Niqash - Saleem al-Wazzan (Basra) - 22 April 2008:

Basra’s state-owned industrial sector is struggling from a lack of new investment, corruption and political in-fighting, leaving it teetering on the economic edge say employees of various companies interviewed by Niqash.

The public companies, as well as thousands of employees, are threatened by closure and unemployment if urgent reform is not introduced.

Most factories have seen no recent new investment in facilities and are being forced to use old and unproductive equipment. Moreover, Iraq’s new class of well-connected businessmen are using their links to establish and gain government support for private companies at the expense of the state-owned firms.

Abdul-Amir Saleh, manager of a state iron and steel company, said that “officials in the Ministry of Industry, government brokers and those with private interests have established privately owned factories to produce iron and steel only two kilometres away from the government owned factory. This has led to an increased loss by the government company, without any consideration of the 6000 employees working there whose salaries barely cover their living expenses.”

According to Saleh, corruption is a big issue. He cites one example related to the Council of Ministers’ decision that iron scrap be sold to the public firm. Instead, the scrap was sold to the private company and no investigation was conducted regarding the deal.

Another Basra factory, the national petro-chemical company, is in equally dire straits. The company, though very successful in the 1970s and 1980s, fell into disrepair during the sanctions of the 1990s and according to experts has become a chemical time bomb waiting to explode, endangering the lives of employees and people living in neighbouring areas.

Engineer Abdul-Bari Kathem stressed that the factory is suffering from severe neglect, and that the destiny of 5000 workers is threaten by the ministry’s decision to make the company self-financing while it is still suffering deficits and in urgent need of government financial support.

Peaceful demonstrations and strikes have been held by employees urging the government to rehabilitate state firms in Basra, especially in light of damage suffered during the 2003 invasion of Iraq. However, the government has continued to ignore the demands say company employees.

In Basra today, there are no problems for which Iran is not held to blame.

A number of workers and engineers told Niqash that there are “invisible hands working to put an end to the future of the petrochemicals company,” referring to Iranian officials. One of the laboratory technicians confidently said that “there are some Iranian parties paying money to prevent the factory from producing because Iran has found a good market in Iraq for its plastic production.” He added that “Iranian products enter Basra’s markets without being taxed and this makes competition even more difficult; if factories stop producing, Iranian products will gain more strength.”

Speaking to Niqash, however, a source from the provincial council rejected the idea of outside interference and blamed the problems afflicting the factories on domestic political battles. He said that the “reasons behind the crisis are political conflicts inside the provincial council and specifically conflicts between the governor and members of the Fadhila party and other members from the Islamic bloc. And for this reason these conflicts have paralyzed the work of the province as is reflected in the work of industrial facilities.” The source added that “investment decisions in the province are being taken on malicious grounds not on economic grounds.”

Dr. Wadad al-Dabbouni, professor of economics at Basra University says that that there has been a lack of serious economic study by the Ministry of Industry and by the provincial council aimed at rehabilitating strategic industrial facilities.

She added that “today there is no inter-regional government planning and nobody asked us, as professors of economics or as university or research experts, to make contributions in this field.” She said that “there is a complete absence of the simplest statistical data needed to prepare an economic study on the southern city including the absence of a population census and employment rates.”

Some workers are more optimistic that reform might emerge following Prime Minister Maliki’s latest offensive against militias in Basra. They cite investigations being conducted by the Integrity Committee into the working of the reconstruction committee as a sign that industrial corruption might be prevented. There is also some speculation of an impending independent budget to rehabilitate the industrial sector.