Risking Everything in Baghdad

Whiz-bang technology alone won’t make people feel safe enough to invest big money into a place like Iraq. The lack of political stability leads to a security vacuum, which leads to car bombs, which leads to further capital flight. “The situation right now in Iraq is not stable. There are many challenges for the stock exchange,” says Salam gloomily. “The investors are all waiting for things to happen to the economy, the services. I believe everyone here is waiting for good things to happen.”

BAGHDAD — Bassam Talal, a wisp of a man with large ears and doleful eyes, is in his element on the floor of the “Iraq Stock Market”:http://www.isx-iq.net/. Every Monday and Wednesday morning, he pirouettes between the other 50 or so brokers, nipping up to the white boards that line the wall of the trading pit. He marks 10,000 shares of Baghdad Carbonated Drinks bought for 2 dinars a share (a $13 trade), 5,000 shares of al-Hillal Water Company sold for 2.05 dinar a share (less than $7). He waves colored order slips above his head and darts between the white boards and the investors, separated from the pit by a waist-high barrier. About 200 individual investors eye the Arabic scribbles of the orders on the wall. Some bring opera glasses. They’re mostly older, heavyset men in suits, with a few traditionally dressed Bedouin guys hanging around. When the see a price they like, they gesture to Talal or another broker and point.

All investment comes with risk, but Iraq’s investors face special — and deadlier — risks. Baghdad is the prize in a civil war that rages even as the Iraq Stock Market attempts to rebuild itself and Iraq’s shattered economy. The fighting that often rages outside the old hotel which houses the bourse is marked by violence that is indiscriminate and savage. In Baghdad, car bombs, ethnic cleansing and massacres are the hallmarks of this fight. Located in Hayy al-Awaya, a Christian neighborhood, massive concrete barriers surround the entrance to deter car bombs, and grim gunmen carefully search anyone who gets close.

“During the session, I have about 15 minutes of watching the prices,” says Taha Ahmed Abdul Salam, the president of the Exchange. “The rest of the time I will be in the street watching my guards who are watching the buildings. And I have some information from the police. When I hear something bad, believe me, I will go and search around the building myself.”

He’s constantly engaged in a juggle of security and business. His refusal to halt trading for anything is a point of pride for him, a show of defiance. On Feb. 22, the day the “Askariya shrine in Samarra was destroyed”:http://www.back-to-iraq.com/archives/2006/02/game_on.php, touching off Iraq’s latest round of violence that has yet to subside, “I didn’t stop the trading,” he says. “I let the trading go on, and I didn’t mention anything to anybody.”

The story of the Iraq Stock Exchange has as many ups and downs as a penny stock. It opened in 1992, but Saddam’s government heavily regulated and manipulated it, and often used it for money laundering. Prices were only allowed to move 5 percent in either direction. By the time U.S. troops bore down on Baghdad in April 2003, about 140 companies were trading on it and its clientele was composed of businessmen and wealthy Ba’athists who had socked some cash away. The Americans closed the old market but re-opened it in June 2004 under Coalition Provisional Authority Order No. 74. The new market has just 15 companies, many of the old brokers and traded about 500 million Iraqi dinars a day back then — about $333,000.

Today — from a business point of view — things aren’t much better. Though there are 94 companies listed, the market sees only about $1 million in business each session, Salam says. Banking is the largest and most active sector, because they have holdings of hard currency and have formed partnerships with foreign banks like HSBC.

The high-point of the market, according to data provided by the economic section of the embassy, was around the end of October, when the permanent constitution was approved. Total market capitalization surged to almost $2.5 billion, but it’s since plummeted to $1.25 billion as the political process drags on with no end in sight. (Iraq’s market is the smallest in the region, with even the Palestinian stock market dwarfing it at $25 billion — and they don’t even have a real state yet.)

Although it’s legal for foreign investors to own up to 49 percent of an Iraqi company, it’s not yet been implemented because of technical hurdles, which means the flood of foreign investment predicted when the market reopened hasn’t happened yet. What local investment there is also sidelined because of a steady exodus of wealthy Iraqis and their money to neighboring countries drives a vicious cycle of violence, insecurity and poor economic performance that might lessen the violence.

“People are worried about their money,” says Talal in a break from trading. “The price drops continue, so people are trying to sell as fast as they can so they don’t lose a lot.”

There is a notional regulatory regime with the Iraqi Securities Commission, but there Salam and the brokers, who own the market, do the real regulation. They all know one another from the old Saddam-era exchange, which helps prevent insurgents or criminals from gaming the market. Such familiarity feels good to Iraqis, but it seems sketchy to westerners used to more transparent, rules-based trading rather than a system run by a bunch of buddies.

