The Business upsides to be gained from war........

[Thinkerman]

The business of rebuilding war zones

 

 

By James Arnold

BBC News Online business reporter

 

 

 

One man's interrupted commute is another man's opportunity

Development agency USAid has shortlisted five US companies for a $900m contract to rebuild Iraq - so is post-war reconstruction an American stitch-up?

For Tam Dalyell, a Labour member of parliament, it was "vomit-making".

 

Indeed, there is something nauseous in the news that the US Government is handing out contracts for rebuilding post-war Iraq - to American companies - before the first shots have even been fired.

 

One of the firms is Halliburton, the company once led by Vice President Dick Cheney (although given the firm's Middle East expertise it would have been more of a surprise if it was not on the shortlist).

 

But at a total of $900m, the current batch of controversial deals represent a tiny fraction of what promises to be an unprecedented reconstruction bonanza.

 

It is US development aid that is being spent here, not "Iraqi money" flowing from Iraqi oil wells.

 

And by signing up contractors before the war begins, Washington is signalling a potentially cheering truth: the post-war reconstruction business is not just getting more lucrative, it's getting far more efficient, too.

 

Overwhelming generosity

 

Lucrative it certainly is, however.

 

Of the $66bn given out in international aid in 1999, a big year for reconstruction, almost one-quarter went to war-torn countries.

 

 

This will need a refit for a start

 

Hard cash is most obviously needed for rebuilding roads, bridges, schools, hospitals and other physical infrastructure.

 

But even more expensive and long-lasting is the work involved in resettling refugees, clearing up pollution, rebuilding civil society and generally putting the economy back on its feet.

 

Over the past few years, this sort of thing has created a gigantic surge in the average post-war aid bill: while $4bn of aid went into Lebanon in the 10 years after its civil war ended in the early 1990s, some $5.4bn poured into smaller Bosnia in half the time.

 

Rebuilding Afghanistan - which didn't have much infrastructure in the first place - is predicted to cost $15bn, while estimates for Iraq have crept as high as $100bn.

 

Scenting an opportunity

 

Understandably perhaps, this tidal wave of cash has sharpened appetites among corporate contractors.

 

Donors encourage this: while efforts like the Marshall Plan - the vast push to revive Europe after World War II - were largely state affairs, modern governments are keen to outsource as many functions as possible to the private sector.

 

Now, a fairly narrow coterie of international firms has developed a reliable sideline in post-war clean-ups.

 

Construction firms such as the US's Fluor and Bechtel, Britain's Costain and Balfour Beatty, and France's Spie are usually the first in; service providers such as British Crown Agents and Swiss SGS are rarely far behind.

 

The invisible hand

 

Sometimes, this results in a sordid scramble or stitch-up.

 

 

Getting things rebuilt quickly is now the priority

Company agents have been known to hit the warzone in advance of the victorious troops.

 

And hackles were raised in boardrooms around the world when the US Army Corps of Engineers blithely handed out all rebuilding contracts to American firms in advance of the 1991 Gulf War.

 

But for the most part, the companies' wish to make a profit coincides with the aid recipients' wish for a speedy recovery.

 

Indeed, the main hitch in this otherwise neat alignment of interests lies with the banks, governments and other agencies that disburse the cash, and whose prevarication often slows things down to a crawl.

 

Spending better

 

Trouble is, growth in post-war aid budgets has outstripped bureaucratic ability, argues Colin Adams, chief executive of the British Consultants and Construction Bureau, a trade body for reconstruction contractors.

 

 

Is the US too cosy with its corporate chums?

 

Administrative muddle reached its peak in the aftermath of the Bosnian war, where aid was provided on a bilateral basis by a bewildering galaxy of governments and agencies.

 

"Everyone wants to be seen financing the prestige projects, and because there is no coordination, you can get terrible duplication of effort," says Mr Adams.

 

Things have started to improve: Kosovo, quickly taken under the wing of the European Commission, was a relatively tidy project - although expensive at $2.3bn.

 

And Afghanistan has been an object lesson in efficiency.

 

Almost all Afghan projects, even many of those financed by freewheeling non-governmental organisations, pass through a single coordinating body, the Afghan Assistance Coordination Agency (AACA).

 

Local heroes

 

The row over the US contracts for Iraq highlights another sticking-point - the role of nationalism.

 

The $900m comes through USAid, a government agency obliged to prefer US firms unless a particular statute is invoked (as it has been for its Afghan activity).

 

This is quite normal: almost all countries insist their own companies should benefit from the aid they give out; one of the few that does not is Britain, whose companies capture a hefty slice of the post-war business worldwide.

