THE OTHER RECONSTRUCTION: How private contractors are transforming Iraq's state and civil society

By Herbert Docena*

After the transfer of 'sovereignty' in Iraq, among those staying behind - aside from 160,000 coalition troops - is a battalion of private contractors attempting to construct economic and political structures most conducive to US and transnational corporate interests even after direct occupation ends. Their mission is crucial for the "exit plan": these contractors are trying to make sure that that the US still gets what it went to war for before it recedes from the scene. Working silently in the background, their impact on Iraq's future may be more significant than that of the more controversial reconstruction contractors such as Bechtel or Halliburton.

SHEIK MAJID AL-AZAWI was one proud and happy Iraqi. His office might look more like a military base than an administrative building, with sandbags, barbed wire, and tall concrete walls surrounding it. It might be pitch-black dark in the corridors most of the day. But that did not dampen the sheik. "We are very happy to be part of this council even if we have simple equipment," says Al-Azawi, one of the members of the Rusafa District Council in central Baghdad. "It's the first time for all the members of the government because it was impossible before." [1]

The Rusafa District Council is one of hundreds of local proto-governing political entities which the US military and the United States Agency for International Development (USAID) - through its private contractor Research Triangle Institute (RTI) - have been painstakingly setting up all over Iraq since the end of "major combat" last year. RTI's role in Iraq came to light in November last year when Coalition Provisional Authority (CPA) head L. Paul Bremer unveiled his original plan - since scrapped - for transferring "sovereignty" back to Iraqis: the interim government would be chosen through complex caucuses in local councils whose members were constituted and vetted by RTI. In effect, Iraq's government would have been chosen by an American contractor.

The incident drew attention to a battalion of private contractors hired by the US government for Iraq's other reconstruction: Side by side with the US-led rebuilding of Iraq's bridges and power plants is the construction and transformation of the economic, political, and social institutions that will make up the new Iraqi state and civil society.

THE 'EXIT PLAN'
Assuming that the war on Iraq was waged for oil, for opening domestic markets, for maintaining military presence in a strategic region, or for promoting a certain ideology, then it would be safe to conclude that the United States would - given the choice - prefer not to "cut and run" without first getting what it invaded Iraq for.

The US could have ensured securing its objectives by keeping Iraq under direct occupation indefinitely through a colonial government run by the US, but this was out of the question from the outset. First, the US was fully aware that this arrangement would not be sustainable for the long-term because it would only fuel the resistance and it would most likely be resisted by the international community. Second, it would be unstable because such an exercise of power would rest only on coercion, not on consent. Finally, the US has no interest in running the affairs of government other than those in which it has a stake.

Hence, in order to secure what its soldiers are dying for, the US is trying something more subtle and more sophisticated: It is attempting to erect Iraq's legal, economic, political, and social institutions according to its own specifications in order to ensure that they will be conducive to US interests even after the occupation authority formally withdraws from the scene and hands over power to a new government. At the same time, the US is also recruiting, mobilizing, and building the capacity of Iraqis who will push for, implement, and defend its preferred policies - both within the state and in civil society - in the new sovereign Iraq. One of them was Sheik Azawi.

Contracted mostly by the USAID but also by the National Endowment for Democracy (NED), and the State Department, these contractors' efforts are funded as foreign aid - and, as the USAID is first to admit, "all aid is political."[2] It has been and will continue to be "a key instrument of foreign policy in the coming decades," declares its aptly titled report Foreign Aid in the National Interest. US foreign aid, says the USAID, will continue to have a two-fold purpose: "furthering America's foreign policy interests in expanding democracy and free markets while improving the lives of citizens of the developing world."[3]

Working quietly in the background - though not in secret, the role of each of these contractors in the division of labor in Iraq reveals the components of the US' comprehensive, systematic, and highly evolved strategy for an "exit plan." The broad strokes may be coming from the higher-ups, but it is these private contractors working to achieve US foreign aid's larger objectives that are drawing the finer details.

THE KINGMAKERS
As the would-be behind-the-scenes king-maker in Bremer's aborted plan, RTI's work in Iraq is illustrative.

