Why best-laid plans can go astray
The corporate looting of Iraq
By Sara Flounders
Before the water was running in Baghdad,
before the electricity was operating, or the phone system, or
mass transit or even the hospitals, L. Paul Bremer III, the
U.S. top administrator, declared Iraq "open for business."
The looting of Iraq by U.S. corporate raiders had begun.
Pentagon bombers and tens of thousands of invading troops had
smashed open the doors.
Some of the same giant U.S. corporations that had received
multi-billion dollar contracts to participate in the
destruction of Iraq were the first to receive no-bid contracts
for reconstruction. Halliburton, MCI World/ Com, Bechtel--all
insiders in the Bush administration--were at the front of the
line for giant handouts.
The Bush administration and Corp orate America had a
detailed plan for the reconstruction of Iraq long before Bush
gave the order for the massive destruction and military
occupation. The May 1 Wall Street Journal reported that the
confidential plan prepared by U.S. Agency for International
Develop-ment and the Treasury Depart ment was drafted in
February--before the U.S. invasion and occupation.
The plan calls for mass privatization of Iraqi industry,
liquidation of insolvent Iraqi industries and assessment of
others for sale. It also proposes a year-long propaganda effort
to persuade the Iraqi people that this is in their best
interests.
Overseeing the restructuring of Iraq's financial system is
Peter McPherson, a top Treasury Depart ment official who is now
the head of the Iraq National Bank. The U.S. AID/ Treasury
Department report echoes the recommendations of the Heritage
Foundation. This powerful, neo-conservative think-tank calls
for preparing state assets for privatization, including
industries, utilities, transportation, ports, airports--and
most importantly, the energy sector.
Ariel Cohen, a research fellow at the Heritage Foundation,
wrote a June 17 UPI analysis entitled "Oil Privatiz ation--Key
for Iraq." The international implications of restructuring Iraq
are made clear. "Iraq's privatization of its oil sector,
refining capacity and pipe line infrastructure, could serve as
a model for the privatization by other OPEC members, thereby
weakening the cartel's domination of the energy markets."
According to the Heritage Found ation, windfall oil revenue
should be distributed to individuals.
What the war was all about
The restructuring of Iraq and re-conquest of the entire
region is what the war was really all about. Corporate America
is determined to lay hold of the fabulous oil resources and the
developed infrastructure.
The reconstruction plan is so deadly, though, that it is
fueling greater resistance. No wonder. Every sector in society,
except a handful of collaborators, stands to lose.
Decisions are being made, multi-billion-dollar contracts
signed and basic industries sold off or closed down by U.S.
corporate executives without any Iraqi participation. These
decisions will affect the future of Iraq for years to come. All
this has been done before there is even an appointed government
in place.
This secret corporate plan was very different than the
excuses Bush, Cheney, Powell and Rumsfeld gave for the
invasion, which are now being exposed as a massive lie and a
forgery.
The Bush administration's deception is now being called into
question, but only because growing Iraqi resistance is
challenging the real plan of corporate looting and quick
super-profits.
Iraqi acts of armed resistance now average 10 to 20 a day.
GI deaths from attacks and accidents average one a day.
The cost of occupation is rising in political and military
terms. Secretary of Defense Donald Rumsfeld admitted that the
military cost is now $1 billion a week.
The changes ahead that the occupiers are planning are every
bit as brutal as the 13 years of U.S.-led economic sanctions.
The resulting consequences for the average Iraqi would be even
more devastating.
Shackled in the 'free market'
Bremer, optimistically announcing plans to open Iraq to
foreign investment, declared "Iraq will find that opening its
borders to trade and investment will increase competitive
pressure on its domestic firms and thereby raise
productivity."
Bremer took the same message to the world's corporate and
political elite gathered at the World Economic Forum meeting in
Switzerland in late May.
The terms used are all too familiar: protecting property
rights, lowering barriers, changing laws governing trade and
commerce.
During the 13 years of sanctions, the U.S. shut Iraq off to
any economic and commercial relations with the countries of the
world, froze all Iraqi assets and barred all forms of trade.
Iraq was prohibited from exporting or importing and was unable
to modernize equipment or purchase spare parts. Bombing and
military occupation followed this.
Now Iraqi industries are told they must compete in the "free
market."
