2003 June 11 Wednesday
Rapid Privatization For State-Owned Companies In Iraq

The Financial Times reports that the United States government has decided to accelerate the privatization of government-owned Iraqi industries.

Dozens of Iraqi state-owned companies are likely to be earmarked for privatisation within the next year, Tim Carney, senior coalition adviser to the Iraqi ministry of industry and minerals, said yesterday.

Previously the US-led coalition had said it would wait until the creation of an elected Iraqi government, in a year or two, before beginning privatisation.

Currently the US occupation administration is usiung the government industry workers simply as a way to pump money into the local economy.

Two months after American forces seized control of Iraq, American officials now find themselves approving salaries for hundreds of thousands of no-show and no-work jobs.

With American blessings, the Iraqi government is paying full salaries to at least 200,000 employees at government ministries and the country's huge but moribund government-owned companies.

The accelerated sell-off seems like a smart move. A lot of workers in these companies are Baath Party loyalists. It is better to force them out into the private sector because doing so effectively ejects Baathists from the government reduces their influence. Also, privatization will speed the growth of the Iraqi economy. One problem is that a lot of workers will be laid off but it hardly seems wise to reward the loyalists while the rest of the population have to take what work they can find. Money spent on keeping the government industries afloat would be better spent on construction projects to rebuild the country.

Share |      By Randall Parker at 2003 June 11 04:51 PM  Mideast Iraq Economics


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