MSU President M. Peter McPherson testified before a U.S. Senate committee Tuesday, urging Congress to support rebuilding efforts to Iraq's economic infrastructure with $15 billion in federal aid.
McPherson testified before the Senate's Subcommittee on International Trade and Finance, part of the Senate Banking, Housing and Urban Affairs Committee.
His speech came only a day after the Senate passed the $87.5 billion package requested by President Bush to restore Iraq and Afghanistan. The House passed a similar bill by an overwhelming majority on Friday with a 298-121 vote.
McPherson said the $15 billion aid recommendation he gave to Congress is part of the $87.5 billion package.
"The appropriations are certainly key," McPherson said. "There's a great deal of progress being made with the economy, health and education. You can now see in stark review what can be, if we can get the security straight."
McPherson said there were two senators from the bipartisan committee present at the testimonial: Sen. Evan Bayh, D-Ind., and Sen. Chuck Hagel, R-Neb. Eleven senators compose the bipartisan committee when it is full.
MSU spokesman Terry Denbow said McPherson is going to be in the nation's capital and will return on Friday after meeting with Michigan's Congressional Delegation to advocate for MSU causes.
Besides McPherson, Mark Malloch Brown, administrator of the United Nations Development Program, also addressed the senators about Iraq's economic policies.
Congress sought McPherson's economic expertise because McPherson served as the financial coordinator for the Office of Reconstruction and Humanitarian Assistance in Iraq, after the MSU Board of Trustees granted him a leave of absence in April.
In a draft version of McPherson's speech obtained by The State News, McPherson outlined how more investment is needed in Iraq to help rebuild the country.
The speech said that last year, the Middle East attracted only $4 billion in foreign investment compared to $7 billion in sub-Saharan Africa and $42 billion to Latin America.
McPherson also outlined how Iraq needs to move away from agriculture and other government subsidies and focus more on the private sector.
Bill Ballenger, editor and publisher of the Lansing-based newsletter Inside Michigan Politics, said Congress' support for the $87.5 billion in reform bodes well for McPherson's $15 billion recommendation for Iraqi aid.
"We attacked them and caused a lot of destruction," he said. "We wreaked havoc on their social, political and fabric structure of the country.
"To then wash our hands from it would be unthinkable."
Congress' aid package includes $15 billion for U.S. military operations in Iraq and $18.6 billion to restore its oil industry, and rebuild the country's economy.
Denbow added that it is McPherson's responsibility to tell Congress his firsthand experiences in Iraq.
"It's all part of the public service he performed and explaining it to the nation," Denbow said.
Besides McPherson's suggestions for economic reform, he outlined some of his economic team's accomplishments in Iraq, including setting up the Finance Ministry to pay 1.3 million Iraqi employees and converting the currency in Iraq from the "Saddam Dinar" to the "Iraqi Dinar."
But some within the MSU community question whether McPherson's economic overhaul was successful.
Mark Ladenson, a retired professor emeritus of economics, said The Washington Post reported that the six paper denominations of the new Iraqi currency range in value from 50 dinars, equal to 4 cents, to 25,000 dinars, which is equal to $18.
Ladenson said most countries that have overhauled their currency are dealing with much smaller denominations and don't group small value currency to paper money.
"Imagine conducting transactions with paper money, worth about a nickel," he said. "It's quite cumbersome."
Linguistics freshman and Students for Economic Justice member George Moyer said McPherson's recommendations to Congress only benefit private corporations, not the people of Iraq.
"Completely liberalizing the economy is a massive change in society," Moyer said. "Essentially, no more things are publicly owned or run by the people of Iraq.
"Now things are owned by corporations," he said.
The Associated Press contributed to this report.
