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Iraq: The Aftermath; Bush Launches Reconstruction of Iraq and Afghanistan

by Rupert CornwellIndependent (London)
May 2nd, 2003

The US declared an end to serious hostilities in Afghanistan and Iraq yesterday, and it shifted the focus to reconstruction in the two countries that have been the prime targets of the Bush administration's war on terrorism.

In Kabul, the Defence Secretary Donald Rumsfeld, sought to give a boost to flagging reconstruction efforts by proclaiming that "major combat activity" is over and the priorities now were "stability, stabilisation and reconstruction." Hours later, President Bush was due to deliver a similar message about Iraq, against the spectacular backdrop of the flight deck of the aircraft carrier Abraham Lincoln in the Pacific ocean, as it headed towards San Diego and home, after ten months at sea and service in both the Afghan and Iraqi campaigns.

Mr Bush, a fighter pilot during a stint in the Texas Air National Guard, had wanted to travel on a two-seat F-18 fighter. But security considerations prevailed and he will make his arrival sitting in the co-pilot's seat of a Navy S-3B Viking, a jetplane with four seats and a top speed of 500mph, normally used for anti-submarine warfare.

Because both Saddam Hussein and Iraq's alleged chemical and biological weapons have yet to be found - and for the sake of diplomatic convenience - Mr Bush is stopping short of claiming definitive victory in his primetime address to the nation. But the thrust will be the same as that of Mr Rumsfeld in Afghanistan: only mopping-up remains, and the task now is to rebuild a country devastated by decades of misrule and oppression.

But well before Mr Rumsfeld spoke, reconstruction was under way, under a plan drawn up and primarily executed by the US government and US companies, and which accords secondary importance at best to the UN and multilateral institutions including the World Bank and the IMF.

In a key personnel move reported yesterday by Newsweek magazine, Mr Bush has decided to appoint a career State Department official and anti-terrorism specialist, Paul Bremer, as the civilian administrator of post-war Iraq. Mr Bremer will have authority over both retired general Jay Garner - who now runs the humanitarian and non-military reconstruction work - and Zalmay Khalilzad, Mr Bush's special envoy who is leading efforts to put together an interim government in Baghdad.

The choice, if confirmed, would represent a significant victory for Colin Powell, the Secretary of State, and his embattled department in the running skirmishes with Mr Rumsfeld's Pentagon which has tried - usually successfully - to get its own men into influential posts.

Less obviously, an ambitious US project for economic and financial reconstruction, whose costs are put anywhere between $ 20bn and $ 60bn (pounds 12.4bn - pounds 37.3bn) a year, is taking shape. Again, American companies, American personnel and American market-orientated policies are in the forefront.

Testifying to a House Committee this week, John Snow, the Treasury Secretary called for cancellation or rescheduling of foreign debt run up by the Saddam Hussein regime, believed to exceed $ 200bn (pounds 124bn), and urged other governments to find and use frozen Iraqi assets abroad to help pay for reconstruction.

A 15-man US Treasury team is now in the Gulf region, examining how to redesign the Iraqi central bank, finance ministry, commercial banking system and stock markets. The US is also working on devising a new national currency to replace the US dollars, pre-Saddam Swiss dinars' and Saddam dinars now in circulation.

But these measures are only part of a far more sweeping overhaul, aimed at giving Iraq a US-style economic system. This would see wholesale privatisation (perhaps even of state-owned Iraqi oil concerns), the training of Iraqis in the ways of Western capitalism, and a new tax code covering both direct and indirect taxes.

The consulting work alone, according to the Wall Street Journal yesterday, could be worth $ 70m (pounds 43.5m) a year. A good chunk of this is likely to be awarded to Bearing Point Inc, a Virginia-based company that did a similar job in Afghanistan.

The contracts are being awarded by the US Agency for International Development (USAID) which has been criticised by Washington for operating a secretive bidding process in which US companies have the inside fast track.

Critics say that if the US persists in a narrow, ideologically driven approach, rebuilding Iraq could run into even worse problems than the sweeping privatisation foisted on Russia after the collapse of the Soviet Union.





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