Financial Times; Jun 25, 2003
COMMENT & ANALYSIS: Unrest grows over rebuilding Iraq: "The situation on the ground is moving faster than we are"
By Charles Clover
The lights go off again in Mohsen T. Hassan's office and the swish of slowing fans signals that the sweltering room will shortly be breezeless and still. As a director- general at the Iraqi Ministry of Electricity, Mr Hassan is slightly embarrassed that the power has again been cut in the cramped premises he uses with six others.
Outside, summer temperatures are soaring. In two weeks' time, demand for water and electricity will reach a peak.
On Mr Hassan's desk is a $680m work programme for the Iraqi electricity sector from Bechtel, the US engineering company. It has almost magical numbers written on it: "1,500MW rehab: $250m" and the like. It seems very simple but Mr Hassan knows it is not. "They take long breaths," he says, using an Arabic expression for foot-dragging.
Iraqis are becoming increasingly concerned at how long the reconstruction of their country is taking, compared with how quickly they feel capable of working if allowed to do so. They did it once before. After the 1991 Gulf war, the story goes, they had everything running again within 40 days.
"The main difference is that back then, we had a state," says Mr Hassan. "Everyone worked 24 hours a day, non-stop. We got very high wages from the government; they were throwing money at us!"
Compare that with today. The damage to Iraqi infrastructure is much lighter than after the 1991 war, when power plants were targeted by air strikes. But only about half of Iraq's generating capacity has been restored and it will be another month, Mr Hassan estimates, before the commission gets back to pre-war levels of generation.
Life in Baghdad often seems at variance with the optimistic pronouncements coming out of the Coalition Provisional Authority (CPA), the US and UK authority mandated with running Iraq by last month's United Nations security council resolution. Police have returned to work but are seldom seen on Baghdad's streets, where cars are stolen in broad daylight and traffic jams are constant. Heaps of rubbish lie in the street - closing even the entrance to the central bank - yet sporadic clean-up campaigns seem designed more for publicity than for effect. Power seems to be off far more than the average of four hours a day that the CPA says is the case.
This slow pace of reconstruction is feeding discontent. There is a real fear among officials of the CPA and other agencies working in Iraq that without a visible rise in living standards over the next few months, the coalition could face an organised and entrenched Iraqi backlash. The violence already sweeping the country is a sign that the window US policymakers thought they had in which to manage Iraq's transition may be narrowing dangerously. Since the end of the US-led military campaign in mid- April, dozens of US soldiers have been killed or injured in attacks by Iraqi guerrillas. Yesterday six British soldiers were killed and eight injured in two separate attacks near the southern city of Amarah.
"The situation on the ground is definitely moving faster than we are," says one senior CPA official. "The situation the British faced in 1920, where momentum towards independence became unstoppable, is repeating itself."
The CPA, run by Paul Bremer, who reports to Donald Rumsfeld, US defence secretary, can point to some notable successes. Shortages in petrol and cooking gas have been eased by importing from neighbouring countries. Oil production is increasing and the CPA has announced a tender for GSM mobile telephone licences. US Army engineers have installed generators in Baghdad hospitals. Security, notwithstanding recent attacks on coalition troops, has improved.
In addition, Mr Bremer is credited with getting the message out that problems are being worked on. "This means a lot to the Iraqi leadership," says one senior western diplomat in Baghdad. "They can go back to their people and say: 'Let's be patient for a few more weeks and things will improve.' "
But Iraqi ministry employees and officials at some international organisations still complain of "organisational dysfunction" in the way the Pentagon is running Iraq. Having decided after the war not to install an interim government to lead the country, the US and the UK opted for direct rule through the CPA. But instead of streamlining authority, the result has been a muddle of confusion and mismanagement.
Dr Ghulam Popal, head of the World Health Organisation's office in Baghdad, says most of the problems he has in working in Iraq stem from the lack of a reliable national counterpart with whom to discuss technical issues. "There is no decision- maker at the national level", he says.
