it’s probably safe to assume that some Iraqi’s will be paid to transport them to their final destinations.
Nonetheless, the trucks will have to be maintained, and their routes and schedules will have to be choreographed, creating additional jobs for mechanics and planners. Since the trucks will also require parts, which are goods that provide a nice profit margin, someone who makes it their business to stock those items (as well as items for existing heavy duty vehicles), could develop a reasonably prosperous business.
In turn, such a business requires support staff and equipment. Now there is a need to have another business that sells and supports various office supplies and equipment. And so on.
The same for oil products. Iraq may pump oil, but do they have refineries? Aren’t the refined products generally transported by tanker ships? Does Iraq have such a fleet and the trained personnel to operate it? (These are sincere questions, as I don’t know. But i’m guessing that they don’t possess these resources.)
Since quite a bit of heavy duty equipment requires diesel fuel, and refined oil products are required to generate electricity where there are no other resources to do the job, the startup costs for installing or improving the basic infrastructure is a necessary upfront hit.
The personnel dispatched for training and consulting will require food, lodging, supplies, interpreters, clean clothes, etc. This will create a bootstrap stimulation to local economies.
With a couple of exceptions, there doesn’t seem to be anything that’s outrageously out of line on this list. Heck, I just spent $2500 for a 40 hour training course, and the plumbing, electricity, equipment, and supplies were already there. The instructor drove home every night. It would have been far more expensive than that to have someone come in from out of town and pay for their transportation, lodging, and food on top of the course fee.
So, it seems that a $2500/week training fee is downright cheap.
Since the plan, as published, lacked the fine details required to make a good assessment, I guess we’re confined to speculation for now.
As to Iraq’s foreign debt…phew! There must be a way to arbitrate that, and I think it should be designed that any countries who invested money in this venture be paid back at some point in the future. Perhaps as was done with the debt that European countries incurred after WWII. Of course, the debts were eventually forgiven, but a number of countries did pay back various portions of their debt.
And in other news…
In an astounding display of stupidity, 43 Democrats and 8 Republicans have voted in the Senate to make half the aid to Iraq a loan instead of a grant.
This is an incredibly bad idea, for the following reasons:
[ul]
[li]There is no government in Iraq to make a deal with. This amounts to a forced ‘loan’, which is simply wrong.[/li][li]The U.S. is currently actively soliciting aid from other countries. This undermines that attempt.[/li][li]The U.S. is trying to get Russia and France to forgive their loans. This undermines that attempt.[/li][li]This plays into the hands of those who say that the Americans are doing this for profit. Now is NOT the time to unilaterally impose a debt onto an Arab nation that you have just invaded.[/li][li]Iraq needs to grow its economy and become a successful democracy. This is the whole point to the war in the first place. Starting out with a crushing debt load is not the way to do this.[/li][/ul]
I still can’t believe they did this. For all the rhetoric over this, I still thought the Senate would swallow and pass the bill. It’s the only intelligent thing to do.
Since the house rejected a similar proposal, I hope this gets corrected in conference. If not, Bush should veto it and send them back to the drawing board. The U.S. needs to send a powerful message to the world that it is willing to pay the price to rebuild Iraq. This is a lousy way to do that.
I agree 100% with Sam Stone, which seems to be happening more and more lately.
A sub-question for this GD: Aside from the fact that our forms of torture and human rights abuses are much more benign, has the U.S. done a better job of “fixing” Iraq than Saddam could have done with the sanctions removed?
Bush did a lousy job of selling the $87 billion to the American public. Those 8 Republican Senators got an earful from their constituents during the Columbus Day recess. Bush needs to make the case to the American people why he wants to spend $20 billion of their hard-earned tax dollars to rebuild a country with the world’s second largest oil reserves.
I agree with you Sam we need to make this money a grant, not what would in essence be a ‘forced’ loan. We probably need to spend more than $20 B.
But Bush chose to twist those senators arms in private, rather than go over their heads to the American public.
Here’s some “unfiltered” news from Iraq. Troops in Iraq and their familes back home are unhappy with the cost of long distance phone calls from Iraq.
Does this make Edith Beach part of the “media filter” Bush was whining about?
