[Peace-discuss] Privatization in Disguise

[patton paul]

 Privatization in Disguise
by Naomi Klein


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 the industry."

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 group held
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 buy."

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.

Copyright  2003 The Nation