13 October 2007

The problems and course of rebuilding in Iraq

The following is a comment I left at Megan McArdle's site on A happy surge in Iraq. I will put the links to my previous posts on this after the commentary, which is as follows:

The ongoing problem is infrastructure: a decayed, Soviet era piece of junk that was not well maintained and then left to neglect in many areas.

Electricity distribution will require a long-term swap-out of electrical substations, new power lines (due to increased demand) and actual new generation capability. The old generators had been natural gas fired, but Saddam had them converted to crude oil use in the 1990s. A vigorous petro-industry captures natural gas not only from well heads (not all oil is, properly, just oil, and segregation and filtration of crude oil gets methane and other hydrocarbons coming out of solution) but from refineries. Not only did USACE have to see if they could get any of the old plants running, they then had to look to convert them back to natural gas as the oil pumping and refining system came back online. The first major part of the new system will be newer refineries as the old ones are just not working at anything like design capacity due to age. Currently Iraq needs to utilize Syrian refineries and, with the pipeline now opened to Turkey, it can be expected to help in that during the interim.

The lack of maintenance and needing to swap in new equipment means that there is an effective cap on Iraqi crude oil production until that can be done. As newer and higher capacity pipelines, pumps, pumping stations and distribution facilities come on line, older ones need to be removed from the system, so the petro-system gets a marginal but sustainable boost, overall, even when older equipment causes drops in production. As natural gas was *flared* by Saddam, that entire revenue stream is now slowly coming on line with LNG facilities and sales on the open market. Further, the IHS review of Iraqi total reserves re-examined the older geological data in Western Iraq in conjunction with those structures in Saudi Arabia, Jordan and what is known in Syria after their late 1990's prospecting boom. Overall reserves shifted Iraq into the #3 position in the world, shifting it past Iran, and the majority of that is in Anbar and other Sunni provinces, and that change made each of the major factions (Arab Shia, Arab Sunni, Kurds) have co-equal portions of the reserves and the Western portions remaining largely untapped. That got Japan and India interested in investment and the first long-term trade and production agreements are still in the works, but each of those has a lot of money to spend that they had not spent in Iran.

The USACE and Iraqi timelines for complete overhaul of the electrical system runs to 2015, and gets a reliable production and management system in place. Pre-war, Saddam managed the electrical system to the tune of 4,300 MW nationwide with 12-14 hours of electricity/day for Baghdad in 2002, residents in surrounding areas got at most 8 hrs/day. The 5,000 MW seen today is nominal load capacity with peak capacity a bit higher. The 4,300 Saddam era is peak, maximum productive capacity and the nominal load was in the 3,900 to 4,000 MW/day. You can get those figures from USAID, USACE, COMTEX, and a number of other aid and development agencies working with Iraq to bring it a modern era electricity network.

As noted above electricity is paid for via a flat rate, across the board, income tax at 15%. It is not metered. You pay one price for all you can use from the government via that single income tax, which results in folks buying refrigerators, stoves, lighting, televisions, audio systems, computers, VCRs, DVD players, air conditioners... the day the first meters are put into Iraq will be the day that electricity usage finally *drops* to set a supply/demand price-point. You want a key stat, that will be it and don't expect that any time soon as there are bigger fish to fry...

On the clean water front: Saddam also shut down water and sewage plants and let them go into disrepair. This was a weapon used by Saddam against his own people: limit both to those that would toe the line to him, and remove it from those that did not. Water projects for agriculture are even more important than for potable water, and have received more attention so that Iraqis can actually *eat food grown in Iraq*. Saddam destroyed the agricultural system, ripped up such things as date palms, and left to neglect and disrepair the agricultural farming water distribution system. Before Saddam Iraq had a vibrant agricultural system and even before 1991 it was a regional exporter of goods. Saddam turned that around, evicted farmers and made everyone queue up for government handouts.

Municipal water supplies are now being put into towns that have *never* had *any* reliable and clean water supplies. In the cities getting old mains repaired and cleaned, along with sewage treatment facilities is taking forever due to nearly 15 years of war time damage, neglect and purposeful non-maintenance. Photos taken inside one of the sewage facilities serving Baghdad to have concrete settling ponds that were dry and the concrete broken by plants growing up through them. Repairing that has been a hell of a problem. The Nasiriyah sewage facility had never been completed by Saddam, so re-fit and final construction and maintenance were key concerns going forward there.

