Iraq-ing up the profits
article - SchNEWS, 9 July 2004
"Desperately needed jobs have gone to Americans, Europeans and South Asians; roads are crowded with trucks shipping in supplies produced in foreign plants, while Iraqi factories were not even supplied with emergency generators. As a result, the reconstruction is seen not as a recovery from war but as an extension of the occupation, a foreign invasion of a different sort."
- Naomi Klein, journalist
Human Rights activist Ewa Jasiewicz and film maker Pennie Quinton, will be appearing in court soon, charged with 'Aggravated Trespass', following their protest against the Iraq Procurement Conference in London this April. Ewa, Pennie and others have been drawing attention to the fact that the corporate handover of Iraq to the multinationals is about more than just oil. The handover's making millions for the members of a cartel of multinationals, dominated by the backers of George Bush. At the same time as millions of reconstruction dollars have gone missing, millions of Iraqi's still live without electricity and water.
The old regime has left Iraq in serious debt. "The Paris Club" of creditor nations is owed $160bn, largely money borrowed by Saddam for his war against Iran, while other debts are reparations payments owed to countries he attacked. These payments, enforced by the UN Compensation Commission, have already cost Iraq $1.64bn since last April: more than its combined health and education budgets. On 23rd June, as the UN called for $259m to meet a shortfall in humanitarian relief, the Compensation Commission also announced that it would take another $600m in reparations this year.
But the US doesn't seem that bothered by the Iraqi debt. John Snow, the US Treasury Secretary recently said, "The people of Iraq shouldn't be saddled with those debts incurred through the regime of the dictator." Is this a new angle on US foreign policy? Maybe John's about to announce the cancellation of the Iraq's debt - mostly owed to non-US companies - so Bush Inc can concentrate on the fat reconstruction contracts to boost its re-election coffers.
The Halliburton Corporation has been pretty coy about total value of its Iraq contracts, although the Pentagon has confirmed that an initial $90m was agreed to be paid to the Corporation before the fall of Saddam Hussein. Former Halliburton boss, Vice President Dick Cheney, has denied any wrongdoing. He says that he severed contact with the corporation when he got into the White House in 2000, but a French Press Agency report claims that a leaked Pentagon e-mail confirms Dick had a hand in huge Halliburton government contracts for Iraq, whilst in office and coordinating the war effort.
Up to the corporate-handover, White House Inc. had spent just 2% of the $18.4bn it had obtained from Congress for the 'urgent' reconstruction of Iraq. While Bush might be saving for a big spend at election time, some cash has just plain disappeared. Last October, Christian Aid revealed that $4bn of oil revenues were unaccounted for and even according to the coalition's latest figures, $1.3bn has gone walkabout.
Being investigated by Ronald Reagan's Commission on Organized Crime for alleged links to gambling and prostitution, didn't stop Richard Armitage becoming Deputy Secretary of State in 2000. Now he's helping oversee the State Department as it nicks $184m, earmarked for drinking water projects, to boost the budget for a lavish new US Embassy in Saddam's former palace. Ever honest Armitage admitted he might have to "rob from Peter in my fiefdom to pay Paul."
hand (over) relief
And all that's before the International Monetary Fund (IMF) have been let loose in Iraq with a long-term IMF structural adjustment program in return for debt reduction. Rapid privatisation and an opening up of the Iraqi economy for foreign investors is the name of the game, leading to increased unemployment and Iraqi public assets falling into the hands of a "coalition" of foreign multinationals.
As soon as big business gets hold of the bargain-priced publicly owned companies up for grabs, they will shed jobs to make a quick profit. Already the Coalition Provisional Authority is making Iraq a great place to do business. Last September it signed Order 30 on Salaries and Employment Conditions, cancelling government subsides for public sector workers which had helped them pay for housing and living costs. The Authority has set the minimum wage at 69,000 Dinar ($40) per month, which is, according to Ewa Jasiewicz, less than half of the recommended salary of a sweatshop worker in one of neighbouring Iran's Free Trade Zones.
Antonia Juhasz of the International Forum on Globalisation, says that the Bush administration is "using the military invasion and occupation of Iraq to advance a corporate globalization agenda that is illegal under international law, has not been chosen by the Iraqi people and may ultimately prove to be even more devastating than twelve years of economic sanctions, two U.S.-led wars and one occupation."
One thing the new Authority sees eye-to-eye with the Saddam regime over is draconian Trade Union Laws. Under the new boss, workers in the state oil industry are forbidden from organising a union, and harassment of union organisers is commonplace. But people are still joining workers groups, and as journalist David Bacon, who travelled to Iraq with US Labor Against the War said, "the thing that was really heartening was that under the most difficult conditions that you can imagine, workers were not waiting one minute before they started organising themselves." Unemployment is still very high (30%), and the reconstruction process isn't exactly the job frenzy it was supposed to be - having created only 15,000 of the 250,000 jobs promised.
Saddam was always heading for trouble, running one of the only state owned oil companies in the world and refusing to let Western oil companies in on the game. Remember two years ago when the US sponsored a coup against Hugo Chavez in Venezuela? (at the time the main supplier of oil to the US - see SchNEWS 345) He had promised to use oil profits to pay for a minimum wage, rather than let all the money go abroad to the oil companies. But this is about more than just oil. They are flogging the whole country's assets off, lock stock and barrel. The Middle East's got a lot of state owned assets which western corporations are ready to buy up cheap. The pretext offered by terrorism to make a profit through invasion and economic colonisation isn't worrying business friendly Saudi Arabia. But no doubt Iran and Syria with their state owned water companies, electricity plants and telecom systems are getting worried by cash-hungry Halliburton and friends.
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- SchNEWS (9th July 2004)