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Agencies Tangle on Efforts to Help Iraq
At a government store in Fallujah, Iraqis pick up basic items such as wheat, rice, sugar and cereal -- rations that many of them have depended on for years.
(2004 Photo By Mohammed Khodor -- Associated Press)
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Staffers in the embassy's economic section called Commerce's plan to end the rations a "zombie idea."
"It was one of those bad ideas that you think is dead, but it keeps coming up every nine to 12 months," the embassy official said. "And each time it comes up, the plan gets worse."
The proposal surfaced in late 2003, when L. Paul Bremer's Coalition Provisional Authority was running Iraq. Bremer's economic team believed that the monthly handouts embodied socialism at its worst, that they promoted corruption, wasted government money, discouraged domestic agriculture and interfered with the CPA's plans to promote capitalism.
Every Iraqi, regardless of need, has been eligible for the basic rations, which Saddam Hussein's government started doling out after the United Nations imposed trade sanctions following Iraq's 1990 invasion of Kuwait. The rations, almost all of which are imported, include wheat, rice, sugar, vegetable oil, salt, tea, cereal, soap and detergent.
It costs Iraq about $4 billion a year -- more than the U.N. World Food Program's global budget. And instead of providing vouchers for people to buy staples on the open market, the Iraqi government buys and hands out the food itself. Each year, more than 2 million metric tons of wheat are distributed by truck across the nation.
Bremer's team wanted to cut off the rich and provide poor Iraqis with cash so they could buy the food they needed. The plan suggested giving Iraqis microchip-embedded "smart cards," even though most Iraqis had never used a credit card. Others in the CPA, including representatives from Britain, and the U.S. military objected, said people involved in the discussions. They argued that the risk of social unrest over problems with the transition was too great. Eventually, in the spring of 2004, the plan was scuttled.
In 2005, economists working for the embassy once again raised the idea. Once again, it was shot down by the military. By early last year, embassy officials assumed that the issue was dead.
Then, in August, they received the list of Gutierrez's priorities. Priority Two was to "dismantle the public food distribution system."
"The system is wasteful and creates a disincentive to produce," the document stated. Iraq's government "should press forward with a program to transfer the supply and distribution to the private sector."
The document was less detailed than the original CPA proposal and did not specify a deadline by which the change should occur, but it acknowledged that the effort would be "politically sensitive" among Iraqis.
It also proved to be sensitive among Americans in Iraq.
"Commerce was off the reservation," said a second embassy official with direct knowledge of the issue. The two embassy officials discussed the dispute in detail on the condition of anonymity because they were speaking without authorization.
