The Coalition Provisional Authority, the US-British body that briefly ruled in Baghdad from May 2003 to June 2004, had grand ambitions for Iraq. The idea was to transform the country completely from what was basically a command economy (notwithstanding liberalization measures in the 1990s) into an o
The Coalition Provisional Authority, the US-British body that briefly ruled in Baghdad from May 2003 to June 2004, had grand ambitions for Iraq. The idea was to transform the country completely from what was basically a command economy (notwithstanding liberalization measures in the 1990s) into an open market and from a dictatorship into a liberal democracy. The radical nature of these plans and orders, coupled with the CPA’s swift dissolution, has led many to dismiss the body as a hasty and ill-conceived imperial experiment. Indeed it was -- and a destructive one as well. But the CPA period still deserves serious examination. It was the only time when the US, in its capacity as occupier, was in charge of Iraq administratively and legally. (Britain always played a secondary role.) These 14 months set the stage for what would come next, without necessarily determining it.
There was considerable disagreement within the Bush administration over how to carry out the “reconstruction” of Iraq, starting with pre-war planning in the spring of 2002. It is clear, nonetheless, that the commitment to reshape Iraq into a market democracy was widely shared. Early documents identified the main US task in Iraq, after establishing law and order and supplying relief and reconstruction aid, as taking measures to “promote US interests in Iraq’s longer-term economic and political stability.” [1] By all accounts, however, including those from the US Office of the Special Inspector General for Iraq Reconstruction (SIGIR), Washington never dedicated sufficient resources or technical expertise to do the job properly. [2] The size of the job was tremendous: taking over and running a state, while rebuilding its institutions from the ground up.
The complex politics of this immense reordering are best illuminated through its most basic and technical tasks. The state is more than a constitution, elections and local councils, after all, just as a market economy is more than financial and budgetary regulations. The re-engineering of the Iraqi state required such mundane measures as introduction of electronic transactions and rehabilitation of the decaying oil infrastructure.
Securing the flow of oil was the unequivocal top priority for the occupiers upon their entry into Iraq. Oil facilities, from wells to pipelines to refineries to the Oil Ministry headquarters in Baghdad, were notoriously the only public-sector sites protected by US troops from the waves of looting in the aftermath of the fall of Baghdad. Though basically intact, however, the Iraqi oil industry could not keep up with domestic consumption even in the earliest days of the occupation. In mid-May 2003, the country almost ran out of gasoline and cooking gas. To solve the immediate problem, the CPA began importing refined products. [3] That fall, however, refineries shut down repeatedly. It appeared that the flow of Iraqi oil depended on something besides armed protection: a dependable flow of electricity.
The Bush administration foresaw the problem with the Iraqi electricity supply -- but not the extent of the damage that would be caused by post-invasion looting. On January 20, 2003, President George W. Bush issued a directive founding the Office of Reconstruction and Humanitarian Affairs (ORHA), housed in the Department of Defense and charged with post-war Iraq under retired Gen. Jay Garner. In the early morning hours of April 13, four days after the fall of Baghdad, a 28-member ORHA team arrived in the Iraqi capital. Their official name was Joint Task Force 4, but they called themselves Task Force Fajr (Dawn, in Arabic). Task Force Fajr was in charge of restoring the flow of electrical power to hospitals, then to water treatment plants and sewer systems, then to households, and finally to business and factories. At dawn on the day they arrived, the task force met with Iraqi engineers who knew Baghdad’s power system. Prior to the occupation, Iraq had produced 4,000 megawatts of electricity per day.
But turning the lights back on was no simple matter. Iraq’s electrical grid had been badly harmed by the post-invasion looting. Within a month of the invasion, the daily power generation dropped to 711 megawatts before recovering to 1,275 by the end of April -- still only one fourth of pre-war levels. [4] Delivery was also a problem. The pre-invasion bombing and subsequent combat damaged nearly 50 electrical transmission towers, and by mid-June 2003 700 towers had been destroyed by looters who stripped them of valuable metals for sale in Iran and Kuwait. [5] The result was disruption of the oil and sewer networks, as well as frequent blackouts in Baghdad. Nationwide, the average electricity supply dropped from 16-24 hours per day before the invasion to 4-8 hours in May 2003.
