As the wisdom of President Bush’s proposed “surge” of US troops is debated across the US and around the world, another question about the US President’s new policy to avert all-out civil war there is coming to the fore. Can using US funding to reopen Iraqi state-owned enterprises get young men to abandon the insurgency and sectarian militias? The idea sounds logical: a man with a good job that enables him to build a decent life won’t want to fight Americans or his fellow Iraqis, right?
Unfortunately, that jobs strategy is unlikely to reduce the violence. Iraq’s state-owned enterprises were the cornerstone of Saddam Hussein’s economic policy. But, propped up by military contracts, those state companies were never well run or efficient; greatly overstaffed, they produced little, similar to the failed state-owned enterprises of the old Soviet Union.
Moreover, outside of the oil and electric power sectors, state-owned enterprises in Iraq have never been major employers. For example, the roughly 180 enterprises in the Ministry of Industry and Minerals, which controls all state-owned manufacturing companies, never employed much more than 100,000 workers in a nation of roughly 27 million people.
The employees of the state-owned enterprises still receive paychecks, even though about a third of their workplaces have been destroyed. For example, the Sulaymaniyah Sugar Mill was bombed during the Iran-Iraq war in the 1980’s, but its employees have been paid ever since, though only rats and pigeons now report for work there.