Throwing money at Basra’s problems

Meet the British merchant banker and part-time soldier who was given $1 billion, some odd instructions and an order to reconstruct Basra.

Tara McCormack

Topics Books

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It is no secret that the invasion and occupation of Iraq have been characterised by an almost complete lack of planning (1). It seems equally clear that the US has no concrete future plans for Iraq, except for getting its troops out of there as quickly as possible. Meanwhile, Britain is currently creeping out of Basra, and the allies are engaging in an unseemly slinging match: the Americans loudly argue that the British have failed in Basra, while British General Sir ‘Mike’ Jackson retorts that the whole mess in Iraq was Donald Rumsfeld’s fault in the first place.

In 2005, as the first steps towards withdrawal were taken, the US cobbled together an Iraqi government under the guise of ‘handing sovereignty back’. The Iraq Study Group report, published in 2006, was explicitly framed in terms of finding a way out of Iraq and giving over control to Iraqis (2). Now, under the evasive managerial speak of ‘benchmarks’ and ‘milestones’, the US is trying to place responsibility for the terrible disaster of Iraq on to the hapless Iraqi government. In a spectacular inversion of reality, an act passed by the Democrat-controlled Congress earlier this year – The US Troop Readiness, Veterans’ Care, Katrina Recovery, and Iraq Accountability Appropriations Act – makes the nature of the US presence in Iraq dependent on the performance of the beleaguered Iraqi government and the extent to which it succeeds in meeting 18 ‘benchmarks’. The US is presented as simply an enabler of the Iraqi government.

This act shifts responsibility on to the Iraqi government and suggests that the complex task of rebuilding a devastated country can be reduced to a series of discrete bureaucratic goals. During his frequent visits to Iraq, US secretary of defence Robert Gates rehashes the local government’s failures to meet these goals by publicly castigating it for the situation in the country, and then warning that the US is running out of patience. Bit by bit, the Coalition has pinned the blame for its devastation in Iraq, and for its own blundering lack of strategic planning, on local Iraqis (3).

So what does an occupation devoid of an underlying strategy look like on the ground? A new book, Bankrolling Basra, provides insights into the ad hoc and chaotic nature of the Coalition’s occupation of Iraq. The blurb on the front of the book is, for once, not an hyperbole – this really is ‘the incredible story of a part-time soldier, $1billion and the collapse of Iraq’. It is a short autobiographical account by Andrew Alderson, a merchant banker from London and member of Britain’s Territorial Army, who ended up running Basra’s economy for about a year. Alderson fell into the post almost by accident after the regional civilian command suddenly realised that Basra was on the verge of collapse and wondered if, by any chance, there might be a chap around who had some understanding of, you know, how to run an entire local economy. Apparently, it had not previously occurred to anyone in America or Britain that the residents of what had essentially been a developed country with a modern economy would need to receive their wages and pensions in order to trade, pay their rents, buy food, medicines and petrol, or that contractors engaged in the country’s reconstruction would require a salary.

By the time Alderson arrived in Iraq in June 2003, no one in Basra had been paid for two months and the central bank of Basra did not have any money at all. Unsurprisingly, tensions were running high: there were regular demonstrations outside the headquarters of the Coalition Provisional Authority South (CPAS), the multinational civilian branch of the occupation. Alderson and the small team that he built up began to assume control of the economic infrastructure of the Basra region. Before anyone could be paid, Alderson had to work out how the economic infrastructure worked in the first place, who exactly needed to be paid, and then how to get the money into the Byzantine system of 25 regional economic ministries, 168 different utility companies and other state organisations.

And before Alderson could do that, he had to work out where all the money from the central bank had gone. ‘Oh that‘, said a Coalition official after some time. ‘We have it.’ The CPAS had taken all the money from the central bank of Basra for protection and stashed millions of Iraqi dinars in plastic bags in its headquarters. Beyond that, however, no one in the CPAS had a clue how the central bank or, more broadly, the local economic infrastructure actually worked.

Alderson began by handing over $14million to the heads of the various utilities in order to pay 110,000 workers. Minor hitches along the way did not stop the resourceful Alderson. For example, when he discovered that there seemed to be a $48million shortfall, he simply flew to Baghdad to ask for it; when the security situation in Basra was so bad that he could not attempt a journey by road, and yet more than 12,000 port workers were threatening an all-out strike, Alderson and some of his team took $1million in cash by motor boat to the head of the relevant ministry.

Once wages were under control, other economic needs had to be met – such as operating budgets for each company and organisation, the supply of office equipment, carrying out office repairs, and so on. There were more surprises for Alderson: a Coalition official requested that he calculate, within just 10 days, how much money was needed for overall reconstruction in the south, including rebuilding and re-staffing hospitals, schools, bridges and power stations. Needless to say, Alderson and his team had no idea – but they had to come up with a figure in time for an international donors conference, or face the prospect of losing their funding. The figure they eventually came up with, Alderson admits, was little more than a back-of-a-fag-packet calculation.