The repair of the electrical sector would become the top US priority until the dissolution of the CPA and the transfer of sovereignty to an Iraqi interim government. On Garner’s first night in Baghdad, April 21, he was informed that L. Paul Bremer, a retired ambassador, was coming to replace him. Bremer arrived on May 12. On May 16 he established the Coalition Provisional Authority and issued its infamous Order 1 that launched the “debaathification” of the Iraqi state. The CPA had an extremely different approach to governing Iraq (and probably also a different mandate). ORHA was focused on a fast transfer of power to Iraqi leaders, with minimum intervention. In his memoir, Bremer criticized the “aversion to ‘nation building’” underlying the modest vision for ORHA’s role. [6] But for the hard-charging proconsul, the electrical sector would remain the first reconstruction priority.
In order to rehabilitate the Iraqi grid, US engineers first had to make it legible. There was no comprehensive map of the transmission and distribution networks and the grid itself was an idiosyncratic patchwork of old, sometimes obsolete technologies. Local stations were running on spare parts from different manufacturers using different codes and standards. A CPA and Army Corps of Engineers official, Lt. Gen. Carl Strock, described the grid as “essentially held together with ‘Band-Aids and rubber bands.’” [7] As a result, the distribution network was very fragile; the whole system would collapse whenever one key facility failed. The CPA judged standardization to be essential for seamless energy flow: It meant efficiency in repairs and easier monitoring of the system. It also meant there would be no need to rely on the knowledge of the Iraqi engineers who had stitched the stations together.
Lack of standardization, however, was not just an Iraqi problem. The CPA itself was using different maps -- one set for military officers and another for civilians -- and thus military and civilian personnel found it nearly impossible to coordinate their destinations. This problem was exacerbated by the lack of reliable cell phone service outside of the majority-Kurdish areas. By the early summer of 2003, the CPA’s engineers had the grid carrying 3,500 megawatts -- more than before, but still below pre-war levels.
The flows of oil and electricity in Iraq were extremely interdependent. The oil pumps and refineries operated on electricity, and most of the electrical power plants in turn ran on petroleum products, either natural gas or fuel oil. Hydroelectric plants generated only 24 percent of the country’s power. For energy to flow without interruption, the oil and the electricity networks needed technology -- know-how and spare parts -- to circulate freely. They also needed a ready supply of cash. Both the money and the technology supply, however, had been severely restricted by 13 years of UN sanctions.
To a large extent, the grid’s composition of “Band-Aids and rubber bands” was a product of the sanctions period, 1990-2003, when access to spare parts was irregular and controlled from the outside. By the rules of the sanctions regime, Iraq deposited its oil revenues in an escrow account managed by a UN Security Council body called the “661 committee,” after the number of the resolution that created it. The “661 committee” had to approve any and all orders of goods that Iraq wished to import, from oil pipes to pencils. Due to the deterioration of its oil facilities in the sanctions years, at the time of the invasion Iraq was unable to refine 45 percent of its oil. It was also unable to capture more than 40 percent of the natural gas produced during the oil production process; the remaining 60 percent it had to burn off. As a result, Iraq had an excess of the residue known as “heavy fuel oil,” which it then used to run thermal power plants. The surplus was exchanged for refined oil products from Turkey and Jordan. Consequently, Iraq relied on heavy fuel oil to generate 54 percent of its electricity and on gas to produce 21 percent -- a state of affairs that was efficient under the circumstances.
The interconnection of oil, electricity and cash -- as well as security -- was very clear during the CPA’s early months. Looting contributed to dramatic shortages of electricity; these shortages led refined oil products nearly to disappear from the Iraqi market; the CPA, in turn, was compelled to dedicate large amounts of money to emergency imports of refined oil products. The cycle started outside the national energy network, in the private market for small electrical generators. To keep the lights on, run air conditioners and refrigerators, and operate essential equipment, businesses, homes and hospitals were installing generators that worked on refined oil products such as diesel and liquefied petroleum gas. [8] Taken together, these hundreds of stopgap measures helped to reduce the availability of refined oil products and to inflate their prices. The private market provided electricity only to those who could afford the generators and the expensive fuel, while exerting pressure on the national networks of oil and electricity.
