- The Washington Times - Friday, April 18, 2003

UMM QASR, Iraq The coalition military command has sparked an angry outcry in this impoverished port city by recommending a cut in pay for many of its local employees, from $2 per day to 40 cents, in an attempt to control inflation.

"It's a really sore subject at this time," said Sgt. Maj. Mike Farrington, of the British Labor Service Support Unit. "After quite a bit of discussion, a rate was set, agreed to, and now someone else in Qatar says that's way too much."

Some 500 local hires here, who have been making between $2 and $10 each day, would be pushed well below the international poverty line with the new pay scale issued late last week.

Acknowledging mistakes in Africa and the Balkans, Sgt. Maj. Farrington said it is dangerous to pay too much in a depressed economy, in part because largesse will provoke inflation and cause trained professionals to take unskilled jobs because they pay better.

The old rates which were thought slightly generous but probably in line with most local wages prior to the U.S.-led invasion attracted scores of applicants for every job in a region that knew little besides poverty and instability in decades of Ba'ath Party rule under Saddam Hussein.

Many port workers temporarily refused to work after rumors of the 80 percent pay cut were confirmed. Other workers, such as those in military kitchens, were apparently more willing to accept concessions.

In an effort to keep the locals on the job, the British, who control this city, on Wednesday pledged a $1 "bonus" to those who reported for a full day.

A British memo drafted this week in English and Arabic explained that salaries had to be lowered because the initial rate "was inflated to incorporate a bonus as a reward for attending work in an unstable environment."

Privately, U.S. and British officials say they have been seeking salary guidance for several weeks, and said they regretted the ill will caused by slashing the pay of port laborers, security guards, construction workers and similar employees.

Iraqi laborers have been paid in U.S. dollars, one of several widely accepted currencies in a country where the "Saddam dinar" is generally without value.

Coalition officials say that salary records have been inconsistent or inflated, making it difficult to get a true picture of what workers made even six weeks ago.

The wage scales implemented in Umm Qasr will have broad implications in the rebuilding of Iraq. The United Nations and most nongovernmental organizations that will return here shortly will take their cues from the U.S. military.

U.S. officials said the scales will be applied by the Pentagon's Office of Reconstruction and Humanitarian Assistance (ORHA) when its south, central and northern offices begin setting up civil administrations.

"We want to demonstrate our commitment to the human rights of the Iraqi people every day," retired Col. Jim Rabbin, deputy director of ORHA's southern office, told representatives of nongovernmental organizations, who asked about local salaries at a meeting this week. "We've got to get these people back to work."

Rebuilding the shattered economy is one of many priorities for any transitional authority, which will be overseen by retired Lt. Gen. Jay Garner, director of ORHA.

In an effort to stimulate the economy and speed return to work, the U.S. Treasury Department has decided to issue one-time bonuses of $20 to Iraqi civil servants starting tomorrow.

An estimated 1.5 million to 2.5 million Iraqis worked for the government prior to the war.

Also, Michigan State University President Peter McPherson has been selected as the U.S. point man on financial matters related to rebuilding Iraq, the Associated Press reported yesterday.

Mr. McPherson, who served as the second-highest Treasury Department official in the Reagan administration, is to serve as a liaison between Treasury Secretary John W. Snow and military officials in charge of the rebuilding effort, U.S. officials told the Associated Press on the condition of anonymity.

Treasury officials have been working on ways to get Iraq's banking system working again. They want to develop a plan for adjusting the country's financial institutions to a free-market economy after years of operating in a system tightly controlled by Baghdad.

Treasury also plans to help a new Iraqi government develop a new currency.

LOAD COMMENTS ()

 

Click to Read More

Click to Hide