Among the first batch of contractors to arrive after the invasion, RTI employees have been roaming around the country searching for what its contract with USAID calls, "the most appropriate 'legitimate' and functional leaders."[4] (Quotes around 'legitimate' in original contract.) Aside from setting up a five-level system of local councils all over the country, RTI is also creating, funding, and supporting dozens of civil society organizations and NGOs that are sprouting-up across the country. How RTI - and its employer, the US government - defines "legitimate" is evident in the way it went about constituting these councils and determining what types of NGOs get supported. "What we are trying to do," said Fritz Wenden of the USAID Office of Transition Initiatives, "is to identify those groups, those leaders that you can work with."[5]

It was not a simple case of RTI knocking on the doors of all pro-occupation Iraqis willing to serve the occupiers. But RTI's process of establishing the councils ensured that it would be self-selecting and self-eliminating: only those who are willing to cooperate - or those who have other plans in mind - would be willing to sit in the councils. These councils were not directly elected by the locals in a one-person, one-vote system. "We didn't know anything about these elections. We just suddenly heard about them," attested one tribe leader from Sadr City.[6] As RTI employee Christian Arandel, pointed out: "Let us be clear. These are not elections. There are all processes of selections."[7] And in these selections, even as some local leaders were consulted and in some cases balloting actually took place, it was the military as guided by RTI - and not the Iraqis - that had the final say.[8]

The military can kick out anyone for whatever unstated and unverified reason. In a number of cases, "Baathists," "criminals," or "terrorists" have been shown the door. Given how such terms have been loosely used to refer to anyone opposed to the occupation, it is difficult to ascertain whether or not those that have been kicked out simply did not meet RTI's criteria for "legitimate" leaders. At the Baghdad City Council, RTI instructed council members to kick out the "terrorists" through "democracy" by voting them out.[9]

Prior to RTI's selection process, the CPA actually abolished all councils that had been formed by the Iraqis after the war without any interference from RTI. "I'm not opposed to [elections], but I want to do it in a way that takes care of our concerns," Bremer said. "In a situation like this, if you start holding elections, the people who are rejectionists tend to win," he explained.[10] Another CPA official was more direct when asked why elections couldn't be held soon enough: "There's not enough time for the moderates to organize."[11]

Under the plan, RTI's task is to make sure the "legitimate" leaders - and not the rejectionists and the non-moderates - prevail. Its mission is part of a bigger goal to build a social base of Iraqis that will stand up for the occupation - or at least passively bear with it - in order to offset those other bases that are hostile to or uncooperative with the occupation authorities and its plans. "Beneath the new interest of the United States in bringing democracy to the Middle East," points out Thomas Carothers, director of the Democracy Project at the Carnegie Endowment for International Peace, "is the central dilemma that the most powerful, popular movements are the ones that we are deeply uncomfortable with."[12]

In answer to its dilemma, the US is attempting to build up its own movement - one with which it would be more comfortable. If the way to make the occupation more acceptable is to put "Americans out back and more Iraqis out front," as influential New York Times columnist Thomas Friedman counseled [13], then the US, through RTI, is on the look-out for Iraqis to put in front.

'THE RIGHT PEOPLE'
Complementing RTI's work is the quasi-governmental organization National Endowment for Democracy. "There is a lot of change taking place [in the Middle East]," NED President Carl Gershman remarked. "We know how to get to the right people."[14]

In Nicaragua in 1990, the right people were from the opposition party-led by conservative candidate Violeta Chamorro who ran against the Sandinista President Daniel Ortega and who was documented to have received campaign funding from the NED.[15] In Haiti last February, the right ones were those who were agitating against popularly elected Jean Bertrand Aristide.[16] In Venezuela, the NED felt it made the right choice by supporting those who organized the coup d'etat against Hugo Chavez in April 2002.[17]

In Iraq, the NED is once again busy searching for the right people and making sure they get adequate support. While RTI recruits people at the grassroots, the NED and its affiliates have been going around Iraq developing the machinery for scores of newly emerging homegrown political formations expected to contest the planned national elections or crowd the scheduled Constitutional Assembly before that.

In Baghdad, scores of houses have been refitted and renovated to be the headquarters of new political parties - many of them furnished by the NED. But it's not just a simple case of the NED dispensing cash. Since the occupation began, the NED's affiliates, the International Republican Institute (IRI) and the National Democratic Institute (NDI), have been going around Iraq holding political party development workshops, seminars, and focus group discussions. As with USAID sponsored "political party development" programs, they train Iraqis on the techniques of strategic planning, building up the party's local and regional structures, recruiting members, fund-raising and media relations. More advanced levels take up electoral communication strategies, campaign planning, and candidate recruitment.[18]

The NDI has been holding sessions for assessing party strengths and weaknesses and evaluating their potential for participating in elections.[19] The IRI, for its part, has gone as far as producing a database of parties, with information on each group's characteristics, their regions of operations, and estimates of their memberships.[20] At least one of the parties, the Free Republican Party, has openly packaged itself as the Iraqi version of the US' Republican Party.[21]

Meanwhile, the US government has allotted funding to the usual NED conduits -- American Federation of Labor - Congress of Industrial Organizations (AFL-CIO) and the US Chamber of Commerce-- to build employers' groups and trade unions in Iraq. The latter is clear about what sort of business associations it plans to set up in Iraq and what role they will have. "By serving as a platform to voice the business community's needs and interests to political decision-makers, business associations contribute to the growth of a participatory civil society and the development of a regulatory and policy environment conducive to private enterprise," reads its report. One of the organizations they are founding, the Iraqi American Chamber of Commerce and Industry, is bent on "promoting an open market economy and a democratic political system." [22]

