5/21/07

The factory initiative, led by Deputy Under-Secretary of Defense for Business Transformation Paul Brinkley, is part of a renewed emphasis on reconstruction and other economic assistance that complements the "surge" of an additional 20,000 U.S. troops into Baghdad.

"The task force has performed over 60 detailed assessments to date," according to a press release from the group. "Major industrial operations in Iskandiriyah, Najaf, Baghdad and Ramadi have been re-started."

"We're turning on factories almost weekly," Brinkley reports. For the time being, they will remain state-owned. "Violence here has made it unreasonable to expect a free market to quickly emerge."

One short-term goal is to get more Iraqis working and dry up the pool of potential insurgents and militia members. "If you impose 50-percent unemployment in any country, there are going to be militia roaming around. Economic distress creates sympathy for violent activity."

Brinkley says that his bosses have seen "specific cases where employees of factories that had been shut down were being paid $300 to place IEDs," or Improvised Explosive Devices, the biggest killer of coalition troops in Iraq.

Using employment as a way of disabling militias was first attempted by Soldiers from the U.S. 101st Airborne Division in northern Iraq in 2003 and by British Soldiers in southern Iraq. In addition, a few private groups including U.S. nonprofit CHF International have quietly overseen small-scale employment schemes. But for U.S. forces in north-central Iraq from late 2003 until recently, combat operations have trumped reconstruction as a priority. Brinkley's group plus the expanded number of "Provincial Reconstruction Teams" represents a belated recognition by U.S. leaders that combat won't solve Iraq's most vexing problems.

Re-opening shuttered factories requires start-up funding, organizational expertise and commercial orders. The funding is coming from the Iraqi government, the expertise is Brinkley's and the initial orders are coming from coalition forces. Brinkley's team tours old facilities to identify the best candidates for re-opening. "A surprising number of these factories are in good condition," he reports. And despite years of idleness, Iraq's 500,000 former factory workers still represent what Brinkley describes as one of the "most highly skilled workforces in the Middle East."
 
A longer-term goal is to restore Iraqi industry's internal connections and its access to global markets, both necessary steps to ensure Iraq's eventual self-sustainability. Ironically, the country's economy is surprisingly diverse thanks to a decade of sanctions that limited imports and exports and forced Iraqi businesses to try meeting all of the country's needs on their own. The result today is an economy that, according to Brinkley, is capable of producing "anything an economy can consume except high-tech goods." The flip-side of the sanctions - and of the violence that has plagued the country since 2003 - is that Iraq's re-launched and surviving businesses are highly isolated.

To end that isolation, Brinkley's task force has escorted representatives of U.S. and other foreign firms on tours of Iraqi factories. "The appeal I make to them is simple," Brinkley says. "If you come to Iraq and see a factory making a good you consume, consider buying from the Iraqi factory."

"Supply agreements are now being negotiated for everything from construction materials to clothing to machine parts," Brinkley says, signaling Iraq's first baby steps towards economic adulthood.

But ending Iraqi factories' isolation from each other requires better security in Iraqi cities and on its dangerous highways - a mostly military mission that might be easier in coming months and years if Brinkley's task force succeeds in boosting factory employment. In that way, the military and economic efforts are intertwined. 

The task force's work has the added benefit of educating senior Iraqi leaders in basic economic management - a phenomenon that U.S. Ambassador Daniel Speckhard identified earlier this year while discussing the effect that the Baghdad surge was having on Iraqi government ministers. He said that the security plan had forced the ministers to improve their organizational skills. But he added that it was "too early" to tell if this represented sustainable progress at the highest levels of Iraqi government.

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