Edmund L. Andrews described how a flood of imports threatens
the survival of Iraqi businesses. "Iraq's cloistered industry
suddenly faces the full fury of globalization and international
competition," he wrote in a June 1 New York Times article
entitled "After Years of Stagnation, Iraqi Industries Are
Falling to a Wave of Imports." Andrews explained that "...
since American forces seized Baghdad, Iraq has been transformed
from one of the most isolated economies into a huge new
free-trade zone.
"Iraqi manufacturers, which employed more than one-tenth of
all workers before the war, are almost powerless to match the
new competition. Their equipment is badly outdated. ... The
free market shocks are even bigger for Iraq's state-owned
industrial companies, which produce everything from packaged
food to electrical equipment and employ more than 100,000
people."
Duty-free, cheap electronic products, packaged food and tons
of other materials have flooded into Iraq. They have pushed
Iraqi business that survived years of sanctions into overnight
bankruptcy.
Privatizing of industry and public services is usually
called by the innocuous term "structural adjustment." Through
out the former Soviet Union, Eastern Europe and many Third
World countries, the results for the overwhelming majority of
the people have been a total disaster. These measures, dictated
by the Inter national Monetary Fund and World Bank, led to
years of massive, chronic unemployment. The people of
Argentina, Mexico, Bolivia, Korea, Thailand and every other
developing country have lost jobs and essential services while
transnational corporations with capital to invest have picked
up the windfalls.
U.S. Labor Against the War (USLAW) released a report in
mid-June entitled "The Corporate Invasion of Iraq: Profiles of
U.S. Corporations Awarded Contracts in U.S./British Occupied
Iraq."
USLAW explained in a release: "Most of these corporations
have been awarded no-bid contracts worth billions of dollars to
rebuild and privatize Iraq, and bring its economy firmly under
U.S. control. Their names read like a rogue's gallery of
anti-union U.S. multinationals, including Halliburton (VP
Cheney's former company), MCI (formerly MCI/WorldCom,
notoriously anti-union and now charged with the largest fraud
in history), and SSA (the leader of the attack on the ILWU
during 2002 contract negotiations)." The contracts are enormous
handouts worth billions.
USLAW says its report "exposes the labor, human rights,
environmental and business records of these corporations--a
sordid history of ... fraud, bankruptcy, overcharging,
price-gouging, profiteering, wage-cheating, deception,
corruption, health and safety violations, worker and community
exploitation, human and labor rights abuses, union-busting,
strike breaking, environmental contamination, ecological
irresponsibility ..."
The best-laid plans
The occupiers are committed to their plan.
It calls for big layoffs of Iraqi workers, massive turnover
of industries and services, cutbacks in all social programs.
And it aims to end the numerous free services--from health care
to schools--that the previous government had provided. Bremer
also wants to cut the free food distributions to the entire
population that kept 80 percent of the Iraqi population alive
during years of sanctions. He considers them a wasteful
subsidy.
Bremer's ban on employment for 30,000 members of the Baath
Party impacts on many vitally necessary low-level civil
servants. Bremer dissolved the Iraqi Army, putting 400,000
Iraqis out of work without pensions or retraining. He is
engaged in a full-scale assault on the Iraqi state. This is
calculated to shrink the public sector, including schools,
hospitals and other essential social services, including
sanitation and sewage and infrastructure needs of a modern
country.
However, in order to have stability, the U.S. occupation
must be able to provide the basic requirements of life.
Electricity, potable water, communications, transportation,
jobs, schools and health care are essential. But since taking
over two and a half months ago, the U.S. has failed to provide
even the bare minimum needed by the people while concentrating
on suppressing their resistance and taking over their
resources.
The Iraqi people, seething with rage against the occupation
and re-colonization, are putting up increasingly fierce
resistance. As it grows, U.S. congressional critics are
beginning to complain that there is no plan on how to stabilize
Iraq.
The plan to hijack the entire economy creates a
contradiction that U.S. occupiers will not be able to
solve.
This unsolvable crisis, the criminal nature of the
occupation and the growing resistance of the Iraqi people means
that the only real solution will become increasingly clear to
GIs on the front lines, their families and millions worldwide.
Their voices will rise in a resounding demand to bring the
troops home and end the occupation of Iraq.
Reprinted from the July 24, 2003, issue of
Workers World newspaper
This article is copyright under a Creative
Commons License.
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