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Iraq wants Iran, China to turn power on

Marketplace Staff Oct 18, 2007

Iraq wants Iran, China to turn power on

Marketplace Staff Oct 18, 2007


KAI RYSSDAL: Almost five years and billions of dollars later, in many places in Iraq electricity is still available only a couple of hours a day. American companies have had the lion’s share of reconstruction contracts so far. But The New York Times reported this morning the Iraqi government has decided to turn elsewhere for help. And not just anyplace else. Iran and China will invest more than a billion dollars to build two enormous power plants. The White House has been urging international cooperation to rebuild that country, but Marketplace’s Dan Grech reports these two probably aren’t the ones the Bush administration had in mind.

DAN GRECH: The U.S. has poured billions of tax dollars into Iraqi infrastructure, but sectarian violence has laid waste to many of those investments.

Marina OTTAWAY: It is quite clear that the United States cannot reconstruct Iraq on its own.

Marina Ottaway directs the Middle East Program at the Carnegie Endowment for International Peace. Iraq says it invited foreign firms to bid on the electrical projects, and Iran and China came back with the best offers.

OTTAWAY: The U.S. would prefer to have, for example, other Western countries, European countries invest, but the European countries do not invest for the same reasons the United States is not investing.

Namely, insecurity. American military officials fear the Iranian investment could be a cover for military activities. Ottaway disagrees.

OTTAWAY: If Iran wants to provide more support for the militias, it provides more support for the militias. It does not have to build a power plant. So, in fact, the investment could have a stabilizing effect.

That’s because Iran and China now have a larger economic stake in Iraqi peace.

Chris Preble is with the Cato Institute, a conservative think tank in Washington, D.C.

Chris Preble: Iraq must be integrated into the global economy, and to the extent that foreign firms are investing there, that is not necessarily a bad thing.

He says this may be the ultimate expression of Iraqi freedom: It gets to pick its own business partners.

I’m Dan Grech for Marketplace.

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