'BEST PRACTICES'
For now, the Rusafa district council members hang out doing nothing much in their RTI-renovated offices - and for the coalition forces, they are doing an excellent job. With no real power at all - not over budgets and not even on their meeting schedules [23] -- the local council's main use to the occupation forces is to deflect criticism, to transmit the CPA's policies to the communities, and to placate the population and channel their political energies towards non-threatening actions. In Sadr City, for instance, the neighborhood council was deployed to calm down the people after a military helicopter knocked down a religious flag.[24] In Abu Nawas neighborhood, the council members were tasked to go from door to door to collect guns from their neighbors.[25]

After - or if ever - the bombs stop exploding, however, the US would like to see the layer of Iraqis they are creating as a social base to be calling the shots in the future Iraq. The "Iraqis out front" are being trained and honed to understand, defend, and implement the policies that the US wants Iraq to put in place for the long-term. USAID has learned that "legitimate" leaders are not just found, they're made. Before the US withdraws from the scene, it first has to ensure that its Iraqis will know what to do.

For this, Iraq has become a massive countrywide teach-in where hundreds of conferences, seminars, forums, and workshops are being conducted by the CPA to teach the Iraqis the different components that make up "democracy"- many of them organized by RTI and other contractors and attended by local council members and NGO leaders. In Najaf, there was a workshop on "Constitutional Democracy: Rebuilding Society in a Democratic Age."[26] Across Iraq, "Tribal Democracy Centers" have been set up to encourage sheikhs and tribal leaders to take the required classses.[27] Even elementary and high school students are starting young: every week, after flag ceremonies in their schools, teachers of "democracy" are given five minutes to expound on various concepts.[28] In the northern city of Arbil, where the lessons are far more advanced, Iraqis from the government, civil society, media, and the business community are undergoing a six-part series of "economic development clinics" for diagnosing the "potential role of Arbil in the global economy."[29]

Among the most important lessons that the Iraqi trainees have to master is that the kind of "democracy" that the US is giving them is distinctive. It is no coincidence that Larry Diamond, one of the leading theorists on this type of democracy and a co-director of the NED, was appointed a senior advisor to the CPA. At a lecture in Hilla University last January, Diamond told his audience that a basic element of "democracy" is a "market economy" and among the most fundamental rights is the right to own property[30] - a view affirmed and advanced by the USAID.

This, in turn, calls for a kind of democracy in which social equality is not a necessary aim and in which inequalities may in fact be necessary. As Samuel Huntington, another scholar who supports this view of "democracy," puts it: "Political democracy is clearly compatible with inequality in both wealth and income, and in some measure, it may be dependent upon such inequality...Defining democracy in terms of goals such as economic well-being, social justice, and overall economic equity is not, we have argued, very useful." [31]

While they imbibe these fundamental lessons about the kind of democracy that they're expected to put in place in the "new Iraq", Iraqis would then be taught the operational details. RTI, for its part, is required by contract to "identify, prepare, and disseminate best practices in local governance."[32]

'PARTICULAR EXPERTISE'
"We don't present ourselves as we have advice to offer to you, or we don't present ourselves as here's the best way to do something... [W]e have experience in a lot of countries in doing similar kinds of work, and so we do try to say, 'In our experience, here are some best practices'," explains Johnson, as though the Iraqis are given choices.[33] RTI's record in dozens of other countries, as gathered from various USAID and RTI documents, shows what's best.

In Central and Eastern Europe, RTI was involved in administering "shock therapy" to former Soviet Bloc states, moving the local governments toward open market economies. In Russia, Ukraine, Kazakhstan, Kyrgyztan, it took part in the massive privatization program of over 150,000 state-owned enterprises. In Ukraine, RTI set up regional offices for disseminating "best practices" and its "advisors" developed the policy for setting the prices of local services. In Romania, where it prides itself in securing the enactment of a new municipal finance law, RTI created an association of municipal civil servants and "guided" them in lobbying for a new national legislative structure for local governments by teaching them the "best practices."

Providing what it described as "high impact assistance" to national ministries and municipal associations setting Bulgaria's fiscal decentralization policies, RTI pushed for the passage of a "Municipal Budget Act" and a "Municipal Borrowing Act." Claiming to be giving "objective non-partisan assistance," RTI was proud to report that it worked - on a daily basis - with officials from the Bulgarian Ministry of Finance drafting two policy papers on decentralization. In pushing for the privatization of its educational system, it also claims to have helped set what standard of education each pupil will get given the maintenance costs. In Poland, it developed training programs on the management of water and wastewater utilities. In privatizing and restructuring the housing agency of one city, RTI went so far as to provide samples of company charters as well as procedures for the meeting of shareholders to the newly privatized company.

