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[casi] Dying for a McDonald's in Iraq

A pretty negative analysis!

MADRID - In London on October 13, an investors' conference entitled
"Doing Business in Iraq: Kickstarting the Private Sector" was agog
with reports that McDonald's, among other corporations, may begin
selling burgers and fries in Iraq by next year. Attracting up to 145
multinational prospectors, the London conference was held less than a
month after the United States announced its economic masterplan for
Iraq, a blueprint which The Economist heralded as a "capitalist
dream" that fulfills the "wish list of international investors".

Whether Ronald McDonald cuts the ribbon in time and makes the dream
come true, however, will depend to a large extent on the outcome of a
US-convened donor's conference that was scheduled to open in Madrid
on Thursday.

As the US struggles against popular resistance in Baghdad, it battles
its cash-flow woes in the balmy Spanish capital. Behind closed doors
at the Campo de las Naciones, representatives of creditor countries
and multilateral financial institutions will meet for two days to
determine how and when McDonald's and other multinational
corporations will finally be able to open their doors in Iraq.

In exchange for allowing the entry of their corporations to Iraq,
rich creditor nations will be pledging hundreds of millions of
dollars to finance the occupation in order to make sure that it goes
on unhampered - long enough for the Golden Arches to rise by the
Tigris and the Euphrates.

Those who will pay the price for the burgers and fries, however, will
have no seat at the table.

What's at stake?
In this donors' conference, the US will be asking the "international
community" to finance an occupation it can no longer afford on its

At first, the US hoped that Iraqi oil revenues and assets, as well as
its own taxpayers' money, would be enough. "We are dealing with a
country that can really finance its own reconstruction and relatively
soon," Defense Undersecretary Paul Wolfowitz confidently told the US
Congress before the war, assured that Iraq's oil would be able to
rake in as much US$50 billion to $100 billion in the next two years.

Regular sabotage of oil pipelines by the Iraqi resistance as well as
the reluctance of a cautious oil industry to start their operations
has all but shattered these initial plans by causing severe cash-flow
problems and a palpable budget crisis. Edward Chow, a former
international executive with Chevron and now an analyst with the
Carnegie endowment, predicts: "Costs will far exceed what oil
revenues will reap in the short term and the long term."

This has forced the Bush administration to reluctantly turn to US
taxpayers with an $87 billion budget request that had to surmount
unexpected resistance from the Bush-controlled Congress. When it was
finally approved, the funding came out with an embarrassing twist:
that the money to be spent will have to be exchanged with IOUs, and
not just sweet thank-yous.

Taking all the money from the pockets of the Iraqis and the American
taxpayers would have allowed the US to unilaterally determine which
corporations would get all the contracts for what. At more than $100
billion and counting, this has been deemed the largest post-war
rebuilding business opportunity since World War II. With the
disappointing oil revenues dashing expectations and with US taxpayers
reluctant to part with their money, however, the US has been forced
to give up its exclusive claim over the post-war reconstruction

A way to get in on the ground floor
Armed with the latest 15-0 United Nations resolution legitimizing the
occupation, the US will be turning to the other rich creditor nations
and multilateral lending agencies with one enticement in exchange for
their cash: a piece of the action.

"We're telling them that this is not just about writing checks or
sending troops, but about having a stake in Iraq so their government
agencies and humanitarian groups are involved in a sector when a new
government is in power in Iraq," a high ranking US official recently
disclosed. "It's a way to get in on the ground floor. That's the
selling point."

Indeed, the well-heeled representatives with fat pockets and blank
checks who will are gathered at the Campo will not be pledging their
money for nothing. As a recent Financial Times editorial put it,
"Washington is in a mess in Iraq, and needs help from its friends.
The friends are prepared to assist, but they will demand a price."

The price comes in the form of a long sought-for guarantee giving the
donor countries a crack at the multi-billion dollar business
opportunities in Iraq - an access to the ground floor where the
action is. With the recent announcement of plans to sell all but a
few of Iraq's crown jewels for dirt-cheap prices, other countries
can't afford to miss the post-war garage sale. If they don't want to
be locked out, they better pay the entrance fee to be collected
personally by Coalition Provisional Authority head L Paul Bremer and
US Secretary of State Colin Powell, who are both in Madrid. Also
present is US Treasury Secretary John Snow.

Opponents of the war - in particular, France, Germany and Russia -
have made it clear they are not ready to forgive and forget and
contribute so readily to Iraqi reconstruction. Delegations from those
three nations, as well as many other countries, will be headed by
lower-level officials. Only Spain, Italy and Japan - all supporters
of the US policy on Iraq - will be represented by their foreign
ministers. United Nations Secretary-General Kofi Annan and World Bank
President James Wolfensohn will also be in Madrid.

