Iraq under their globalisation

international | anti-war / imperialism | opinion/analysis Friday October 17, 2003 17:07 by Anarcho

Sale of the Century!

September saw Iraq being put up for sale. Learning no lessons from the disaster in Russia, the US-run administration has unveiled a sweeping overhaul of the economy, giving foreign companies near total access to Iraqi firms which are to be sold off in a privatisation frenzy.

Under the new rules, announced by the US-appointed Iraqi finance minister, foreign firms will have the right to wholly own Iraqi companies, except those in oil (whose revenues, remember, the US plans to use to pay for its war and the rebuilding of what it has destroyed). There will be no restrictions on the amount of profits that can be repatriated or on using local products. Corporate tax will be set at 15%. And the new regime is clear: the privatisation of Iraq's 192 public sector companies is not up for debate.

Unsurprisingly, the reforms won the backing of the US treasury secretary. And, unsurprisingly, Iraqi capitalists warned that the economic reforms would spell disaster for them (as they would be unable to compete with foreign companies in privatisation tenders).

Of course the US is at pains to stress that the decision to "reform" the Iraqi economy was made by the Iraqi Governing Council (IGC). Yet the New York Times had Ahmad Chalabi pressing for increased independence of the IGC. Significantly, he demanded that the Iraqi Governing Council be given at least partial control of the finance and security ministries. Yes, the finance ministry, the one that just decreed the new economic regime. So, it appears that the IGC does not even have "partial control" over the ministry that just transformed the Iraqi economy!

Clearly the proposal was not the sole brainchild of the Iraqi Finance Minister, particularly as the imposition of free-market reforms in Iraq has long been a goal of the Bush Junta. Surprisingly, Iraqi and U.S. officials admitted that the plan was the result of months of work by the IGC as well as the US occupation power, the Coalition Provisional Authority. The laws were signed by Paul Bremer, who, let us not forget, can veto any decision of the IGC.

A "senior US official" stated that "having done this today, as opposed to three months ago, before there was a governing council, fundamentally makes it have deeper roots." In other words, the US has determined the fate of the Iraq economy, as planned, after waiting until the IGC was in place to rubber stamp it.

Truly the Iraqis are now free -- of the tyranny of having a say in their own economic destiny.

Operation Iraqi Free-market

Iraq is now free for transnationals to cherry-pick industries. What has been achieved by the IMF in other countries, has been achieved by force of arms in Iraq. And it has already started. The most valuable contracts on offer have already gone to US corporate giants. A subsidiary of Halliburton (once run by the American vice-president) won a contract worth up to $7 billon to repair Iraq's oil infrastructure. Bechtel won the $680m chief contract to start rebuilding other essentials, such as roads and schools.

As an example of the future awaiting Iraq, we can look at what happened to the technicians at the Baghdad South power plant when they needed spare parts. They first submitted a written request to Bechtel Corp., the engineering firm given more than $1 billion in U.S. government contracts to fix Iraq's decrepit infrastructure. Then they went to the junkyard to look for items to jerry-rig their geriatric plant. Why? Because their repeated appeals to Bechtel and the U.S. military did not yield anything significant. Incredibly, U.S. officials said the requests for new parts were beyond the scope of Bechtel's contract! So, just to clarify, Bechtel gets a billion dollars to fix the Iraqi power system but to actually do this is beyond the scope of their contract.

Halliburton and Bechtel, selected behind closed doors, are making billions, yet they have not been able to turn on the electricity or the water supply. Who says that private enterprise cannot deliver?

Having it both ways...

As he did last year, September saw Bush delivering a speech to the UN. This time he was cap-in-hand, asking for help from the institution he had so recently decried as "irrelevant" (i.e. it did not do what the US demanded). The French government, in reply, called for an immediate transfer of sovereignty to the (US appointed) Iraqi Governing Council (IGC). Given that this was meant to be "Operation Iraqi Freedom," this seems a reasonable demand. Not so. The Washington Post (Editorial, September 24), echoing the Bush Junta, described Chirac's position as an "irresponsible demand," noting that the council was "unelected."

Yet this "unelected" and "not representative" body seems to be legitimate and responsible enough to decree the future economic regime of Iraq and send representatives to both the UN and OPEC. You cannot have it both ways. You cannot pretend that the IGC is legitimate enough to pass wide ranging economic decrees that benefit the US, but not legitimate enough to be involved in a quick transition in political power. Nor should we forget that Paul Wolfowitz stated in April that "decisions regarding the long-term development of Iraq's oil resources and its economy will be the responsibility of a stable Iraqi government." Yet another lie exposed.

And talking of lies, Bush (let us not forget) said that the US ignored the UN and invaded Iraq in part to defend the credibility of that body. Yet he refuses to allow it to assume responsibility for the civilian nation-building process in Iraq. How strange. But then again, UN intervention would set a dangerous precedent, allowing US imperialism to invade anywhere it liked and then asking the UN to clean up the mess (so legitimising the attack as well as freeing the US for more adventures elsewhere) so perhaps we should not be too bothered by Bush's lack of tact or logic. Not that we can expect much from the UN, being as it is dominated by the imperialist powers and representing the ruling classes of each nation. Looking for peace there is like looking for virginity in a brothel.

Free to eat GM!

So the IGC legitimacy is, like dead Iraqis, useful only when it can be used as a front for US plans -- such as the privatisation of the economy. Or when pushing US agribusiness and its products.

The UN Food and Agriculture Organization and the World Food Program have reported that millions in Iraq suffer from malnutrition, particularly in the central and southern areas. Do not fear, however. The new Agriculture Minister has a solution. He hopes to encourage the private sector and foreign investment, stating that "our conditions are that they have to use the modern science means. We will focus on forming big agricultural projects which create agricultural and industrial projects to use modern means of irrigation" Which, in all probability, means an open door to GM crops and large-scale industrial farming (funded, of necessity, by big agribusiness).

Clearly American influence on the Agriculture Ministry is large, with it simply reflecting US policies. By why expect it to be any different from any of the other part of the US occupied "free" Iraq?