DoD vs. State Dept on Reviving Iraqi Industry

[tequila]

U.S. Falters in Bid to Boost Iraqi Business - WASHINGTON POST, 23 Aug.

More than a year after the Pentagon launched an ambitious effort to reopen Iraqi factories and persuade U.S. firms to purchase their goods, defense officials acknowledge that the initiative has largely failed because American retailers have shown little interest in buying products made in Iraq.

The Pentagon thought U.S. firms would be willing to help revitalize the war-torn Iraqi economy and create jobs for young men who might otherwise join the insurgency. But the effort -- once considered a pillar of the U.S. strategy in Iraq, alongside security operations and political reform -- has suffered from a pervasive lack of security and an absence of reliable electricity and other basic services.

Iraqi officials have recently highlighted pending deals with retailers such as Wal-Mart and J.C. Penney, businesses that they said were considering purchasing Iraqi products from the few local factories that have restarted. But the two companies said last week that they are not in negotiations to buy Iraqi products, citing Iraq's uncertain future and the questionable viability of potential suppliers there.

Three officials who have worked with the Pentagon's Task Force to Support Business and Stability Operations in Iraq said in recent interviews that, although some factories have achieved limited success, the larger effort to link Iraqi industries with U.S. retailers has been a "failure ..."

[tequila]

Pentagon official under investigation - LATIMES, 27 Aug.

A Bush political appointee and former Silicon Valley executive who has faced opposition in his bid to bail out Iraq's struggling factories is under investigation by the Defense Department on mismanagement allegations.

Deputy Undersecretary of Defense Paul A. Brinkley, who heads an economic task force in Baghdad, is accused of mismanaging government money and engaging in public drunkenness and sexual harassment, a Defense Department spokesman said last week.

The allegations stem from a 12-page memo filed this month by two former members of the task force. The charges are being investigated by the Defense Department's Office of the Inspector General ...

Although Brinkley has won support from military commanders for his campaign for taxpayer-funded investment in Iraqi factories, the plan is opposed by State Department officials here who believe the former state-run factories should be privatized.

Brinkley has argued that Iraqi factories need a jump-start to compete with the international companies now serving Iraq, importing everything from fruit to air conditioners.

"They're so worried about having socialism here," Brinkley said of his critics at the State Department. "The free market already won. A free market will take hold -- they just need a shot."

But critics note that despite Brinkley's efforts and millions spent on the factories, only nine of about 200 have been restarted, creating about 4,000 jobs -- fewer than the 11,000 Brinkley's task force projected in December ...

[Jedburgh]

Mar-Apr 08 Military Review: Restoring Hope: Economic Revitalization in Iraq Moves Forward

One of the critical factors in the counterinsurgency strategy that is demonstrating early but measured progress in increasing security in Iraq is the alignment and rapid application of economic development as security improves.

As discussed in the first part of this series on revitalization of the Iraqi economy, “A Cause for Hope”, the challenges in leveraging and applying American economic expertise, investment, and other stimuli to uplift the Iraqi economy have been numerous, ranging from policy to strategy to tactics.

Prior to 1991, Iraq was the most industrialized of the Arab states with a significant base of industrial operations across a wide range of sectors, and a highly skilled civilian workforce. From 1991-2003, industry in Iraq was strictly focused on internal production to meet domestic demand—United Nations sanctions prevented export of goods or international economic engagement, although some factories remained relatively modern through investments in equipment upgrades.

Following the collapse of the regime in 2003, the Iraqi workforce experienced great economic hardship with unemployment and underemployment exceeding 50 percent. These conditions directly contributed to insurgent sympathy and economically motivated violence. The Task Force for Business and Stability Operations in Iraq (TF BSO) was established in 2006 by Deputy Secretary of Defense Gordon England to address the revitalization of the industrial economy in Iraq. What follows is a status report on this revitalization effort and the ongoing transition of the Iraqi industrial economy to a free-market state that is integrated with global financial, supply, and trade infrastructures.....