In Indonesia, RTI trained bureaucrats to "restructure local water utilities into profit making entities"[34] by obliging Indonesian city-dwellers to pay for urban services. In Pakistan, RTI was recently contracted by USAID to privatize the country's educational system.[35] In South Africa, RTI boasts of drafting the constitutional amendment signed by President Thabo Mbeki in 2001 allowing municipalities to make loans. The South African government claimed that the Municipal Infrastructure Investment Unit, which assisted municipalities in getting financing for their local infrastructure through public-private partnerships, was part of a government agency. It was, in fact, created, run, and staffed by people from RTI. [36] To show how it's actually done, RTI conducted pilot demonstrations of how to privatize solid waste management in Tunisia.

RTI performed similar work throughout the Carribean and Central America, including Guatemala and El Salvador, as well as in Ghana, Haiti, Honduras, Swaziland, Korea, and Portugal. This long and broad range of experience has given RTI reason to advertise its market niche. "We have particular expertise in helping prepare short- and long-term public-private partnerships for the financing and management of municipal services such as water supply, sanitation, waste management, energy, and transportation," RTI's website proudly notes.[37]

AT THE HEART OF USAID
Given its background, its track record, and its self-avowed expertise, what constitutes RTI's "best practices" is obvious. Paid by the USAID, RTI has no choice but to follow the directives which USAID itself has made clear: "The safeguarding and protection of economic freedom lies at the heart of USAID's legal and institutional reform activities."[38] In its contracts with the USAID, RTI invariably works towards overhauling local governments in order to make them more market-oriented and friendlier to the private sector.

In Iraq, if the pieces fall into place, the council members and the NGOs will soon be sitting through lessons on the "best practices" of local governance and directed, as RTI's previous students from other countries have been, to reading materials such as The World Bank Tool for Private Sector Participation in Water and Sanitation.[39] If its previous use is any indication, even the financial spreadsheet software they will be tasked to master will fill a specific purpose: that of assessing the creditworthiness of their municipality. Already in Kerbala, local council members and bureaucrats have taken workshops in "Management Accounting and Reporting for Efficient and Effective Service Delivery."[40]

When the Iraqis eventually begin to roll up their sleeves and work on the nuts and bolts of their political system, RTI will be there every single step of the way - providing "technical assistance" in drafting the necessary laws, helping ministries understand and relay complex regulations to their constituencies, supplying them with "model" constitutional provisions, giving them access to the advise of "consultants" free of charge, handing them "technical" studies and background papers, doing PR work, etc. - all as part of an effort to "promote techniques for 'reinventing' local government," as the USAID puts it.[41]

"As the CPA and the Iraqi Governing Council advance in their efforts to strengthen national institutions, adopt and implement national policies, and design a political system for a future Iraq," notes the contractor, "RTI and our partners are working to ensure that the knowledge base generated by our field activities informs key decisions." [42] RTI's contract specifically spells out that they will "strengthen the capacities of NGOs...to advocate on behalf of preferred local policies."[43] The use of the passive tense is instructive because even as the contract avoids the question, it reveals who made the choice.

THE HIDDEN LEGISLATORS
While RTI is out in the streets rounding up "legitimate" leaders, Bearing Point is working inside the offices of the Ministry of Finance or the Central Bank erecting Iraq's economic infrastructure - as designed and envisioned by the occupiers. It has taken to heart another important lesson USAID has learned: if reform is susceptible to being blocked by politicians and organized labor, then the solution is to keep key ministries like that of Finance and the Central Bank insulated.[44]

"We are now overhauling the functions of and building the institutional capacity of the entire ministry," Iraq's US-appointed Finance Ministry Kamal Gailani announced last February.[45] One of his first public appearances was to unveil possibly the most investor-friendly investment laws ever conjured. The CPA enacted Order 39 gives foreign investors rights equal to Iraqis in exploiting Iraq's domestic market and allows them full repatriation of profits.[46] The Economist heralded this a "capitalist dream" and a wire agency called it a "free market manifesto."[47] Not even the interim government, according to the US-IGC written transitional constitution, can overturn this order.

By "we," Gailani would have included all the "technical advisors" hired by Bearing Point, another USAID contractor, who report to the "macroeconomic analysis unit" in his ministry. Bearing Point's contract is very detailed - complete with schedules and benchmarks, and leaves no doubt as to what the US intends to do. It is chilling in its comprehensiveness and brazen in its wording. "The new government will seek to open up its trade and investment linkages and to put into place the institutions promoting democracy, free enterprise and reliance on a market-driven private sector as the engine of economic recovery and growth," the contract reads, preempting anything the new government might want or not want to do.[48]

Instructed to coordinate with the US Treasury Department, the World Bank, the IMF and other donors, Bearing Point is mandated to ensure that Iraq's investment policies conform to the over-all economic thrust put forward by the CPA as well as with all the WTO requirements and other multilateral financial institutions. With the help of Bearing Point, an offshoot of KPMG, one of the Big Five auditing firms, Iraq had granted "observer" status in the WTO - the first non-sovereign country to be admitted as such in the organization. The CPA-enacted Central Bank Law as well as its Company Law, which eliminates the previous requirement to have trade union representatives on the board of private companies, had been penned - or lifted from existing templates - by Bearing Point as though they were Iraq's unelected legislators.