The CPA has only 600 staff on the ground and its main role is to create policies. Each of 23 Iraqi ministries has been assigned a senior adviser from the CPA, who steers policy and regularly meets senior Iraqi technocrats. But the advisers live and work in the CPA com pound in the secluded Republican Palace in Baghdad and for implementation the CPA must rely on a confusing mix of military personnel, private companies, civil groups, United Nations agencies and Iraqi ministries.
Civil groups and UN agencies have the bulk of the implementation work. But they complain that this is impossible without functioning ministries and say the CPA has failed to use existing Iraqi government institutions effectively to help manage reconstruction.
Ministry officials are reluctant to take decisions because they are unsure how much authority they have; US advisers are reluctant to issue orders for fear of appearing as arrogant colonial overlords.
Co-ordination between the ministries and the CPA is slow. On June 14, there was a near riot at the Health Ministry after the CPA told former army medical personnel to report there to get new assignments in civilian hospitals. But the ministry had apparently not been informed and US soldiers guarding the ministry inexplicably shut the building down because of the crowd. Dr Ahmed Abu Ragif, a former army surgeon, says he and his former colleagues have been trying to get new working papers for three weeks, ever since the CPA announcement. Every time they show up, on Tuesdays or Saturdays as ordered, they are turned away.
Nada Doumani, of the International Committee for the Red Cross, says there is a lack of what she calls "national ownership" among ministry employees, with lack of motivation, no clear chain of command and few decisions taken and implemented. "There is a need for better empowerment of people," she said.
At Mr Hassan's Electricity Ministry, for example, workers drift home at 1pm every day despite the crushing workload. Spare parts have been looted. The workers are getting paid but "the wages don't buy anything", he says, and the ministry has almost no cash to run operations. Mr Hassan estimates that people are working 30 per cent as fast as they did after the 1991 war.
One UN official says: "The CPA is good at taking care of the big things, the problems that are in the headlines and on TV. But it's the small things that get them . . . They have barely scratched the surface and the deeper they go, the more they realise 'Oh, we need to do this as well?' I think they have bitten off more than they can chew and they realise it, frankly."
The CPA itself is facing a barrage of criticism from its own ranks. Tim Carney, who until mid-June was senior adviser for the Industry Ministry, said in a June 22 opinion piece for The Washington Post: "No lessons seem to have taken hold from the recent nation-building efforts in Bosnia or Kosovo, so we in ORHA [the predecessor of the CPA] felt as though we were reinventing the wheel."
In the health sector the lack of central authority has created a power vacuum. Mr Popal estimates that 50 per cent of clinics and hospitals in Baghdad are guarded by armed militias, mainly Islamist groups that moved in after the war ended and use their control of services to gain followers.
"They are establishing a parallel system and using it to implement a political agenda through control of these services," he says. "Their concern is not the people; their concern is power."
Many gaps in services have been filled by US agencies and civil groups. The UN Children's Fund has launched a vaccination programme; and worked jointly with the Ministry of Education to extend the school year by a month and hold national exams. The ICRC is distributing oxygen to hospitals, a responsibility it took on during the war and wants to hand over to a government. The World Food Programme is distributing rations to 27m registered recipients.
But the UN and civil groups stress that they are not there to run the national health system or feed the country in place of a non-existent national government. "We don't want to be substituting the occupying power or its obligations under the Geneva Convention," says Ms Doumani. "We are willing to support but not substitute."
Meanwhile, with billions of dollars pledged in donations, billions on the way from oil revenues and more billions available from the unfreezing of Iraqi assets overseas, it is surprising how little funding there is in Baghdad.
The $2.4bn Iraq aid budget allocated by US Congress is disbursed mainly to US companies, with some going to UN agencies and civil groups. Technocrats in Iraqi ministries and government commissions, meanwhile, have the cash they have on hand or can get from civil groups - in practice, very little.
The ministries receive money to pay wages but have barely any budgets for things such as transport, maintenance and other simple running costs such as cold storage for medicines.
