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IRAQ: Bush Aims to Remake Iraq as a Free-Market Paradise

When Paul Bremer, fresh from Kissinger Associates, first arrived in Iraq, the Coalition Provisional Authority made a lot of changes other than just disbanding what was left of the Iraqi army. He annulled all of Saddam Hussein's rules and regulations overseeing the Iraq economy, except one: He kept Saddam's laws banning labor unions.

by William O'RourkeChicago Sun-Times
April 3rd, 2005

Given the realities of the war in Iraq -- shock and awe, death and destruction, a continuing guerrilla insurgency -- it is easy to overlook what in Hollywood is called "the back story," what our government also brought to Iraq when it invaded: We're not just bringing "democracy" to Iraq, we are bringing, without objection, unchecked free-market ideology.

When Paul Bremer, fresh from Kissinger Associates, first arrived in Iraq, the Coalition Provisional Authority made a lot of changes other than just disbanding what was left of the Iraqi army. He annulled all of Saddam Hussein's rules and regulations overseeing the Iraq economy, except one: He kept Saddam's laws banning labor unions.

Tariffs protecting Iraqi industries were cut to a minimum. Foreign ownership of land and most businesses was allowed. Iraq had had a largely self-sustaining economy, but when Bremer's reforms were enacted, all that changed.

Iraq's cement industry found itself being undersold by Jordanian firms after the tariffs were cut, and when cement plants shut down -- similar to the permanent death steel mills suffer when closed -- they turn into concrete. Iraq is now a cement importer -- not a sign of economic efficiency. As one military observer put it, the state department sent in young economists -- many in their first job out of graduate school -- to create the free-market economy Bremer and the White House wanted.

When Bremer left last June, he didn't leave behind a new economy, just a destroyed one. His successor, John Negroponte, is leaving to become the national intelligence czar, and no one has yet been named to replace him.

The free-market economy experiment has made Iraq a nation of importers and high unemployment -- nearly 50 percent -- and the U.S. underwrites endless unemployment insurance. Much of business is still conducted in a cash-and-carry manner. Hundred-dollar bills have been a symbol of the Iraq war since its very beginning, when caches of them were found squirreled away in various locations. The American military pays compensation in cash for whatever human collateral damage occurs, if relatives of the damage complain.

The new Iraqi government in formation is having trouble deciding how to divide the spoils of the war, though, at this point, the spoils are largely spoiled. Counter to all claims to the contrary, the one industry that remains as it was before the war -- in fact, has even improved -- is the oil industry, and, although Bremer wanted it privatized, oil was exempted temporarily, though it remains under the protection and control of the U.S. military. In any case, outside investors aren't too eager to risk their capital and employees in such an unsafe environment. Last week, Iraq's National Assembly halted its work when it couldn't decide who would be named oil minister.

What the Bush administration is doing domestically -- trying to privatize Social Security, continuing tax favors for corporations, changing bankruptcy laws to favor business over individuals, applying free-market ideology wherever possible -- has been done with impunity in Iraq.

Wars might be hell, but they have their up side for business. Bechtel and Halliburton might be impeded in the way they do business here in the States, but in Iraq, anything goes. One of the first edicts Bremer signed gave immunity from Iraqi laws to U.S. contractors and other Western firms doing business in Iraq.

Americans are concerned with the suffering of their soldier children, dead and injured and in peril. It is hard to get exercised over spending tax money for other purposes, beyond that of the tardily produced body and Hummer armor -- all the equipment and infrastructure large armies require. The last thing on most minds is the fact that the Bush administration has attempted, however ineptly, to remake Iraq in its chosen image: a triumphal business-friendly, free-market paradise, a future Banana Republic, where those in-the-know profit and those on the ground try to figure out what happened to their lives.






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