EVENTS

Date:	Thursday, October 14, 2004
Time:	9:00 AM -- 11:00 AM
Location:	Wohlstetter Conference Center, Twelfth Floor, AEI 1150 Seventeenth Street, N.W., Washington, D.C. 20036

October 2004

Iraq: Sovereignty, Security, and Justice

Before the war in Iraq, AEI hosted a series of conferences on what it would take to rebuild post-Saddam Iraq. Now it's time to revisit some of those prescriptions. Elections are slated for January, but concerns about security are growing. The collapse into civil war predicted by opponents of the intervention did not occur, but the political and economic reconstitution of Iraq has been slower than hoped. On October 14, AEI hosted three speakers to address security and the progress of the political and economic transitions.

Rend Rahim
Former ambassador-designate of Iraq to the United States

In Iraq, there is no debate over the merits of removing Saddam Hussein from power.  Saddam's removal was the greatest day in Iraqi history; it gave hope to a place that had long forgotten what hope was. But it is important to understand that the criticism that comes with hindsight is, at the moment, a tremendous distraction from the work that remains to be done. Iraqis should have been handed power sooner; the delay meant that a sovereign Iraq was less able to dissuade the insurgency. The Iraqi government is continuing to build its own security force, and despite the lack of security equipment no desertions have occurred since April. Many supporters of the insurgency do not oppose the new order in Iraq but simply do not know where to direct their energy. It is crucial to win over this sub-sect of the insurgency and decrease support for extremists and Baathists. Security will only improve as more parts of Iraqi society become invested in the new political order.

The January elections will be a test for security and for the legitimacy of Iraqi sovereignty.  If a sufficient number of people from disparate parts of society vote for a diverse group of candidates, the election will be a success.  The election will be a greater success if the Iraqi people see that the government is there to address their needs and is not trying to simply wield power. 

The new government's legitimacy will also be judged by reconstruction progress. Almost everywhere that reconstruction projects are possible, they are underway-even though many projects are targets of terrorist and insurgent attacks. Yet there is still a need for smaller, locally-based projects that will immediately impact the general population.  The biggest challenges in reconstruction are projects in post-conflict cities, where it is essential that development crews move into place right behind the tanks.

Salem Chalabi
Lawyer

The development of a new Iraqi constitution will be a complicated process. While the idea of federalism is accepted among members of the interim government, the concept is widely misunderstood among the public. Iraqis do not acknowledge the difference between Kurdistan and the rest of Iraq, but the Kurds are moving rapidly forward in developing the northern region and are depending upon the rest of the country less and less.  This growing divide may make the Kurds less willing to compromise on constitutional debates.

The process of drafting the constitution is possibly more important than the constitution itself.  The drafting of the transitional constitution (the Transitional Administrative Law) took place behind closed doors in order to transfer sovereignty quickly to the Iraqis.  This was widely criticized, and it is essential that the upcoming constitution be written and debated publicly in a way that engages all communities.  In the first constitution process, the CPA mistakenly focused too much attention on negotiations with the Kurds but placed little attention on parties and divisions in the rest of Iraq. The next round of drafting needs to avoid this mistake. Also, it is crucial that the new constitution be written by an elected government, not the interim one.

Basil Al-Rahim
Merchant Bridge & Co.

Giving each Iraqi family fifty dollars per month would only account for 6 percent of the total military budget of the United States during the war.  The Iraqi economy is in shambles today with a GDP per capita of less than 1,000 dollars.  In 1979, the GDP was 7,500 dollars, roughly equivalent to Spain; given the resources available to Iraq, the economy should have been growing at around 4 percent per year since then.

Iraq has six resources that could bolster its economy.  The first is oil and minerals.  The last accurate estimate of oil reserves in Iraq taken twenty-five years ago found that the country could produce 113 billion barrels per day (bpd).  Today, estimates find Iraq could produce three times this amount, making its oil reserves greater than Saudi Arabia.  The second resource is water.  Iraq has more arable land than Egypt, and agriculture could be another strong source of income.  Third, there is a large professional population that can be employed with minimum re-training.  Fifth, Iraq has many archeological and historical religious sites, making the tourism industry a distinct possibility once security can be guaranteed.  Finally, there is significant international interest in Iraq.

To take advantage of all these resources, there must be an economic master plan for development. Oil must be a large part of the plan, as it now accounts for 95 percent of the Iraqi economy.  The goal should be for the oil industry to comprise only 50 percent of the economy, while raising production from 2.5 billion bpd to 8 billion bpd.  To do this, the oil sector should be privatized. Even if the government maintains some influence, privatization must be complete in refineries.

In the financial sector, there are eighteen private banks and four state-run banks.  The state banks are not functioning well, while the private ones are working with an average capitalization of five million dollars (roughly equivalent to that of a United States grocery store).  The stock market is also in need of reconstruction.

The key to successful reconstruction in Iraq is empowering the private sector.  Average Iraqis want only to have food on the table, a little money in their pockets, and the ability to send their children to school.  They are tired of ethnic divides and radical groups. Economic improvement will lessen these divides.

This summary was prepared by AEI intern Elizabeth Steiner.