Privatization Disguised as Reparations

Wednesday 23 April 2003, by Naomi Klein

On April 6, Deputy Defense Secretary Paul Wolfowitz spelled it out: there will be no role for the UN in setting up an interim government in Iraq. The U.S.-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 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 coalition responsibility."

The process of how they will get all this infrastructure to work is usually called "reconstruction." But American plans for Iraq’s future economy go well beyond that. Rather than rebuilding, 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 U.S. company, Stevedoring Services, and there are similar deals for airport administration on the auction block. The United States Agency for International Development has invited U.S. multinationals to bid on everything from rebuilding roads and bridges to distributing textbooks. The length of time these contracts will last is left unspecified. How long before they turn into long-term contracts for water services, transit systems, roads, schools and phones? When does reconstruction turn into privatization in disguise?

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 people like Fadhil Chalabi, a former Iraqi Petroleum Minister and executive director of the Center for Global Energy Studies. "We need to have a huge amount of money coming into the country. The only way is to partially privatize the industry," Chalabi says.

He is part of a group of Iraqi exiles that has 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 U.S. Helpfully, the group held a conference in London on April 6 and called on Iraq to open itself up to oil multinationals shortly after the war. The Bush administration has shown its gratitude by promising that there will 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 Iraqi’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.

So what is a recessionary, growth-addicted superpower to do? After all, negotiations with sovereign countries 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."
Entirely absent from this debate are the Iraqi people, who might - who knows? - want to hold on to a few of their assets. 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 by 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.

Naomi Klein, columnist, Alternatives Newspaper
A longer version of this column appears in The Nation.

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