But if you talk to June Reed, a senior consultant for private sector development at the embassy, things are going pretty well. “This market has functioned very well through several interim governments,” she said. “Make no mistake: There is investment in Iraq.”

Reed, a former investment banker from New York for Merrill Lynch and Credit Suisse, refused to budged off her cautious optimism about the market, stressing that great things were in store for the Iraq Stock Market when a permanent government is in place and a planned automation program is established. “Here it is truly the potential that is the most important thing,” she says. But given the archaic, anarchic and opaque nature of the market (“It was unusual to see grease boards, handwriting, etc.,” Reed says) any foreign investors are rightly worried that they could lose their shirts before they ever know what happened.

In the coming weeks, she says, that’s going to change, thanks to a proposed automated system for trading securities that will create a central, networked electronic depository, due to be completed by the end of the year. There will be automated sales, clearing and depository functions like the NASDAQ, she says. “It’s very high tech.” Brokers like Talal will be able to respond to orders from his desk at his firm, the Nineveh Brokerage, rather than navigate the IED-peppered streets of Baghdad. There are even plans for trading over the Internet.

But as the American military has learned, whiz-bang technology alone won’t make people feel safe enough to invest big money into a place like Iraq. The lack of political stability leads to a security vacuum, which leads to car bombs, which leads to further capital flight. “The situation right now in Iraq is not stable. There are many challenges for the stock exchange,” says Salam gloomily. “The investors are all waiting for things to happen to the economy, the services. I believe everyone here is waiting for good things to happen.”

[Ed. note: I wrote this for “Fast Company”:http://fastcompany.com/homepage/index.html after I left Baghdad, but it was killed because I had the bad luck of filing it the day before the NYT story ran. Such is the journalism biz. But better to blog than to never been seen at all!]

Fallujah: One Year Later

FALLUJAH — Last week, I was in Fallujah working on a story about how the city is one year later. Well, here it is.
A note on this embed: Someone asked me if I had to “clear” this story with the U.S. military. No, I did not. They had absolutely no input on this story. i didn’t show the copy to anyone but my editors and they didn’t show it to anyone else.
As for media events to show me how great Fallujah was going, I can’t speak for what CNN saw a while back, but I was shown several things that were obviously pre-packaged media showcases, and I refused to write about them — with one exception. One such event was the delivery of supplies to the hospital. This was the _first_ supply drop to the hospital since the invasion of November 2004 and it consisted of blankets and kerosine heaters. Nice enough, I suppose, but good equipment and medicine would have been better. It was also a clumsily staged event with the Marines taking their own camera people and showcasing themselves. The Marine major who was providing security took me aside and apologized because, as he said, “I thought this was going to be something real.” His embarrassment was evident.
I wrote about that in my file, but because of space restrictions, it didn’t make it in. That’s life in the magazine business.
Now, as for me being a shameful excuse for a human being — and I’m talking to you, “Susan” — get over yourself. My story was hardly cheerleading and I’m sick and tired of people who think any coverage of the military is somehow being complicit with war crimes. The Marines I met committed no crimes, wanted to get home and realized they were doing an often pointless task, a feeling I tried to convey in my story. If my reporting doesn’t fit your preconceived notions of what’s happening, tough. I’m right and you’re not. Referencing Dahr Jamal, who came over here with an agenda to “document atrocities,” is _not_ journalism — it’s activism. And if that’s what you want, go to another damn blog.

In Huseybah for Steel Curtain

HUSEYBAH — Hello all. Currently in Huseybah covering Operation Steel Curtain. Will write more later.
*UPDATE 11/9/05 2:45:20 AM:* And “here it is”:http://www.time.com/time/world/article/0,8599,1127376,00.html on TIME.com. The most interesting aspect to me was about the tribal politics the U.S. is exploiting.
A note on civilians. I didn’t see one civilian hurt or mistreated while I was with the Marines of the 2/1. For one, there aren’t many there. Huseybah, normally about 30,000 people, is almost abandoned. I made it halfway through the city, and found maybe 10 houses with families in them. Best estimate is that about 5,000 civilians remain.
Secondly, I never saw a Marine shoot first. They never fired a round unless fired upon, which is in keeping with their rules of engagement. Now, when they were fire upon, even if it was just some guy taking potshots, the entire company would open up. If they brought the tanks in, it was all over.
Some will say, “yeah, well, that unit was probably behaving themselves because they had press with them.” Well, I moved freely between Fox and Golf company, and all the various platoons over the three days I was up there. They were often completely surprised to see me and it was sort of a “spot press check” on the squads. Secondly, the New York Times and CNN is embedded with the 3/6 in the north of the city. No one is reporting significant effronteries to civilians. And if they _are_ behaving themselves because of the press, doesn’t that make the case for _more_ embedding not less, as the press is fulfilling its watchdog role and keeping people honest — and, presumably by extension, civilians alive?
Anyway, I’m back in Baghdad now.

