Iraq Needs an Economic Surge

**astralis** · 25 Feb 07,, 00:46

beat shek to it, this time.

----

Zakaria: Iraq Needs an 'Economic Surge' - Newsweek International Editions - MSNBC.com

The Surge That Might Work
It would cost $100 million to restart all of Iraq's state companies. That's as much as the military will spend in the next 12 hours.

By Fareed Zakaria
Newsweek

March 5, 2007 issue - We are now fighting a war intelligently in Iraq. The only problem is, it's the last war, not the present one. The United States has gambled all its efforts on a troop surge that tackles the conflict that defined Iraq from 2003 to 2005—the insurgency—rather than the civil war now raging across the country. Worse, in trying to solve yesterday's problem we are exacerbating today's. In Baghdad, Shiite militias have melted away. Almost all U.S. military operations are now directed against Sunni insurgents. If those are successful, the picture could look less violent in six months, but it will be a dangerous stasis. A senior U.S. military officer, who is not allowed to speak on the record on these matters, said to me, "If we continue down the path we're on, the Sunnis in Iraq will throw their lot behind Al Qaeda, and the Sunni majority in the Arab world will believe that we helped in the killing and cleansing of their brethren in Iraq. That's not a good outcome for the security of the American people."

We don't intend to side with anyone. We're trying to be evenhanded and build a single, democratic nation. But this attempt at neutrality is collapsing in Iraq's bloody sectarian reality. Last week's uproar over allegations that Shiite policemen in Baghdad had raped a 20-year-old Sunni woman vividly illustrates how trust between the two communities has been shattered. Shiite Prime Minister Nuri al-Maliki first ordered an investigation, then 12 hours later declared the woman a liar, freed and rewarded the alleged rapists and later fired a Sunni official who had called for an unbiased investigation. Meanwhile we're stuck in the middle, promising to uncover the truth while both sides are convinced that we've betrayed them. This is the definition of a no-win strategy.

The United States needs to find fresh approaches that won't feed the sectarian dynamic and will address the needs of ordinary Iraqis, not the political elites who are jockeying for power. Most important, we need to find a strategy whose costs are sustainable. Militarily this means drawing down our forces to around 60,000 troops and concentrating on Al Qaeda in Anbar province. The surge we should be pushing instead is a political one, and even more critically, an economic one.

An economic surge is long overdue. One of the less-remarked-upon blunders of the Coalition Provisional Authority was that—consumed by free-market ideology—it shut down all of Iraq's state-owned enterprises. This crippled the bulk of Iraq's non-oil economy, threw hundreds of thousands of workers into the streets and further alienated the Sunnis, who were the managerial class of the country. The economic effects of this decision have been seismic. For example, Iraq's agricultural productivity has plummeted because fertilizer plants were summarily closed. Unemployment in non-Kurdish Iraq remains close to 50 percent, which helps explain why so many young men are joining gangs, militias and insurgent groups. For the moment at least, democracy in Iraq has sharpened the country's divisions. Capitalism and commerce can make them less relevant. That is the lesson of many conflict-ridden countries from Northern Ireland to Mozambique to Vietnam.

Paul Brinkley, a talented deputy under secretary of Defense, is trying to get the bulk of these state-owned factories up and running. He's already restarted a bus factory in Iskandariyah, south of Baghdad, and the experience has been telling. Hundreds of workers still in the area showed up for work and the machines are now humming busily. There have been no attacks on the factory. "The insurgents attack people working for the police, Army or the Americans. They do not want to alienate locals trying to make ends meet," said one official working on the project.

Of the original 193 state enterprises, 143 could be restarted soon, says Brinkley. Management and workers are desperate to get jobs. The problem is money. Brinkley points out that his next target, a ceramics factory in Ramadi, is only waiting for two generators before it can reopen. They cost $1 million each. But funds for this purpose are hard to find. Washington has pledged more than $18 billion to fund "reconstruction" in Iraq but will not appropriate a cent to start up state-owned Iraqi companies. The Iraqi government has billions in oil revenue of its own but is so dysfunctional that it cannot move a new project through the system. So the factory is idle. A major global consulting firm has reviewed Iraq's state-owned enterprises and estimated that it would cost $100 million to restart all of them and employ more than 150,000 Iraqis—$100 million. That's as much money as the American military will spend in Iraq in the next 12 hours.

**GVChamp** · 25 Feb 07,, 06:28

Drawing our forces down to about 60,000 in the midst of a growing "civil war" and then advocating "restarting" an economy that was ineffecient AND ill-equipped when it started?
Iraq's economy needs some serious investment, no doubt, and the US was extremely ineffective in providing aid in the early going. But trying to run a growing, dynamic economy without security ranks up there with fighting the US army with a popsicile stick on the list of "difficult tasks"

Give people jobs and such. Industrialize. Build basic infrastructure. Kill militias and insurgents. Get the moronic extremists out of government.

**astralis** · 25 Feb 07,, 07:05

GVChamp,

several things.