 

But even a dose of national bias is preferable to the administrative chaos seen in the mid-1990s, Mr Adams argues.

 

And governments, for all their faults, generally move much faster than agencies such as the European Commission or World Bank, whose money is scrupulously doled out in plodding competitive tenders.

 

After all, getting the bridge rebuilt fast is more important than the nationality of the firm that builds it - as any Afghan will tell you.

[Thinkerman]

Another Interesting article from The FT (Financila Times for Non-Uk residents)

 

 

Bush's inflated sense of supremacy

By George Soros

Published: March 12 2003 20:02 | Last Updated: March 12 2003 20:02

 

 

With US and British troops poised to invade Iraq, the rest of the world is overwhelmingly opposed. Yet Saddam Hussein is generally seen as a tyrant who must be disarmed and the United Nations Security Council has unanimously demanded that he disclose and destroy his weapons of mass destruction. What has gone wrong?

 

 

Iraq is the first instance in which the Bush doctrine is being applied and it is provoking an allergic reaction. The doctrine is built on two pillars: first, the US will do everything in its power to maintain unquestioned military supremacy; second, it arrogates the right to pre-emptive action. These pillars support two classes of sovereignty: American sovereignty, which takes precedence over international treaties; and the sovereignty of all other states, which is subject to the Bush doctrine. This is reminiscent of George Orwell's Animal Farm: all animals are equal but some are more equal than others.

 

The Bush doctrine is grounded in the belief that international relations are relations of power; legality and legitimacy are decorations. This belief is not entirely false but it exaggerates one aspect of reality - military power - at the exclusion of others.

 

I see a parallel between the Bush administration's pursuit of American supremacy and a boom-bust process or bubble in the stock market. Bubbles do not grow out of thin air. They have a solid basis in reality but reality is distorted by misconception. In this case, the dominant position of the US is the reality, the pursuit of supremacy the misconception. Reality can reinforce the misconception but eventually the gap between reality and its false interpretation becomes unsustainable. During the self-reinforcing phase, the misconception may be tested and reinforced. This widens the gap leading to an eventual reversal. The later it comes, the more devastating the consequences.

 

This course of events seems inexorable but a boom-bust process can be aborted at any stage and few of them reach the extremes of the recent stock market bubble. The sooner the process is aborted, the better. This is how I view the Bush administration's pursuit of American supremacy.

 

President George W. Bush came into office with a coherent strategy based on market fundamentalism and military power. But before September 11 2001 he lacked a clear mandate or a well defined enemy. The terrorist attack changed all that. Terrorism is the ideal enemy. It is invisible and therefore never disappears. An enemy that poses a genuine and recognised threat can effectively hold a nation together. That is particularly useful when the prevailing ideology is based on the unabashed pursuit of self- interest. Mr Bush's administration deliberately fosters fear because it helps to keep the nation lined up behind the president. We have come a long way from Franklin D. Roosevelt's dictum that we have nothing to fear but fear itself.

 

But the war on terrorism cannot be accepted as the guiding principle of US foreign policy. What will happen to the world if the most powerful country on earth is solely preoccupied with self-preservation?

 

The Bush policies have already caused severe unintended adverse consequences. The Atlantic Alliance is in a shambles and the European Union divided. The US is a fearful giant throwing its weight around. Afghanistan has been liberated but law and order have not been established beyond Kabul. The Israeli-Palestinian conflict festers. Beyond Iraq, an even more dangerous threat looms in North Korea.

 

The global economy is in recession, stocks are in a bear market and the dollar is in decline. In the US, there has been a dramatic shift from budget surplus to deficit. It is difficult to find a time when political and economic conditions have deteriorated as rapidly.

 

The game is not yet over. A rapid victory in Iraq with little loss of life could cause a dramatic reversal. The price of oil could fall; the stock market could celebrate; consumers could overcome their anxieties and resume spending; and business could respond by stepping up capital expenditure. America would end its dependency on Saudi Arabian oil, the Israeli-Palestinian conflict could become more tractable and negotiations with North Korea could be started without a loss of face. This is what Mr Bush is counting on.

 

Military victory in Iraq would be the easy part. It is what follows that should give us pause. In a boom-bust process, passing an early test tends to reinforce the misconception that has given rise to it. That could happen here.

 

It is not too late to prevent the boom-bust process from getting out of hand. The Security Council could allow more time for weapons inspections. Military presence in the region could be reduced - and bolstered if Iraq balks. An invasion could be mounted at summer's end. The UN would score a victory. That is what the French propose and the British could still make it happen. But the chances are slim; Mr Bush has practically declared war.