On the massive privatization program, over which Bearing Point is in charge, the contractor is told that "if changes to legislation are required, contractor will assist legislative reform specifically to allow for the privatization of State-owned industries and firms and/or establishing a privatization entity." Not only will Bearing Point decide which state owned enterprises (SOEs) are up for bidding, it will also determine their prices and set up the secondary trading system for re-selling these companies. It is at this secondary market that the windfall profits would be made when the SOEs, having been bought at dirt-cheap prices, are re-sold. The profiles of the SOEs to be put on the bidding block have already been compiled and posted in the CPA website. It is an inventory of what The Economist calls a "yard sale."[49]

THE SCHOOLMASTERS
So unsparing is USAID's plan for Iraq that even the educational system is being geared towards the global marketplace by another contractor, Creative Associates. Its task is to "coordinate" with other agencies in supervising textbook production, training teachers, and school kits. Among its targets, as listed in its $62 million-contract, is "enhanced public-private partnerships for education service delivery."[50] While Bearing Point acts as Iraq's unseen de facto legislature, Creative Associates acts as its thought police in determining what Iraqi students should and should not learn. In a telling sign of who will set Iraq's educational policy - and possibly shape the minds of generations of students and re-write Iraqi history -- the contract explicitly states that "USAID shall review the contents of all teaching materials before they are published."[51]

In assessing these teaching materials, USAID will be guided by its own pedagogical philosophy. According to its report, educational policies must respond to the shift in global markets from low-cost labor to high-end manufacturing. USAID administrator Andrew Natsios thereby recommends that "education systems in developing countries must broaden their sights - and US foreign assistance must offer more support for secondary education for the global marketplace."[52] Learning must be based on demand so they can meet the needs of the global market. It's no longer enough to count on primary education to prepare young people for employment. Hence, "[s]econdary education and skills-based learning must now be considered as essential elements in tapping into the global economy - and in building democratic institutions."[53]

The USAID takes pains to convince Iraqis that all these measures are in their best interests because they supposedly ensure that the new Iraq succeeds in the global economy. "Globalization and regional integration have benefited countries regardless of their stage of development," the USAID maintains.[54] At the same time, USAID is quick to point out, this success will also rebound to the US. "Successful development abroad generates diffuse benefits. It opens new, more dynamic markets for US goods and services. It generates more secure and promising environments for US investment."[55]

If Iraq is "today's California Gold Rush," as former CPA director of private sector Tom Foley calls it,[56] then the silent battalion of private contractors exemplified by RTI, Bearing Point, and Creative Associates, is erecting the legal and institutional structures for ensuring that the occupiers get the most gold in that rush. "Business conditions are improving everyday in Iraq, creating a greater opportunity for US business to explore virtually an untapped market," cheerfully noted US Commerce Secretary Don Evans. From laying the foundations through to choosing the colour scheme, the US is attempting to transform Iraq along free market lines and to install one of the most radical sets of neo-liberal economic policies ever dreamed up.[57]

If Iraq is to be the "capitalist dream," then these private contractors are the ones making these dreams come true.

IN THE NATIONAL INTEREST
In this complex and ambitious plan, RTI, Bearing Point, and Creative Associates, and the other contractors in Iraq are applying what the US government has learned from decades of using foreign aid to push for "policy reforms" in scores of countries around the world.[58] According to USAID, the successful adoption of US-backed policies requires "political will" which can come from three sources: from the state, the ruling elites, or government bureaucrats; from civil society; and from foreign governments and civil society.

Focusing on only either the state or the ruling elites, USAID learned, is not enough. "Even if state elites propose reforms - for example, to privatize state industries, improve the tax system, or crack down on smuggling and bribery - these reforms may not be sustainable unless society is educated about the need for them and mobilized to support them," the report Foreign Policy in the National Interest points out. This explains why the US - as seen by the proliferation of USAID-funded NGOs and other organizations - is also very hot on "civil society." "Organized pressure from below, in civil society, plays an essential role in persuading ruling elites of the need for institutional reforms to improve governance," the report notes.[59]

