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American Forces Press Service

Security Will Set Stage for Iraqi Economic Growth, Bremer Says

By Jim Garamone
American Forces Press Service

WASHINGTON, June 20, 2003 - Coalition forces have made great strides in providing security in Iraq and rooting out the remnants of Saddam Hussein's regime, but for any change to stick, Iraq must change its economic underpinnings, said L. Paul Bremer III.

In an opinion piece in The Wall Street Journal that appeared June 20, Bremer, civilian administrator in Iraq, said that establishing law and order is the first prerequisite to growth in Iraq.

"Looters and saboteurs have destroyed offices, stores, factories and government buildings," he said. "Deliberate attacks on oil facilities and electricity lines continue to undermine our efforts and hurt the Iraqi people. Fortunately, we have made the streets of Baghdad safer, and coalition forces are working to root out the last remaining vestiges of the former regime."

On NBC's "Today Show," Bremer said that the leftovers of the paramilitary Fedayeen Saddam, the Iraqi Republican Guard and the Baath Party are not only after coalition forces, they are after the Iraqi people. "They're basically trying to send a message that the coalition cannot provide the most basic function of any government, which is security. They're not going to succeed. We will provide security."

Saddam Hussein's Iraq was a Stalinist top-down economy. State firms were the producers and they answered not to market forces, but to their political master. Undoing 30 years of stultifying government control will be tough, Bremer wrote in the Journal.

But the coalition is up to the challenge. "Iraq faces unique problems, but we have the experience of formerly socialist countries, as well as analysis of successful capitalist ones, to inform our perspective," he said in the article. "While the ultimate future of Iraq's economy will be determined by the Iraqis themselves, economic growth will depend on the birth of a vibrant private sector."

This will require a change in thinking and perspective by the Iraqi people. It will also require a massive shift of resources from government control to private enterprise, he wrote.

Much of Iraq's wealth is tied to oil. The country has the second-largest proven oil reserves in the world, after Saudi Arabia. Coalition moves to safeguard the oil fields in the north and south will pay dividends to the people of Iraq. Bremer said he expects Iraq will ship nearly $5 billion in oil in the next six months.

Bremer said that he would lead a delegation of Iraqi business and financial leaders to a special meeting of the World Economic Forum in Amman, Jordan, June 21 and 22 to "discuss the economic aspects of the Coalition's overall strategy."

He noted on the "Today Show" that the "focus is on a fundamental transformation of a very devastated economy." In the article, he added that "still much work remains."

He noted that more than $400 million of purchasing power is in the "hands of the Iraqi people through the rapid payment of public-sector salaries, pensions, and emergency payments."

"Baghdad's streets are now alive with traders and merchants selling goods that were unobtainable only a few months ago. The coalition has committed billions of dollars to further spur economic growth by funding infrastructure and development projects around the country," he noted.

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