Dams had been left in disrepair and a major concern early on was actually repairing the Mosul Dam to ensure that catastrophic flooding would not be seen due to dam failure. Basra, in particular, needs new water supplies and maintaining the Sweetwater Canal has been an undertaking, it being 240 km long. It needs maintenance to replace sections of it where gypsum had been used in the embankments and that was crumbling. Additionally the pumping plants on the canal needed not only refurbishment but electricity, so getting reliable electricity in-place is a double-purpose endeavor.

Similarly the overland transport network was in high states of disrepair outside the major cities, with some major towns still having dirt roads. Getting reliable roads for transport of food and other goods is critical, and such towns also needed to serve as a set of supply points, and thus, got other infrastructure to help maintain that. The rail system needs a complete overhaul and major repair across all of Iraq. Locomotives were left in the desert or just derailed, sometimes derailed in the desert and left to rust.

This does not even begin to address the outlying airport system, of which the old military airports are being converted to civilian or dual-use facilities once the Iraqi Air Force gets stood up. That is a major military logistical headache and while the transport aircraft are being delivered pilots are being found and trained and certified to fly them... another year or two for that at least.

Once infrastructure is stood up and reliable, even if only partially functional, manufacturing jobs can come back. In Ramadi, in JAN 2007, the first agreements to start re-opening factories there this year had been settled. While the number is modest, per factory, the jobs needed for supply chain, infrastructure, plant maintenance, costing, accounting, etc. is enormous. Each factory looks to employ 3,000 or more people, with, if memory serves, some 59 factories to be rehabilitated. That is already having an effect on double-digit unemployment slowly moderating downwards and allowing for the Central Bank of Iraq to put out numerous small business loans. Even without reliable branch banks, this is causing a moderating of unemployment in Baghdad and that is stretching to Ramadi and Fallujah. Baqubah was the major grain milling city in Iraq and the re-opening of the flour mills means that Iraq can now produce its own flour... and when the agricultural system is up and running a bit better, that now puts a reliable processing point into the mix.

These are the things one needs to dig through many sources to get, not only aid agencies, but places like TMC.net news and finding reliable local translation services and individuals interested in moving news into the english realm of the net. There are lots of newspapers, magazines, weekly and monthly publications in Iraq, along with commercially owned television and radio stations manned by local crews. They compete with the satellite networks on that basis: local news is very important in Iraq and most people have been starved of information on the goings-on elsewhere in their own Nation since the early 1990's. And the majority of journalists killed in Iraq are Iraqi, also... yet the Western news agencies never tell you about that, either. You know, Iraqi's reporting on the insurgents getting killed for that reporting?

Too bad no Western news agency can be bothered to do this work. I guess we are waiting for the Iraqis to do that for us. They already know our television news sources and what lazy sorts we are and scratch their heads at the disconnects between our Military and Civilian populations... apparently our Civilian population isn't reflecting well on the military, and Iraqis do wonder at that.

In semi-reverse chronological order of posts related directly or indirectly to this comment:

A look at the underworld Kazali network and the role it plays in Iraq: Terror takedown in Iraq.

One of the top 'Most Wanted' by Iraqis, currently under extradition to the US from Spain: Monzer al-Kassar.

A review of the pre-surge Brookings numbers.

On the oil reserves view: Breaking the logjam of Iraq.

The Evaporating base of Sadr.

The rising power inside Iran.

A quick look at the Kerbala attack.

Dropping the dime on the 'oil drop': why that COIN could not work in post-war Iraq.

Oil outlook for Iran, which looks at infrastructure problems there and gives a feel for what the problems in Iraq are: original review and deeper look.

Building up a mosaic societal view of Iraq to understand what is going on there.

Syrian WMD site list for fun and frivolity.

The reason why 'realist' foreign policy failed us in Iraq. And if you want to cite post-war scenarios, can we go back a bit further than the 1960's?

