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Iraqi Envoy Critical of US Contracts in Iraq
Published on Monday, February 9, 2004 by Reuters
Iraqi Envoy Critical of U.S. Contracts in Iraq
by Sue Pleming

WASHINGTON - Iraq's ambassador-designate to the United States on Monday urged the U.S.-led authority in her country to give more U.S.-funded contracts to local firms, saying that would improve security as well as boost jobs.

Speaking at an Iraqi reconstruction conference in Washington, envoy Rend Rahim Francke said she wanted to see more Iraqis get work rebuilding their own country rather than foreign firms.

By handing out most contracts to foreign companies, the bulk of which are American, Rahim said the United States was alienating Iraqis.

"Alienation within the country is a dangerous feeling and can lead to revolution. We must be careful about that," said Rahim, the Iraqi Governing Council's top diplomat and an Iraqi-American.

Unemployment in Iraq is conservatively estimated to be more than 50 percent and Rahim said that was contributing to the violence in Iraq where U.S. troops and contractors come under daily attack.

"Jobs for Iraqis will create stability and peace in Iraq instead of terrorism. This correlation is absolutely certain," she added."

The first round of contracts to rebuild Iraq went to a handful of established U.S. companies such as oil services giant Halliburton and San Francisco engineering company Bechtel, which in turn have subcontracted projects.

A second round funded by $18.6 billion appropriated by the U.S. Congress is now being handed out, and $5 billion in construction work is set to be announced next month.


U.S. officials defended the contracting process and said they were working hard to ensure Iraqis got their share.

"It is very clear to us that this is a job for the Iraqi people and the Iraqi people are up for the task," said Joe Benkert, U.S.-based chief of operations for the Coalition Provisional Authority.

Benkert said a U.S. Treasury study estimated U.S.-funded reconstruction projects would lead to 50,000 new jobs in Iraq by the summer and 1.7 million new jobs over the next few years.

James Krum, director of program management at the Pentagon, said while the goal was to get as many Iraqis involved as possible, contracts would be given to "the A team who can hit the ground running."

Falah Wajdi, who runs an Iraqi engineering company, said companies such as his were getting only small deals when, he said, they had the capacity to do more.

He said his company had won 28 contracts so far but the value of those was under $1 million. "We are getting small, small stuff that is not worth talking about," he said.

Rahim said she had complained in the past to the CPA over the use of laborers from as far afield as Asia when millions of Iraqis were unemployed.

"It was a public relations disaster," she said of an initial decision to import labor, adding the situation had improved.

The head of a Jordanian company, Khaled Kanaan, told Reuters his firm, a subcontractor in Iraq, was still using a lot of foreign laborers, including workers from the Philippines, Sudan, Nigeria and Kuwait.

Kanaan said most of their work was on U.S. bases and it was hard to get clearance for Iraqis because of constant attacks on U.S. forces in Iraq.

"Believe me, it's cheaper to hire Iraqis, but we had to go outside. It was getting too difficult," said Kanaan.

© Copyright 2004 Reuters Ltd


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