USAID to Favor For-Profit Companies in Iraq

USAID to Favor For-Profit Companies in Iraq

The U.S. Agency for International Development plans to tap mainly for-profit companies to rebuild Iraq, angering nonprofit organizations, which claim they would be more effective over the long term, the Los Angeles Times reports.

USAID director Andrew Natsios confirmed that the agency will rely largely on for-profit companies to execute three major contracts worth several hundred million dollars to rebuild healthcare, education, and governance institutions in the war-torn country. According to Natsios, the projects are too large for nonprofit organizations, and consulting firms are more capable of providing the thorough documentation of results sought by President Bush and Congress. However, the Times reports, nonprofits are already heavily involved in USAID's relief efforts and may participate in future development projects as subcontractors.

"[Nonprofits] have their own agenda, to be loving and caring, and that's very effective in relief work," said Derish Wolff, chairman of the global engineering firm Louis Berger Group Inc., which is working on democratic institutions in Afghanistan. "But it doesn't work for building institutions on a national scale."

For their part, nonprofit leaders argue that a more considered approach to rebuilding is likely to be less costly in the long run. "Sending private contractors into a country they are not familiar with to spend a huge amount of money in a short amount of time is a classic recipe for a waste of taxpayer funds," said Kevin Henry, advocacy director at CARE, the international humanitarian organization. People familiar with the invitation-only bidding process for the contracts said only one nonprofit was contacted, and it refused to participate because it considered the goals too ambitious for the one-year timeframe specified by USAID.

Farshad Rastegar, CEO of Los Angeles-based Relief International, which operates mobile health clinics in Iraq, sees room for all types of aid groups in a project as large as the reconstruction of Iraq. But, he adds, "a balance [has] to be struck, [and] I think the pendulum has shifted too far to the other side. Ultimately, the argument comes down to which is the most effective means of assistance."

Mark Fineman. "For-Profits Are Focus for a New Iraq." Los Angeles Times 04/10/2003.