David Nummy, a senior CPA adviser, said yesterday the CPA was working jointly with the Finance Ministry to develop a budget for the ministries covering the second half of the year. The revenues for the budget would include $900m in Iraqi government assets found in Iraq by coalition forces and $1.7bn in Iraqi assets frozen in the US. He said the CPA would have spent almost $500m of this by the end of June, financing three months' worth of salaries, pensions, and emergency payments to Iraqi state employees. He said they had recently created a fund for operating costs of the ministries but it contains only 8bn dinars ($5m).
The Construction Ministry, responsible for government properties in Baghdad, is starting to repair looted and burned ministry buildings with its own funds received from building rentals, according to Ali Abdel Hussein al Tamim, the director-general for planning in the ministry. The funds are "clearly not enough" for the task, he says. But he prefers to look on the bright side - especially since Mr Bremer this month announced a $100m construction fund as part of a job creation programme.
Eventually, says Mr Nummy, the CPA will manage an Iraqi development fund that will contribute to the state budget. It is to be funded by Iraq's oil revenues and by money left over from the UN-managed oil-for-food programme, which is to be wound up later this year.
However, while everyone focuses on big projects, smaller amounts of short-term funding are failing to get through the layers of bureaucracy. An official from the UN Development Programme [UNDP] complains that he has a $2m grant from the UK's Department for International Development to spend on the electricity sector but so far has had no luck disbursing it. "No one has the time to waste on $2m," he says.
A senior CPA official explains: "Obviously we'd like to be able to disburse money as soon as possible. But, equally, we can't be irresponsible with the Iraqi people's own resources." He adds: "The primary tasks of re-establishing electricity, water supplies and emergency services are carrying on. We all know that it hasn't been 100 per cent successful but each week more progress is made."
So far, workers such as Ms Doumani are giving the CPA the benefit of the doubt: "I think they are doing the best they can with the means available. At this stage there is probably some organisational dysfunctioning but it is not ill-will."
UN and civil groups' officials concede that many differences with the coalition come down to vision. The coalition's strategy has been extremely ambitious from the outset, which has created short-term problems.
Last month, Mr Bremer announced a policy of de-Baathification - firing up to 30,000 top-level Ba'ath party officials from the old regime. Then he announced the dissolution of the national army and the beginning of a programme of economic reforms designed to steer Iraq away from a socialist command economy and towards a liberal, market-run system. Last weekend the CPA announced the creation of a new Iraqi army corps.
These policies will pay off handsomely in the long run, US officials argue. But in the short run each creates enormous difficulties for the coalition. Getting rid of Ba'ath party cadres has created a huge bureaucracy to vet Iraqi government employees, as well as depriving the ministries of talented managers. Dissolving the army has created a massive unemployment problem. Market-led reform may result in further job losses from inefficient state-owned enterprises.
Geoffrey Keele, of the UN Children's Fund in Baghdad, says part of the problem is that Americans have not been allowed in the country for 13 years, so "there is a bit of a learning curve".
"I don't think they were sufficiently prepared when they came here. At the same time, they are not complacent. They are trying," says Mr Keele.
In place of a government, Mr Bremer has promised to form an interim Iraqi administration, as called for by last month's UN resolution. It will consist of 25-30 people and will be able to select ministers. He has made it clear that the ultimate word on the selection process will be his, though he has pledged to consult Iraqis. Iraqi political groups are set against this, however, wanting some form of free elections and a sovereign national government, rather than an administration.
Mr Bremer is adamant that elections should not be held before a new constitution is ratified, a process expected to begin in July and to take months, if not years. A senior CPA official told a press conference recently that democratic elections should not be held until the security situation improved and services were back to normal, otherwise "the process would be open to intervention by extremists".
With the CPA saying there will be no Iraqi state until there is progress towards security and a rising standard of living, Iraqis are saying the opposite: there will be no progress until they have a state of their own.
The contrast between the rhetoric and the reality of the coalition occupation feeds this frustration. Iraqis are tired of hearing about plans.
Ali Mohammed, a 56-year-old engineer working for the Iraqi electrical grid, who is visiting Mr Hassan to try to get his nephew a job in the ministry, says: "The Americans don't do anything, they just ride around on tanks and watch.
"We heard all about democracy, about a new republic, from them - and all we get is this."