 

Let us hope that if there is war, it will be swift and claim few lives. Removing Mr Hussein is a good thing, yet the way Mr Bush is going about it must be condemned. America must play a more constructive role if humanity is to make any progress.

 

The writer is chairman of Soros Fund Management

[Curly]

You know what, I was watching a documentary about Nelson Mandela last night on UK telly and there was this one quote I just loved and it actually got him into a lot of trouble for saying was when he said:

 

"The Whitehouse has become drunk with power!"

 

But the sad thing is that we (and I use that term loosely) have allowed this to happen, okay… not over night but ever since World War II America has been making it clear to the world how ‘great’ they are. I really wish Russia won the cold war; I believe this would change things dramatically for the better.

 

And I resent the fact the people call that stupid country a superpower!

[mojam]

Rebuilding Iraq my ***. What hapenned to rebuilding Afghanistan? I don't think that is done yet. These people they destroy, kill, and then say, 'hey, we're gonna rebuild it okay!' Well no rebuilding would be needed if you didn't destroy it in the first place.

 

Also anybody hear that they want Iraq to pay for the war. Some American gov officials are suggesting that Iraq after Saddam has been kicked out should be sent a big fat bill to pay for the war. 'Let me attack your country, kill your people, then you pay for the bullets.' Ridicilous. Isn't it?

[SomaliaOnline-President]

I really wish Russia won the cold war; I believe this would change things dramatically for the better.

The Russians would've been better? There is so little you know about the Russians.

[N.O.R.F]

i dont know what it is but, i get this feeling telling me this war will have a gr8 impact on the reunification of the muslim ummah, it has, to an extent brought many ppl to a common position on this!

 

just hope ppl finally wake up!

[Curly]

Originally posted by SomaliaOnline-President:

quote: I really wish Russia won the cold war; I believe this would change things dramatically for the better.

The Russians would've been better? There is so little you know about the Russians.

Waryaa...what are you on? anything would be better than the bloody Americans!!!

[N.O.R.F]

they are the same as each other in diff ways, communism or capitalism/democracy???

 

non of the above!

[SomaliaOnline-President]

Originally posted by Curly_Sue:

quote:Originally posted by SomaliaOnline-President:

quote:

---

I really wish Russia won the cold war; I believe this would change things dramatically for the better.

The Russians would've been better? There is so little you know about the Russians.

Waryaa...what are you on? anything would be better than the bloody Americans!!!

Do you know what they are doing in Chechnya? They are killing, while raping children. Just think about it, the Russians are communists and they have no faith in GOD.

[SomaliaOnline-President]

Originally posted by Curly_Sue:

quote:Originally posted by SomaliaOnline-President:

quote:

---

I really wish Russia won the cold war; I believe this would change things dramatically for the better.

The Russians would've been better? There is so little you know about the Russians.

Waryaa...what are you on? anything would be better than the bloody Americans!!!

Do you know what they are doing in Chechnya? They are killing, while raping children. Just think about it, the Russians are communists and they have no faith in GOD.

[Thinkerman]

• i dont know what it is but, i get this feeling telling me this war will have a gr8 impact on the reunification of the muslim ummah, it has, to an extent brought many ppl to a common position on this!

   

  just hope ppl finally wake up!

Am feeling what your saying Northner, but only allah knows when nxt our ummah will be one.

 

 

Anyway the point i was trying to illustrate with the help of those 2 articles is that all this posturing about the humanitarian case for going to war is rather weak compared to the more obvious and tangiable economic case for war, which is contniously left out of any war debate, or @ best mentioned as 'one' of the reasons for going to war, and not the main reason :mad: which is Bulls***

[Valenteenah.]

Originally posted by Northerner:

i dont know what it is but, i get this feeling telling me this war will have a gr8 impact on the reunification of the muslim ummah, it has, to an extent brought many ppl to a common position on this!

 

just hope ppl finally wake up!

I know exactly what you mean. I've had such a feeling since Sept 11th.

[Honesita]

Let's hope for the unity of all Muslims, yes we've been more open eyed since 9/11, but i dont see much of an action.....!!! This war against Iraq is completely unjustified, and what r the Muslim nations doing to stop it...!!! I dont believe that America, the power house of the world, is gonna spend all that money just to take out Saddam...!!! No matter how bad he is, no matter how much weapons of mass distruction he has, i believe that the Americans r just after the economic boost that comes after rebuilding Iraq...!!!

Russia having the power, i totally agree with SOP, we dont know a lot about the Russians, and they deffinitely would not have been better than the US......i just have this image in my head about the Russians, Anti-Islam.....they all r, but the Russians have mastered the hatred...!!!

 

Salaamz