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[casi] Iraq - Privitization in Disguise

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Subject: Iraq - Privitization in Disguise
Date: Mon, 14 Apr 2003 20:42:17 -0400
Message-ID: <>

Privatization in Disguise
by Naomi Klein, The Nation, April 28, 2003 Issue

    On 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

    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

    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.


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