The Bush Administration's complete contempt for democracy in Iraq

In the June 27 edition of Focus on Trade, Herbert Docena compiles the complete story on how America have implemented their neo-liberal economic designs on Iraq.

'Shock and Awe Therapy: How the US is attempting to control Iraq's oil and try open its economy" is a very impressive piece of work and while long, is well worth reading. My April 2004 article 'Hijacking of a Nation' covered similar ground - its nice to see someone else reaching similar conclusions, as well as providing some damming quotes and references :)

Even before the invasion Docena quotes documents to show that the US had "sweeping plans to remake Iraq's economy in the US image". During the bombing BP engineers were embedded with the soldiers to locate and secure the oil wells. In May 2003, Defense Secretary Rumsfeld announced the Bush administration would be installing a regime heading by personnel who "favor market systems" and "encourage moves to privatize state-owned enterprises"

The US hand the contract for "transforming" Iraq's economy to US multinational Bearing Point. The contract states "The new government will seek to open up its trade and investment linkages and put in place the institutions promoting democracy, free enterprise and reliance on a market-driven private sector as the engine of economic recovery and growth.". Docena contrasts this 'systematic plan' with the complete lack of any planning for post-war humanitarian, rehabilitation and relief operations.

US Viceroy Paul Bremer illegally changed the "existing laws in force" in Iraq, allowing foreign investors to buy up and take over Iraq's state owned enterprises and repatriate 100% of the profits and other assets at any time (Order 39). As Iam al-Khafaji, who worked with the US in the early states of he occupation but later left, attests, "Many radically new sweeping changes, for example the law on foreign investment, Iraqis were not allowed to review it. They not even given the chance to look at it before it was passed.". Other 'orders' allowed foreign banks into the country and reduced the top tax rate form 40% to a flat rate of 15%, doing away with the principle of progressive taxation.

All of these imposed 'law' changes are clear violations of international law. The Hague Regulations and the Geneva Conventions, which the US has signed up to, outlaw such law changes under occupation. Even though these 'laws' were forced on the Iraqi people before they had a chance to have a say in an election, Bremer also took steps to ensure it would be difficult for an incoming elected government to change the 'Orders' put in place by the Coalition Provisional Authority.

From the earliest days of the occupation, the US searched for Iraqis whose interests converged with that of the US. The US needed Iraqi faces 'out front' to attempt to show they were not colonizers imposing their will on the Iraqi people (yeah right!), and these Iraqis needed the US because lacking constituency and legitimacy, they have no chance of surviving in power without US protection. "What Washington wanted was Iraqis who - while willing to dabble in occasional criticism of the administration - were at the final analysis beholden to it" Middle East Historian Dilip Hiro (Hiro's book on the history of Iraq is well worth reading)

The US also planted hundreds of "advisers" in key ministries and the bureaucracy - including dozens of organisations and agencies who specialise in designing neo-liberal policies. The US also created new commissions and institutions that, according to the Wall Street Journal "effectively take away virtually all the powers once held by several ministries". Paul Bremer appointed the chiefs of the commissions to 5 year terms, which will neatly ensure the US appointees can not be replaced by an elected government.

During the January 2005 elections, the US used its usual "democracy promotion" organs (National Endowment for Democracy, The National Democratic Institute and the International Republican Institute(IRI)) to promote their preferred parties, mostly Allawi's and other parties inside the Iraqi Governing Council, who also dominated the interim government. A IRI survey found 55% of Iraqis did not see the interim government as representing their interests. Bremer and his cronies also made attempts to disallow "rejectionists" such as Moqtada Sadr from being candidates in the elections.

No international monitors were allowed to scrutinize the elections - so there was no way to verify if fraud took place - the world just had to trust the word of the US-installed Iraqi government.

