http://www.timesonline.co.uk/article/0,,1072-1731547,00.html
August 12, 2005
My sadness at the privatisation of Iraq
Michael Meacher
The US transnational companies are taking over and they'll benefit
for years to come
IF DEMOCRACY is the goal of American policy in Iraq, as President Bush
repeatedly says it is not eliminating WMD, not controlling Middle
East oil, not removing a dictator guilty of genocide then with the
Sunni walkout from government and Kurdish intransigence over
federalism and Kirkuk, that policy is nearing breakdown. But democracy
was always only an after-thought, and anyway never really on offer in
the first place.
Before the US proconsul Paul Bremer left Baghdad, he enacted 100
orders as chief of the occupation authority in Iraq. Perhaps the most
infamous was Order 39 which decreed that 200 Iraqi state companies
would be privatised, that foreign companies could have complete
control of Iraqi banks, factories and mines, and that these companies
could transfer all of their profits out of Iraq. The reconstruction
of the country amounts in effect to wholesale privatisation of the
economy and is little short of economic colonisation.
These laws will not be reversed while 140,000 US troops remain in the
country, or a network of US military bases planned to be retained in
Iraq for a much longer period. Aid for rebuilding the electricity and
water services, the oil industry, and the legal and security systems
will reside with the US Embassy for many years to come.
If all 100 orders are taken together, they set the overall legal
framework for overriding foreign exploitation of Iraqs domestic
market. They cover almost all facets of the economy, including Iraqs
trading regime, the mandate of the Central Bank, and regulations
governing trade union activities. Collectively, they lay down the
foundations for the real US objective in Iraq, apart from keeping
control of the oil supply, namely the imposition of a neoliberal
capitalist economy controlled and run by US transnational
corporations.
But what is remarkable about these laws is not only their overall
degree of control, but their far-reaching application. Order 81, for
example, has the status of binding law over patent industrial
design, undisclosed information, integrated circuits and plant
variety a degree of detailed supervision normally associated with
a Soviet command-and-control economy. While historically the Iraqi
Constitution prohibited private ownership of biological resources,
the new US-imposed patent law introduces a system of monopoly rights
over seeds. This is virtually a takeover of Iraqi agriculture.
The rights granted to US plant breeding companies under this order
include the exclusive right to produce, reproduce, sell, export,
import and store the plant varieties covered by intellectual property
right for the next 20-25 years. During this extended period nobody
can plant or otherwise use plants, trees or vines without
compensating the breeder.
In the name of agricultural reconstruction this new law deprives
Iraqi farmers of their inherent right, exercised for the past 10,000
years in the fertile Mesopotamian arc, to save and replant seeds. It
enables the penetration of Iraqi agriculture by Monsanto, Syngenta,
Bayer, Dow Chemical and other corporate giants that control the
global seed trade. Food sovereignty for the Iraqi people has
therefore already been made near-impossible by these new regulations.
This is merely one example of the pervasiveness of the orders left
behind by Bremer. But their impact is largely concentrated in the
near-monopolisation by US corporations of the economic contracts
awarded by the US-dominated Coalition Provisional Authority.
Overwhelmingly they have been allocated to big US companies, notably
Bechtel and Halliburton, which happens to be Vice-President Dick
Cheneys former company, sometimes on a secret no-bid basis such as
the contract to repair and operate oil wells awarded to the
Halliburton subsidiary Kellogg, Brown and Root.
Almost no contracts have gone to UK companies, apart from one to
repair and rebuild the Baghdad sewage system. For oilfield repairs
over a two-year period the contracts have been worth some $7 billion.
For the little known and disarmingly entitled Logistics Civil
Augmentation Programme, the contracts value is far greater.
The funding of these massive contracts has largely come from the
Iraqi oil revenues expropriated for US corporate use. The oil money
is held in the US Federal Reserve, and the US Government is
determined to keep control of it under an international board. The US
has already spent around half the revenue, mainly on these long-term
contracts with their construction companies. Of course John
Negroponte, who was then the American Ambassador to Iraq, made clear
that these enormous funds will be managed in consultation with the
Iraqi Government, but there can be little doubt where the decision-
making power will lie.
Whether this enforced takeover of the economy and imposed
privatisation across the board of all the main economic sectors is in
accordance with international law is now much disputed. But whether
it can be reversed when America holds all the military, political and
economic cards is another matter. The only way for the US authorities
to sidestep the potential conflict is to ensure that the new Iraqi
Government is pliant enough not to press for full sovereignty. Paul
Bremer thought of that too.
His Transitional Administrative Law (TAL) effectively gives the
Kurds, the most pro-American section of the population, a veto over
the new constitution because the TAL itself states that it can only
be amended by a 75 per cent vote in parliament. The Kurds hold more
that 25 per cent of the seats.
* Michael Meacher is Member of Parliament for Oldham West and Royton
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