Embedded in Anbar

“Saed’s capture is a lucky break, and maybe it will help. Because these days, Fox Company has been catching hell from insurgents who have been pushed out of the city of Fallujah and into the surrounding countryside since U.S. forces wrested the city from insurgent control last November….”

CAMP DELTA, al-Karma, Iraq — Must make this one short and sweet, as I’m running of of battery on my laptop, but since Thursday evening, I’ve been embedded with the 2nd Battalion, 2nd Marines of the II Marine Expeditionary Force surrounding the garrisoned town of Fallujah. I’ve not yet had a chance to get into the city proper yet, as the 2-2 doesn’t operate there (that’s the 2-6 and 2-7’s area of operations) but al-Karmah is an interesting little town.
It’s just to the north of Fallujah and Camp Delta, home of Fox Company, is nestled in between Fallujah and al-Karmah next to the old Oil-for-Food warehouse. (It’s now an alleged staging area for the insurgents in the area who regularly poke their heads up and take potshots at the Fox Company.)
I just want to share some notes and observations I’ve made over the last two days.
*Friday, October 28, 2005*
For the short drive to Camp Delta just across a half-hearted stream from the town of al-Karma, the Marines of Fox Company ride only at night. They do this to minimize the IED threat, says Capt. Mike Estes, the company commander, which is still ever-present almost a year after U.S. troops attacked the rebel stronghold of Fallujah and its surrounding towns, such as al-Karmah. Dust and grit pepper the googles of Fox Company, because they ride in high-backed, up-armored lorries instead of humvees.
Earlier, Capt. Chad Walton, a spokesman for the 2nd Marines at Camp Fallujah to the south, said that Fallujah was closed to the outside world, with only residents allowed in after showing ID cards that proved their address. The Marines man five entry checkpoints to the city, turning away anyone who can’t provide the proper credentials or whoever they deem suspicious.
“Obviously, it’s not foolproof,” says Walton. “But it’s way better than it was.”
The Marines of Fox Company agree; they talk of driving through the old city without having a shot fired at them. But Fallujah is thoroughly occupied. Iraqi police and Army take second stage to the Americans, who aren’t shy about showing their presence, in contrast to Baghdad where U.S. patrols are almost scarce these days until you get near major installations such as the airport or the Green Zone. The Iraqis aren’t prepared to take over security operations yet, and it will likely be years before they can. Is a thorough occupation what it’s going to take to pacify the restive cities of the Sunni heartland?
*Saturday, October 29, 2005*
It’s still dark when the Marines of 3rd platoon, Fox Company starts out. The idea is to get a jump on their quarry, the leader of a mortar team that has been peppering Fox Company’s base, Camp Delta just south of al-Karmah. The air is cool on the skin and the sun brightens the sky from the direction of Baghdad. Ahead, date palms are black against the indigo sky, and lush greenery of reeds, cottontails, rice, dates and olive trees line the dirt roads.
3rd Platoon takes it easy. The commander, Lt. Anthony Carter of Endicolt, N.Y., doesn’t believe in the brute force method of cordon-and-knock. It’s easier — and more — effective to take a more discreet and polite approach, he says. Whereas the U.S. Army excels are roaring up in humvees, soldiers piling out and putting on a show of force, Carter’s Marines instead walk up to the house where they believe Ali Muhammad Saed, the mortar team leader, is living.
They’re in luck. He’s out front fiddling with his orange-and-white taxi. He doesn’t seem surprised to see him and sits quietly while Carter orders all other military-age men in the immediate neighborhood to be rounded up and brought to Saed’s house. Soon enough, three men and two boys are brought over and they all squat on the porch of the house. It’s possibly the most peaceful and respectful raid in Iraq’s history.
“The days of just running in the house are over,” Carter says. “If you flash-bang every house, you’re not making many friends.”
Saed’s capture is a lucky break, and maybe it will help. Because these days, Fox Company has been catching hell from insurgents who have been pushed out of the city of Fallujah and into the surrounding countryside since U.S. forces wrested the city from insurgent control last November. While direct engagements are rare — the Marines always win and the insurgents know it — IEDs and suicide car bombs are taking a toll on Fox Company. Since their deployment in July, the 2-2 has had 12 Marines killed. Fox company has nine guys out wounded and Carter’s 3rd Platoon has had 6 purple hearts awarded — out of a force of 37 guys. Only one of 3rd Platoon’s awards came from being shot. The rest have come from IEDs and car bombs. So numerous are incoming mortar attacks on Camp Delta that body armor and helmets are required anytime a Marine goes outside a building.
“It’s not more violent,” says Lance Cpl. Thomas Cummings, 21, of Horicon, Wisc. “But what is violent is more intense.”
This wasn’t supposed to happen. As the political process moved forward, embassy officials said all year, the violence should decrease. There would be a coupling in increased Sunni participation and a decrease in violence. But most of the injuries that have befallen 3rd Platoon, says Lt. Carter, have occurred since the Oct. 15 referendum.
Just two hours later, the nearby boom of an IED followed by the rattling of gunfire were a late coda his remarks. An ambush, somewhere. Someone else was catching it today.

