Friday, 8 June 2012
The corporate capture of Iraq
A review of Making the world safe for capitalism: How Iraq threatened the US economic empire and had to be destroyed, by Christopher Doran, published by Pluto, price £17.99 pbk.
Why did the US invade Iraq? Christopher Doran’s new study argues that the policy has been a success, if the true motivations behind the Occupation are considered.
First, the US sought to demonstrate that there is no alternative to the debt-ridden, IMF-dominated, neoliberal model of “development” favoured by the US. The best educated country in the Middle East, with free health care and the highest level of female participation in public life, would not be permitted to exemplify an alternative model.
Beyond this, the US wanted to create the first real free market state in the region. The protection of the oil ministry by occupying forces soon after the invasion, while Iraq’s cultural heritage was looted was not a “mistake”. Nor was the sectarian constitution or the institutionalisation of terror - all part of a Shock Doctrine that facilitated the introduction of a deregulated, privatised economy. The result is social devastation, but an Iraq open for business.
Secondly, oil - not just as a material resource, but because of the leverage it confers. Iraq alone has oilfields that rival Saudi Arabia’s and can challenge that country’s accommodation to the US - affordable oil and the recycling of petrodollars into the US economy, to the tune of $1 trillion between 1973 and 2000.
“There are only two credible reasons for invading Iraq,” wrote a former top British civil servant in 2004. “Control over oil and preservation of the dollar as the world’s reserve currency.” “If anything put the final nail in Saddam Hussein’s coffin,” agreed banker Richard Benson, “it was his move to start selling oil in euros.”
If other countries followed this lead, then the dollar would cease to be the world’s oil-trading currency and dollar investments that get recycled into the US economy would reduce drastically. It is these investments that allow the US to be $15 trillion in debt - without them the US empire would simply crumble. Continuing to price oil in dollars, which the Saudis have agreed to, allows the US Treasury to run up unpayable debts, print money and buy oil, something no other country could do.
These concerns about Iraq were expressed within the Bush Administration well before 9/11. Immediately after, the Administration made a series of false allegations, widely repeated, about Iraq’s non-existent al Qaeda links and weapons of mass destruction. The 2003 invasion allowed the US to impose its economic doctrines on a defeated people and sell off the country’s industries to foreign corporations at prices set by the occupiers. The money raised went into a Development Fund that helped pay for the Occupation. Tariffs were scrapped, throwing the Iraqi economy open to subsidised imports that wrecked domestic production.
None of these measures were seen - let alone discussed - by Iraqis before being decreed. And awarding contracts almost exclusively to US companies increased Iraq’s dependence on the Occupation itself.
Unsurprisingly, fraud and corruption were extensive. Popular protests were fiercely repressed, nowhere more so than in Fallujah, a city almost totally destroyed by Coalition forces in 2004. The effects of chemical weapons used in the onslaught are still being felt in the city’s alarming rates of cancers and birth defects.
But in one important respect, the Occupation suffered a setback. The successful mobilisation of Iraqi civil society, led by its independent trade unions, defeated the US’s proposed oil law that would have expropriated Iraq’s vital natural resource.
It doesn’t stop with Iraq. The creation of a Middle East Free Trade Area is opening up other economies in the region to US penetration. But it has also led to skyrocketing food prices, a key factor in triggering the “Arab spring” - most impressively in Bahrain. In February 2011, 200,000 people out of a population of 1.2 million protested. With US collusion, Saudi troops entered the country to mete out repression.
The book contains rare coverage of the impact of the US Occupation on Iraqi agriculture - in short, the abolition of price supports, the opening up of the sector to US agri-business conglomerates and the introduction of GM crops. The results have been catastrophic: Iraq’s wheat yield in 2010 was 1.86 million tonnes - a stunning drop from the 2.6m Iraqi farmers produced under sanctions in 2002. But it was not so disastrous for the US: agriculture-related products dominate US exports to Iraq, averaging $1.5 billion a year.
So was the conquest of Iraq a success? Yes, concludes Doran, but only according to the twisted logic of neoliberalism, where “the role of government is no longer to ensure its citizens have food, shelter, water and health care; these are now things to be commodified from which new corporate profit can be extracted.”