Iraqis Look at Cuts in Payroll

· Many fear that a plan to slash government jobs, which make up nearly half of the country's workforce, could swell ranks of the insurgency.

By Borzou Daragahi, Times Staff Writer -June 6, 2005,latimes.com : World

BAGHDAD — Iraqis, who are already dealing with food shortages, daily power blackouts and a deadly insurgency, on Sunday received another dose of bad news: Their newly elected leaders may slash budgets and government jobs.

Many fear that the move could cause impoverished Iraqis to sympathize with rebel forces. The new Iraqi government said it recently had deployed 40,000 troops in the capital to capture militants, who have killed more than 800 people in the last month in suicide bombings and other attacks.

In addition to the insurgency, the government said it must also grapple with a bloated bureaucracy. Government spokesman Laith Kubba said that ministries were overstaffed and that a new agency could soon try to cut budgets and subsidies.

"Many government ministries can carry out their duties with only about 40 to 60% of [their] employees," Kubba, a spokesman for Prime Minister Ibrahim Jafari, told reporters at a news conference. "There are many senior employees who are receiving high salaries but who do not have a great deal to do."

As many as half of Iraq's 6.5 million-strong workforce is employed by the state, thanks in part to ousted President Saddam Hussein, who increased the public payroll to mask unemployment and shore up a faltering economy.

Kubba did not say how many jobs could be eliminated, but he warned that budget cuts "will be a bit painful."

"We cannot tolerate this level of overburdening the government," he said in an interview. "Currently, Iraq is a huge welfare state. We'd like to make sure that those who are in need are protected…. Currently, it's a free-for-all."

Observers worry that any attempt to dismantle the patronage networks could alienate more Sunni Arabs, believed to be leading the insurgency.

For months, U.S. and Iraqi officials have said that poor, desperate Iraqi men have been carrying out many of the insurgent attacks in exchange for cash handed out by Hussein loyalists and foreign Islamic extremists. Many Iraqis blame the former U.S. administrator in Iraq, L. Paul Bremer III, for laying the groundwork for the insurgency by summarily dismissing the old Iraqi army's tens of thousands of soldiers, a move that may have swelled the ranks of militant groups.

Humam Shamaa, an economist with the Iraqi Institute for Future Studies, a think tank, said that each Iraqi without a paycheck is a potential recruit for well-funded militant groups.

Salaries account for only 20% of public expenses, Shamaa said. Iraqi ministry employees earn about $130 a month on average. He warned that with increasing food prices, 30% unemployment and 9 million Iraqis living below the poverty line, any budget cuts could push more Iraqis toward violence.

"We have to find jobs for people, not throw them out of work," he said. "I think that reducing the public sector will only encourage the insurgency."

Kubba, who last week had discussed slashing popular subsidies for electricity and oil products, said that shrinking the government and allowing the private sector to expand would solve many of Iraq's financial troubles.

He said the nation was obligated to reduce public spending under a debt-reduction scheme sponsored by the International Monetary Fund. The Jafari government, he added, was contemplating creating a ministry of administrative reform to cut subsidies and bureaucratic waste.

Iraq's oil industry, he said, had been hampered by acts of sabotage, including a fire that shut down a pipeline from Kirkuk to Turkey from Friday to Sunday. Oil industry officials say sabotage has dragged northern oil exports down from 1 million barrels a day during Hussein's rule to no more than 350,000.

Because of sabotage, Kubba said, the country failed to fully fund its 2004 budget and is in danger of falling further behind in 2005. Oil exports amounted to 95% of Iraqi revenue last year, he said, making the economy particularly vulnerable to any drop in oil prices.

Members of the transitional National Assembly, elected in the January vote that many Sunni Arabs boycotted, on Sunday discussed ways to draw Sunnis into the process of drafting the new constitution, scheduled to be put to the public in a referendum before Aug. 15.

But Iraq's dilapidated infrastructure and fragile economy threaten to thwart the fledgling government, which must pave the way for two nationwide votes by year's end. Public employees also complain of corruption and incompetence.

On Sunday, members of Iraq's elite police commando units, heralded by U.S. and Iraqi officials as a key to stemming the insurgency, staged a protest outside Baghdad's heavily fortified Green Zone, saying they hadn't been paid in four months, witnesses said.

The capital was largely free of violence Sunday, as the series of raids called Operation Lightning continued the mission of rooting out militants.

In Washington, Sen. Joseph R. Biden Jr. (D-Del.) repeated concerns that far fewer Iraqi forces were well-trained enough to stand on their own than Bush administration statements had suggested.

"There's 107 battalions that have been trained out there and [are] in uniform, but only three — three — are fully operational and three are close to operational," Biden, who recently visited Iraq, said on ABC's "This Week."

Biden, the top Democrat on the Senate Foreign Relations Committee, said that "we have to stop misleading the American public so we don't lose their confidence. Tell them it's going to take more time. Tell them it's able to be done, but tell them the truth."

Sen. Mitch McConnell (R-Ky.), the assistant majority leader, took a rosier view, saying on CNN's "Late Edition" that "it's indisputable that progress is being made in getting both the Iraqi military and police up and running."

"Most of the country is quiet and normal and in much better shape than under Saddam Hussein," McConnell added.

He said he couldn't set a timetable for withdrawal, but that "we can't stop in the middle, and just because things are going tough from time to time we can't get fainthearted here."