Another Day in Ramadi

Signs warning “Complacency kills” dot the bases of the 1st Battalion, 5th Marine Regiment in Ramadi. The Marines stationed in this provincial capital in the treacherous Sunni triangle are bored. Bored of patrols, tired of manning outposts and frustrated by an enemy they can’t meet face-to-face. The signs attest to the tedium of their days.

_(Note: This is the dispatch I planned to file from my last embed in Ramadi back in May. For a variety of reasons it never made it into TIME, but I thought you guys might like to see it. This was a typical day on a week-long embed at the end of May.)_
RAMADI — Signs warning “Complacency kills” dot the bases of the 1st Battalion, 5th Marine Regiment in Ramadi.
The Marines stationed in this provincial capital in the treacherous Sunni triangle are bored. Bored of patrols, tired of manning outposts and frustrated by an enemy they can’t meet face-to-face. The signs attest to the tedium of their days.
Unlike the few soldiers and Marines taking the fight to insurgents in towns such as al-Qa’im on the Syrian border, most of the 140,000 U.S. troops in Iraq, including the guys of the 1-5, are not likely to “get some,” as the young warriors like to say. There are few firefights in Ramadi, a city of about 375,000 people, but lots of roadside bombs. Marines are hunkered down in their bases. When they get out, they patrol the streets, search cars and houses and act more like police than a military force.
“We’re not on the offensive anymore,” said Lt. Brian Huysman, commander of Alpha Company, from his post at the Anbar Province Government Center, which his men guard. “We’re not here to stop the insurgency, but to help the Iraqi government grow.”
His men guard the building so the Anbar government, such as it is, can function. The day after the provincial council elected a new governor, he was promptly kidnapped. Now the deputy governor has taken over the duties of governor. Marines also help set up the new police force, which is non-existent at the moment. The screening process for the new applicants is set to start May 22. “It’s a day-in, day-out kind of thing,” Huysman said thoughtfully as he watched Iraqis wave metal detecting wands over Anbar Governorate employees coming into the triple-walled compound. “There’s no corner to turn. It’s just a slow, slow process.”
By early afternoon, the sun has hit peak intensity, and the men of 1st platoon, Charlie Company are sweating heavily in their body armor. They’re on a patrol to investigate anti-American graffiti on three “known bad guy” mosques near the canal. Three Shi’ites from Najaf, members of the 18th Brigade of the new Iraqi Army—the Desert Lions— are with them because mosques are sensitive sites. Marines aren’t to enter unless the Iraqi troops determine there’s reason to search. There is almost no traffic or people on the streets, making the hairs on the back of Marines’ necks bristle.
They search a palatial house and find a Kalashnikov magazine with a single armor-piercing round in it, in the lead position. The man who says he lives there isn’t arrested, nor is his ammo confiscated, but he’s put on a watch list. In another house, next to one of the suspect mosques, Capt. John Maloney, commander of Charlie Company, talks to the owner, an old man in a white dishdasha. He offers the Marines water, but the captain defers to the Iraqi troops with him, and asks him to support them and give him information about insurgents.
The old man replies that if they are Shi’ite, they have no business in Ramadi. He fears the insurgents and their homemade bombs, but he also fears the Shi’ite government in Baghdad and its new army. His fear reveals the fault lines of the new Iraq and the challenge the Marines face in their mission here.
It’s frustrating. No one knows how long it will really take to build a credible government that all Iraqis believe in. The lack of enemy contact — and missions that seem designed to avoid contact with insurgents — frustrates the leathernecks. Marines are trained to fight, acknowledges battalion commander Lt. Col. Eric Smith, and any Marine will say he’d rather be in a gunfight than patrolling a city. However, “There will be no knockout punch here,” Smith said. “It is a daily grind.”
But while the duties are tedious, they’re still dangerous.
“Try watching your buddy get blown up by an IED set by chickenshits who won’t come out and fight,” growled a lance corporal in 1st platoon of 1-5’s Charlie Company.
Five Marines have died since the 1-5 arrived in early March.