Here’s a link to a Market Place report about how the US money will be spent in Iraq.
www.marketplace.org/play/audio
Apparently the deal is that the contracts go to American companies and these copanies can subcontract to Iraqi companies if they should so choose. It’s not very detailed, (a five minute piece), but it does provide an outline.
I can’t find Global Market Link or Tompie Hall on the web. There’re lots of references to Mr. Hall, but usually only in context of this interview.
That isn’t the point. Sure, they’re likely to see some trickle-down benefits, but why should it go through Bechtel or Halliburton if it’s something that Iraqis are capable of doing on their own?
The only reason much of the stuff on the list is there, is to scratch their backs.
Take #8 on the list - the $400 million for prisons, for instance. Two prisons, housing 8,000 convicts altogether, $400M?
Look, Iraqi construction companies can build prisons. Prisons were built under Saddam; prisons can be built now, only without the torture chambers, somewhat better sanitation, and with a bit more space per convict. And for a fraction of the price, if they’re built by the locals.
What’s more, they ought to be the ones deciding whether new prisons are even necessary, or whether existing prisons can be modified.
This also cuts out #4 - the $10M for the 100 prison-building experts.
I’d also question #11, the $700M children’s hospital. I don’t know whether that’s reasonable or not, but it sure looks like Western-scale money, rather than reflecting regional costs. If I were investigating this as part of my day job, I’d be inquiring about the most state-of-the-art (I assume that’s what we’re getting, for $700M) children’s hospitals in Saudi Arabia, Jordan, etc., and how much they cost. What especially worries me, though, is that we may be building them a white elephant that they may not be able to afford to maintain, once we pull out of there.
#5, the planned communities for 3,258 families, strikes me as total idiocy at any price. (FWIW, the price tag is $100M.) Heck, it would be a perfect “That’s Outrageous!” tidbit in Reader’s Digest. We’ve never really gotten the hang of doing planned communities here; why the hell do we think we can build one there, and why is it particularly important for 3000 Iraqi families, in a country of 22 million people, to benefit from our community-planning wisdom?
Might as well swipe #12 and #13, the $54M study of the Iraqi postal system, and the $9M to overhaul its business practices and bring it the enlightened wisdom of ZIP codes. This is another let-them-decide item. I bet Iraq under Saddam had some sort of postal system, and I bet Iraq after Saddam can figure out how to run it without the help of the latest business theories.
#10 is another Western-prices gig, IMHO. $20M ($50K each) to provide protection for 400 judges and prosecutors. Somehow I think the price of bodyguards in Iraq is way cheaper than that: there are thousands upon thousands of unemployed young men who used to be in the Iraqi army, and know which end of a rifle is which.
#3: $900M of imported petroleum?! According to the Prez, “we have helped restore Iraq’s oil production capacity to nearly two million barrels a day, the benefits of which are flowing directly to the Iraqi people.” Let’s take him at his word, and cut this ridiculous item. If he’s lying, he can 'fess up and we can reinstate it.
They did; can’t recall what I last heard about what shape they’re in. But there are surely other refineries in the region; Iraq ought to be able to make arrangements to trade X million barrels of crude for Y million barrels of refined, with the price of X-Y million barrels of crude being the cost of refining and transporting those Y million barrels.
Regardless of how reasonable the cost is, I’d say #1 ($20M to pay for 4-week business courses for 2000 Iraqis) is one of those do-they-really-need-it deals. As our Prez has also said,
The fact is, a lot of Iraqis already have much experience at running businesses, and a lot of the stuff we’d teach them is not applicable to their problems, like how to operate a business on an intermittent power supply. For now, let them learn business the old-fashioned way: by trying and succeeding/failing. It’s always worked in the past.
The garbage trucks, I don’t have a problem with.
But my point here was about fat cats scratching each other’s backs, and the evidence was a bunch of stuff that was priced to be supplied by Americans that Iraqis could either do better themselves, or do without. I’ve identified over $2B worth of stuff like that here. I think I’ve made my point.
I’m less than sure myself whether they should expect full repayment, but I think that’s the topic for a whole new thread.
I do agree with Sam that whatever help we give Iraq shouldn’t be in the form of a loan. Like it or not, for the time being this is our mess, and so it’s our tab to pick up. I just don’t want to be paying absurd sums of money for Halliburton to do what a local Iraqi firm can and will do for a quarter or a tenth of the price, or for stuff that Iraq doesn’t seem to need at all.
