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Context of 'Late October 2003: Iraq’s Governing Council Rejects Privatization Plan'

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At a press briefing in Baghdad, Paul Bremer says that Iraq should consider privatizing its state-owned sectors and allowing foreign investment into its oil industry soon, even if that means doing so before Iraq has an elected government. He says that the soon-to-be-appointed Iraq Governing Council will need to reassure private investors by taking a friendly stance toward foreign capital. “Privatization is obviously something we have been giving a lot of thought to,” he says. “When we sit down with the governing council… it is going to be on the table. The governing council will be able to make statements that could be seen as more binding and the trick will be to figure out how we do this. Everybody knows we cannot wait until there is an elected government here to start economic reform.” (Reuters 7/8/2003)

The Iraqi Governing Council is created and its 15 members sworn in. The members were selected by Paul Bremer on July 11 after tense negotiations between the Coalition Provisional Authority and a number of Iraqi opposition groups. Thirteen of the members are Shiites, five are Kurds, five are Sunni Muslims, one is an Assyrian Christian, and another, one of three women on the council, is a Turkoman. Most of the members are Iraqi exile leaders or Kurdish chieftains who worked with the US and Britain prior to the invasion. More than half of the members have connections to, or were members of, the Iraqi National Congress. The new governing council will have the authority to appoint some officials and diplomats, review laws, and approve budgets. But Paul Bremer may veto any of the council’s proposals. (Tyler 7/13/2003; Kaplow 7/14/2003)

Members of Congressman Henry A. Waxman’s staff interview two members of the Iraqi Governing Council. They state that Iraqi firms could be hired for reconstruction projects at one-tenth the amount being charged by US firms. Their claim is corroborated by the Coalition Provisional Authority’s (CPA) own justification (see September 17, 2003) for the $20 billion reconstruction supplemental. The CPA states that when work is done by Iraqi companies the “cost of construction is 1/10th of US standard per sq. ft. in general construction.” (US Congress 9/30/2003, pp. 3-4 pdf file)

The twenty-five members of the Iraqi Governing Council and the twenty-five interim ministers unanimously decide to reject cooperation with the CPA in the privatization of state-owned companies and publicly owned infrastructure. (Klein 9/24/2004)

Thamir al-Ghadban is appointed as Iraq’s minister of oil. Al-Ghadban is a British-trained petroleum engineer and former senior adviser to Ibrahim Bahr al-Uloum, Iraq’s previous oil minister under the US-appointed Iraqi Governing Council. (Muttitt 2005)


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