Harvard’s Iraqi socio-Economic Trajectory Workshop

Dar Al-Hayat, July 18 – Only a tiny handful of the members of Ambassador Bremer’s Coalition Provisional Authority knew anything very much about the modern history of Iraq and fewer still anything about its twentieth century social and economic development. This had the apparent advantage of allowing them to treat the whole country as a blank sheet on which to impose their own highly ideological projects. But wiser counsels now prevail and many of the same persons have come to regret both their own ignorance and the absence of any real historical bench-marks by which to tell how well, or how badly, the American-led Iraqi reconstruction project is doing compared with the country’s past economic performance.

It was with this in mind that I organised an international workshop at Harvard in May on what I called the ‘Socio-economic trajectory of Iraq since 1950’, bringing together a dozen academic experts from Europe, America and Iraq as well as administrators and government officials, some with knowledge of the period before 2003, some who only knew the country under occupation. Together we addressed such important subjects as Iraq’s two decades of planned, oil-financed development in the 1950s and 1960s, the changes wrought by Ba’th party authoritarianism, wars, sanctions and occupation, and the balance sheet of CPA economic policies, as well as the somewhat gloomy prospects for the future.

Central to the whole enterprise was the desire to pool our knowledge and concerns in the interests of establishing a research agenda designed to understand the highly unusual nature of Iraq’s experience once it moved away from the path of what might be called third world normalcy some time after 1968.

My own approach was to contrast the period up to 1979/80 when Iraq followed a comprehensible and reasonably well-known path of economic and social development with that of the two extraordinary decades of Saddam Hussein’s person rule marked not only by constant crisis but also by an combination of secrecy and compartmentalisation which prevented almost any general knowledge about the economy, its performance and how it was actually run. Other members of the workshop preferred to note two major turning points: the introduction of a particular Ba’thi version of the rentier state in the mid-1970s, and then what might be called the creation of a ‘war economy’ in the 1980s, followed by years of economic collapse.

In my account, Saddam Hussein’s management of the economic aspect of Iraqi life involved the establishment of an increasing number of independently managed enclaves accountable only to himself and his close-advisers. These included the state-owned industrial enterprises, the organisations responsible for the manufacture of conventional and unconventional weapons, and, above all, control over the production and sale of oil, all with their own budgets and all beyond Ministry of Finance supervision and powers of financial regulation.

As a result there was no one centre of economic knowledge except the Presidency and, I would suggest, no regime interest in trying to manage the Iraqi economy as a single unit. Instead of a concerted drive to develop national resources, everything was subject to a logic focussed on finding the money needed to maintain internal security as well as a military force powerful enough to deter both domestic opposition and intervention from abroad.

Central to the management of the separate economic enclaves, as everyone at the workshop agreed, was a system of patronage, fueled by oil revenues and answerable directly to Saddam Hussein himself. But it is also important to note that this could involve a considerable delegation of decision-making to the individuals concerned, a practice which is at much at odds with the conventional wisdom that Saddam Hussein was running a would-be totalitarian system in which everything was subject to his own person control.

It also had important consequences as far as certain vital sectors of the economy were concerned. Agriculture is a case in point. Scattered pieces of evidence suggest that when it came to the application of new land reform laws in the 1970s, access to the land was mainly used as a reward to regime clients, many of whom were already well-established in the countryside. The result was one in which, while little harm was done to traditional patterns of land management, little government effort could be made to increase production by introducing measures designed to improve either the quality of the soil or of agricultural practice. The system also did much to inhibit the collection of accurate data about cropping patterns and output, making agriculture one of the many black holes which prevent proper analysis of Iraq’s economic performance then and now.

Efforts to evaluate economic activity since the occupation run into other kinds of difficulties as well. Not only are their problems with obtaining accurate information but workshop discussion underlined two important methodological difficulties as well. One is the question of whether, given various form of fragmentation which economic life has been subject to there is anything which might reasonably be called an Iraqi economy in the first place.

A second, and related question, involves the usual way in which Coalition policies are subject to a type of good new/bad news formula with successes, such as the introduction of a new and much stronger currency balanced against the failures to achieve certain set targets as far as oil exports, electricity production and the provision of clean water are concerned. Not only does this generally ignore progress, or lack of it, in the two major productive sectors, manufacturing and agriculture, but it also appears to make economic recovery dependent not only on oil revenues and foreign aid. It is not difficult to see this is as yet another set of pressures pushing the country in the direction of a renewal of the type of rentierism which, almost all would agree, encouraged the consolidation of Saddam Hussein’s patronage state while putting an end to all notions of national economic development at the same time.