So who pays?
The amounts to be pledged at this conference could, therefore, be
seen as an investment with expected returns. How big or small that
investment will depend on what each donor thinks the prospects for
profits will be. This in turn depends on how big a piece of the pie
the US is willing to give up. Those in Madrid will need to report
back to their capitals with an answer to the question: was the
donation worth every cent?

What they won't be eager to tell the folks back home, however, is
where the money they just donated came from and to whom it is being
given. Representatives will beat their chests and package their
donations as acts of charity towards those poor and war-ravaged

The rhetoric about helping Iraqis rebuild their country will
hopefully drown out the fact that the people who will be paying for
the occupation will not be the same people who will be profiting from
it. The money that participants to this donor's conference will be
bringing to the table is not theirs to give away.

Hence, as the conference opens, it will be important to come up with
a simple - though perhaps not exhaustive - list of those who will pay
for the reconstruction of Iraq, as opposed to those who will gain
from it. Those who will be made to pay are often not aware what their
money is being used for and - as the opposition to the war by
majorities in almost all countries indicate - will most likely object
if they only knew. Those who will profit, however, will have the most
to gain from keeping the transactions in the dark.

Iraqis: Paying with their future
First, the Iraqis. All of the past and future revenues from the sale
of their oil as well as all of their former government's assets
deposited anywhere in the world have been turned over to the UN
Security Council-created but US-controlled Development Fund for Iraq.

What will be paid to US-chosen contractors such as Halliburton and
Bechtel - at a price set by these contractors themselves - will be
paid out of this fund. Not only that, the fund will also be used by
the US Export and Import Bank for extending credit to any US company
that hopes to start business in Iraq or that wishes to buy any of the
formerly Iraqi-owned corporations that will be sold off by the US as
part of Iraq's massive privatization scheme.

The Iraqis will, therefore, be paying American corporations for
rebuilding the bridges, the hospitals, the schools, the irrigation
systems, the power grids and almost everything else which the US - as
prodded on by these corporations - destroyed. They will also be
paying US investors to take over the corporations that the Iraqi
people previously collectively owned, but which will now be sold off
without their authorization.

Just as they had no say over the bombing of their country, however,
so will they have no say over how their money will be spent for
bringing the pieces together. When some members of the US-installed
Iraqi Governing Council (IGC) tried to make a fuss over what they
think were unreasonably priced purchases two weeks ago, for instance,
they were promptly reminded about their place in the occupation's
pecking order.

"If we had voted [on the spending decisions], we would have rejected
it," one IGC member was quoted as saying. He was all too aware, of
course, that the IGC members would never have been allowed to vote
against those who put them in power.

Those who are hoping for at least a little prudence in the way that
the fund will be used can take comfort from what a lawyer for
companies hoping to strike gold in Iraq recently said. According to
Washington lawyer Robert Kyle, the fund will be "subject to a less
formal approach in their allocation than those from USAID [US Agency
for International Development] which used [US] taxpayers' money."

By "less formal", the lawyer must have meant spending $6,000 for a
mobile phone that normally costs $495 only per set, $33,000 for a
pickup truck that normally costs half that, and $55,000 for a prison
bed that usually costs only $14,000 - as current details provided in
Bush's budget request for Iraq shows when compared with actual market
prices of these items.

And it's not just their present income with which the Iraqis are
paying the Americans to occupy and reconstruct their country. Even
their future is being mortgaged. Just last week, the US Senate voted
to convert the $10 billion that will be used on Iraq from grants to
loans. Should the World Bank and the International Monetary Fund
decide to lend money to Iraq, they will also come with strings
attached in the form of the economic conditionalities to be imposed
by these banks.

In other words, the Iraqis will be forced to borrow money from the US
and international banks without their consent - and at interest rates
and with conditions that they did not agree with - in order to spend
on things over which they have no say whatsoever.

It's a small price to pay for being liberated.

The taxpayers: Paying with their work
But since the Iraqis' oil and assets are currently insufficient, the
US Congress has also just reluctantly passed Bush's request for $87
billion, around 78 percent of which will be spent for military costs
alone. Senator Tom Daschle came out of the session stressing that US
taxpayers could not "go on shouldering this burden virtually alone".

Meanwhile, each American will now be giving away $300 for the
continued control of Iraq. According to independent estimates, this
total amount is more than enough to wipe all of the budget deficits
now plaguing a number of state governments; enough to pay for all of
the country's unemployment benefits for two years; seven times what
the US federal government spends for low-income schools and 10 times
the total spent for environmental protection.

The donors' conference, however, is really an attempt to shift the
burden from American taxpayers to say, Japanese, British, Spanish,
French, German, Canadian, Kuwaiti and other rich nations' taxpayers.
Japan is said to be donating up to $5 billion to the pot, Britain
$835 million, Spain $300 million, the European Union $230 million and
Canada about $200 million.

