Saturday, May 17, 2003

BAGHDAD — U.S. officials are preparing to pay Iraqi workers next week, the first time most have received a salary in more than a month.

More than 1 million Iraqis will receive the new salaries, which range from $115 to $575 a month. The new payment plan includes none of the perks that used to go with high-ranking Iraqi jobs, such as housing, cars, extra ration cards and cash supplements.

In the Kurdish regions, workers will be paid $50 to $250 a month, in U.S. dollars.

A new four-level salary scale, created by U.S. officials, will replace the wildly inconsistent salaries paid by the former Iraqi regime, and should be more transparent and easier to administer.

“The salary structure of the former regime is complex, discretionary and unfair,” according to a memo signed by reconstruction chief L. Paul Bremer, which was made available to The Washington Times. “This is one of the ways the former regime controlled the population, rewarding loyalty over merit.”

Iraqi workers will also receive a one-time cash bonus of $30, in addition to the $20 emergency payments that the Americans began distributing two weeks ago.

Concocting a pay scale was one of the more vexing tasks facing officials of the Pentagon’s Office of Reconstruction and Humanitarian Assistance. U.S. and British commanders faced excruciating difficulties sorting out pay scales in other parts of the country as well.

Nearly 80 percent of Iraq’s work force is employed by the government or state-owned businesses, according to U.S. officials. They have not been paid since before the war.

“It’s very important that we pay people,” said George Mullinax, an American banking official who advises the Iraqi Central Bank. “Even if you don’t need the money, it shows that things are getting back” to normal.

He said that for most of the big companies and ministries, payroll records were readily available to show what people were earning before the war.

According to the Bremer memo, some people will be making more and others less, but the roughly $135 million a month Iraqi payroll is equivalent to prewar levels.

The Iraqi economy has been in flux, as the “Saddam dinar” soared yesterday to 850 to the U.S. dollar. This is in part a result of optimism over the end of the war, but also a response to the Americans flooding Iraq with small U.S. bills.

For much of the last decade, the Iraqi currency traded at as little as 3,000 to the dollar.

Iraqi people, who have long taken second jobs to make ends meet, have little to gain by a stronger dinar. Imports — from prepared foods to satellite dishes — are priced in dollars.

U.S. officials expect to phase out the dinar, whose every note bears Saddam Hussein’s portrait. The notes are also of inferior quality, with smeary ink and a lifespan of less than six months.

The Kurdish areas to the north have since the mid-1990s used a different note known as the “Swiss dinar,” but the ornately engraved bills cannot be printed in sufficient quantities for use in the central and southern regions.

Mr. Mullinax said he expects a transitional Iraqi administration to design and create a new currency, hopefully within the next year.

The new currency will be guaranteed by the hard currency and other Iraqi assets frozen by foreign governments since U.N. sanctions were imposed in 1990. Although Iraq used to be one of the richest countries in the world, it is not clear today how much remains.

Mr. Mullinax, on loan from the U.S. Treasury’s Office of Technical Assistance, said the Iraqi Central Bank had its accounts stored on computers that were destroyed or stolen in the wave of postwar looting.

He said he hoped computers can be cobbled together to read the old data-storage discs within the next 10 days.

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