In Iraq, the US-sponsored civil society is intended to function as a back-up in case the subsequent government - despite all the safeguards to retain influence that the US is attempting to lock-in - still refuses to pursue "reforms" after the US leaves. "What we are hoping is... that there will be this moderating influence that will have an effect on the way that people at the national level choose to behave," a USAID official said. "Now we know... that we stand a better-than-even chance of moderating some of the extreme behavior at the top."[60] Controlling the $18.4 billion dollar reconstruction fund as a lever of power, the US is blunt about what it should do in case the future government does not take up its recommended reforms: "If there is no political commitment to democratic and governance reforms, the United States should suspend government assistance and work only with non-government actors."[61] USAID calls this "tough love."[62]

According to the USAID's review, "reforms" don't succeed because of the failure to organize wider constituencies among "stakeholders." This is where foreign aid comes in. "Where political will for systemic reform is lacking," says the report, "the main thing that foreign assistance can do is to strengthen the constituencies for reform in civil society..."[63] Foreign aid will be used to educate them about the preferred policies and learn about the experience of other countries, improve their coordination with each other, enhance their ability to lobby and to project themselves as experts, and campaign for support from more people. Interest groups such as trade unions, chambers of commerce, think tanks and the mass media should be specifically targeted.

A crucial element for the "reforms" to succeed, the USAID points out, is the perception of "ownership." The adoption of "reforms" must not be seen as externally imposed, the way the IMF's structural adjustment policies were or those of a direct colonial authority would be, for example. It is important that the "best practices" that the RTI is teaching Iraqis will, in the end, be seen as proposed by the Iraqis themselves - and not rammed down the Iraqis' throats by RTI.

'POLICY CHAMPIONS'
Guided by these realizations, USAID has developed a step-by-step list of tasks to improve the likelihood of "reforms" being successfully embraced.

The first among these tasks is what USAID calls "legitimation" or the means for getting "buy-in" from the people who should be seen as owning the policies. In this stage, USAID should single out what it calls "policy champions" who could be relied on to act as the main proponents of the policy. Drawing from its "Policy Implementation Toolkit," USAID contractors are expected to carry out "stakeholder analysis" because this "helps managers to identify individuals and groups that have an interest, or stake, in the outcome of a policy decision."[64]

To carry out this analysis, USAID contractors must create and maintain a catalog of stakeholders and classify them either as "supporters," "opponents" or "neutral parties. They should also be able to prioritize "which groups are the most important ones for managers to seek to influence."[65] A more advanced version of the analysis is what USAID calls "political mapping" which should provide a graphic guide to the political landscape facing a certain policy. This tool "permits a finer grained assessment of the support and opposition facing policy implementation and allows implementers to track how various implementation strategies might rearrange coalitions of supporters and opponents."[66]

Somewhere at the USAID headquarters in Baghdad's heavily fortified Green Zone presumably hang these political maps. What better way to gather data for "stakeholder analysis" and for "political mapping" than to sit through all of the local council meetings or be planted in the ministries, observe the members and bureaucrats, and take notes? RTI is incidentally under contract to "develop a body of knowledge that is essential to effective program implementation" by making reports on various aspects of Iraqi society, including "appropriate and legitimate leadership" and the "status of local governance."[67] At a time when Iraq's governors are selected by "screening committees" rather than the people at large, the information that RTI gathers on the ground should be useful not only for getting the pulse of the people but also for identifying "policy champions" to be endorsed to higher ranking positions in government or "opponents" to be marginalized and countered. No need for deep penetration agents; RTI's immersion in the local communities is a perfect method for surveillance.

The second task is "Constituency Building" or "gaining active support from groups that see the proposed reform as desirable or beneficial" and which is intended to "reduce or deflect the opposition of groups who consider the proposed reform measure to be harmful or threatening."[68] Here, the plethora of workshops and conferences that the USAID is organizing become useful not just as educational sessions but also for building consensus and developing common plans of actions among "policy champions." "It is of vital importance to set up groups of activists in every locality," RTI noted from its experience in Ukraine.[69] Building consensus is key because, as USAID points out, "The broader and more sustained elite consensus in favor of governance reforms, the greater the impact of democracy and governance programs tend to have."[70]

'ENTRY POINTS' AND 'OPENINGS'
In a sense, the USAID and its contractors are having it easier in Iraq. In most of the other countries where it has projects in, USAID has no choice but to work through existing institutions and work with people that are already in power to implement its "reform" programs. Confronting circumstances that are often beyond its control, USAID had to seize on opportunities such as constitutional reforms, the passage of bills or the implementation of administrative regulations to push for its preferred policies. In the jargon of USAID, these are the "entry points".[71] To increase its chances of succeeding, USAID contractors are instructed to look for "sympathetic" ministers in the national administration or a chairperson of a strategic parliamentary commission in the legislature, as well as to set up and support associations of elected officials or bureaucrats. USAID calls this "capitalizing on national opening."[72]

In Iraq, the "entry point" was the invasion. The "national opening" was the collapsed state left in its wake. There are no existing institutions to work through; the US is attempting to create them from the ground up. From the rubble of the bombed-out ministry buildings scattered all over Baghdad new government agencies are rising, designed and constructed by the occupation authorities from the bottom-up . The "legitimate leaders" are not to be identified and co-opted, they have to be groomed and primed. In other countries, USAID operators have to cajole, intimidate, threaten, or effectively coerce governments to submit to its "reforms". In Iraq, they are the government. There is no need to tweak or tinker with Iraq's laws because they are being written on a blank slate. All this is possible because of the rare opportunity offered by the war. In Iraq, the first step was not "legitimation" or "constituency-building." It was dropping bombs.