These amounts will not come out of nowhere. Giving these millions to
the occupation means squeezing off some health care expenditures
there, bumping off some educational items here, maybe cutting away
some housing funds there, eliminating some unemployment benefits a
little here, etc.

Every cent spent for corporations to do business in Iraq is a cent
not spent somewhere else. It's a small price to pay for being
protected from terrorists and their weapons of mass destruction.

Soldiers and civilians: Paying with their lives
But while the American and the rich countries' taxpayers are
contributing cash, others are paying with their lives. According to
various estimates, as many as 10,000 up to 30,000 Iraqi civilians
have died; more than 100 American soldiers and scores of allied
troops have been killed during the war and pacification.

With no less than the chairman of the US joint chiefs of staff
admitting that the US military is now overstretched, the US has been
pleading with other countries to pledge non-monetary contributions to
Iraq in the form of warm bodies that will attempt to stabilize the
occupied country and make it safe for corporations like McDonald's.
Once in Iraq, these soldiers and neo-Gurkhas will be moving targets
for Iraqis who - for some incomprehensible reason - are mad enough to
resent being colonized and mad enough to fight back.

Interestingly, with a few notable exceptions, most of those who are
being asked to pack their bags and go to Iraq are those who'd give
anything and go anywhere for a job. Over the past few weeks, the US
has been courting mostly countries from the south, such as India,
Pakistan, Bangladesh, Fiji, the Philippines, Thailand, El Salvador,
Honduras, Nicaragua, etc to deploy more troops to Iraq so that their
weary soldiers can go home and fight another day - in a different
part of the world.

These soldiers are happy to go to Iraq because the per diem there
would be so much more than what they'd get staying at home.
Domestically, one of the strongest arguments for fielding them in
Iraq is the promise of dollar-denominated remittances to be sent
home. These gun-strapped and cash-strapped governments are happy to
send their boys away in exchange for more military aid from and
stronger military ties with the US.

Senator Edward Kennedy has asserted that the US has been bribing
foreign governments to induce them to go against domestic popular
opinion against the war. He says that up to half of the $4 billion
that the US spends monthly on Iraq could not be accounted for by the
Congressional Budget Office.

In this occupation, what the US is asking for from different
countries interestingly reflects international realities as well:
capital from the north, cheap labor from the south. The ultimate
price per hour is apparently cheaper in developing countries than in
the developed ones.

Who profits?
Smiling McDonald's attendants may start ushering in customers to
their branch in Iraq next year - but only after Bechtel had switched
back the lights, Halliburton had rebuilt the bridges, Flour had paved
the roads, MCI had set up the mobile network system, Research
Triangle Institute had trained the managers and bureaucrats, Abt
Associates had restored the hospitals, the military-industrial
complex and the private armies had restored security, and the
multinational force had pacified the resistance.

The Iraqis and the taxpayers who are bankrolling the occupation
better not know to whom they're being made to give their checks.
Bechtel sold chemical weapons to Saddam Hussein back in the 1980s and
had been accused of gross overpricing in Massachusetts and Bolivia.
MCI was involved in history's biggest accounting scandal and has
totally no experience building cell networks. Halliburton had been
accused of inflating costs and had even settled a number of fraud
charges. Dyncorp had been accused of covering up sex trafficking.
Flour faces a multibillion dollar lawsuit for exploiting black
workers and making security guards wear Ku Klux Klan robes to attack
their workers.

The business records of the recipients are less than flattering.
According to well-documented reports summarizing the histories of
those that had been awarded contracts, they are variously riddled
with "cost overruns, accounting irregularities, financial
dereliction, 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, malpractice, criminal prosecutions,
civil law suits, privatization of public resources, collusion with
dictators, trading with regimes in violation of international
sanctions, drug-running, prostitution, excessive executive
compensation, and breach of fiduciary duty to shareholders and the

Lest those donor countries angling for deals on behalf of their own
corporations be misled: This is not the list of requirements for
interested contractors and subcontractors hoping to do business in

To be discussed in Madrid is the direction that the occupation takes.
At stake is the future of the "capitalist dream" of multinational
corporations like McDonald's in Iraq. If the money's not enough, the
occupation forces might simply pack up in a few months. If the
lending nations cough up enough cash, they could only have ensured
that they'd get a bang for their buck.

If this happens, then those financing the continued occupation - the
Iraqis, the taxpayers, the soldiers, and the civilians - must at
least be treated to a complimentary combo meal of Big Mac, cola and
fries when the Baghdad franchise opens. They must be dying for a
taste of freedom.

Herbert Docena /Asia Times Online, Hong Kong

Mark Parkinson

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