Some FMSO document digging, one in a series.

Want to ferret out some terrorists? Find out how cars can be stolen from the US and shipped *whole* to Iraq for al Qaeda. It is beyond me, that's for sure.

First looks at rebuilding via the Quiet and Hidden news in Iraq: Part I and Part II.

Creating an Army, in this case Iraq... but, really, why are they supposed to be so much better than Americans?

The Iranian Foreign Legion: Hezbollah.

The Faultlines of the Middle East.

Peace in the Middle East: the checklist.


SwampWoman said...

When I read that comment, I immediately came here for the whole thing because I recognized the writing style. Great job, as usual.

A Jacksonian said...

Swampwoman - My thanks!

Numbers tell a story, but the whole story is much harder to understand and document. The entire rebuilding effort to get things like potable water in cities requires a decent water supply... that requires a reliable system to get water into the system... that requires maintenance and electricity... that requires a regularized delivery of fuel or dam maintenance (for hydro power). The list is endless and the entire thing fell into a high state of active neglect under Saddam. And we can't just ask for the entire Nation to shut down for a few years while everything gets built new... it needs to be replaced on the fly. Sort of like repairing a bus engine careening down the street during a rainstorm with gangsters gunning at you.

The trend lines are all good and have been for nearly three years now on the economic side: the year on year economic growth in Iraq is amazing as more and more gets stood up. Unemployment is now measurable and falling... that will 'drain the swamp' faster than anything... but that takes getting the infrastructure up and operating and there is a LOT that went to hell under Saddam.

K T Cat said...

Incredible post. I just threw you a link to this one and will blogroll you as soon as I press "Publish" here.

Unknown said...

Thank, ajacksonian. This is the post I'll nominate this week.

A Jacksonian said...

KT Cat - My thanks and I'm glad you got something from it!

Dave - You are very welcome, glad to have your regard!

Truly this is in no way out of the ordinary... no idea what any fuss is over it...

K T Cat said...

The disrepair you list is typical of a socialist/communist country. When I was in Russia a few years back, I saw that the whole place was a shambles. I'm sure their infrastructure looks a lot like this.

It might be interesting to search the web for stories of what the Germans had to do to rebuild the East after reunification.

A Jacksonian said...

KT Cat - You do make a good point, East Berlin, in particular, was left 'as is' by the Communist regime to 'remind Germans'. The startling differences when crossing West-East were apparent throughout that era.

Saddam's Iraq is a bit like that and some other areas of war neglect by the Soviets. His, however, was a bit more brutal using public services as 'favors' politically. After the Iran/Iraq war then moving on to Kuwait and the pummeling by the Coalition then, he further pressed that to his service, leaving much unrepaired unless favor was curried to him. By the time 2002-03 rolled around, that old Soviet era equipment with wartime maintenance undone and new equipment targeted only to very special projects, Iraq as a Nation was left with an infrastructure after 10 years, what the East Germans had after 45. That timescale compression is about right for what the current generation in Iraq has experienced from the 1970's to now: from relatively wealthy, advancing Nation to one with decrepit infrastructure and a huge natural resource.

The one thing that Iraqis are also aware of, is the temptation to go socialist with the oil infrastructure. In the Kurdish regions and in Ramadi and Fallujah the folks there have seen what Americans do with manufacturing and want to do *that*. Of all the things they can do, that would be best: stand up their own, local manufacturing base and build on it heavily. Japan would be a vital resource for that, to help utilize their economic history of pulling themselves out of pure destruction and becoming a global manufacturing power in 40 years. Poland has been a great help in the Central areas of Iraq when all else was going awry, to keep things stable and demonstrate that profound religious adherance did not have to have bloodshed with it. It was the Poles that uncovered the chemical weapons caches via local help, and it was they that helped keep a lid on Baghdad for nearly two years before al Qaeda got venomous.

Well do I support that the US should help, and greatly, the Eastern European Nations out from under Soviet rule. They have valuable lessons to teach in Iraq and skill and knowledge of how to rebuild society after such abuse. We really should honor our friends and allies far more than we do today... we need their help and insight desperately at this point.