December 01, 2005

Inter Press Service

BAGHDAD, Dec 1 (IPS) - Despite the allocation of billions of dollars of U.S. government money for "reconstruction", Iraqis are struggling to exist amidst soaring prices, unemployment, a devastated infrastructure, and cuts in services.

Iraqis received a monthly food ration during the Oil for Food programme which was set up to provide relief during the sanctions against Iraq up to the invasion in 2003. The head of each family was allotted monthly food coupons for commodities like sugar, rice, tea, detergents, cooking oil, beans and baby milk.

But the U.S.-backed governments, starting with the Iraqi Governing Council, have failed to consistently deliver the monthly food basket on time, amidst an unemployment rate estimated at close to 70 percent.

Abu Ali, 66, worked until recently as a distributor of the monthly food ration.

"The Ministry of Trade used to give us sugar for the people," he said. "But not any more. This means we have to buy it from the market at twice the price just to achieve the same quantity. What will poor people do now to get their sugar?"

Abu Mushtaq, a 40 year-old father of five lacks the money to buy products in the market, even after receiving 120,000 Iraqi Dinars (roughly 85 dollars) monthly from the government to offset the shortfall in the food ration.

"Everything has gone up in price so many times," Abu Mushtaq told IPS. "Petrol, kerosene, even the price of bread has gone up so many times since the invasion. The invaders only came to Iraq to fill up their own pockets."

The recent influx of government money to offset the untimely delivery of food rations has raised the demand for particular items, along with prices. This trend is disconcerting because the government's record of keeping food supplied is getting worse.

"The Ministry of Trade did not give sugar for the last seven months, nor rice for two months," Abu Ali said. "Nor tea for four months, and no cooking oil for the last three months."

Meanwhile the market price of sugar has risen 25 percent, of rice 80 percent, tea 100 percent and cooking oil 50 percent.

Most homes in Baghdad get on average only three hours of electricity supply per day, and Iraqis who can afford them use small generators. But petrol shortages and rationing continue, with only 40-50 litres allowed per vehicle monthly.

The interim government is considering a five-fold increase in petrol prices early next year.

The situation is being further complicated by attempts by some Iraqis to compensate for the dramatic shifts in their economy. "Many landlords are raising rents two or three times the normal amount," said Abu Ali. "This creates a bad spiral for everyone."

Hope also appears to be in short supply. "Anybody who tells you there are plans for this is a liar," Abu Anas, who works in the Ministry of Trade told IPS. "The government is still interim, so they cannot make plans, and they don't think that is their task. God help the Iraqi people."

Many analysts have blamed the U.S. government squarely for this situation.

"The 'reconstruction' of Iraq is the largest American-led occupation programme since the Marshall Plan (for reconstruction of Europe after the second world war)," analyst Ed Harriman wrote in the London Review of Books. "But there is a difference: the U.S.. government funded the Marshall Plan whereas (defence secretary) Donald Rumsfeld and (former administrator of Iraq) Paul Bremer have made sure that the reconstruction of Iraq is paid for by the 'liberated' country, by the Iraqis themselves."

According to Harriman's research, 6 billion dollars in assets were left over from the UN Oil for Food programme, and revenue from resumed Iraqi oil exports brought another 10 billion dollars in the year following the invasion.

Nevertheless, while the U.S. Congress voted to spend 18.4 billion dollars of U.S. taxpayers' money in Iraq on 'reconstruction', Harriman says that "by 28 June last year, when Bremer left Baghdad two days early to avoid possible attack on the way to the airport, his CPA (Coalition Provisional Authority) had spent up to 20 billion dollars of Iraqi money, compared to 300 million dollars of U.S. funds."

Allegations of fraud and theft have plagued the occupiers of Iraq from the beginning. Auditors with the U.S. government are reported to have found serious problems.

"The auditors have so far referred more than a hundred contracts, involving billions of dollars paid to American personnel and corporations, for investigation and possible criminal prosecution," writes Harriman.

"They have also discovered that 8.8 billion dollars that passed through the new Iraqi government ministries in Baghdad while Bremer was in charge is unaccounted for, with little prospect of finding out where it went. A further 3.4 billion dollars earmarked by Congress for Iraqi development has since been siphoned off to finance 'security'."

Iraq has oil and dollar wealth, but the people do not see it.