US agencies scrap over Iraq policies

The free market ideologues in commerce obviously haven't a clue as to the consequences of their policies. They would make good neo-cons. This is supposedly from the Tehran Times but after the authors name it says Washington Post. At any rate it is hardly Iranian propoganda or if it is the tone is sure muted.

Agencies tangle on efforts to help Iraq

By Rajiv Chandrasekaran, Washington Post
As violence in Iraq crescendoed last year, President Bush summoned his secretaries of agriculture, commerce and energy to Camp David in June to meet with his national security team. During a two-hour afternoon discussion in the main lodge, the president urged the three secretaries to become more involved in the Iraq reconstruction effort.

When Commerce Secretary Carlos M. Gutierrez got back to his office, he asked his staff members to develop a list of Iraq-related projects for the agency. They did, and two months later, they shared it with the U.S. Embassy in Baghdad, expecting that diplomats on the ground would welcome a little help from Washington.

Instead, the document, "Secretary Gutierrez's Five Priority Areas for Economic Reform in Iraq," set off a bureaucratic grenade in Baghdad's Green Zone. The second item on the list called for the United States to pressure Iraq's government to cease providing people with monthly food rations, which more than half of Iraq's population relies on for sustenance.

Embassy officials were incensed. Although the embassy's economists favored changes to the ration system, they believed that dismantling it as Commerce was proposing could spark riots that might topple the Iraqi government. "Commerce was stunningly naive," said a senior State Department official involved in Iraq policy. "They were way out of their lane."

The dispute between Commerce and State illuminates the rivalries that have cropped up within the U.S. government as the White House seeks to involve more parts of the federal bureaucracy in the reconstruction of Iraq. Instead of collaborating, agencies have often found themselves split by the gulf between idealistic officials in Washington, some of whom have never been to Iraq, and embassy staffers whose ambition to promote change has been attenuated by the violence and dysfunction they witness every day.

The disagreements often center on arcane subjects -- such as tariff policy or the rehabilitation of state-owned enterprises -- but the impact can be profound, according to people on both sides of the fights. Embassy staffers said they have wasted countless hours squabbling with Washington instead of focusing on more urgent initiatives to stabilize Iraq. In one incident, as the bickering between Commerce and State intensified, the embassy blocked a team of Commerce officials from entering the country.

Some at Commerce regard embassy staffers and their bosses at the State Department as ungrateful and unwilling to embrace others' ideas -- even as Secretary of State Condoleezza Rice pleads with other federal agencies to send more people to Iraq. "We were willing to help, as the president asked us to do, but the State Department feels that it has control of the situation," said a senior Commerce official involved in the food-ration policy.

Officials at State contend that they do want other federal departments to assist in Iraq, but they said they are less interested in policies that are developed by those agencies in Washington and imposed on Baghdad.

"The problem stems from this view at the White House that the whole Cabinet has to be involved," the senior State Department official said. The result, an embassy official with direct knowledge of the food-ration debate said, is that "there are too many cooks in the kitchen." Staffers in the embassy's economic section called Commerce's plan to end the rations a "zombie idea." "It was one of those bad ideas that you think is dead, but it keeps coming up every nine to 12 months," the embassy official said. "And each time it comes up, the plan gets worse."

The proposal surfaced in late 2003, when L. Paul Bremer's Coalition Provisional Authority was running Iraq. Bremer's economic team believed that the monthly handouts embodied socialism at its worst, that they promoted corruption, wasted government money, discouraged domestic agriculture and interfered with the CPA's plans to promote capitalism.

Every Iraqi, regardless of need, has been eligible for the basic rations, which Saddam Hussein's government started doling out after the United Nations imposed trade sanctions following Iraq's 1990 invasion of Kuwait. The rations, almost all of which are imported, include wheat, rice, sugar, vegetable oil, salt, tea, cereal, soap and detergent.

It costs Iraq about $4 billion a year -- more than the U.N. World Food Program's global budget. And instead of providing vouchers for people to buy staples on the open market, the Iraqi government buys and hands out the food itself. Each year, more than 2 million metric tons of wheat are distributed by truck across the nation.

Bremer's team wanted to cut off the rich and provide poor Iraqis with cash so they could buy the food they needed. The plan suggested giving Iraqis microchip-embedded "smart cards," even though most Iraqis had never used a credit card. Others in the CPA, including representatives from Britain, and the U.S. military objected, said people involved in the discussions. They argued that the risk of social unrest over problems with the transition was too great. Eventually, in the spring of 2004, the plan was scuttled.

In 2005, economists working for the embassy once again raised the idea. Once again, it was shot down by the military. By early last year, embassy officials assumed that the issue was dead. Then, in August, they received the list of Gutierrez's priorities. Priority Two was to "dismantle the public food distribution system." "The system is wasteful and creates a disincentive to produce," the document stated. Iraq's government "should press forward with a program to transfer the supply and distribution to the private sector."

The document was less detailed than the original CPA proposal and did not specify a deadline by which the change should occur, but it acknowledged that the effort would be "politically sensitive" among Iraqis.

It also proved to be sensitive among Americans in Iraq.

"Commerce was off the reservation," said a second embassy official with direct knowledge of the issue. The two embassy officials discussed the dispute in detail on the condition of anonymity because they were speaking without authorization.

The embassy's economic section fired off a classified cable to Washington stating that Commerce's priorities did not mesh with the economic section's priorities, the two officials said. "It was along the lines of, 'Thank you very much for your interest in this issue, however we think Commerce is best positioned to work on other areas,' " the first embassy official said. But Commerce officials were undaunted. They believed their involvement had the support of Zalmay Khalilzad, the U.S. ambassador to Iraq, who welcomed Gutierrez when he visited Baghdad in July. And Bush himself had asked the Commerce Department to help with reconstruction. "There were discussions at a high level between Washington and Baghdad," the senior Commerce official said.

"The top level seemed to be in agreement with the economic priorities that the secretary had identified." Commerce believed it was best suited to incubating private-sector food producers and distributors -- a key prerequisite to dismantling the ration system. "We are the agency that interacts the most with the private sector [in other countries], and certainly the private sector is key to any reconstruction and stabilization effort in Iraq," the Commerce official said.

The official said the document stating that Gutierrez wanted to "dismantle" the ration system was an "early draft." Now, the official said, the department simply wants to "reform" the system. But the two embassy officials said they never received follow-up documents from Commerce stating that the goal had changed.