The market of reconstruction in post-2003 Iraq was shaped by violence. Huge amounts of reconstruction funds were redirected to the task of surrounding reconstruction sites with fences and armed patrols. Between 2003 and 2008, the CPA and USAID apportioned $5.3 billion to 77 private security companies to guard US-funded project locations. [9] Sabotage continuously sapped the physical integrity of the energy infrastructure.
The violence itself was made possible by a series of decisions taken by the Pentagon and the CPA. Throughout the pre-war planning, Secretary of Defense Donald Rumsfeld pressured US generals to reduce the number of troops in the invasion force. At the outset of the occupation, the ground commanders thought that the number of troops on the ground was inadequate. In Baghdad, for instance, there was one soldier for every 250 residents. As the Iraqi army and police had vanished upon the fall of Baghdad, there was hardly anyone to prevent the instant emergence of looting. Worsening the situation was the CPA’s early decision to dismantle all of Iraq’s armed forces and security services. The CPA’s attempts to revitalize the police force through training and debaathification (which drained a large pool of experienced bureaucrats across state institutions) hardly led to positive results. Even in Maysan, a relatively calm southern province on the Iranian border, “no one was afraid of the police, and the police was afraid of almost everyone.” [10]
In the summer of 2003, a growing insurgency rose against the occupation and the emerging post-invasion political order, announced with the devastating August 19 bombing of the UN headquarters in Baghdad. The insurgency was composed of various groups -- some religious, some secular, some linked to criminal gangs. Oil infrastructure was one of their major targets. During the CPA’s tenure, according to the Iraq Pipeline Watch website, insurgents launched over 70 attacks on pipelines, wells, refineries and storage tanks, as well as people working for the Ministry of Oil. Attacks on the electricity grid were also systematic, with strikes on distribution networks, oil and gas supplies, and generators. These attacks contributed to the decline in the electricity supply after the initial repairs. According to SIGIR numbers, the average daily supply nationwide improved to 16 hours in March 2004, but then it steadily declined, hitting a low of 10 hours in January 2006. Baghdad’s supply followed a similar pattern, with an increase in 2004 to an average of 16 hours per day and then a fall to 3.6 hours in January 2006.
Seven years into the occupation, neither the US military nor the nascent Iraqi state held a monopoly on violence. Armed bandits and insurgents controlled long stretches of highway, particularly in the western desert, as well as parts of Iraqi ports and swathes of land traversed by pipelines. They were part of any market transaction in those places, whether legitimate trade or smuggling, including in oil siphoned from pipelines. [11]
Under the CPA, the Iraqi state building project was funded by public money, but overseen, executed and secured by private American firms. In and of itself, this arrangement was not unique to post-invasion Iraq: For private consultants or “experts” to occupy the space between donors and recipients of aid is the norm in development practice. The integral and fundamentally political role of these experts in the politics of development projects is well documented. [12] But the expansive scope of the CPA operation and the occupiers’ unaccountable use of Iraqi money to fund their myriad projects brought a new degree of moral hazard.
CPA reconstruction projects had two sources of funding: American taxpayer dollars and Iraqi oil revenue and other state funds. In April 2003, the US created the Iraq Relief and Reconstruction Fund to channel the former; the next month, the CPA began to deposit Iraqi monies in a parallel Development Fund of Iraq. The latter fund’s money came from frozen Iraqi bank accounts and funds seized by the invaders, but it mostly came from oil revenues collected under the UN Oil for Food program. The US money was subject to Congressional appropriation and oversight. Its first tranche, approved in April 2003, totaled $2.475 billion with a separate $800 million earmarked for the oil industry. An additional $18.4 billion was approved for the 2004 fiscal year and was to be contracted over two years. Of that $18.4 billion, the CPA only spent $366 million due to the elaborate restrictions imposed by Congress. [13] In contrast, Bremer had complete personal control over the Iraqi funds. He resisted the introduction of outside auditing until April 2004, just over two months before the transfer of sovereignty. A full $8.8 billion of the Development Fund for Iraq money, including $600 million in cash, [14] was found to be mismanaged and lacking in financial and contractual controls. Apart from $7 billion of this money that went to relief and reconstruction, all of the Development Fund for Iraq money was used to finance Iraqi ministry operations. Over the course of its tenure, and aided by a last-minute spending frenzy, the CPA authorized the expenditure of $20 billion of the Iraqi money. [15]
Once the public money was disbursed, it ended up in the hands of private companies, most of which were American. Bechtel, for instance, was contracted to assess Iraq’s infrastructure reconstruction needs and later to carry out many of the projects it had judged necessary. The San Francisco corporation, in turn, subcontracted the project execution to other firms like General Electric and Siemens. With the heightened attacks on electricity and oil sites, the CPA sought to train Iraqi forces to provide security. For the oil sector, a British company called Erinys was hired to conduct the training.
