Iraq's State-Owned Enterprise Problem and China's Solution (Again)

When China started to privatize its state-owned enterprises (SOEs), it could have auctioned them off to the highest bidder.  I'm sure large auctions happened in many cases.  In many other cases, the factories were sold (given?) to people with contacts inside the party.  While that may not seem morally correct, the end result really did serve a large number of people.  In fact, selling (giving?) the factories at low prices indicates an understanding that most SOEs are really worth nothing more than the land they are on, and maybe some equipment value.  As businesses, SOEs are, for the most part, disasters. By getting SOEs into the private sector quickly, many people were put to work in productive and viable businesses.

Iraq has a similar problem.  The government of Iraq owns hundreds of factories, which employ hundreds of thousands of workers, who don't even show up for work.  Essentially, the SOEs have become another means to distribute government rations.  Still, the Iraqi government, with advice from some US advisors, continues to overvalue these terrible companies and desperately offer them to foreign investors.  Better they use China's models -- give them away to businessmen who will rapidly make them productive.  Of course, a few connected people will get wealthy.  Other than making some feel jealous, who cares?  The end result will be thousands of Iraqis returned to work.