24 September 2003

Underpinning all the propaganda, the bluster and the bullshit about bringing ‘democracy and freedom’ to Iraq and other points East and South, lies the real truth, that the reality is about capitalism and the triumph of the ‘free market’. That’s what the entire invasion has always been about, everything else is but a smokescreen.

And nothing could expose this fundamental reality more than the edicts issued by the USUK occupation forces (through their puppet Mr Gailani) this week on opening up Iraq’s economy to the depredations of US capitalism, perhaps best illustrated by Bush the smaller’s pals in Halliburton and Bechtel who have already gotten contracts (without bidding) worth over $1 billion.

Americanising Iraq even extends to the cellular phone system employed (and owned by MCI) that uses the outmoded US system that is incompatible with every other wireless network in the Middle East and much of the rest of the world.

And unsurprisingly, they’re not bashful about pushing the capitalist way of life, as someone is going to have pay the minimum of $100 billion that it’s going to cost to rebuild everything the invasion and a dozen years of sanctions have destroyed. What better way to do it than to sell off the nation’s assets to big US capital?

The core elements of this giant ‘fire sale’ are:

• 100% private ownership in all sectors (except natural resources but more on this later)
• Direct foreign ownership of assets
• 100% remittance of all profits, dividends, interest and royalties to the overseas owners
• The total privatisation of all state assets and companies
• A ‘tax holiday’ for the rest of the year and then a cap of 15%
• A maximum 5% tariff on all imports

And in a truly cynical move, the nation’s major resource, oil, is to remain in the hands of the occupiers because true to their cause, private enterprise has no intention of paying for the cost of rebuilding the state, instead oil revenues will be used for the major investment of running the government’s operations. In other words, oil revenues will be used to subsidise the theft of the nation’s resources through the state management of the privatisation process.

This is gangster capitalism in action, and reminiscent of the sale of state enterprises following the collapse of the Soviet Union in 1990. But will it work? As John Snow, US Treasury Secretary said:

“Capital is a coward…it doesn’t go places where it feels threatened.”

And as things stand, Iraq grows ever more insecure for the occupation forces with each passing day. So if opening up the economy of Iraq is to be the ‘model’ for the other countries on Bush’s hit-list, many of whom have large state-owned sectors waiting to be ‘liberated’, what are the prospects?

Dependency, not development
In an interesting parallel with Britain’s post-WWII relationship with a then industrialising Africa, it is clear that the objective is not ‘nation-building’ but on the contrary, to make sure that Iraq will be totally dependent on US exports and that its domestic economy will never compete with the US.

Twelve years of sanctions have de-industrialised Iraq, a country that prior to the Gulf War had, by developing country standards, a modern health and education system, a large highly educated middle-class and a developed energy, communications and transportation infrastructure.

But none of this news. The treatment meted out to Iraq follows a well-worn path whereby any country which dares to defy the US will be isolated, denied access to markets, embargoes placed on imports and exports, and especially imports of products and services that will aid in the development process.

In the run-up to the US-backed coup d’etat that ousted Allende’s ‘Marxist’ government in Chile in 1973, the US instituted an embargo on many of the products needed to develop the Chilean economy, especially in the telecommunications sector, so necessary to modernising the economy.

The same tactic was used against Nicaragua following the Sandinista revolution in 1979. Nicaragua was also accused of being a ‘Marxist’ country, this in spite of the fact that 80% of its economy was privately owned. Other countries to have felt the dead hand of the ‘free market’ include many of the countries of Central America and elsewhere, that dared to institute land reform or the nationalisation of key sectors of the economy.

For decades US foreign policy has — under the guise of fighting communism — waged an ideological war based on the notion of extending the ‘free market’ to those parts of the world that dared to take a different road, whether that of socialism or not. If not socialism, then a propaganda campaign would be waged that accused the country in question of being ‘Marxist’ as in the case of Nicaragua, often forcing the target country into the camp of the Soviet Union, China, or Cuba out of the necessity of economic and national survival.

And Iraq is no exception to this rule. The US never forgave Iraq for the nationalisation of the oil industry in the early 1970s, nor of its opposition to the imperialist policies of its ally, Israel. It explains US and UK support for Iraq in its war with Iran, knowing full well that such a war could only undermine Iraq’s economy and that of Iran.

It’s an “error”
That the US and the UK can employ such a cynical policy, and get away with it, is a testament to the power of the US propaganda machine, a machine that over the past year has, probably for the first time since the Vietnam War, broken down. Even the Independent’s front-page headline “America puts Iraq up for sale” (22/09/03) reveals just how much the times have changed.

The Independent’s editorial appeared to go even further calling the ‘fire sale’ something that “could be seen as a second looting of Iraq”, although the text called the sale “insensitive” and calling it an “error” and excusing the sale by telling us that:

“Money is urgently needed to pay for the reconstruction of Iraq — more than was originally estimated because the country is in a worse state than was thought”

Thought by whom? Such a disingenuous statement is laughable (if the situation weren’t so tragic), given the statements made by the Bush clique over the past months and years, that it intended to privatise Iraq’s economy at the first opportunity. Clearly the editor of the Independent has a short and highly selective memory and as usual of course, bends over backwards to find excuses for the US’s imperialist programme.

The bottom line as ever, is that the Western media will never admit to the fundamental reasoning behind the invasion, preferring to call the theft of a country, an “error” rather than admit to the truth, for in doing so, it would have to call into question the policies of the Blair clique and admit that its rationale for playing second fiddle to Bush is based on exactly the same reasoning.