Reconstruction of Iraq Underway

America hasn’t yet destroyed Iraq by bombing, but the US Administration already begins a post-war reconstruction of the country. The situation resembles selling of lots on the Moon very much: purchase of such lots is possible, but at the same time it is very much fantastic.

The US Administration, as a manager of the Iraqi territory can give contracts to the sum total of 900 million dollars exclusively to US companies with a view of “initial reconstruction”.

And the situation is spoken about from a humanitarian point of view: as if the matter concerns a new “Marshall plan”, more investments in a young Iraqi democracy (but in fact it is not born yet). It is astonishing that objects of “initial reconstruction” are thoroughly studied already and “Iraqi money” is being distributed among friendly corporations.

In what democratic processes exactly are Americans going to invest? To begin with, they will invest in reconstruction of oil objects that Saddam, as supposed, is surely to damage. And quite natural that other objects will be damaged during bombings as well.

Then goes development of the military infrastructure. At that, it has been openly declared already that American army is to come to Iraq to stay there.

There are five American companies that will participate in the Iraqi reconstruction; two of them are the construction firms Bechtel and Fluor, plus the Halliburton oil group. Incumbent vice-president of America Richard Cheney used to be at head of the oil group, which by the way attaches some particular cynical tinge to the situation.

Halliburton representatives admitted that a subsidiary of the company, Kellogg, Brown and Foot “is working on prevention of arsons on Iraqi oil wells.” And this statement actually means that American special services are currently working on Mr. Cheney’s firm, and special forces will also have to fight under the flag of the oil concern.

The US International Development Agency announced its scheme of post-war activities; they pledged to reconstruct roads, bridges, mosques, schools and hospitals within half a year after the war. Together with this plan, there are also skeptical opinions saying that if Americans get oil, but other states don’t get anything at all, they will all the same suffer from consequences of the war.

The war will inevitably entail oil deficit and a sudden bounce of the oil price. France’s Liberation reports: “The next day after beginning of US’s war in Iraq, two million of barrels of Iraqi oil will vanish from the world market, consequently, OPEC’s total oil production level will drop to 22.5 million of barrels per day.” Besides, as the war begins, it’s highly likely that oil supplies from Kuwait that is close to the front will be also stopped; this means another reduction by 2 million of barrels on the world market. It is forecasted that oil prices will go up to 70 dollars per barrel. The pre-war oil price at the London Exchange made up 35 dollars.

OPEC representatives are trying to dispel such gloomy apprehensions: they say they have an opportunity to increased oil production every day (today’s total quota makes up 24.5 million of barrels per day) and to fix a price corridor within the limits of 22 to 28 dollars per barrel. It was decided that as soon as the war begins in Iraq, the oil cartel will increase its daily oil production by 4 million barrels. Saudi Arabia, the key oil producer, suggested that quotas on oil export deliveries must be cancelled in case of war in Iraq. The oil monarchy can increase its daily production of oil by 4 million of barrels, at that it will cover the deficit independently.

However, OPEC’s promises don’t sound convincing for those who deal with the fuel market professionally. Specialists say, majority of oil producing countries are at the breaking point of their production capacities. Even Venezuela’s recent return to the market of oil exporters cannot change the present-day situation radically as it hasn’t yet got back to its previous level of oil supplies. Venezuela Oil Minister Rafal Rodriguez declared at an extraordinary OPEC session in Vienna that at that moment oil production in the country made up 2.65 million of barrels of oil per day (and the quota makes up 2.81 million).

In accordance with available calculations, the West can hold out without importing oil within 110 days at the expense of its reserves. It is not clear what may happen then. It is probable that the West will be stricken with a fuel crisis, similar to that experienced in the early 1970s.

Sergey Dunayev Nezavisimoye obozrenie newspaper

Translated by Maria Gousseva

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