That Iraq place again
I’m am back from the Western end of the Arab world to its supposed center. In the former, a courageous press (and a few imprisoned journalists) , a timid reform movement that just hopes to hang on against government pressure and those unhelpful Islamists. In the latter, continuing aimlessness under the yoke of a lingering mediocracy. In other words, boring stories about slow changes, small regressions, petty oppression, routinized corruption and technocratic malpractice. Only 100 million people are concerned, so let’s get back to that exciting eye-rack place further East.
Since Sunday, the big story is “the sale of Iraq” — the announcement of new rules that will allow unfettered foreign ownership of Iraq’s non-oil state companies. That means the ability for foreign companies to bid for up to 100% of all the state-owned companies that are going to be put on the privatization block, with the ability of repatriating 100% of the profit they make and both personal and corporate taxes fixed at 15%. Imports, for their part, will only face a tariff duty of 5%. I don’t think an economic set-up like this exists in any country in the world. It’s a neo-liberal economist’s wet dream — except that it’s bound to cause all kinds of problems, is not adapted to the needs of a ravaged country (or even its indiginous business class) and even theoretically, it’s absolutely useless in a world where no one operates this. Anyone remember last week’s Cancun WTO talks?
The Guardian says:
The last big socialist, centralised economy that opted for such sudden and drastic shock therapy was Russia in 1992. The result was economic devastation, rampant corruption and the rise of a powerful class of businessmen, the oligarchs
…
In adopting a neoliberal economic orthodoxy, the US falls into the trap of believing that the state has only to be removed from the sphere of the economy to see a vibrant free market appear. History suggests this process has to be managed by a stable, home-grown government.
I believe in the US we called this the New Deal, and I seem to remember that it got us out of a lot of trouble.
The LA Times gets some local reactions:
“It’s the wrong approach,” said Sam Kubba, who heads the American Iraqi Chamber of Commerce in Washington. “It’s a recipe for disaster because it gives the impression that they’re trying to sell off all the Iraqi resources. They should go about it much more slowly. Start by getting a democracy in place first and letting the people elect a government.”
Juan Cole notes that it’s probably illegal under the Geneva Convention, which the US is bound to as an occupying power:
The US occupying forces blatantly contravened the Fourth Geneva Convention on Monday, announcing that they were opening the Iraqi economy to foreign investment and setting low trade tariffs. The economy has been plagued by massive unemployment (estimated by many observers at 60%) since the fall of the Baath regime, which had channeled oil money to employees through state industries and patronage. US civil administrator Paul Bremer, a fanatical devotee of the “Washington Consensus” on the absolute benefits of “free trade,” has managed to get the Interim Governing Council to sign off on a wideranging set of new economic regulations.
Iraq Democracy Watch has a series of posts and tons of links on this and related subjects. It’s probably the most comprehensive source if you bother to read them all and see what they add up to. All this reading made him make this interesting point:
Comparing the British and American papers’ coverage of the new economic liberalization laws in Iraq should be a lesson for anyone who thinks that the media is unbiased.Ê The Guardian, Independent, and even the conservative UK Telegraph all had headlines variously proclaiming, “Iraq for Sale.”Ê
The American headlines, in contrast, used phrasing like, “A Free Iraq Economy…” ( LA Times ), or “Economic Overhaul” (Washington Post ).
Also, do dig up his excellent overview of “America’s conflicting interests with Iraqi agriculture” from an older post, which points out that the man currently in charge of the US Department of Agriculture effort in Iraq, Dan Amstutz, is a former executive at one of the biggest agro-business companies in the world, Cargill:
Dan Amstutz had at one time worked for Cargill, a US agribusiness giant — the largest privately-owned corporation in the world and the third largest food processor on the globe, and also a company that controls a sizable portion of US grain exports, according to an article by Emad Mekay from Inter Press News Service and written for the Global Policy Forum.
In a press conference this year, Mr. Amstutz insisted that he no longer had any relationship with Cargill, but an article in The Holland Sentinel from June 22nd, 2003, as late as “ late-October 2000, Amstutz was named chairman of the board of directors of a new company established by ADM, Cargill, Cenex Harvest States, DuPont and Louis Dreyfuss.”
Mr. Amstutz isn’t just drawing the wrath of NGOs and international agriculture ministers. Jeffrey St. Claire, in his article, “The Rat in the Grain, Dan Amstutz and the Looting of Iraqi Agriculture,” reprinted in various news media, quotes George Naylor, president of the National Family Farm Coalition as saying,
Daniel Amstutz, an ex-Cargill executive, is there to push the agribusiness agenda, not a democratic agenda…He will excel in telling the world that his policy is good for farmers, consumers and the environment when just the opposite is true.
Says Mr. St. Claire,
The small farmers of the grain belt of the Midwest have a particular loathing for Amstutz. During his stint in the first Bush administration, Amstutz devised the notorious Freedom to Farm Bill, which eliminated tariffs and slashed federal farm price supports. As a result, thousands of American farmers lost their farms and monopolists like Cargill reaped the benefits.
Doesn’t sound good, does it? And why again did those Cancun talks fail?
The Arms and the Man — the definitive blog on “who’s making a killing on killing in Iraq” — notes that big capital is getting ready for all these juicy prospects, for instance by hosting $1500-a-head conferences on “Exploring Business Prospects in Iraq.” In the meantime, Richard “Prince of Darkness” Perle himself goes on teevee and counters claims of war profiteering by one of those pesky human rights activists. She (Medea Benjamin of Global Exchange) says:
The resentment will only grow unless the U.S. turns this over to a legitimate authority, which is the United Nations, which will have a quick time line for Iraqi self rule and that the money that is pledged by the U.S. and the international community — and let’s remember the international community will not pledge money unless it is in the hands of the United Nations — and that money should go directly to Iraqis and not to companies like Halliburton and Bechtel that are profiteering from this war.
Perle replies:
What you just heard is a tirade against American companies in the left-wing tradition that she represents.
Those America-bashing left-wing liberals. Why do they hate us?
For a local perspective, if you read anything read this post on Baghdad Burning, which has a few concrete examples of why unfettered foreign investment is bad and how it can lead to serious economic and moral abuse. Here’s the first ‘graf, to set the tone:
For Sale: A fertile, wealthy country with a population of around 25 million… plus around 150,000 foreign troops, and a handful of puppets. Conditions of sale: should be either an American or British corporation (forget it if you’re French)… preferably affiliated with Halliburton. Please contact one of the members of the Governing Council in Baghdad, Iraq for more information.
Read it all.