To Stem Iraqi Violence, U.S. Aims to Create Jobs

The task force hopes to have a rolling system of factory openings spanning 2007. Part of that effort, its members said, is to reevaluate how the Defense Department spends nearly $4 billion each year to support troops in Iraq.

Brinkley said he hopes that at least 25 percent of that total -- about $1 billion -- could be spent on orders from Iraqi companies that previously have gone to firms in neighboring countries, such as Jordan and Kuwait. "We're not seeking to invest in Iraq, but to buy from Iraq," Brinkley said.

Stuart W. Bowen Jr., the special inspector general for Iraq reconstruction, whose office has been critical of the rebuilding effort, said that defense officials are "right on target in pushing this."

"It's about stimulating interest and getting contracts going between U.S. firms and Iraqi firms. That's the goal," he said. "The solution in Iraq is not primarily a military one. It is primarily an economic and political solution."

Bowen said defense officials recently met with about two dozen key business leaders at the U.S. Chamber of Commerce to gauge private industry's interest in the program. He acknowledged that corruption and lack of security remain major obstacles to U.S. commercial investment in Iraq but said he is impressed that business leaders "recognize that and are still interested in moving forward."

Caterpillar Inc., a $36 billion construction equipment firm, is one of the first U.S. companies to show interest. Gerald L. Shaheen, a Caterpillar group president and chairman of the U.S. Chamber of Commerce, said he probably would be looking for low-tech supplies, such as hinges, but said the program dovetails with the company's interest in expanding opportunities in the Middle East.

"But I can't look at this solely as a business proposition. I've already got suppliers," Shaheen said. "I'm doing this because I think there's a social responsibility not only to the Iraqi people but to our troops."

Dow Chemical Co., a $46 billion firm that sells plastics and other products in more than 175 countries, is also considering what supplies it can purchase from Iraq.

"We see this as a positive initiative and very much hope that we can find the appropriate opportunities to support business activity in the country," a Dow spokesman said.

U.S. businesses were looking at Iraq as a significant opportunity before the war began. With vast oil resources, an underserved population and a strategic location, that nation had all the markings of a place for U.S firms to expand. But few have found success there.

Major American companies that went into Iraq on U.S. government contracts, including Bechtel, Parsons and Halliburton subsidiary KBR, had hoped reconstruction work would serve as a natural bridge to private-sector deals in Iraq. Instead, they found rampant violence, with many U.S.-funded projects coming under attack and workers being targeted. The firms also received bad publicity when projects did not go as planned.

Now, with their contracts expiring, Parsons and Bechtel are closing up shop in Iraq and returning home. KBR is doing the same with its reconstruction work, though it continues to hold a major contract supporting the U.S. Army.

"We're pleading with the companies to give Iraq a second or third look," said retired Lt. Gen. Daniel Christman, senior vice president for international affairs at the Chamber of Commerce. "This is very different from asking that they go into Fallujah and build a plant. That's not the intent."

Rep. William D. Delahunt (D-Mass.), incoming chairman of the oversight and investigations subcommittee of the House International Relations Committee, said part of the CPA "disaster" was that obvious ideas, such as creating employment for Iraqis, were ignored.

"It's a concept that common sense would dictate to pursue," Delahunt said. "I think the key question is: Is it too late?"

Chiarelli said unemployment is daunting because many working Iraqis support up to 13 family members, meaning unemployment has exponential effects on the country.

"There's no doubt in my mind that it has the potential to turn the tide," he said. "I find it unbelievable after four years that we haven't come to that realization. . . . To me, it's huge. It's as important as just about any other part of the campaign plan."