The following article, written by Voices, first appeared in Nonviolent Action, October 2003
The corporate invasion of Iraq gathered pace last weekend as the US Coalition Provisional Authority (CPA) issued a series of new laws concerning taxes, tariffs and foreign investment which, in the words of the
Guardian, 'effectively put [Iraq] up for sale.'
NEW LAWS
The new laws allow foreign investors to control up to 100% of Iraqi enterprises in every sector of the Iraqi economy except natural resources (where foreign direct and indirect ownership remains prohibited for the time-being) and banking. Foreign investors are now entitled to make their investments 'on terms no less favorable than those applied to an Iraqi investor' and to repatriate any profits 'without delay.'
In addition, according to the New York Times, 'the Central Bank of Iraq has been made legally and operationally independent' and 'the law permits six foreign banks to buy complete control of local banks within the next five years, after which there will be no limits on foreign banks' entry into Iraq.'
From the beginning of next year corporate taxes will be capped at 15% and a flat tariff of 5% will be placed on all imports except relief supplies.
'A RECIPE FOR A CAPITALIST IRAQ'
Reuters noted that the 'reforms . read like a recipe devised by Washington for a capitalist Iraq' (21 September). In fact, they are: the US Agency for International Development (USAID) drafted just such a blueprint prior to the invasion.
Drafted in February, the confidential 100 page document 'Moving the Iraqi economy from Recovery to Sustainable Growth' - leaked to the Wall Street Journal - spells out 'sweeping plans to remake Iraq's economy . based on free-market principles' (Wall Street Journal, May 1st 2003). These plans include the 'mass privatisation of Iraqi industry' - including Iraq's oil sector - and 'fundamental tax reform.'
'MUCH TO LOSE'
Similar 'economic restructuring' elsewhere has led to corruption, massive job losses, and gaping inequality - and is likely to do so again in Iraq.
Interestingly, just three days before the new laws were announced the Boston Globe reported that plans to 'aggressively sell and privatise many state-run Iraqi businesses' had been put on hold and that 'US officials in charge of Iraq .... fear that privatising industries would force the dismissal of thousands of people in state-run companies with bloated payrolls, exacerbating an unemployment rate estimated at 50 percent of working-age Iraqis' (Boston Globe, 18th June 2003).
According to the Globe CPA Head Paul Bremer had 'acknowledged [that] the planned privatisation of Iraq's state-run industries would be delayed because the country was too unstable to absorb the shock of swift deregulation.' Apparently his masters in Washington thought differently - or just didn't care.
THE DEMOCRATIC DEFICIT
Bremer claims to have 'worked closely with the [Iraqi] Governing Council to ensure that economic change occurs in a manner acceptable to the people of Iraq' but the 25-member 'Governing Council' is a body selected by Mr Bremer in consultation with a group of 7 Iraqis selected by Mr Bremer! They do not 'represent' the Iraqi people any more than Mr Bremer.
In fact neither the Council nor Mr Bremer has a mandate to determine what is 'acceptable to the people of Iraq.' As Greg Palast has observed 'If the Iraqi people choose to have a market-driven economy, [if] they want to sell off their oil industries, go right ahead. [But] I don't think that five guys in the US State Department should be making that decision for them.'
In fact neither the Council nor Mr Bremer has a mandate to determine what is 'acceptable to the people of Iraq.' As Greg Palast has observed 'If the Iraqi people choose to have a market-driven economy, [if] they want to sell off their oil industries, go right ahead. [But] I don't think that five guys in the US State Department should be making that decision for them.'
BOMB BEFORE YOU BUY
Back in April Naomi Klein observed that in Iraq 'a people, starved and sickened by sanctions, then pulverised by war, is going to emerge from this trauma to find that their country had been sold out from under them. They will also discover that their new-found " freedom" - for which so many of their loved ones perished - comes pre-shackled by 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.'
This must not be allowed to happen.