Alderson reveals a confused and confusing relationship between the CPAS and military headquarters in Baghdad. Military officials in Baghdad often had no idea that CPAS existed. In fact, the occupation headquarters in Baghdad seemed to have hardly any knowledge of, or interest in, the rest of the country. CPAS itself started out with no operating budget. Alderson says that there was often a huge gap between the rhetoric and reality of reconstruction. For example, officials based in Baghdad confidently assured London and Washington that certain power stations were up and running, when in fact they had not even been reconstructed. Another recurring problem, says Alderson, was that where projects in Basra and elsewhere were completed, no budget would be allocated for their upkeep, repair or for the provision of new equipment. Thus, rebuilt factories, sewage systems and fire stations would cease to be viable, and eventually have to close, only months after reopening.

Alderson offers glimpses into how Western agendas have been prioritised over the real needs of Iraqis. He writes about how the UK Department for International Development would send civil servants to southern Iraq to discuss ‘gender issues’, that he was urged not to allocate money for the reconstruction of a sorely needed power plant until a full ‘environmental audit’ had been completed, and tells of demands that research to be done into HIV when the health system was barely functioning due to a lack of the most basic drugs and equipment.

As the handover-of-sovereignty date neared, Alderson and his team were under pressure to spend more and more money on projects and reconstruction, without any overall strategic or long-term plans in place. Then, just as suddenly as it had begun, Alderson’s job came to an end and the multinational CPAS was dissolved. As the Iraqi state took on the formal trappings of sovereignty CPAS was replaced by separate national representatives. Shortly before the handover, British civil servants breezed in to tell CPAS what parts would be disbanded and what parts would be replaced with small teams. Each state, it seemed, would pick bits of the local economy to ‘support’; the UK proposed to ‘support’ water purification, for example. When asked by one of Alderson’s team about the linked processes of sewage and general sanitation, the civil servants said they would ‘give it some thought’. Alderson was told off by British officials for concentrating too much on ‘projects’ (like running water and power plants) rather than on ‘institutional capacity building’.

Alderson left Iraq after one year, in June 2004, and then found out that the policy of separate national presences was reversed; instead smaller versions of the Coalition Provisional Authority were set up. And all of them, it seemed, were starting from scratch. When Alderson spoke to someone involved in one of the new teams, he discovered they had no idea about the most basic aspects of the local infrastructure. Alderson writes that, to date, he has not even been de-briefed by the British government on what he did – although he was invited to a general ‘brainstorming’ session in the autumn of 2004 to ‘tap into people’s experiences of working in Iraq’ with a cringe-inducing warning to participants to bring their own sandwiches.

Alderson remains saddened and puzzled by his experience. Although he and his team clearly worked very hard to try to rebuild the economy of Basra, it was a pointless task in the face of the overwhelmingly chaotic and indifferent nature of the occupation. ‘Didn’t anyone think about any of these things?’, he asks at several points in Bankrolling Basra.

This is not a book of great critical insights; it is a simple and straightforward account of one man’s curious experiences in Iraq. It does, however, provide plenty of shocking insights into the nature of a new kind of occupation: a semi-detached occupation, or what Brendan O’Neill has called a ‘phantom occupation’ (see The phantom occupation of Iraq, by Brendan O’Neill). There is an amusing exchange between Alderson and the British ambassador to Jordan, who tells Alderson off for pointing out that Iraq was being run by Britain and America. ‘People’, Alderson writes, ‘seemed embarrassed by the fact that to all intents and purposes we’d been running the country for the last 10 months. Yet that’s precisely what had been necessary since the Iraq government had vanished after the invasion.’

The semi-detached occupation of Iraq has destroyed the domestic system and created great insecurity for the population, and it has failed to replace the old system with anything viable or dynamic. This has left the citizens of Iraq in a desperate situation, which seems to be getting worse by the day.

Tara McCormack is a doctoral student researching post-Cold War security theory at the University of Westminster.

Bankrolling Basra by Andrew Alderson is published by Constable and Robinson (buy this book from Amazon(UK)). Visit the website here.

Previously on spiked

Brendan O’Neill said the British withdrawal from Basra was a media stunt to end a PR war. He argued that America’s and Britain’s phantom occupation of Iraq was turned into a ‘gesture invasion’. Mick Hume looked into what inspired the Reality Torture in Basra. Patrick West said it was the Brits who invented ‘friendly fire’. Or read more at spiked issue War on Iraq.

(1) Report raps poor planning for Iraq reconstruction, CNN, 22 March 2007

(2) Iraq Study Group report

(3) Progress report on Iraq benchmarks, BBC News, 12 July 2007

To enquire about republishing spiked’s content, a right to reply or to request a correction, please contact the managing editor, Viv Regan.

Topics Books


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