The Privatization of Iraq, or "Bomb and then buy"

how the privatization of Iraq is the real plan..

The Nation

column | Posted April 10, 2003

LOOKOUT by NAOMI KLEIN
Privatization in Disguise

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n April 6, Deputy Defense Secretary Paul Wolfowitz spelled
it out:
There will be no role for the United Nations in setting up
an interim
government in Iraq. The US-run regime will last at least
six months,
"probably...longer than that."
>
> And by the time the Iraqi people have a say in choosing a
government,
> the key economic decisions about their country's future
will have been
> made by their occupiers. "There has got to be an
effective
> administration from day one," Wolfowitz said. "People
need water and
> food and medicine, and the sewers have to work, the
electricity has to
> work. And that's a coalition responsibility."
>
> The process of getting all this infrastructure to work is
usually
> called "reconstruction." But American plans for Iraq's
future economy
> go well beyond that. Rather, the country is being treated
as a blank
> slate on which the most ideological Washington
neoliberals can design
> their dream economy: fully privatized, foreign-owned and
open for
> business.
>
> Some highlights: The $4.8 million management contract for
the port in
> Umm Qasr has already gone to a US company, Stevedoring
Services of
> America, and the airports are on the auction block. The
US Agency for
> International Development has invited US multinationals
to bid on
> everything from rebuilding roads and bridges to printing
textbooks.
> Most of these contracts are for about a year, but some
have options
> that extend up to four. How long before they meld into
long-term
> contracts for privatized water services, transit systems,
roads,
> schools and phones? When does reconstruction turn into
privatization
> in disguise?
>
> California Republican Congressman Darrel Issa has
introduced a bill
> that would require the Defense Department to build a CDMA
cell-phone
> system in postwar Iraq in order to benefit "US patent
holders." As
> Farhad Manjoo noted in Salon, CDMA is the system used in
the United
> States, not Europe, and was developed by Qualcomm, one of
Issa's most
> generous donors.
>
> And then there's oil. The Bush Administration knows it
can't talk
> openly about selling off Iraq's oil resources to
ExxonMobil and Shell.
> It leaves that to Fadhil Chalabi, a former Iraq petroleum
ministry
> official. "We need to have a huge amount of money coming
into the
> country," Chalabi says. "The only way is to partially
privatize the
> industry."
>
> He is part of a group of Iraqi exiles who have been
advising the State
> Department on how to implement that privatization in such
a way that
> it isn't seen to be coming from the United States.
Helpfully, the
> group held a conference on April 4-5 in London, where it
called on
> Iraq to open itself up to oil multinationals after the
war. The
> Administration has shown its gratitude by promising there
will be
> plenty of posts for Iraqi exiles in the interim
government.
>
> Some argue that it's too simplistic to say this war is
about oil.
> They're right. It's about oil, water, roads, trains,
phones, ports and
> drugs. And if this process isn't halted, "free Iraq" will
be the most
> sold country on earth.
>
> It's no surprise that so many multinationals are lunging
for Iraq's
> untapped market. It's not just that the reconstruction
will be worth
> as much as $100 billion; it's also that "free trade" by
less violent
> means hasn't been going that well lately. More and more
developing
> countries are rejecting privatization, while the Free
Trade Area of
> the Americas, Bush's top trade priority, is wildly
unpopular across
> Latin America. World Trade Organization talks on
intellectual
> property, agriculture and services have all bogged down
amid
> accusations that America and Europe have yet to make good
on past
> promises.
>
> So what is a recessionary, growth-addicted superpower to
do? How about
> upgrading Free Trade Lite, which wrestles market access
through
> backroom bullying, to Free Trade Supercharged, which
seizes new
> markets on the battlefields of pre-emptive wars? After
all,
> negotiations with sovereign nations can be hard. Far
easier to just
> tear up the country, occupy it, then rebuild it the way
you want. Bush
> hasn't abandoned free trade, as some have claimed, he
just has a new
> doctrine: "Bomb before you buy."
>
> It goes further than one unlucky country. Investors are
openly
> predicting that once privatization of Iraq takes root,
Iran, Saudi
> Arabia and Kuwait will be forced to compete by
privatizing their oil.
> "In Iran, it would just catch like wildfire," S. Rob
Sobhani, an
> energy consultant, told the Wall Street Journal. Soon,
America may
> have bombed its way into a whole new free-trade zone.
>
> So far, the press debate over the reconstruction of Iraq
has focused
> on fair play: It is "exceptionally maladroit," in the
words of the
> European Union's Commissioner for External Relations,
Chris Patten,
> for the United States to keep all the juicy contracts for
itself. It
> has to learn to share: ExxonMobil should invite France's
TotalFinaElf
> to the most lucrative oilfields; Bechtel should give
Britain's Thames
> Water a shot at the sewer contracts.
>
> But while Patten may find US unilateralism galling and
Tony Blair may
> be calling for UN oversight, on this matter it's beside
the point. Who
> cares which multinationals get the best deals in Iraq's
post-Saddam,
> pre-democracy liquidation sale? What does it matter if
the privatizing
> is done unilaterally by Washington or multilaterally by
the United
> States, Europe, Russia and China?
>
> Entirely absent from this debate are the Iraqi people,
who might--who
> knows?--want to hold on to a few of their assets. Iraq
will be owed
> massive reparations after the bombing stops, but without
any real
> democratic process, what is being planned is not
reparations,
> reconstruction or rehabilitation. It is robbery: mass
theft disguised
> as charity; privatization without representation.
>
> A people, starved and sickened by sanctions, then
pulverized by war,
> is going to emerge from this trauma to find that their
country has
> been sold out from under them. They will also discover
that their
> newfound "freedom"--for which so many of their loved ones
> perished--comes pre-shackled with irreversible economic
decisions that
> were made in boardrooms while the bombs were still
falling.
>
> They will then be told to vote for their new leaders, and
welcomed to
> the wonderful world of democracy.
>
>