Drawing our forces down to about 60,000 in the midst of a growing "civil war"

does the US have enough forces to clearly stamp out a civil war? no, it doesn't. we don't even have enough troops to stamp out the sunni insurgency- and the sunnis make up what, 35% of iraq.

more to the point, the level of forces we have in-country precludes a military solution. but how to get a recalcitrant shi'a government to reach out to the sunnis and create a political solution? they have shown no desire to do so, and so long as sectarian tensions remain high, it will not be in their political interest to do so.

and we cannot keep the current level of forces forever. a draw-down to 60,000 would certainly reduce public opposition to the war, and having the troops target al-qaeda rather than trying to police every block in baghdad would seem to be a more efficient method of rooting out terrorism, in lieu of the occupation force we cannot field.

advocating "restarting" an economy that was ineffecient AND ill-equipped when it started?

state companies are certainly inefficient, but inefficiency should be the least of our concerns. getting people off the street and WORKING is the first priority. this addresses your point of "give people jobs and such. industrialize. build basic infrastructure."

Kill militias and insurgents

we've been doing that for four years now, and violence hasn't gone down now, has it.

Get the moronic extremists out of government.

unfortunately a real clean sweep would probably mean disbanding the current government...and also guaranteeing that the shi'a militia, thus far haphazardly anti-american, are definitely anti-american. a shi'a insurgency + a sunni insurgency = disintegration of US position in iraq.

**GVChamp** · 25 Feb 07,, 18:48

astralis,

does the US have enough forces to clearly stamp out a civil war? no, it doesn't. we don't even have enough troops to stamp out the sunni insurgency- and the sunnis make up what, 35% of iraq.

more to the point, the level of forces we have in-country precludes a military solution. but how to get a recalcitrant shi'a government to reach out to the sunnis and create a political solution? they have shown no desire to do so, and so long as sectarian tensions remain high, it will not be in their political interest to do so.

Not having enough troops to do the job in a strictly military manner doesn't imply that we should further reduce troops and further handicap the mission. Suggesting that because the troops haven't worked a miracle yet sounds to me like saying we should get rid of our police force because not all crime has disappeared.

and we cannot keep the current level of forces forever. a draw-down to 60,000 would certainly reduce public opposition to the war, and having the troops target al-qaeda rather than trying to police every block in baghdad would seem to be a more efficient method of rooting out terrorism, in lieu of the occupation force we cannot field.

I'm not sure if reducing our forces down to 60,000 would actually reduce public opposition to the war. If the drawdown merely emboldens other forces in Iraq and they become more aggressive (for instance, if Shi'a leaders leave the government entirely because they won't face US retribution), support for the mission would fall off entirely.
And while I don't like using US soldiers in an effort to "police every block in Baghdad," as you put it, someone has to do it, especially if you are attempting to create an economic surge.

state companies are certainly inefficient, but inefficiency should be the least of our concerns. getting people off the street and WORKING is the first priority. this addresses your point of "give people jobs and such. industrialize. build basic infrastructure."

Yes. I've come to the conclusion that it is a neccessary action. However, "restarting" all these companies is tough, and especially so in the midst of a near civil war. And Iraq certainly needs structural, market reforms in its economy as well, which can't be ignored, lest Iraq simply collapse economically 20 years down the road.

we've been doing that for four years now, and violence hasn't gone down now, has it.

But not doing it doesn't mean they are simply going to lay down and die, either. And our goal is to get rid of them. It just requires some other actions in addition to the ***kicking action.

unfortunately a real clean sweep would probably mean disbanding the current government...and also guaranteeing that the shi'a militia, thus far haphazardly anti-american, are definitely anti-american. a shi'a insurgency + a sunni insurgency = disintegration of US position in iraq.

I admit that this is the toughest step. Typically, allowing powerful extremists in government is a much better method of neutralizing them than trying to kill them. But we both know that our goal should be to try to minimize their influence as much as possible, or else they will simply use government machinery to prolong the fighting.

**astralis** · 25 Feb 07,, 19:16

GVChamp,

Not having enough troops to do the job in a strictly military manner doesn't imply that we should further reduce troops and further handicap the mission. Suggesting that because the troops haven't worked a miracle yet sounds to me like saying we should get rid of our police force because not all crime has disappeared.

what i'm saying is, we should be thinking about changing the mission, too. the mission which we've set for ourselves is honestly unrealistic, without some very serious change in how the iraqi government operates. barring such a change in the government that allows for a political solution, we can only go for a military one.

and what of the military one? right now petraeus seems to be moving away from the "superbase" strategy of earlier, to a strategy that embraces the oil-spot theory of counter-insurgency. however, surge or no, the number of troops is far too limited (and also, i'm not sure if the US public has the patience for the long years which even a successful counter-insurgency requires). strategy is finally right, resources are lacking. that's still not a recipe for success. "go big, go long, or go home." an increase in 21,500 troops unfortunately does not really count as "go big"...

