Rebuilding Iraq : The US masterplan

14 March 2003
An 11-page document obtained by MEED details the plans drawn up by the US Agency for International Development (USAID) for the reconstruction of Iraq. Tom Everett-Heath and Richard Thompson examine the draft programme, which MEED exclusively prints in full

USAID, a branch of the US State Department, has drawn up an aggressive and intrusive plan for the redevelopment of a post-conflict Iraq. Although the blueprint avoids details of how any post-Saddam government might be formed, it repeatedly states the US aim is for the establishment of democracy in Iraq: the word is used five times in the opening preamble alone.

However, the focus of this proposed democracy falls at the local, or devolved, government level. The most striking aspect of the USAID masterplan, which is dated 19 February, is that a clear decision has already been taken that Iraq will be governed according to a system based on the concept of 'subsidiarity', in which most power is devolved from the centre.

'The national government will be limited to essential national functions such as defense and security, monetary and fiscal matters, justice, foreign affairs and strategic interests such as oil and gas,' reads the document. 'Authority and funding for most other functions and services will be devolved to sub-national levels of government. Local governments will be responsible for meeting the needs of citizens, and will be required to operate in an open, transparent and accountable manner.'

The main inference that can be drawn from such a structure is that some form of federal government is envisaged for Iraq.

As well as a sketch of the political structure, the USAID document is divided into nine sections which detail the development plans for key sectors: water and sanitation; public health; transportation; electricity; local development; economic governance; payroll management assistance; education; and shelter. Each area has a schedule drawn up marking the landmarks of reconstruction that are to be passed at regular intervals over the 18 months immediately following the removal of Saddam Hussein's regime.

The draft document contains a mix of humanitarian, economic and political objectives, the distinctions between which are often blurred. For example, the delivery of 'emergency humanitarian relief' will be used to 'emphasise rapidly demonstrated improvement in the quality of life for Iraqis. It aims to quickly show that Iraq will move towards democracy and economic growth'.

It also makes clear that international agencies will be closely involved in the reconstruction programme. UNICEF, the World Health Organisation and Geneva-based Red Cross are repeatedly mentioned, and in places it is stated that some of them will receive funding from the US government.

Throughout the document, however, no price tag is attached for the USAID assistance programme, but some hints are made towards massive ongoing expenditure. For example, the section on public health stresses that Saddam's regime has been spending 'only $20 million annually on healthcare, as compared with $500 million a year in the 1980s'. Elsewhere, USAID makes a commitment to return facilities to a 'modestly improved pre-conflict level', though it concedes 'complete reconstruction to the economic and institutional capacity of 1980 [conditions prior to the first Gulf war] will require years of public investment'.

However, not all the financing of the reconstruction programme will come from outside the country. The section covering the transportation sector anticipates that revenue generation at ports will be used to supplement contributions from the US government, though no details are offered on how such a revenue allocation mechanism will be structured or who will administer it.

According to the plan, private sector contractors will do much of the reconstruction work. No details are offered on the process through which they will be selected or how different packages of work will be divided. However, the language of the document suggests a series of major single contracts will be awarded for the reconstruction programme in most of the specific sectors. Although no details are given in the document, MEED understands that USAID has already invited at least five of the US' largest contractors to bid for a capital contract estimated to be worth up to $900 million (MEED 28:2:03, Seven Days).

The plan has considerably more than reconstruction on its agenda - it envisages a fundamental reshaping of the Iraqi economy. According to the schedule, within 18 months 'privatisation of state-owned businesses is occurring', and long before this the currency is to have been replaced.

There is no lack of ambition. 'The post-conflict economy will not only be prospering, but it will be market-driven, open to personal initiative and able to compete globally. A diversified private sector will be emerging,' reads the introduction - and all within 18 months.

Equally ambitious is the programme for institution building. A string of central government ministries are expected to be operational within extremely short time-frames. For example, it is expected that the Ministry of Finance will be smoothly functioning within six months and an independent central bank will have been set up. If so, it will be the first independent central bank in the Arab world.

If any of these macro-economic targets is to be achieved, the US government must be assuming only the most minor dislocation of Iraq's existing bureaucratic elite: the inference is that Saddam's technocrats will have an important role to play in the rebuilding of the country. n

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