Contracting to private firms, which in turn would subcontract, created a number of long-term oversight problems, including kickbacks and contract and tax fraud. These problems mostly became apparent after the CPA’s tenure was over. But the trends started under Bremer. Another trend was the high turnover of CPA employees. Almost like in private firms, most government employees in Iraq (whether CPA or USAID) were “consultants” or contractors assigned to a particular job but rotated out of it in short order. Most CPA employees were on three-month tours. The CPA usually had two thirds of the staff it needed. On June 28, 2004, the day of the CPA’s dissolution, only seven employees had served since the inception. [16] SIGIR found that high turnover adversely affected the contract management of the Perini Corporation, in charge of electricity sector reconstruction in the south. The churn there was at the rate of one new contracting officer every 65 days over the two and a half years from March 2004 to September 2006. [17]
Upon closing its doors, the CPA issued a report reviewing its achievements. In the report, Bremer compared the CPA’s reconstruction project in Iraq to that of the Marshall Plan in Germany. While many commentators have drawn this connection, the former CPA head is perhaps the only one to judge the US performance in Iraq to be superior. According to Bremer, the CPA accomplished in 14 months in Iraq what took years in Germany.
In 2009, the RAND Corporation produced a history of the CPA by four writers, two of whom, James Dobbins and Seth Jones, were also co-authors of RAND’s The Beginner’s Guide to Nation Building (2007). This study reinterpreted the power outages, so damaging to the CPA’s credibility, as a moral victory. In the introduction, the authors note, “Bremer also allocated available electricity more fairly throughout the country. Under Saddam, Baghdad had enjoyed more-or-less continuous service, while less favored areas of the country experienced frequent blackouts. Now these shortages were more evenly distributed. Unfortunately, most political leaders and nearly all foreign journalists lived in Baghdad, so the impression of an overall degradation in service gained currency.” [18] This reading makes sense if one sees the map of Iraq through a sectarian-ethnic lens. Then the Kurdish north and Shi‘i Arab south seem to have suffered for the benefit of the Sunni Arab center. But seen through the lens of population concentration, the moral victory is hardly so clear. Baghdad is both the most densely populated area and the most “mixed” in terms of ethno-sectarian affiliation. It is not self-evident that the CPA’s mode of distribution was more equitable.
A less morally loaded indicator is megawatts produced. The CPA was indeed able, eventually, to produce electricity at pre-war levels. Yet the use of megawatts as an indicator became part of the problem of interrupted electrical supply -- a problem that was never solved by the CPA or those who followed. Initially, the CPA’s goal was simply to reach pre-war production levels. But before reaching this level, at the end of August 2004, Bremer promised to increase the megawatts to 6,000 in order to meet the estimated household need and provide uninterrupted service. At the time, some warned that the promise was dangerous. To set goals of megawatts achieved by deadlines is to shift the focus of reconstruction from long-term rehabilitation to quick fixes. Without thorough overhaul of the entire grid, the system would not be able to handle the new demand. These skeptics were proven correct by the frequent collapses of the system after the increase of megawatt production to over 4,000 in the fall of 2003. The estimate of 6,000 megawatts was not reliable, moreover, because it was based on expectations that would rise once more electricity was provided. Significant improvement in the electricity supply did not begin until 2009. In 2012, the grid supplied 8,400 megawatts, but two thirds of this amount came from a private power plant in the Kurdish region, a private Turkish power plant in Basra and imports from Iran. The grid continues to falter and is not expected to catch up with consumption until 2015. [19]
The raft of CPA orders to “democratize” the Iraqi polity and open the Iraqi market met with demonstrable failure. The institutionalized ethno-sectarian divides introduced by Bremer with his appointments to the Iraqi Governing Council marked the front lines of civil war in Iraq only months after the CPA’s departure. The occupiers’ inability to secure a monopoly on violence contributed to the emergence of a market that is indeed open, but mainly for those who can secure armed protection for their transactions (including the transport of cash in the absence of electronic transfers).