I'm not sure if reducing our forces down to 60,000 would actually reduce public opposition to the war. If the drawdown merely emboldens other forces in Iraq and they become more aggressive (for instance, if Shi'a leaders leave the government entirely because they won't face US retribution), support for the mission would fall off entirely.

i think it would, if placed in context of a restructured mission of taking on al-qaeda in iraq. nixon got some more political maneuvering room after he started to take out the troops in vietnam. in fact, i suspect that the surge itself is a prelude to a drawdown, given public comments from many quarters (such as john mccain) that this surge in a "last chance" to get things right.

by the way, i highly doubt the shi'a leaders will leave the government- they like the control and the power that governments wield. as for the sunnis, well, they will either have to deal with the shi'a with US support, or else they're going to be crushed by the sheer weight of numbers alone. a threat of a US drawdown would hopefully be some incentive for them to deal with both the US and the iraqi government.

in the short-run, a US drawdown will probably embolden al-qaeda in iraq, but i would imagine that 60,000 US troops, freed from tiring policing duties, would make sure that they don't stay bold for long.

And while I don't like using US soldiers in an effort to "police every block in Baghdad," as you put it, someone has to do it, especially if you are attempting to create an economic surge.

according to zakaria,

"Hundreds of workers still in the area showed up for work and the machines are now humming busily. There have been no attacks on the factory. "The insurgents attack people working for the police, Army or the Americans. They do not want to alienate locals trying to make ends meet," said one official working on the project."

to be sure, this is very much a chicken-or-the-egg problem, which comes first, jobs or security? but the way i lean is, if one implements enough jobs, then not only will you take unpaid, desperate men out of the streets, but also create a pool of people whose livelihoods depend on that factory running.

this gives a powerful incentive for people not to go around raising sectarian tensions, or to tolerate other people with such, as that may very well cause their OWN factory to be blown sky-high.

**GVChamp** · 28 Feb 07,, 03:26

what i'm saying is, we should be thinking about changing the mission, too. the mission which we've set for ourselves is honestly unrealistic, without some very serious change in how the iraqi government operates. barring such a change in the government that allows for a political solution, we can only go for a military one.

Restarting government enterprises would be one aspect of changing how the government operates. Or, we can just sidestep the Iraqi government entirely and create our packages if the government continues to be uncooperative.

and what of the military one? right now petraeus seems to be moving away from the "superbase" strategy of earlier, to a strategy that embraces the oil-spot theory of counter-insurgency. however, surge or no, the number of troops is far too limited (and also, i'm not sure if the US public has the patience for the long years which even a successful counter-insurgency requires). strategy is finally right, resources are lacking. that's still not a recipe for success. "go big, go long, or go home." an increase in 21,500 troops unfortunately does not really count as "go big"...

We're stuck in the long-haul...at least until the Iraqi government is strong enough that it can actually field a relilable military/police force on its own. And if the political will doesn't exist for the long haul, then it just doesn't exist. It's not only the American deaths that bother Americans, but the near non-stop violence; bringing down the level of American troops won't affect that, and, in my opinion, is only going to aggravate that.
So, if we won't go long, we won't go long, whether it is with 125,000 troops, 125 troops, or 125 million troops.

i think it would, if placed in context of a restructured mission of taking on al-qaeda in iraq. nixon got some more political maneuvering room after he started to take out the troops in vietnam. in fact, i suspect that the surge itself is a prelude to a drawdown, given public comments from many quarters (such as john mccain) that this surge in a "last chance" to get things right.

See above comment on violence in Iraq. A restructured mission might assist in that, of course, but we'd be lying through our teeth if we think that it is merely "Al Qaeda" causing trouble in Iraq. And what would be the purpose of even being in Iraq if we're not planning on making a nation? Americans, as far as I can tell, believe a civil war is going on, and they don't want troops in the middle of a civil war even IF they are just there to go after Al Qaeda.

by the way, i highly doubt the shi'a leaders will leave the government- they like the control and the power that governments wield. as for the sunnis, well, they will either have to deal with the shi'a with US support, or else they're going to be crushed by the sheer weight of numbers alone. a threat of a US drawdown would hopefully be some incentive for them to deal with both the US and the iraqi government.

in the short-run, a US drawdown will probably embolden al-qaeda in iraq, but i would imagine that 60,000 US troops, freed from tiring policing duties, would make sure that they don't stay bold for long.

My point, though, is that they don't have to be part of the democratic process to weild power. A powerful Shi'a leader with a large militia has little incentive to listen to other people's opinions if the US can't keep him from expanding his influence.
As for the Sunnis being more willing to work with the government...perhaps, though local bonds might still be strong enough to keep them from revealing the location of extremists, and that is the real intelligence prize we want.
It's a big, big gamble.

according to zakaria,

"Hundreds of workers still in the area showed up for work and the machines are now humming busily. There have been no attacks on the factory. "The insurgents attack people working for the police, Army or the Americans. They do not want to alienate locals trying to make ends meet," said one official working on the project."

to be sure, this is very much a chicken-or-the-egg problem, which comes first, jobs or security? but the way i lean is, if one implements enough jobs, then not only will you take unpaid, desperate men out of the streets, but also create a pool of people whose livelihoods depend on that factory running.

this gives a powerful incentive for people not to go around raising sectarian tensions, or to tolerate other people with such, as that may very well cause their OWN factory to be blown sky-high.

I like this last part. It appeals to my inner economist.