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[casi] Privatising Iraq will have dire results on the country and its people

Economic Outlook: Privatising Iraq will have dire results on the country and
its people

By Ahmed Musthafa, Special to Gulf News | 14-08-2003

George W. Bush has appointed one of his business buddies as a privatisation
officer in Iraq. Thomas C. Foley has accepted the position of Director of
Private Sector Development for the Coalition Provisional Authority (CPA) in
Iraq, according to a statement from Pennsylvania-based firm TB Woods, of
which he was formerly chairman of the board of directors.

Foley will be reporting to CPA Administrator, Paul Bremer, and will have
responsibility for overseeing 194 Iraqi state-owned businesses. He will also
be responsible for developing a privatisation plan and foreign trade and
investment programmes for Iraq.

Foley was one of the main fund-raisers for Bush's election campaign. He will
be joining a bunch of American businesspeople running the Iraqi economy such
as Philip Carroll and Dan Amstutz. They'll be working closely with Paul
Wolfowitz, Deputy Secretary of Defence, who supervises Bremer and his CPA.

Philip J. Carroll is the U.S.-appointed chair of the U.S.-established
'advisory' committee for the Iraqi oil industry. He is former head of Shell
Oil and Fluor (a firm invited to bid on Iraqi construction projects) and
with substantial stock in both. He is also a major corporate player in

Dan Amstutz is running Iraq's agricultural industry. He is former senior
executive of Cargill Corporation, the biggest grain exporter in the world,
and president of the North American Grain Export Association.

During the Reagan administration, Amstutz drafted the original text of the
main international agreements governing the trade of agricultural goods.
Amstutz's rules allow wealthy countries to dump their subsidy-backed
agricultural surpluses in world markets, pushing down prices to levels that
growers in developing nations can't compete with.

"Putting Dan Amstutz in charge of agricultural reconstruction in Iraq is
like putting Saddam Hussain in the chair of a human rights commission," said
Oxfam, the British aid agency, in June.

"This guy is uniquely well placed to advance the commercial interests of
American grain companies and bust open the Iraqi market, but singularly
ill-equipped to lead a reconstruction effort in a developing country."

It's clear that the U.S. decided, as the main occupying force in Iraq, to
transform the Iraqi economy into a free-market controlled one. Regardless of
the undemocratic way this decision was taken, privatising state-owned
companies, services, and other sectors is set to have dire consequences on
Iraq and the Iraqis.

An example of these consequences could be water and other utilities handed
out to major U.S. company Bechtel in its reconstruction contract. Bechtel
received a no-bid contract from the U.S. Agency for International
Development (USAID) on April 17.

The contract provides for emergency repair or rehabilitation of power
generation facilities, electrical grids, municipal water systems, sewage
systems, airport facilities, and reconstruction of hospitals, schools,
ministry buildings, irrigation structures and transportation links.

The contract is for $34.6 million initially, up to $680 million over 18
months, and could eventually be worth up to $100 billion.

Bechtel has botched past projects in the U.S. and elsewhere. In Boston, what
promised to be a $2.5 billion job for the infamous tunnel project became
$14.6 billion, costing taxpayers $1.8 million a mile. In California, Bechtel
installed one of the nuclear power plant reactors backwards.

In Bolivia, Bechtel was part of a consortium which took control of the water
supply and increased prices by an average of 35 per cent. Many in the city
of Cochabamba could not afford to pay and street protests led to several
deaths. Bechtel pulled out, but is suing the Bolivian government for $25
million for cancelling the contract.

Foley will decide which of the roughly 200 state-owned companies, employing
about half a million people, should survive or die.

Half a million families, added to 400,000 Iraqis, became unemployed when
Bremer dissolved the Iraqi army on May 23, which means almost a quarter of
the Iraqi population will be begging for a living. Some services, if
privatised, will be made very dear to millions of ordinary Iraqis.

Moshe Adler, associate professor of economics at Columbia University, wrote
in the Washington Post on August 5, criticising the Americans imposing
privatisation on Iraq.

"The plan of L. Paul Bremer, chief U.S. administrator in Iraq, to sell
government-owned companies to private investors assumes two things - that
privatisation is what free people anywhere prefer, and that it's what's good
for them. Neither assumption is true.

"In fact, when it comes to government ownership, highly developed
democracies have made very different choices. T-Mobile's 10 million American
customers may be surprised to learn that the German government owns 44 per
cent of it.

"In France, the government owns 54 per cent of Air France, 21 per cent of
the company that owns RCA and 27 per cent of the car manufacturer Renault,
which, in turn, owns 37 per cent of Nissan and 70 per cent of Samsung.

"The British government controls 100 per cent of the BBC. In Finland, the
government is the owner of all the liquor stores and 60 per cent of an
energy firm that owns petrol stations. In Sweden, the government owns all
pharmacies and several iron mines."

Nobody knows, or can claim to know, what the 'Iraqi people' really want to
do with their economy. But one can easily guess that the 'Iraqi people' are
not democratically in favour of selling their economic sectors to Corporate

The author is an Arab writer based in Qatar.

Stop the War Profiteers!

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