|Privatization in Disguise
By Naomi Klein, The Nation
April 15, 2003
On April 6, Deputy Defense Secretary Paul
Wolfowitz spelled it out: There will be no role for the United Nations in
setting up an interim government in Iraq. The US-run regime will last at
least six months, "probably . . . longer than that."
And by the time the Iraqi people have a say in choosing a government, the
key economic decisions about their country's future will have been made by
their occupiers. "There has got to be an effective administration
from day one," Wolfowitz said. "People need water and food and
medicine, and the sewers have to work, the electricity has to work. And
that's a coalition responsibility."
The process of getting all this infrastructure to work is usually called
"reconstruction." But American plans for Iraq's future economy
go well beyond that. Rather, the country is being treated as a blank slate
on which the most ideological Washington neoliberals can design their
dream economy: fully privatized, foreign-owned and open for business.
Some highlights: The $4.8 million management contract for the port in Umm
Qasr has already gone to a US company, Stevedoring Services of America,
and the airports are on the auction block. The US Agency for International
Development has invited US multinationals to bid on everything from
rebuilding roads and bridges to printing textbooks. Most of these
contracts are for about a year, but some have options that extend up to
four. How long before they meld into long-term contracts for privatized
water services, transit systems, roads, schools and phones? When does
reconstruction turn into privatization in disguise?
California Republican Congressman Darrel Issa has introduced a bill that
would require the Defense Department to build a CDMA cell-phone system in
postwar Iraq in order to benefit "US patent holders." As Farhad
Manjoo noted in Salon, CDMA is the system used in the United States, not
Europe, and was developed by Qualcomm, one of Issa's most generous donors.
And then there's oil. The Bush Administration knows it can't talk openly
about selling off Iraq's oil resources to ExxonMobil and Shell. It leaves
that to Fadhil Chalabi, a former Iraq petroleum ministry official.
"We need to have a huge amount of money coming into the
country," Chalabi says. "The only way is to partially privatize
He is part of a group of Iraqi exiles who have been advising the State
Department on how to implement that privatization in such a way that it
isn't seen to be coming from the United States. Helpfully, the groupheld a
conference on April 4-5 in London, where it called on Iraq to open itself
up to oil multinationals after the war. The Administration has shown its
gratitude by promising there will be plenty of posts for Iraqi exiles in
the interim government.
Some argue that it's too simplistic to say this war is about oil. They're
right. It's about oil, water, roads, trains, phones, ports and drugs. And
if this process isn't halted, "free Iraq" will be the most sold
country on earth.
It's no surprise that so many multinationals are lunging for Iraq's
untapped market. It's not just that the reconstruction will be worth as
much as $100 billion; it's also that "free trade" by less
violent means hasn't been going that well lately. More and more developing
countries are rejecting privatization, while the Free Trade Area of the
Americas, Bush's top trade priority, is wildly unpopular across Latin
America. World Trade Organization talks on intellectual property,
agriculture and services have all bogged down amid accusations that
America and Europe have yet to make good on past promises.
So what is a recessionary, growth-addicted superpower to do? How about
upgrading Free Trade Lite, which wrestles market access through backroom
bullying, to Free Trade Supercharged, which seizes new markets on the
battlefields of pre-emptive wars? After all, negotiations with sovereign
nations can be hard. Far easier to just tear up the country, occupy it,
then rebuild it the way you want. Bush hasn't abandoned free trade, as
some have claimed, he just has a new doctrine: "Bomb before you
It goes further than one unlucky country. Investors are openly predicting
that once privatization of Iraq takes root, Iran, Saudi Arabia and Kuwait
will be forced to compete by privatizing their oil. "In Iran, it
would just catch like wildfire," S. Rob Sobhani, an energy
consultant, told the Wall Street Journal. Soon, America may have bombed
its way into a whole new free-trade zone.
So far, the press debate over the reconstruction of Iraq has focused on
fair play: It is "exceptionally maladroit," in the words of the
European Union's Commissioner for External Relations, Chris Patten, for
the United States to keep all the juicy contracts for itself. It has to
learn to share: ExxonMobil should invite France's TotalFinaElf to the most
lucrative oilfields; Bechtel should give Britain's Thames Water a shot at
the sewer contracts.
But while Patten may find US unilateralism galling and Tony Blair may be
calling for UN oversight, on this matter it's beside the point. Who cares
which multinationals get the best deals in Iraq's post-Saddam,
pre-democracy liquidation sale? What does it matter if the privatizing is
done unilaterally by Washington or multilaterally by the United States,
Europe, Russia and China?
Entirely absent from this debate are the Iraqi people, who might – who
knows? – want to hold on to a few of their assets. Iraq will be owed
massive reparations after the bombing stops, but without any real
democratic process, what is being planned is not reparations,
reconstruction or rehabilitation. It is robbery: mass theft disguised as
charity; privatization without representation.
A people starved and sickened by sanctions, then pulverized by war, is
going to emerge from this trauma to find that their country has been sold
out from under them. They will also discover that their newfound
"freedom" – for which so many of their loved ones perished –
comes pre-shackled with irreversible economic decisions that were made in
boardrooms while the bombs were still falling.
They will then be told to vote for their new leaders, and welcomed to the
wonderful world of democracy.
Naomi Klein is the author of "No
Logo: Taking Aim at the Brand Bullies" (Picador) and, most recently,
"Fences and Windows: Dispatches From the Front Lines of the
Globalization Debate" (Picador).