The failure to deliver a reliable supply of electricity is likewise a clear indication of a mission not accomplished. To restore the grid, it had to be made legible -- standardized and updated. But standardization, in turn, required rehabilitation of the entire grid. It was a difficult task made even more so by the ambient insurgency and criminal violence. The grid’s close connection to the oil network meant that attacks on one system reverberated in the other. Many tasks were outsourced to private firms paid with Iraqi money by occupiers with negligible accountability to the population.
The problems with the Iraqi electricity supply actually worsened after June 2004, when leadership of reconstruction efforts was transferred from the Pentagon (and the CPA) to the State Department (and USAID). Part of the reason was the greater intensity of the insurgency. In addition, however, the CPA’s planned refurbishing of the electrical sector was never completed because physical reconstruction was now second to institution building and civil society in US priorities. As USAID administrator Andrew Natsios commented on the first CPA funding proposal to Congress, “Development is not building things…. It’s not engineering. It’s institution building.” [20] Meanwhile, the accountability gap widened, for the USAID mission in Iraq was almost entirely executed by private contractors.
Unlike democracy promotion, ensuring a sufficient and uninterrupted electricity supply seems like a simple and unambiguously technical problem. Just like democracy, however, it proved a difficult goal to attain in post-2003 Iraq. The techno-politics of the electrical aspect of the Iraqi state building project can be understood by following the lines of the grid. What becomes obvious is the highly political nature of the flow of electrical power: the tight connection of electricity to oil, political violence, crime, private markets of power, and the circulation of spare parts and cash -- not to mention the ways in which success is measured. The technologies and networks were not external to politics, but were wired into the configuration of power in occupied Iraq.
[1] Office of the Special Inspector General for Iraq Reconstruction, Hard Lessons: The Iraq Reconstruction Experience (Washington, DC, 2009), p. 8. [2] See SIGIR’s quarterly reports at: http://www.sigir.mil/publications/quarterlyreports/index.html. [3] SIGIR, Hard Lessons, pp. 139-140. [4] Ibid., p. 144. [5] Ibid., p. 147. [6] L. Paul Bremer (with Malcolm McConnell), My Year in Iraq: The Struggle to Build a Future of Hope (New York: Simon and Schuster, 2006), p. 12. [7] SIGIR, Hard Lessons, p. 146. [8] Ibid., p. 148. [9] Ibid., p. 180. [10] Rory Stewart, The Prince of the Marshes, and Other Occupational Hazards of a Year in Iraq (Orlando, FL: Harcourt, 2006), p. 80. [11] See Pete Moore and Christopher Parker, “The War Economy of Iraq,” Middle East Report 243 (Summer 2007) and Pete Moore, “Making Big Money in Iraq,” Middle East Report 252 (Fall 2009). [12] See, for instance, Richard Rottenburg, Far-Fetched Facts: A Parable of Development Aid (trans. Allison Brown and Tom Lampert) (Cambridge, MA: MIT Press, 2009). [13] SIGIR, Hard Lessons, p. 114. [14] SIGIR, Coalition Provisional Authority Comptroller Cash Management Controls Over the Development Fund for Iraq (2004), available online at: http://www.sigir.mil/files/audits/cpaig_audit_dfi_cash_Management.pdf#view=fit. [15] SIGIR, Hard Lessons, pp. 79-80, 118, 155. [16] Ibid., pp. 82-83. [17] SIGIR, Outcome, Cost and Oversight of Electricity-Sector Reconstruction Contract with Perini Corporation (2008), available at: http://www.sigir.mil/files/audits/08-011.pdf#view=fit. [18] James Dobbins et al, Occupying Iraq: A History of the Coalition Provisional Authority (Santa Monica, CA: RAND Corporation, 2009), p. xxvii. [19] SIGIR, Learning from Iraq (2013), pp. 77-79. available at: http://www.sigir.mil/files/learningfromiraq/Report_-_March_2013.pdf#view=fit. [20] SIGIR, Hard Lessons, p. 100.