Wow, was that ever interesting.
If I understood things correctly: here you’ve got this consortium of American companies saying to Iraqi companies, “You can pay us $7500/month for first dibs on being our subcontractors, should we get any contracts.” And telling them that this is the American way of doing business, while the Iraqis say, “That’s not the way we do things over here, and we’ve got to think about this before we sign on.”
Can you say shakedown?? This is an interesting way of democracy and Western values to Iraq. It will certainly reinforce the convictions of anyone over there who thinks that Osama was on the right track. If this is a sample of what’s coming, we might want to get the hell out of Dodge before we make more enemies.
Why does Iraq need more prisons? Didn’t Saddam build enough prisons while he was in power?
Oh, I forgot reason #3485734 why this ‘loan’ concept is a bad idea.
By making it a loan, there will be even more incentive on lawmakers in the U.S. to ladle on the pork. And that would be the worst of all worlds, if politicians in the U.S. start buying votes in their districts by promising reconstruction contracts to local businesses, and then charging the Iraqis for it without their consent.
Why are the Democrats doing this? 43 Democrats voted for this. Only a handful didn’t. Are they that clueless? Or do they see this as a way to throw a monkey wrench into the Bush administration’s plans? Is this some election strategy? I really don’t understand the logic here. When you’re already spending well over 150 billion on Iraq, why would you risk souring the whole project for a measly 7% cut in cost? This is the very definition of “Penny wise, pound foolish”.
Actually that is a very good question… especially since Saddam emptied the prisons before the war. I figure Guantanamo is pretty full ? Or someone wants a nice contract… but until you asked the question I never really thought of the “why more prisons ?”
Yeah, right Sam the reconstruction contracts shall only go to companies politically connected to the Bush Administration :rolleyes:
While politics certainly played a part in it, the Democrats voted for the loan for the same reason the 8 Republicans voted for it- their constituents are against giving $20 Billion to Iraq.
Bush needs to go over the heads of the Senate and explain to the American people why their tax dollars need to be spent on some of the boondoggles mentioned above.
We’re gonna build some w/ running water, sewer connections and electricity type thingies. I think that’ll be the big difference between what Husseinbuilt and what we’re trying to provide.
I just saw some news footage which I found chilling. A US vehicle was totally destroyed and set on fire in an attack. many more US vehicles come to the area to secure it. Then swarms of children start throwing rocks at the US soldiers who hold their fire and retreat. It looked exactly like the images we have been seeing of Palestinian children throwing rocks at Israeli soldiers. It is a bad omen. I am afraid it can lead to nothing good. Children are bound to get shot eventually.
It already happened several times. I remember a thread about one of these death. The child was standing on his house’s roof and fired upon by nevous soldiers, or something similar.
I don’t disagree with many of your concerns. What you and Sam have articulated about not making this a loan is eminently sensible.
Yes, there certainly is a sleaze factor regarding Halliburton, and there must be other companies with the skills and resources to deploy quickly and do the job.
Of course, there are those French companies that built quite a bit of Iraq’s infrastructure, hence the large debt to France. Hussein contracted French companies for jobs that “should have(?)” gone to Iraqis. The question is: Why?
Either there were no Iraqi companies and workers with the requisite skills, or there was a concern about sabotage, perhaps? And maybe that’s the issue here; until the chaos settles and the rogues are sorted out, it’s a risky proposition to leave this important task open to assault by those who would like to see setbacks and failures.
Pencils have erasers. Pandering to the public’s distaste for pouring thier money into the Godforsaken Desert can easily be done. OK, its a loan. To who? Who is signing for Iraq? What is the payment schedule? Is it negotiable? Can it be “forgiven”?
Mere posturing.
You misunderstand me: I’m asking why some of these jobs need doing at all - by Halliburton or Bechtel or whoever - and why any Western company needs to be doing certain jobs that are very much like others done by Iraqi firms in the past.
If the locals don’t bring that prison in on time and under budget, the consequences are…what?
Sorry, I’m not buying it. If we’re talking about restoring essential services, you can make a case, but the point is that none of this stuff seems to fall into that category. It’s just corporate pork.