22 June 2003
Bremer Sees Economic Freedom as Vital to Iraq's Future
(Coalition aims to reverse decades of mismanagement by ousted regime) (750) By Berta Gomez Washington File Staff Correspondent Dead Sea, Jordan -- The successful reconstruction of Iraq will require that newly acquired political freedoms be accompanied by economic freedoms and the reversal of "decades of economic mismanagement" by the former Ba'athist regime, says Ambassador Paul Bremer, the top U.S. civilian administrator in Iraq. "The nation's liberation would be incomplete if Iraqis were secure in the persons but not their property; if Iraqis looked forward to rising political representation but stagnant living standards," he said to a June 22 plenary session of the World Economic Forum (WEF) meeting in Jordan. The Iraqi economy was in a shambles even before the war, Bremer said, noting that more than 50 percent of Iraqis were unemployed and about one-third of gross domestic product (GDP) went to military spending. About 60 percent of the population still depends on government food rations. "Between militarization, misguided central planning and outright theft, for decades Iraq has experienced pervasive misallocation of resources," Bremer said. In the coming months, policies will be set in motion to re-allocate resources from state enterprises to more productive private firms in Iraq, Bremer said. U.S. planners expect small and medium-sized firms in Iraq to play a vital role in providing employment, and believe that lifting barriers to trade will help raise productivity. Bremer said such changes must be accompanied by fundamental reforms. Reducing subsidies to state-owned enterprises should coincide with the establishment of a humane social safety net, he said. Similarly, a private sector cannot thrive without "a clear commercial code, honest courts, low barriers to entry and transparent corporate governance arrangements." He acknowledged the difficulty of the task, but said Iraq begins the process with clear advantages, including potentially fertile farmland, an educated population and oil wealth. On the issue of Iraq's considerable oil resources, Bremer said that Iraqis might choose to create a special program funded with oil revenues, with profits from sales going to citizens as "dividends." Another option would be to deposit oil revenues into a national "trust fund" to finance public pensions or other social programs to help ease Iraq's transition from a state-dominated to a private sector economy. "In either case, every individual Iraqi would come to understand his or her stake in the country's economic success," Bremer said. He spoke as the first Iraqi oil shipment since the war ended was scheduled to be loaded at a terminal in Turkey. "Iraq's oil industry is back in business, only this time for the Iraqi people -- not Saddam Hussein," Bremer said. He also underlined President Bush's pledge that U.S. forces would remain in Iraq "until our job is done, and not a day longer." During a panel discussion following Bremer's address, the secretary-general of the League of Arab States, Amre Moussa, and Sergio Vieira de Mello, the U.N. special representative in Iraq, both said they believed their organizations had an important role to play in Iraq's reconstruction. "Iraqis are determined to become self-reliant ... and the United Nations is there to promote that as quickly as possible," Mello said. Moussa said that Arab countries "agree with and will work to support" President Bush's vision of "a free Iraq ruled by Iraqis." However, he urged accelerating the process that will eventually return control of Iraq to the Iraqi people. He urged the audience not to view his comments as a criticism of the United States, but rather as an offer of assistance. "Iraq is, after all, an Arab country. We are concerned and we want to help," Moussa said. Both Moussa and Mello also expressed concern over what they described as a fluid security situation in Iraq and the possibility that continued lawlessness could seriously disrupt plans for reconstruction and eventual Iraqi self-reliance. In his address, Bremer said coalition forces have made considerable strides in improving Iraq's security and are also setting the stage for Iraq's political transformation. Iraqi police officers are going back to work and patrolling streets alongside coalition forces, he said. Inductions for soldiers in a new Iraqi army will begin within two weeks, he added. Within a month, a Political Council representing the major strands of Iraqi society will be established to help manage the Iraqi government, and plans are in place to convene a constitutional conference, run entirely by Iraqis, to draft a new constitution, Bremer said. (The Washington File is a product of the Bureau of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)
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