Because of the size of their contracts and the allegations of corruption involved, other reconstruction contractors like Halliburton and Bechtel have been more controversial. In their attempt to fundamentally alter Iraq's economic, political and social landscape, the impact of less well-known contractors such as RTI, Bearing Pont and Creative Associates, may be more profound, more far-reaching, and more lasting. Halliburton is merely repairing the oil wells; Bechtel is merely building schools. In a way, Bearing Point is going to determine the future of Iraq's oil industry; Creative Associates is going to decide what will be taught inside the schools that Bechtel is building.

By having the power to plan Iraq's economic institutions, Bearing Point's success or failure will affect the fortunes not just of Bearing Point but of all the corporate interests who hope to benefit from Iraq's new economic policies. The amount of money spent on these efforts may be small relative to other aspects of the war. But as the USAID noted, in the long run, the "influence potential" of the kind of work it is doing in Iraq is much more important than its "resource contribution."[73] The NED may not be killing Iraqis but, as Heritage Foundation analyst said, it is "an important weapon in the war of ideas."[74]

A few weeks after the interview at the Rusafa district council, one of its members, al-Azawi, the one who was very happy to see the end of the dictatorship and who was very eager to be part of RTI's "new Iraq," was killed by the resistance. Ironically, despite the relative ease with which USAID's programs are being implemented in Iraq, Sheik al-Azawi's death underscore why it may not all be that easy.

