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Ministry of Industry and Military Industrialisation (MIMI)

The military procurement system of Iraq was managed by the Ministry of Industry and Military Industrialization [MIMI]. During the 1980s MIMI was headed by Hussain Kamil, who was Saddam's son-in-law. In May 1989 Hussein Kamil proclaimed publicly that Iraq was implementing a defense industrial program to cover all its armed forces' needs for weapons and equipment by 1991. He stated that Iraq's industrialization program was intended to provide all of Iraq's basic industrial supplies from indigenous sources. An estimate of the magnitude of the effort is contained in a June 1989 Eximbank report which says that in 1988 Iraq devoted 42 percent of its oil revenues to military-related procurement.

Hussain Kamil, besides heading the MIB and MIMI, was also head of the Secret Service Organization [SSO], which had responsibility for protecting Saddam Hussein and for keeping track of other Iraq intelligence organizations. The convert techniques Kamil learned at the SSO would become valuable tools in his quest to obtain sophisticated Western technology despite growing obstacles. Through this organization, he set up the clandestine technology procurement network that was essential to Iraq's success. A key member of the Secret Service Organization was Safa Al-Habobi, who had direct responsibility for making the procurement scheme work. Safa Al-Habobi was the mastermind behind MIMI's procurement efforts, and a director general of the NASSR weapons complex.

MIMI used a series of stated-owned organizations to buy and build the military power Saddam desired for Iraq. There were at least a dozen organizations operated by MIMI that bought Western technology and goods for the weapons program. Under MIMI, Iraq established a complex defense industrial plan that encompassed not only military related production facilities but also government enterprises primarily devoted to civilian production. MIMI can be thought of as a dual structure holding company divided between civilian and defense components.

MIMI controlled about 40 civilian agencies that were assigned responsibility for building commercial ventures such as the Badush Dam, petrochemical complex two (PC-2), and fertilizer factories and truck assembly factories. MIMI often used civilian activity as a front for procuring equipment used to produce weapons of mass destruction. Many Iraqi entities passed the materials from foreign suppliers directly to military projects. For example, Iraq used the Badush Dam as a front for purchasing equipment for the Condor II ballistic missile program. And PC-2 was used as a front to purchase components for Gerald Bull's super gun. Petrochemical complex three (PC-3) was the code name for Iraq's clandestine nuclear weapons program.

The military side of MIMI, which was comprised of roughly 25 organizations, had responsibility for producing products ranging from military supplies to complete weapons systems. Large Iraqi industrial complexes often contained both civilian and military production facilities. MIMI used the civilian and military nature of these mixed-use factories to mask the ultimate end-user of technology shipped to these complexes.

Defense industrial facilities controlled by MIMI included:

The oil price collapse (and Iranian military victories) of 1986 took the Iraqis by surprise. As of 1987, the Ministry of Heavy Industry, Ministry of Light industry and Special Security Department were combined to form the Ministry of Military Industry. Also falling under this Ministry was the General Technical Industry Corporation. It was under this sector of the Ministry of Military Industry that chemicals for warfare purposes were produced.

The scandal involving the Italian Banca Nazionale de Lavoro (BNL) , which involved criminal behavior by both BNL and Iraqi officials, revealed the extent of Iraqi efforts to attract Western financial support for Iraq's military industrialization program. Iraq was pursuing technologically advanced, import-substituting, dual civilian-military industrialization in violation of Western export restrictions. Iraq received more than $5 billion worth of loans and credit commitments' from the Atlanta branch of BNL between 1985 and 1989, including some $900 million guaranteed by the U.S. Government's Commodity Credit Corp. Several employees of the Atlanta branch of BNL conspired to provide the Government of Iraq with over $4 billion in unreported loans by keeping a secret set of accounting records that concealed the loans to Iraq. The BNL loans were crucial to Iraqi efforts to build weapons of mass destruction. With the backing of President Bush, the State Department and National Security Council staff worked in 1989 and 1990 to keep the flow of United States credit, technology, and intelligence information flowing to Iraq despite repeated warnings by several other agencies and the evidence showing that Iraq used BNL loans to pay for United States technology destined for Iraq's missile, nuclear, chemical, and biological weapons programs. Some $2 billion plus in BNL loans to Iraq went to Iraqi Government entities involved in running a secret Iraqi military technology procurement network. The procurement network, which operated through front companies situated in Europe and the United States, used the BNL loans to supply Iraqi missile, chemical, biological and nuclear weapons programs with industrial goods such as computer controlled machine tools, computers, scientific instruments, special alloy steel and aluminum, chemicals, and other industrial goods. The suspension of credits from BNL -- by far Baghdad's largest source of credits -- almost certainly complicated Baghdad's procurement efforts.

Extremely high revenues from oil exports in the 1970s made budgeting and development planning almost irrelevant in Iraq. In the early 1970s, Iraq made capital investments in large-scale industrial facilities such as steel plants. Many of the facilities were purchased from foreign contractors and builders on a turnkey basis. But Iraq neglected development of the next stage in the industrial process, the transformation of processed raw materials into intermediate products, such as construction girders, iron pipes, and steel parts. These bottlenecks in turn hampered the development of more sophisticated industries, such as machinery manufacture. Plant construction also outpaced infrastructure development. Many plants, for example, were inadequately linked

According to official Iraqi figures, the total industrial labor force in 1984 consisted of about 170,000 workers. State- operated factories employed slightly more than 80 percent of these workers, while 13 percent worked in the private sector. The remaining 7 percent worked in the mixed economy, which consisted of factories operated jointly by the state--which held a major share of the common stock--and the private sector. Men constituted 87 percent of the industrial work force. According to the Iraqi government, in 1984 there were 782 industrial establishments, ranging in size from small workshops employing 30 workers to large factories with more than 1,000 employees. Of these, 67 percent were privately owned. The private sector owned two-thirds of the factories, but employed only 13 percent of the industrial labor force.

Sources and Resources

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