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University of Iowa News Release

Oct. 7, 2005

UI Development Expert Questions New Orleans Reconstruction Policies

A University of Iowa law professor and international economic development expert said that current federal policy for the reconstruction of New Orleans and the Gulf Coast may be compromised because local input into the rebuilding plan has been minimal and residents have not been encouraged to take ownership in the plans.

"If local residents don't feel they have ownership of the reconstruction process, there could be any number of complications because they felt they had no voice," said Enrique Carrasco, an expert in international development law in the University of Iowa College of Law and director of the UI Center for International Finance and Development. "Unfortunately, what we've seen so far in the Gulf Coast doesn't include a lot of local input."

Carrasco cited no-bid contracts for cleaning up after Hurricane Katrina, many of them to companies with ties to key powerbrokers, such as Haliburton, and some discussion of bringing low-wage workers to the Gulf Coast to rebuild instead of relying on local labor. On top of that, he said, many decisions are being made about the reconstruction of New Orleans while many of its residents are still evacuated to cities across the country.

"Most local residents have not been included as part of the process yet," said Carrasco. "So far, the displaced are invisible."

Carrasco said international development experts have learned the importance of local input through experience. For years, world organizations such as the World Bank or International Monetary Fund provided aid to developing countries, but only if those countries followed strict rules established by the agencies. In most cases, those agencies imposed reforms on developing countries from the top down, without giving the countries much say in the reform programs. Most of the reforms required free-market reforms, without first determining whether the countries were capable or even willing to create and sustain changes.

"What typically happened then is those economic development programs broke down because the countries themselves had no stake in it," he said.  Numerous countries, ranging from those in Sub-Saharan Africa to Russia, have troublesome economies as a result he said.

Carrasco credited the Bush Administration with some good proposals, such as the Gulf Opportunity Zones, which will provide incentives to organizations that do business in the areas damaged by Katrina. However, thus far the reconstruction is going forward with little participation of the people most affected by Katrina.

"It just seems a basic common sense proposition that if you don't take into account local circumstances, the process will be problematic," Carrasco said.

STORY SOURCE: University of Iowa News Service, 300 Plaza Centre One, Suite 371, Iowa City, Iowa 52242-2500.

MEDIA CONTACT: Tom Snee, 319-384-0010, tom-snee@uiowa.edu.