And the duties are vital. Iraqi security forces are not ready to take over, fears of civil war loom and insurgents can still move relatively freely. But these boring day-to-day tasks of the Marines in Ramadi are the new American strategy in Iraq: Avoid casualties, hold down the violence and hope the Iraqi security forces can take the fight to the insurgency.
Like much of Anbar province, Ramadi is a dirty, dun-colored place, made up of squat two- and three-story buildings. It tumbles out in a triangle from the intersection of the Euphrates River and the Habbaniyah canal, which feeds into Lake Habbaniyah to the south. And like most Iraqi cities, the dividing line is carelessly maintained between the city and the countryside. Ramadi just kind of runs out of steam to the south and shrugs into farmland as it gets closer to the lake.
Roads from Jordan, Syria and Saudi Arabia converge here, before merging into the major highway leading to Baghdad. Before the war, these roads made Ramadi a smugglers’ haven, one barely under the control of Saddam Hussein. Today, insurgents and foreign fighters make use of the same smugglers’ trails and while it’s not the insurgent stronghold Fallujah was, the deeply conservative culture, a population that’s 90 percent Sunni and a local leadership made up of tribal sheikhs and imams gives the Marines’ enemies plenty of purchase in Anbar’s capital.
The 1-5 in turn occupies three bases on the strategic tip of the city where the river and canal split: Camp Ramadi, Hurricane Point and Snake Pit. They have responsibility for the western half of the city while the Army’s 1st Battalion of the 503rd Infantry Regiment has the eastern half. With no police force to speak of — it fell apart earlier this year in the face of persistent insurgent attacks — the Marines are the main security presence in the city.
That doesn’t mean they’re happy about it. “I cannot contain my excitement of going on this patrol,” Lance Corporal James Bellasario, 19, of White Hall, Mont., said sarcastically before 2nd platoon of Charlie Company began a sweep for weapons caches on the banks of the canal.
He worries that the lack of obvious successes in Iraq will mean the conflict slips the American public’s mind. “If that happens,” he said, taking a long drag on a cigarette he is too young to buy in some states, “what the hell are over here for? It will be just like Vietnam.”
Maj. Benjamin Busch, with a civil affairs unit attached to the 1-5, sympathizes. “It’s always nice to have a specific place that’s a focus of your effort,” he said. Ramadi doesn’t offer that, as there are no strategic targets other than the goodwill of the citizens, which is vital to the Marines’ efforts here. “When it comes to the actual engagements, the Marines are winning. But the insurgents have incredible power to shut the city down.”
That power is fear, and the people of Ramadi feel it. When insurgents plan an attack, the people know it. Sometimes they tip off the Marines, sometimes they don’t. Members of 2nd platoon grumble about this.
Such patrols are designed not only to find weapons caches, said Smith, but also to squeeze the insurgents from operating in areas of town and undermine their ability to terrorize. The theory is that the mere presence of Marines rather than heavy offensive actions will prove to Ramadi citizens the insurgents can’t provoke or drive away the Americans because for the insurgents, just attacking the Marines is a victory. Attacks show the Americans aren’t in control and undermine citizens’ sense of safety.
“In a sense, not having contact is good, because if I’m able to keep the level of violence down until the government can take over, that’s a successful day,” Smith said. “That gets me to the strategic aim of stability.”
Now, as another day ends without incident or encounter with the enemy, Maloney likens the current battle for Iraq as a chess match. “The trick here, like chess, is to set up the environment,” he said.
His men moved into position as he spoke: some on lookout on roofs, others down the road looking for men planting IEDs. Still others were stopping cars in snap vehicle checks in an attempt to surprise insurgents. He was continuing to apply pressure, but nothing to a breaking point. The goal was to get insurgents to show themselves while keeping his pieces in play.
“Every time they’ve come out, they’ve lost a pawn,” he said. “And they’ve lost a few knights, too.”
Ramadi’s dust hung in the air, backlit by the setting sun. The muezzin’s call to prayer drifted over the city. The Marines headed back to Snake Pit, knowing that when they moved out of the area, the insurgents would come back out to plant more IEDs. As Huysman of Alpha Company said earlier: “They’re trying to see where we’re not watching, where they can get close.”
Another day winds down in Ramadi.

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