My point at present is not whether Iraq adopts a free market capitalist or a socialised economy. Following the fall of Saddam Hussein, it should be entirely up to the Iraqi people to decide the type of economy they want and the laws that will govern it. Not only are the radical reforms imposed by the CPA in violation of international law, they have been imposed before the Iraqi people have had a chance to have a say in an election. Not only that, but it appears the US have gone to great lengths to ensure any 'elections' are anything but a fair fight.

The actions of the Bush Administration in Iraq demonstrate nothing by complete contempt for democracy.

Categories: Iraq, Antiwar, Politics, Neo-liberalism, Investment, International Law

Iraq opens oil reserves to Western companies

Just read a report on the NZ Herald Online 'Iraq opens oil reserves to Western companies'.

Opening up Iraq's natural resources to widespread foreign investment completes the neo-liberal agenda of the US and its former viceroy Paul Bremer. In September 2003 Bremer imposed Order 39, a 'law' that rescinded nearly all of Iraq's legal and constitutional restrictions on foreign investment and banking. This law allowed 100% foreign investment in Iraqi companies (and state assets) and 100% repatriation of profits to their offshore owners. The only sector to be excluded from this carte blanche neo-liberalism was 'natural resources' (i.e. oil). This law is clearly illegal under the Geneva and Hague conventions, as Iraq was under under military occupation when Bremer imposed the changes, and the provisions of Order 39 clearly breached Iraq's constitution of 1970, a constitution that is still valid under international law.

Oil was exempted from Order 39 because it was thought that domestic political opinion would not stand for it. That’s not to say these changes were in any way democratic, as Order 39 was imposed before elections. The US clearly thinks that Iraqis will be happier with US part ownership of oil infrastructure, if the policy is advocated by an Iraqi face. This is where the (unelected) interim government comes in.

In an interview in a Shell newsletter that is distributed to its Middle Eastern clients, [Oil Minister] Mr Ghadban added that Iraq would open its doors to the oil giants early next year.

"We would like to open a dialogue with international oil companies [IOCs]. We are now formulating our policies ... and we think there is room for IOCs in Iraq - in particular in the upstream because we need new investment."

"We believe that there is at least 2.5 to 3 million barrels per day of new oil production capacity that could, in the long term, be added to our production levels."

The 'problem' for such 'investment' is the 1970 constitution that provides that "natural resources" and the "basic means of production" are owned by "the People". Not even Bremer attempted to override the clear constitutional prohibition to foreign ownership of the oil. It would not surprise me if the latest comments by the 'Iraqi' Oil minister are part of a strategy to move public opinion in favour of privatisation. Expect the interim unelected 'government' to stitch up a deal with BP or Shell and then claim 'there is no alternative' to Iraqis accepting full or part US/UK profiteering from the oil. Then expect such clauses to be missing when a replacement constitution for Iraq is drawn up next year.

Luckily, global justice activists have time to fight this issue, as the western oil companies are hesitant about investing in Iraq while the violence continues.

The Iraqi Oil Ministry was forced to cancel a conference in April when most companies pulled out after a surge in violence in the country.
...
Today, neither BP nor Shell has any staff working there. Shell has one consultant in Iraq and it is monitoring developments from its Dubai office. A spokeswoman refused to say if it was planning to send employees to the country. But she added: "Iraq does offer opportunities. We are following developments and working with the Iraqi Minister of Oil.". A BP spokesman said that the company would only consider opportunities in Iraq when "there is a proper regime" in the country.

While it would be nice to think that BP regards the current Iraqi administration as illegitimate, it is more likely they are worried about the prospect of their 'investments' being renationalised by a future representative Iraqi government, on the grounds that privatisation under effective occupation is illegal (and they would be right!)

Also expect US relations with Saudi Arabia to cool further as more barrels of oil roll out of Iraq. Saudi Arabia was one of the most significant beneficiaries of the 1991 Gulf War, as it was able to increase its production as Iraq's oil infrastructure was bombed. Saudi Arabia picked up the slack, and Iraq will soon want and be able to take the 'slack' back.