Iraq: Stop the war in Iraq – The “reconstruction” of Iraq, lessons of the Balkans

There is hardly a building in Sarajevo city that has not been damaged in some way by the conflict in the 1990s. Walls are pock marked with bullet holes. More often than not, blocks of flats are scarred by damage from shells. Every so often a building has been completely destroyed. In the office I was working in during my visit, a map of the minefields around Sarajevo was pinned to the wall. The map was dated 2002. It is clear from this evidence that only a small number of mine fields had been cleared.

Stop the war in Iraq. Sarejevo.

At the same time as massacring Iraqi people and destroying infrastructure, US/British imperialist spokespeople claim they only want to "liberate" Iraq and to "rebuild" the shattered country. But what does the promise of "reconstruction" really amount to? What are the lessons of other recent similar programmes? A CWI correspondent recently visited Sarejevo and reveals what ‘post-war reconstruction’ really means for working people in that war torn city. CWI Online

The ‘reconstruction’ of Iraq – lessons of the Balkans

The military presence of different international forces are visible everywhere in the city, whether the helicopters of SFOR (‘Stabilisation Force’, which is NATO led) at the airport or the soldiers on the streets.

If the city’s infrastructure was damaged terribly during war, the psychology of the population is even more scarred. People remember the feelings of betrayal they felt when they were advised by international diplomats to take certain actions and were then left defenceless. There is a feeling of deep frustration at the political structures imposed on the country in an attempt by western powers to balance the interests of the different nationalities. It is almost as if the calendar in Bosnia-Herzegovina differs from that of the rest of the world – people are always referring to times as "before the war" or "after Dayton".

The 1995 Dayton Accords, which marked a formal end to conflict in Bosnia Herzegovina, were presented to the world as a peace settlement. A huge programme of "economic aid" accompanied them. But this was not aimed at rebuilding industry in the country. The money has been used to force through privatisation of large parts of the economy. This benefits the gangster-elite and further impoverishes working people. Huge amounts of ‘donor aid’ have been pumped into the economy with a recent estimate saying that up to 30% of the country’s Gross Domestic Product consists of such aid. But large amounts have been siphoned off by corrupt officials and criminal gangs. Corruption is now far higher than at any time before the war.

Forced privatisation

The aid that does not simply ‘disappear’ is used by Western powers as a political tool to force through privatisation. The construction industry is a prime example. In the years before the war, when there was still state ownership of industry, there were about ten construction companies operating in Sarajevo, some employing several thousand employees. A programme of imposed privatisation however accompanied the Dayton Agreement. A scheme was used where every resident was given a voucher to ‘buy’ a share of industry. These shares were then sold to companies, which used them to buy shares in the newly privatised firms. Thus ownership was changed with no new investment. That was bad enough but the Bosnian economy, ravaged by war, had no money left to provide for the rebuilding of homes and flats. Refugees occupied one building site, which had been started before the war, consisting of 80 flats with no windows or utilities, as late as the year 2000. New building constructions that were financed by ‘foreign aid’ were usually banks and hotels. The latter were built to provide accommodation for the staff working for the foreign aid institutions!

During this process, the former state building companies were deliberately refused contracts for what rebuilding actually took place. Typically, local employees working on the ‘reconstruction’ projects were left without wages. Workers from at least one of the firms are still owed over a year’s wages.

State assets are being sold off to finance redundancies. This means that from having employed several thousand workers, these companies are left with several hundred on the books. Over 500 small construction companies have sprung up taking the place of these former state companies. Usually employing less than ten people they can pay wages that are higher than the former giants. But this is for the simple reason that the new employers do not pay taxes and insurance for the staff. More often than not, workers at the small companies are still formerly employed by one of the giants, who pay their tax and insurance for them. Although many of these companies have earned a reputation as cowboy firms, they still have the advantage when competing for contracts of being freed from insurance and tax "overheads". Thus they can undercut the prices of the larger companies.

Corrupt bureaucrats and politicians

Many of the smaller companies have direct connections to the bureaucrats and politicians, who at the behest of the western powers have divided up control of the country between themselves. No talk here of a ‘level playing field’ – the western donors openly encourage and assist the so-called small and medium companies, which they see as the basis of a new private sector dominated economy. And one of the most active western donors to these crooks is none other than Clare Short’s Department for International Development in Britain.

Clearly the same fate awaits a "liberated" Iraq. Already, ’USAid’, the US government’s foreign aid vehicle, has announced that its policy of reconstruction for a post Saddam Iraq will be based on a rushed programme of privatisation. After years of UN sanctions, which have left millions of Iraqis in dire poverty, and the devastation of this present bloody and possibly protracted war, the Iraq working people will see their jobs destroyed and living standards further devastated. And all for the sake of ‘free enterprise.’

A CWI correspondent, Sarajevo

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March 2003