[1] Interview, 27 March 2004
[2] United States Agency for International Development, Foreign Aid in the National Interest, 23
[3] USAID website, www.usaid.gov
[4] USAID contract with RTI, C-1.
[5] USAID Local Governance Consultation transcript, 30 September 2004, USAID website
[6] Interview, 29 March 2004
[7] Chris Kromm, Rania Masri, and Tara Purohit, "Why No Democracy in Iraq?," Counterpunch, February 23, 2004
[8] Ariana Eunjung Cha, "Iraq Has Lessons in Democracy," Asian Wall Street Journal, November 25, 2003
[9] Interview, 23 March 2004.
[10] William Booth and Rajiv Chandrasekaran, "Occupation Forces Halt Elections Throughout Iraq," Washington Post, June 28, 2003
[11] Edward Wong, "US tries to give moderates an edge in Iraqi elections," New York Times, January 18, 2004
[12] Alissa Rubin, "Suging Shiite Demands Put US in a Bind," Los Angeles Times, January 18, 2004
[13] Thomas Friedman, "More Americans Out Back, More Iraqis Out Front," International Herald Tribune, August 21, 2003
[14] See William Robinson, A Faustian Bargain: US Intervention in the Nicaraguan Elections and American Foreign Policy in the Post-Cold War Era (Boulder: Westview, 1992)
[15] John Stauber and Sheldon Rampton, Toxic Sludge is Good for You, (Monroe, Maine: Common Courage Press, 1995), 166.
[16] Thomas Monnay, "Anti-Aristide Groups Split Threat to Future," Sun-Sentinel.com, February 14, 2004
[17] Duncan Campbell, "American Navy 'helped Venezuelan coup'," Guardian, April 22, 2002,
[18] Ronald Shaiko, "Political Party Development and USAID," Democracy Dialogue, December 1999.
[19] CPA Administrators Weekly Governance Report, March 13-19, 2004.
[20] CPA Administrators Weekly Governance Report, February 7-13, 2004
[21] CPA Administrators Weekly Governance Report, various dates.
[22] Raad Ommar and Sabah Khesbak, "Conditions and Expectation for Private Enterprise in Iraq," Iraqi American Chamber of Commerce and Industry, undated report; Nick Nadal and Zaid Abdul Hamid Abdul Moneim, "Iraq Trip Report," Center for International Private Enterprise, internal memo, August 23-31, 2003.
[23] Baghdad Citizen Advisory Council Handbook.
[24] USAID Local Governance Consultation transcript, September 30, 2003, USAID website.
[25] Interview, 29 March 2004.
[26] CPA Administrators' Weekly Governance Report, January 31- February 6, 2004.
[27] "Democracy Building in South Central Iraq," CPA Press release, January 21, 2004.
[28] Coalition Provisional Authority Administrators Weekly Governance Report, February 28- March 5 2004.
[29] CPA Administrator's Weekly Governance Report, March 6 - 12, 2004.
30 "Democracy Building in South Central Iraq," CPA Press Release, January 21, 2004.
[31] Samuel P. Huntington, "The Modest Meaning of Democracy," in Robert A. Pastor, Democracy in the Americas: Stopping the Pendulum, New York: Holmes and Meier, 1989, p. 12-13, cited in Robinson, 55.
[32] USAID contract with RTI, C-2.
[33] USAID Local Governance Consultation transcript, September 30, 2003, USAID website
[34] USAID data sheet.
[35] "USAID allocates $60 million for educational reforms in Pakistan," Daily Times, February 19, 2004.
[36] Public Services International, August 20, 2002.
[37] RTI website, www.rti.org
[38] USAID website.
[39] USAID Making Cities Work website.
[40] CPA Administrator's Weekly Governance Report, January 31- Febuary 6, 2004, CPA website.
[41] Center for Democracy and Governance, Decentralization and Democractic Local Governance Programming Handbook, (Washington: USAID, 2000) 45, 49.
[42] "The Local Governance Project in Iraq," RTI website, www.rti.org.
[43] USAID contract with RTI, C-2.
[44] David Sogge, Give and Take: What's the Matter with Foreign Aid, (London: Zed Books, 2002), 189.
[45] Kamal Gailani, opening statement during press conference, February 6,2004.
[46] Coalition Provisional Authority Order Number 39
[47] "Let's All Go to the Yard Sale," Economist, September 25, 2003; Reuters, September 21, 2003
[48] USAID contract with Bearing Point, 77
[49] "Let's All Go to the Yard Sale," Economist, September 25, 2003[
[50] USAID contract with Creative Associates, 4
[51] USAID contract with Creative Associates, 3
[52] Foreign Aid in the National Interest, iii
[53] Foreign Aid in the National Interest, 18
[54] Foreign Aid in the National Interest, 13
[55] Foreign Aid in the National Interest, 2
[56] CPA Press Release, "Commerce Secretary Evans Urges US Business to Deal with Iraq," February 12, 2004
[57] Iraq is only the jump-off point, however. Bush has struggled to launch the Broader Middle East and North Africa Initiative as a "forward strategy of freedom" for promoting "democratization" and "free markets" in the strategic region. Among the components of this initiative include the launch of the Middle East Free Trade Area shortly after the invasion last year, the accession of the various "reformed" countries to the World Trade Organization, and the signing of Status-of-Forces type military agreements with the US (Robin Wright and Glen Kessler, "Bush Aims for 'Greater Mideast Plan,' Washington Post, February 9, 2004).
USAID, the NED, and their private contractors - backed by the US military housed in the planned permanent bases in Iraq - are expected to take the lead. NED has already requested for a budget increase while USAID has singled out the region for having "strongest obstacles to democracy and the greatest near term dangers for US national security."(Foreign Aid in the National Interest, 38) By obstacles, it meant not only the presence of authoritarian regimes but of encumbrances to trade. "A recent survey of nine ME countries concluded that a lack of trade openness and significant barriers to private sector development limit potential for foreign trade," the USAID took note. (Foreign Aid in the National Interest, 62)
[58] For more on this, see William Robinson, Promoting Polyarchy: Globalization, US Intervention, and Hegemony, (Cambridge: Cambridge University Press, 1996), pp. 48-56.
[59] Foreign Aid in the National Interest, 48
[60] USAID Local Governance Consultation transcript, June 19, 2003
[61] Foreign Aid in the National Interest, 10
[62] Foreign Aid in the National Interest, 50, 51
[63] Foreign Aid in the National Interest, 48
[64] Policy Implementation: What USAID has Learned, 11.
[65] USAID Center for Democracy and Governance, Policy Implementation: What USAID has Learned, (Washington D.C. USAID, 2001), 11.
[66] Policy Implementation: What USAID has Learned, 12.
[67] USAID contract with RTI, C-1.
[68] Policy Implementation: What USAID has Learned, 5
[69] RTI Ukraine project website.
[70] Foreign Aid in the National Interest, 48
[71] Decentralization and Democratic Local Governance Programming Handbook, 35.
[72] Decentralization and Democratic Local Governance Programming Handbook, 33.
[73] Nelson, J. and G. Ranis, "Measures to ensure the effective use of aid," USAID discussion paper, 1966, quoted in Wood, R.E., From Marshall Plan to Debt Crisis: Foreign Aid and Development Choices in the World Economy, Berkeley: University of California Press, 1986
[74] cited in Barbara Conry, "Loose Cannon: the National Endowment for Democracy," Cato Foreign Policy Briefing No. 27, November 8, 1993