Bush's other Iraq invasion

As Iraqis draft a new constitution, U.S. corporations maintain a stranglehold on almost every economic issue.
By Antonia Juhasz
Alternet
If Iraq's National Assembly meets its deadline, it will release a draft constitution to be voted on by the people in two months. Since February, vital issues have been debated and discussed by the drafting committee: the role of Islamic law, the rights of women, the autonomy of the Kurds and the participation of the minority Sunnis.

But what hasn't been on the table is at least as important to the formation of a new Iraq: the country's economic structure. The Bush administration has succeeded in maintaining a stranglehold on issues such as public versus private ownership of resources, foreign access to Iraqi oil and U.S. control of the reconstruction effort -- all of which are still governed by administration policies put into place immediately after the invasion. The Bush economic agenda favors foreign interests -- American interests -- over Iraqi self-determination.

Over a year ago, orders were put in place by L. Paul Bremer III, then the U.S. administrator of Iraq, that were designed to "transition [Iraq] from a ... centrally planned economy to a market economy" virtually overnight and by U.S. fiat. Those orders were also incorporated into the transitional administrative law -- Iraq's interim constitution -- and the economic restructuring they mandate is well underway.

Laws governing banking, investment, patents, copyrights, business ownership, taxes, the media and trade have all been changed according to U.S. goals, with little real participation from the Iraqi people. (The Transitional Authority Law can be changed, but only with a two-thirds majority vote in the National Assembly, and with the approval of the prime minister, the president and both vice presidents.) The constitutional drafting committee has, in turn, left all of these laws in place.

A central component of the Bush economic agenda is foreign corporate access to, and privatization of, Iraq's once state-run economy. Thus, an early Bremer order allowed foreign investment in and the privatization of all 192 government-owned industries (excluding oil extraction).

After the election of the transitional government, the Ministry of Industry and Minerals fell right in line, announcing plans to partially privatize most of its 46 state-owned companies and open them to foreign investment as part of a plan to establish a "liberal, free-market economy."

Oil is, of course, at the heart of the agenda. In 2004, U.S.-appointed interim Prime Minister Iyad Allawi submitted guidelines to Iraq's Supreme Council for Oil Policy suggesting that the "Iraqi government disengage from running the oil sector ... and that the [Iraq National Oil Company] be partly privatized in the future" and opened to international foreign investment, according to International Oil Daily. (U.S oil imports from Iraq increased by more than 86 percent between 2003 and 2004 alone.)

Plans for a new Iraqi oil law were made public last December at a news conference in Washington hosted by the U.S. government. The U.S.-appointed interim Finance Minister Adel Abdul Mehdi explained that the new law would be "very promising to the American investors and to American enterprise, certainly to oil companies."

A few weeks later, Mehdi became one of Iraq's two vice presidents and Allawi was elected to the National Assembly. Iraq's new oil law is on track for implementation in 2006.

Finally, consider Iraq's reconstruction, which also remains firmly under U.S. control. One of Bremer's orders denied the Iraqi government the ability to give preference to Iraqis in the reconstruction effort. Instead, more than 150 U.S. companies were awarded contracts totaling more than $50 billion, more than twice the GDP of Iraq. Halliburton has the largest contract, worth more than $11 billion, while 13 other U.S. companies are earning more than $1.5 billion each.

These contractors answer to the U.S. government not the Iraqi people, several thousand of whom recently protested the failure of U.S. companies to provide accessible water, sanitation and electricity at pre-war levels. Iraqis argue that they have the knowledge, skill and experience to conduct the reconstruction themselves; what they need is the money and decision-making control that they are being denied.

By all accounts, the draft constitution has failed to provide Iraqis with the means to control their economic future. As Iraq prepares for the October 15 referendum on the constitution, these crucial issues must be added to the debate, and the influence of the Bush administration countered, so that Iraqis can truly determine their own economic and political fate.

Just as discussions are finally emerging for ending the U.S. military occupation of Iraq, so too must the economic invasion be brought to an end.



Antonia Juhasz is a Foreign Policy In Focus scholar based in San Francisco. Her book "The Bush Agenda: Invading the World, One Economy at a Time" will be published by Regan Books in 2006.